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6 | [Footnote *] Together with No. 691, Food Store Employees Union, Local No. 347, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO v. Gissel Packing Co., Inc., also on certiorari to the same court, argued March 26, 1969, and No. 585, Sinclair Co. v. National Labor Relations Board, on certiorari to the United States Court of Appeals for the First Circuit, argued March 26-27, 1969. In Nos. 573 and 691, Unions waged organizational campaigns, obtained authorization cards from a majority of employees in the appropriate bargaining units, and demanded recognition by the employers. The employers refused to bargain, on the ground that the cards were inherently unreliable, and carried out vigorous antiunion campaigns. In one instance the Union did not seek a representation election but filed unfair labor practice charges against the employer; in a second, an election sought by the Union was not held because of unfair labor practice charges filed by the Union as a result of the employer's antiunion campaign; and in the third, an election petitioned by the Union and won by the employer was set aside by the National Labor Relations Board (NLRB) because of the employer's pre-election unfair labor practices. In each instance the NLRB found that the Union had obtained valid authorization cards from a majority of the employees in the bargaining unit and was thus entitled to represent the employees for bargaining purposes, and that the employer's refusal to bargain, in violation of 8 (a) (5) of the National Labor Relations Act, was motivated, not by a "good faith" doubt of the Union's majority status, but by a desire to gain time to dissipate that status. The NLRB ordered the employers to stop their unfair labor practices, offer reinstatement and back pay to employees discriminatorily discharged, and to bargain with the Unions on request. The Court of Appeals for the Fourth Circuit upheld the NLRB's findings as to violations of 8 (a) (1) and (3) but declined to enforce the orders to bargain, holding that the Taft-Hartley amendments to the Act withdrew the NLRB's authority to order an employer to bargain under 8 (a) (5) on the basis of cards, in the absence of NLRB certification, unless the employer knows, independently of the cards, that there is in fact no representation dispute. The court held that the cards were so inherently unreliable that their use gave the employer an automatic, good faith claim that such a dispute existed, for which an election was necessary. In No. 585, after the Union announced to the employer that it held authorization cards from a majority of the bargaining unit, and the employer claimed it had a good faith doubt of majority status, the Union petitioned for an election. From the time the employer first learned of the Union's drive until the election, the company's president talked and wrote to the employees. The NLRB stated that the communications "reasonably tended to convey ... the belief or impression that selection of the Union in the forthcoming election could lead [the Company] to close its plant, or to the transfer of the weaving production, with the resultant loss of jobs to the wire weavers," and constituted a violation of 8 (a) (1). The NLRB set aside the election because the employer "interfered with the exercise of a free and untrammeled choice in the election," found that the Union had a valid card majority when it demanded recognition and that the employer declined recognition in order to gain time to dissipate that majority status in violation of 8 (a) (5). The employer was ordered to bargain on request. The Court of Appeals for the First Circuit sustained the NLRB's findings and enforced its order. Held: 1. To obtain recognition as the exclusive bargaining representative under the Act, a union has not been required, prior to or since the Taft-Hartley amendments, to obtain certification as a winner of an NLRB election; it can establish majority status by possession of cards signed by a majority of the employees authorizing the union to represent them for bargaining purposes. Pp. 595-600. 2. Authorization cards can adequately reflect employee desires for representation and the NLRB's rules for controlling card solicitation are adequate safeguards against union misrepresentation and coercion where the cards are clear and unambiguous on their face. Pp. 601-610. (a) The NLRB's rule set forth in Cumberland Shoe Corp., 144 N. L. R. B. 1268, that an unambiguous authorization card will be counted unless it is proved that the employee was told that the card was to be used solely to obtain an election, should not be applied mechanically. Pp. 607-609. (b) An employer is not obligated to accept a card check as proof of majority status under the NLRB's current practice, and he is not required to justify his insistence on an election by making his own investigation of employee sentiment and showing affirmative reasons for doubting the majority status. Not every employer unfair labor practice will necessarily support a bargaining order. Pp. 609-610. 3. The issuance of a bargaining order is an appropriate remedy where an employer who has rejected a card majority has committed unfair labor practices which have made the holding of a fair election unlikely, or which have undermined a union's majority, caused an election to be set aside, and made the holding of a fair rerun election unlikely. Pp. 610-616. (a) In fashioning a remedy the NLRB can consider the extensiveness of an employer's unfair practices in terms of their past effect on election conditions and the likelihood of their recurrence in the future, and if it finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies is slight and that employee sentiment once expressed through cards would be better protected by a bargaining order, such order should issue. Pp. 614-615. (b) Because the NLRB's findings in Nos. 573 and 691 were based on its former practice of phrasing its findings in terms of an employer's good or bad faith doubts of a union's majority status, these cases are remanded for proper findings. Pp. 615-616. 4. An employer's free speech right to communicate with his employees is firmly established and cannot be infringed by a union or by the NLRB, and 8 (c) merely implements the First Amendment by requiring that the expression of "any views, argument or opinion" shall not be "evidence of an unfair labor practice," so long as such expression contains "no threat of reprisal or force or promise of benefit" in violation of 8 (a) (1). Pp. 616-620. (a) An assessment of the precise scope of employer expression must be made in the context of its labor relations setting, and an employer's rights cannot outweigh the equal rights of the employees to associate freely, as those rights are embodied and protected in the Act. Pp. 617-618. (b) An employer may communicate to his employees any of his general views on unionism and his specific views about a particular union, as long as there is no "threat of reprisal or force or promise of benefit." He may predict the precise effects he believes unionization will have on his company, if the prediction is based on objective fact to convey his belief as to demonstrably probable consequences beyond his control or to convey a management decision already arrived at to close the plant in case of unionization. Pp. 618-619. (c) In No. 585 the NLRB correctly found that the communications were cast as a threat of retaliatory action and not as a prediction of "demonstrable economic consequences." P. 619. No. 585, 397 F.2d 157, affirmed; Nos. 573 and 691, 398 F.2d 336, 337, and 339, reversed and remanded.Dominick L. Manoli argued the cause for petitioner in No. 573. With him on the brief were Solicitor General Griswold, Peter L. Strauss, Arnold Ordman, and Norton J. Come. Albert Gore argued the cause for petitioner in No. 691. With him on the brief was Joseph M. Jacobs. Edward J. Simerka argued the cause for petitioner in No. 585. With him on the brief was Eugene B. Schwartz.John E. Jenkins, Jr., argued the cause and filed briefs for Gissel Packing Co., Inc., respondent in Nos. 573 and 691. Lewis P. Hamlin, Jr., argued the cause and filed a brief for General Steel Products, Inc., et al., respondents in No. 573. Fred F. Holroyd argued the cause for Heck's, Inc., respondent in No. 573. With him on the brief was Charles E. Hurt. Lawrence G. Wallace argued the cause for respondent in No. 585. On the brief were Solicitor General Griswold, Dominick L. Manoli, and Messrs. Strauss, Ordman, and Come.Briefs of amici curiae in Nos. 573 and 691 were filed by J. Albert Woll, Laurence Gold, and Thomas E. Harris for the American Federation of Labor & Congress of Industrial Organizations, and by the Associated Builders & Contractors, Inc. Briefs of amici curiae in No. 585 were filed by Lambert H. Miller for the National Association of Manufacturers; by Harry L. Browne for the American Retail Federation; and by Stanley E. Tobin for the Mechanical Specialties Co., Inc. MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.These cases involve the extent of an employer's duty under the National Labor Relations Act to recognize a union that bases its claim to representative status solely on the possession of union authorization cards, and the steps an employer may take, particularly with regard to the scope and content of statements he may make, in legitimately resisting such card-based recognition. The specific questions facing us here are whether the duty to bargain can arise without a Board election under the Act; whether union authorization cards, if obtained from a majority of employees without misrepresentation or coercion, are reliable enough generally to provide a valid, alternate route to majority status; whether a bargaining order is an appropriate and authorized remedy where an employer rejects a card majority while at the same time committing unfair labor practices that tend to undermine the union's majority and make a fair election an unlikely possibility; and whether certain specific statements made by an employer to his employees constituted such an election-voiding unfair labor practice and thus fell outside the protection of the First Amendment and 8 (c) of the Act, 49 Stat. 452, as amended, 29 U.S.C. 158 (c). For reasons given below, we answer each of these questions in the affirmative. I. Of the four cases before us, three - Gissel Packing Co., Heck's Inc., and General Steel Products, Inc. - were consolidated following separate decisions in the Court of Appeals for the Fourth Circuit and brought here by the National Labor Relations Board in No. 573. Food Store Employees Union, Local No. 347, the petitioning Union in Gissel, brought that case here in a separate petition in No. 691. All three cases present the same legal issues in similar, uncomplicated factual settings that can be briefly described together. The fourth case, No. 585 (Sinclair Company), brought here from the Court of Appeals for the First Circuit and argued separately, presents many of the same questions and will thus be disposed of in this opinion; but because the validity of some of the Board's factual findings are under attack on First Amendment grounds, detailed attention must be paid to the factual setting of that case. Nos. 573 and 691. In each of the cases from the Fourth Circuit, the course of action followed by the Union and the employer and the Board's response were similar. In each case, the Union waged an organizational campaign, obtained authorization cards from a majority of employees in the appropriate bargaining unit, and then, on the basis of the cards, demanded recognition by the employer. All three employers refused to bargain on the ground that authorization cards were inherently unreliable indicators of employee desires; and they either embarked on, or continued, vigorous antiunion campaigns that gave rise to numerous unfair labor practice charges. In Gissel, where the employer's campaign began almost at the outset of the Union's organizational drive, the Union (petitioner in No. 691) did not seek an election, but instead filed three unfair labor practice charges against the employer, for refusing to bargain in violation of 8 (a) (5), for coercion and intimidation of employees in violation of 8 (a) (1), and for discharge of Union adherents in violation of 8 (a) (3).1 In Heck's an election sought by the Union was never held because of nearly identical unfair labor practice charges later filed by the Union as a result of the employer's antiunion campaign, initiated after the Union's recognition demand.2 And in General Steel, an election petitioned for by the Union and won by the employer was set aside by the Board because of the unfair labor practices committed by the employer in the pre-election period.3 In each case, the Board's primary response was an order to bargain directed at the employers, despite the absence of an election in Gissel and Heck's and the employer's victory in General Steel. More specifically, the Board found in each case (1) that the Union had obtained valid authorization cards4 from a majority of the employees in the bargaining unit and was thus entitled to represent the employees for collective bargaining purposes; and (2) that the employer's refusal to bargain with the Union in violation of 8 (a) (5) was motivated, not by a "good faith" doubt of the Union's majority status, but by a desire to gain time to dissipate that status. The Board based its conclusion as to the lack of good faith doubt on the fact that the employers had committed substantial unfair labor practices during their antiunion campaign efforts to resist recognition. Thus, the Board found that all three employers had engaged in restraint and coercion of employees in violation of 8 (a) (1) - in Gissel, for coercively interrogating employees about Union activities, threatening them with discharge, and promising them benefits; in Heck's, for coercively interrogating employees, threatening reprisals, creating the appearance of surveillance, and offering benefits for opposing the Union; and in General Steel, for coercive interrogation and threats of reprisals, including discharge. In addition, the Board found that the employers in Gissel and Heck's had wrongfully discharged employees for engaging in Union activities in violation of 8 (a) (3). And, because the employers had rejected the card-based bargaining demand in bad faith, the Board found that all three had refused to recognize the Unions in violation of 8 (a) (5).Only in General Steel was there any objection by an employer to the validity of the cards and the manner in which they had been solicited, and the doubt raised by the evidence was resolved in the following manner. The customary approach of the Board in dealing with allegations of misrepresentation by the Union and misunderstanding by the employees of the purpose for which the cards were being solicited has been set out in Cumberland Shoe Corp., 144 N. L. R. B. 1268 (1963) and reaffirmed in Levi Strauss & Co., 172 N. L. R. B. No. 57, 68 L. R. R. M. 1338 (1968). Under the Cumberland Shoe doctrine, if the card itself is unambiguous (i. e., states on its face that the signer authorizes the Union to represent the employee for collective bargaining purposes and not to seek an election), it will be counted unless it is proved that the employee was told that the card was to be used solely for the purpose of obtaining an election. In General Steel, the trial examiner considered the allegations of misrepresentation at length and, applying the Board's customary analysis, rejected the claims with findings that were adopted by the Board and are reprinted in the margin.5 Consequently, the Board ordered the companies to cease and desist from their unfair labor practices, to offer reinstatement and back pay to the employees who had been discriminatorily discharged, to bargain with the Unions on request, and to post the appropriate notices.On appeal, the Court of Appeals for the Fourth Circuit, in per curiam opinions in each of the three cases (398 F.2d 336, 337, 339), sustained the Board's findings as to the 8 (a) (1) and (3) violations, but rejected the Board's findings that the employers' refusal to bargain violated 8 (a) (5) and declined to enforce those portions of the Board's orders directing the respondent companies to bargain in good faith. The court based its 8 (a) (5) rulings on its 1967 decisions raising the same fundamental issues, Crawford Mfg. Co. v. NLRB, 386 F.2d 367, cert. denied, ; NLRB v. Logan Packing Co., 386 F.2d 562; NLRB v. Sehon Stevenson & Co., Inc., 386 F.2d 551. The court in those cases held that the 1947 Taft-Hartley amendments to the Act, which permitted the Board to resolve representation disputes by certification under 9 (c) only by secret ballot election, withdrew from the Board the authority to order an employer to bargain under 8 (a) (5) on the basis of cards, in the absence of NLRB certification, unless the employer knows independently of the cards that there is in fact no representation dispute. The court held that the cards themselves were so inherently unreliable that their use gave an employer virtually an automatic, good faith claim that such a dispute existed, for which a secret election was necessary. Thus, these rulings established that a company could not be ordered to bargain unless (1) there was no question about a Union's majority status (either because the employer agreed the cards were valid or had conducted his own poll so indicating), or (2) the employer's 8 (a) (1) and (3) unfair labor practices committed during the representation campaign were so extensive and pervasive that a bargaining order was the only available Board remedy irrespective of a card majority.Thus based on the earlier decisions, the court's reasoning in these cases was brief, as indicated by the representative holding in Heck's: "We have recently discussed the unreliability of the cards, in the usual case, in determining whether or not a union has attained a majority status and have concluded that an employer is justified in entertaining a good faith doubt of the union's claims when confronted with a demand for recognition based solely upon union authorization cards. We have also noted that the National Labor Relations Act after the Taft-Hartley amendments provides for an election as the sole basis of a certification and restricts the Board to the use of secret ballots for the resolution of representation questions. This is not one of those extraordinary cases in which a bargaining order might be an appropriate remedy for pervasive violations of 8 (a) (1). It is controlled by our recent decisions and their reasoning... . There was not substantial evidence to support the findings of the Board that Heck's Inc. had no good faith doubt of the unions' claims of majorities." 398 F.2d, at 338-339. No. 585. In No. 585, the factual pattern was quite similar. The petitioner, a producer of mill rolls, wire, and related products at two plants in Holyoke, Massachusetts, was shut down for some three months in 1952 as the result of a strike over contract negotiations with the American Wire Weavers Protective Association, the representative of petitioner's journeymen and apprentice wire weavers from 1933 to 1952. The Company subsequently reopened without a union contract, and its employees remained unrepresented through 1964, when the Company was acquired by an Ohio corporation, with the Company's former president continuing as head of the Holyoke, Massachusetts, division. In July 1965, the International Brotherhood of Teamsters, Local Union No. 404, began an organizing campaign among petitioner's Holyoke employees and by the end of the summer had obtained authorization cards from 11 of the Company's 14 journeymen wire weavers choosing the Union as their bargaining agent. On September 20, the Union notified petitioner that it represented a majority of its wire weavers, requested that the Company bargain with it, and offered to submit the signed cards to a neutral third party for authentication. After petitioner's president declined the Union's request a week later, claiming, inter alia, that he had a good faith doubt of majority status because of the cards' inherent unreliability, the Union petitioned, on November 8, for an election that was ultimately set for December 9.When petitioner's president first learned of the Union's drive in July, he talked with all of his employees in an effort to dissuade them from joining a union. He particularly emphasized the results of the long 1952 strike, which he claimed "almost put our company out of business," and expressed worry that the employees were forgetting the "lessons of the past." He emphasized, secondly, that the Company was still on "thin ice" financially, that the Union's "only weapon is to strike," and that a strike "could lead to the closing of the plant," since the parent company had ample manufacturing facilities elsewhere. He noted, thirdly, that because of their age and the limited usefulness of their skills outside their craft, the employees might not be able to find re-employment if they lost their jobs as a result of a strike. Finally, he warned those who did not believe that the plant could go out of business to "look around Holyoke and see a lot of them out of business." The president sent letters to the same effect to the employees in early November, emphasizing that the parent company had no reason to stay in Massachusetts if profits went down.During the two or three weeks immediately prior to the election on December 9, the president sent the employees a pamphlet captioned: "Do you want another 13-week strike?" stating, inter alia, that: "We have no doubt that the Teamsters Union can again close the Wire Weaving Department and the entire plant by a strike. We have no hopes that the Teamsters Union Bosses will not call a strike... . The Teamsters Union is a strike happy outfit." Similar communications followed in late November, including one stressing the Teamsters' "hoodlum control." Two days before the election, the Company sent out another pamphlet that was entitled: "Let's Look at the Record," and that purported to be an obituary of companies in the Holyoke-Springfield, Massachusetts, area that had allegedly gone out of business because of union demands, eliminating some 3,500 jobs; the first page carried a large cartoon showing the preparation of a grave for the Sinclair Company and other headstones containing the names of other plants allegedly victimized by the unions. Finally, on the day before the election, the president made another personal appeal to his employees to reject the Union. He repeated that the Company's financial condition was precarious; that a possible strike would jeopardize the continued operation of the plant; and that age and lack of education would make re-employment difficult. The Union lost the election 7-6, and then filed both objections to the election and unfair labor practice charges which were consolidated for hearing before the trial examiner.The Board agreed with the trial examiner that the president's communications with his employees, when considered as a whole, "reasonably tended to convey to the employees the belief or impression that selection of the Union in the forthcoming election could lead [the Company] to close its plant, or to the transfer of the weaving production, with the resultant loss of jobs to the wire weavers." Thus, the Board found that under the "totality of the circumstances" petitioner's activities constituted a violation of 8 (a) (1) of the Act. The Board further agreed with the trial examiner that petitioner's activities, because they "also interfered with the exercise of a free and untrammeled choice in the election," and "tended to foreclose the possibility" of holding a fair election, required that the election be set aside. The Board also found that the Union had a valid card majority (the unambiguous cards, see n. 4, supra, went unchallenged) when it demanded recognition initially and that the Company declined recognition, not because of a good faith doubt as to the majority status, but, as the 8 (a) (1) violations indicated, in order to gain time to dissipate that status - in violation of 8 (a) (5). Consequently, the Board set the election aside, entered a cease-and-desist order, and ordered the Company to bargain on request.On appeal, the Court of Appeals for the First Circuit sustained the Board's findings and conclusions and enforced its order in full. 397 F.2d 157. The court rejected the Company's proposition that the inherent unreliability of authorization cards entitled an employer automatically to insist on an election, noting that the representative status of a union may be shown by means other than an election; the court thus reaffirmed its stance among those circuits disavowing the Fourth Circuit's approach to authorization cards.6 Because of the conflict among the circuits on the card issues and because of the alleged conflict between First Amendment freedoms and the restrictions placed on employer speech by 8 (a) (1) in Sinclair, No. 585, we granted certiorari to consider both questions. . For reasons given below, we reverse the decisions of the Court of Appeals for the Fourth Circuit and affirm the ruling of the Court of Appeals for the First Circuit. II. In urging us to reverse the Fourth Circuit and to affirm the First Circuit, the National Labor Relations Board contends that we should approve its interpretation and administration of the duties and obligations imposed by the Act in authorization card cases. The Board argues (1) that unions have never been limited under 9 (c) of either the Wagner Act or the 1947 amendments to certified elections as the sole route to attaining representative status. Unions may, the Board contends, impose a duty to bargain on the employer under 8 (a) (5) by reliance on other evidence of majority employee support, such as authorization cards. Contrary to the Fourth Circuit's holding, the Board asserts, the 1947 amendments did not eliminate the alternative routes to majority status. The Board contends (2) that the cards themselves, when solicited in accordance with Board standards which adequately insure against union misrepresentation, are sufficiently reliable indicators of employee desires to support a bargaining order against an employer who refuses to recognize a card majority in violation of 8 (a) (5). The Board argues (3) that a bargaining order is the appropriate remedy for the 8 (a) (5) violation, where the employer commits other unfair labor practices that tend to undermine union support and render a fair election improbable.Relying on these three assertions, the Board asks us to approve its current practice, which is briefly as follows. When confronted by a recognition demand based on possession of cards allegedly signed by a majority of his employees, an employer need not grant recognition immediately, but may, unless he has knowledge independently of the cards that the union has a majority, decline the union's request and insist on an election, either by requesting the union to file an election petition or by filing such a petition himself under 9 (c) (1) (B). If, however, the employer commits independent and substantial unfair labor practices disruptive of election conditions, the Board may withhold the election or set it aside, and issue instead a bargaining order as a remedy for the various violations. A bargaining order will not issue, of course, if the union obtained the cards through misrepresentation or coercion or if the employer's unfair labor practices are unrelated generally to the representation campaign. Conversely, the employers in these cases urge us to adopt the views of the Fourth Circuit.There is more at issue in these cases than the dispute outlined above between the Board and the four employers, however, for the Union, petitioner in No. 691, argues that we should accord a far greater role to cards in the bargaining area than the Board itself seeks in this litigation. In order to understand the differences between the Union and the Board, it is necessary to trace the evolution of the Board's approach to authorization cards from its early practice to the position it takes on oral argument before this Court. Such an analysis requires viewing the Board's treatment of authorization cards in three separate phases: (1) under the Joy Silk doctrine, (2) under the rules of the Aaron Brothers case, and (3) under the approach announced at oral argument before this Court.The traditional approach utilized by the Board for many years has been known as the Joy Silk doctrine. Joy Silk Mills, Inc., 85 N. L. R. B. 1263 (1949), enforcedApp. D.C. 360, 185 F.2d 732 (1950). Under that rule, an employer could lawfully refuse to bargain with a union claiming representative status through possession of authorization cards if he had a "good faith doubt" as to the union's majority status; instead of bargaining, he could insist that the union seek an election in order to test out his doubts. The Board, then, could find a lack of good faith doubt and enter a bargaining order in one of two ways. It could find (1) that the employer's independent unfair labor practices were evidence of bad faith, showing that the employer was seeking time to dissipate the union's majority. Or the Board could find (2) that the employer had come forward with no reasons for entertaining any doubt and therefore that he must have rejected the bargaining demand in bad faith. An example of the second category was Snow & Sons, 134 N. L. R. B. 709 (1961), enforced, 308 F.2d 687 (C. A. 9th Cir. 1962), where the employer reneged on his agreement to bargain after a third party checked the validity of the card signatures and insisted on an election because he doubted that the employees truly desired representation. The Board entered a bargaining order with very broad language to the effect that an employer could not refuse a bargaining demand and seek an election instead "without a valid ground therefor," 134 N. L. R. B., at 710-711. See also Dixon Ford Shoe Co., Inc., 150 N. L. R. B. 861 (1965); Kellogg Mills, 147 N. L. R. B. 342, 346 (1964), enforced, 347 F.2d 219 (C. A. 9th Cir. 1965).The leading case codifying modifications to the Joy Silk doctrine was Aaron Brothers, 158 N. L. R. B. 1077 (1966). There the Board made it clear that it had shifted the burden to the General Counsel to show bad faith and that an employer "will not be held to have violated his bargaining obligation ... simply because he refuses to rely upon cards, rather than an election, as the method for determining the union's majority." 158 N. L. R. B., at 1078. Two significant consequences were emphasized. The Board noted (1) that not every unfair labor practice would automatically result in a finding of bad faith and therefore a bargaining order; the Board implied that it would find bad faith only if the unfair labor practice was serious enough to have the tendency to dissipate the union's majority. The Board noted (2) that an employer no longer needed to come forward with reasons for rejecting a bargaining demand. The Board pointed out, however, that a bargaining order would issue if it could prove that an employer's "course of conduct" gave indications as to the employer's bad faith. As examples of such a "course of conduct," the Board cited Snow & Sons, supra; Dixon Ford Shoe Co., Inc., supra, and Kellogg Mills, supra, thereby reaffirming John P. Serpa, Inc., 155 N. L. R. B. 99 (1965), where the Board had limited Snow & Sons to its facts.Although the Board's brief before this Court generally followed the approach as set out in Aaron Brothers, supra, the Board announced at oral argument that it had virtually abandoned the Joy Silk doctrine altogether. Under the Board's current practice, an employer's good faith doubt is largely irrelevant, and the key to the issuance of a bargaining order is the commission of serious unfair labor practices that interfere with the election processes and tend to preclude the holding of a fair election. Thus, an employer can insist that a union go to an election, regardless of his subjective motivation, so long as he is not guilty of misconduct; he need give no affirmative reasons for rejecting a recognition request, and he can demand an election with a simple "no comment" to the union. The Board pointed out, however, (1) that an employer could not refuse to bargain if he knew, through a personal poll for instance, that a majority of his employees supported the union, and (2) that an employer could not refuse recognition initially because of questions as to the appropriateness of the unit and then later claim, as an afterthought, that he doubted the union's strength.The Union argues here that an employer's right to insist on an election in the absence of unfair labor practices should be more circumscribed, and a union's right to rely on cards correspondingly more expanded, than the Board would have us rule. The Union's contention is that an employer, when confronted with a card-based bargaining demand, can insist on an election only by filing the election petition himself immediately under 9 (c) (1) (B) and not by insisting that the Union file the election petition, whereby the election can be subjected to considerable delay. If the employer does not himself petition for an election, the Union argues, he must recognize the Union regardless of his good or bad faith and regardless of his other unfair labor practices, and should be ordered to bargain if the cards were in fact validly obtained. And if this Court should continue to utilize the good faith doubt rule, the Union contends that at least we should put the burden on the employer to make an affirmative showing of his reasons for entertaining such doubt.Because the employers' refusal to bargain in each of these cases was accompanied by independent unfair labor practices which tend to preclude the holding of a fair election, we need not decide whether a bargaining order is ever appropriate in cases where there is no interference with the election processes.With the Union's arguments aside, the points of difference between the employers and the Board will be considered in the following manner. The validity of the cards under the Act, their intrinsic reliability, and the appropriateness of a bargaining order as a response to violations of 8 (a) (5) as well as 8 (a) (1) and (3) will be discussed in the next section. The nature of an employer's reaction to an organizational campaign, and particularly the Board's conclusion that the employer's statements in No. 585 contained threats of reprisal and thus constituted restraint and coercion in violation of 8 (a) (1) and not protected speech, will be covered in the final section. III.A. The first issue facing us is whether a union can establish a bargaining obligation by means other than a Board election and whether the validity of alternate routes to majority status, such as cards, was affected by the 1947 Taft-Hartley amendments. The most commonly traveled7 route for a union to obtain recognition as the exclusive bargaining representative of an unorganized group of employees is through the Board's election and certification procedures under 9 (c) of the Act (29 U.S.C. 159 (c)); it is also, from the Board's point of view, the preferred route.8 A union is not limited to a Board election, however, for, in addition to 9, the present Act provides in 8 (a) (5) (29 U.S.C. 158 (a) (5)), as did the Wagner Act in 8 (5), that "[i]t shall be an unfair labor practice for an employer ... to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9 (a)." Since 9 (a), in both the Wagner Act and the present Act, refers to the representative as the one "designated or selected" by a majority of the employees without specifying precisely how that representative is to be chosen, it was early recognized that an employer had a duty to bargain whenever the union representative presented "convincing evidence of majority support."9 Almost from the inception of the Act, then, it was recognized that a union did not have to be certified as the winner of a Board election to invoke a bargaining obligation; it could establish majority status by other means under the unfair labor practice provision of 8 (a) (5) - by showing convincing support, for instance, by a union-called strike or strike vote,10 or, as here, by possession of cards signed by a majority of the employees authorizing the union to represent them for collective bargaining purposes.11 We have consistently accepted this interpretation of the Wagner Act and the present Act, particularly as to the use of authorization cards. See, e. g., NLRB v. Bradford Dyeing Assn., ; Franks Bros. Co. v. NLRB, ; United Mine Workers v. Arkansas Flooring Co., . Thus, in United Mine Workers, supra, we noted that a "Board election is not the only method by which an employer may satisfy itself as to the union's majority status," 351 U.S., at 72, n. 8, since 9 (a), "which deals expressly with employee representation, says nothing as to how the employees' representative shall be chosen," 351 U.S., at 71. We therefore pointed out in that case, where the union had obtained signed authorization cards from a majority of the employees, that "[i]n the absence of any bona fide dispute12 as to the existence of the required majority of eligible employees, the employer's denial of recognition of the union would have violated 8 (a) (5) of the Act." 351 U.S., at 69. We see no reason to reject this approach to bargaining obligations now, and we find unpersuasive the Fourth Circuit's view that the 1947 Taft-Hartley amendments, enacted some nine years before our decision in United Mine Workers, supra, require us to disregard that case. Indeed, the 1947 amendments weaken rather than strengthen the position taken by the employers here and the Fourth Circuit below. An early version of the bill in the House would have amended 8 (5) of the Wagner Act to permit the Board to find a refusal-to-bargain violation only where an employer had failed to bargain with a union "currently recognized by the employer or certified as such [through an election] under section 9." Section 8 (a) (5) of H. R. 3020, 80th Cong., 1st Sess. (1947). The proposed change, which would have eliminated the use of cards, was rejected in Conference (H. R. Conf. Rep. No. 510, 80th Cong., 1st Sess., 41 (1947)), however, and we cannot make a similar change in the Act simply because, as the employers assert, Congress did not expressly approve the use of cards in rejecting the House amendment. Nor can we accept the Fourth Circuit's conclusion that the change was wrought when Congress amended 9 (c) to make election the sole basis for certification by eliminating the phrase "any other suitable method to ascertain such representatives,"13 under which the Board had occasionally used cards as a certification basis. A certified union has the benefit of numerous special privileges which are not accorded unions recognized voluntarily or under a bargaining order14 and which, Congress could determine, should not be dispensed unless a union has survived the crucible of a secret ballot election.The employers rely finally on the addition to 9 (c) of subparagraph (B), which allows an employer to petition for an election whenever "one or more individuals or labor organizations have presented to him a claim15 to be recognized as the representative defined in section 9 (a)." That provision was not added, as the employers assert, to give them an absolute right to an election at any time; rather, it was intended, as the legislative history indicates, to allow them, after being asked to bargain, to test out their doubts as to a union's majority in a secret election which they would then presumably not cause to be set aside by illegal antiunion activity.16 We agree with the Board's assertion here that there is no suggestion that Congress intended 9 (c) (1) (B) to relieve any employer of his 8 (a) (5) bargaining obligation where, without good faith, he engaged in unfair labor practices disruptive of the Board's election machinery. And we agree that the policies reflected in 9 (c) (1) (B) fully support the Board's present administration of the Act (see supra, at 591-592); for an employer can insist on a secret ballot election, unless, in the words of the Board, he engages "in contemporaneous unfair labor practices likely to destroy the union's majority and seriously impede the election." Brief for Petitioner, the Board, in No. 573, p. 36.In short, we hold that the 1947 amendments did not restrict an employer's duty to bargain under 8 (a) (5) solely to those unions whose representative status is certified after a Board election.17 B. We next consider the question whether authorization cards are such inherently unreliable indicators of employee desires that, whatever the validity of other alternate routes to representative status, the cards themselves may never be used to determine a union's majority and to support an order to bargain. In this context, the employers urge us to take the step the 1947 amendments and their legislative history indicate Congress did not take, namely, to rule out completely the use of cards in the bargaining arena. Even if we do not unhesitatingly accept the Fourth Circuit's view in the matter, the employers argue, at the very least we should overrule the Cumberland Shoe doctrine (see supra, at 584) and establish stricter controls over the solicitation of the cards by union representatives.18 The objections to the use of cards voiced by the employers and the Fourth Circuit boil down to two contentions:19 (1) that, as contrasted with the election procedure,20 the cards cannot accurately reflect an employee's wishes, either because an employer has not had a chance to present his views and thus a chance to insure that the employee choice was an informed one, or because the choice was the result of group pressures and not individual decision made in the privacy of a voting booth; and (2) that quite apart from the election comparison, the cards are too often obtained through misrepresentation and coercion which compound the cards' inherent inferiority to the election process. Neither contention is persuasive, and each proves too much. The Board itself has recognized, and continues to do so here, that secret elections are generally the most satisfactory - indeed the preferred - method of ascertaining whether a union has majority support.21 The acknowledged superiority of the election process, however, does not mean that cards are thereby rendered totally invalid, for where an employer engages in conduct disruptive of the election process, cards may be the most effective - perhaps the only - way of assuring employee choice. As for misrepresentation, in any specific case of alleged irregularity in the solicitation of the cards, the proper course is to apply the Board's customary standards (to be discussed more fully below) and rule that there was no majority if the standards were not satisfied. It does not follow that because there are some instances of irregularity, the cards can never be used; otherwise, an employer could put off his bargaining obligation indefinitely through continuing interference with elections.That the cards, though admittedly inferior to the election process, can adequately reflect employee sentiment when that process has been impeded, needs no extended discussion, for the employers' contentions cannot withstand close examination. The employers argue that their employees cannot make an informed choice because the card drive will be over before the employer has had a chance to present his side of the unionization issues. Normally, however, the union will inform the employer of its organization drive early in order to subject the employer to the unfair labor practice provisions of the Act; the union must be able to show the employer's awareness of the drive in order to prove that his contemporaneous conduct constituted unfair labor practices on which a bargaining order can be based if the drive is ultimately successful. See, e. g., Hunt Oil Co., 157 N. L. R. B. 282 (1966); Don Swart Trucking Co., 154 N. L. R. B. 1345 (1965). Thus, in all of the cases here but the Charleston campaign in Heck's the employer, whether informed by the union or not, was aware of the union's organizing drive almost at the outset and began its antiunion campaign at that time; and even in the Heck's Charleston case, where the recognition demand came about a week after the solicitation began, the employer was able to deliver a speech before the union obtained a majority. Further, the employers argue that without a secret ballot an employee may, in a card drive, succumb to group pressures or sign simply to get the union "off his back" and then be unable to change his mind as he would be free to do once inside a voting booth. But the same pressures are likely to be equally present in an election, for election cases arise most often with small bargaining units22 where virtually every voter's sentiments can be carefully and individually canvassed. And no voter, of course, can change his mind after casting a ballot in an election even though he may think better of his choice shortly thereafter.The employers' second complaint, that the cards are too often obtained through misrepresentation and coercion, must be rejected also in view of the Board's present rules for controlling card solicitation, which we view as adequate to the task where the cards involved state their purpose clearly and unambiguously on their face. We would be closing our eyes to obvious difficulties, of course, if we did not recognize that there have been abuses, primarily arising out of misrepresentations by union organizers as to whether the effect of signing a card was to designate the union to represent the employee for collective bargaining purposes or merely to authorize it to seek an election to determine that issue. And we would be equally blind if we did not recognize that various courts of appeals and commentators23 have differed significantly as to the effectiveness of the Board's Cumberland Shoe doctrine (see supra, at 584) to cure such abuses.Thus, even where the cards are unambiguous on their face, both the Second Circuit (NLRB v. S. E. Nichols Co., 380 F.2d 438 (1967)) and the Fifth Circuit (Engineers & Fabricators, Inc. v. NLRB, 376 F.2d 482 (1967)) have joined the Fourth Circuit below in rejecting the Board's rule that the cards will be counted unless the solicitor's statements amounted under the circumstances to an assurance that the cards would be used only for an election, or for no other purpose than an election. And even those circuits which have adopted the Board's approach have criticized the Board for tending too often to apply the Cumberland rule too mechanically, declining occasionally to uphold the Board's application of its own rule in a given case. See, e. g., NLRB v. Southbridge Sheet Metal Works, Inc., 380 F.2d 851 (C. A. 1st Cir. 1967); NLRB v. Sandy's Stores, Inc., 398 F.2d 268 (C. A. 1st Cir. 1968); NLRB v. Swan Super Cleaners, Inc., 384 F.2d 609 (C. A. 6th Cir. 1967); NLRB v. Dan Howard Mfg. Co., 390 F.2d 304 (C. A. 7th Cir. 1968); Furr's, Inc. v. NLRB, 381 F.2d 562 (C. A. 10th Cir. 1967); UAW v. NLRBApp. D.C. 196, 392 F.2d 801 (1967). Among those which reject the Cumberland rule, the Fifth Circuit agrees with the Second Circuit (see S. E. Nichols Co., supra), that a card will be vitiated if an employee was left with the impression that he would be able to resolve any lingering doubts and make a final decision in an election, and further requires that the Board probe the subjective intent of each signer, an inquiry expressly avoided by Cumberland. See NLRB v. Southland Paint Co., 394 F.2d 717, 728, 730 (C. A. 5th Cir. 1968); Engineers & Fabricators, Inc. v. NLRB, supra. Where the cards are ambiguous on their face, the Fifth Circuit, joined by the Eighth Circuit (see, e. g., NLRB v. Peterson Bros., 342 F.2d 221 (C. A. 5th Cir. 1965), and Bauer Welding & Metal Fabricators, Inc. v. NLRB, 358 F.2d 766 (C. A. 8th Cir. 1966)), departs still further from the Board rule. And there is a conflict among those courts which otherwise follow the Board as to single-purpose cards (compare NLRB v. Lenz Co., 396 F.2d 905, 908 (C. A. 6th Cir. 1968), with NLRB v. C. J. Glasgow Co., 356 F.2d 476, 478 (C. A. 7th Cir. 1966)). We need make no decision as to the conflicting approaches used with regard to dual-purpose cards, for in each of the five organization campaigns in the four cases before us the cards used were single-purpose cards, stating clearly and unambiguously on their face that the signer designated the union as his representative. And even the view forcefully voiced by the Fourth Circuit below that unambiguous cards as well present too many opportunities for misrepresentation comes before us somewhat weakened in view of the fact that there were no allegations of irregularities in four of those five campaigns (Gissel, the two Heck's campaigns,24 and Sinclair). Only in General Steel did the employer challenge the cards on the basis of misrepresentations. There, the trial examiner, after hearing testimony from over 100 employees and applying the traditional Board approach (see n. 5, supra), concluded that "all of these employees not only intended, but were fully aware, that they were thereby designating the Union as their representative." Thus, the sole question before us, raised in only one of the four cases here, is whether the Cumberland Shoe doctrine is an adequate rule under the Act for assuring employee free choice.In resolving the conflict among the circuits in favor of approving the Board's Cumberland rule, we think it sufficient to point out that employees should be bound by the clear language of what they sign unless that language is deliberately and clearly canceled by a union adherent with words calculated to direct the signer to disregard and forget the language above his signature. There is nothing inconsistent in handing an employee a card that says the signer authorizes the union to represent him and then telling him that the card will probably be used first to get an election. Elections have been, after all, and will continue to be, held in the vast majority of cases; the union will still have to have the signatures of 30%25 of the employees when an employer rejects a bargaining demand and insists that the union seek an election. We cannot agree with the employers here that employees as a rule are too unsophisticated to be bound by what they sign unless expressly told that their act of signing represents something else. In addition to approving the use of cards, of course, Congress has expressly authorized reliance on employee signatures alone in other areas of labor relations, even where criminal sanctions hang in the balance,26 and we should not act hastily in disregarding congressional judgments that employees can be counted on to take responsibility for their acts.We agree, however, with the Board's own warnings in Levi Strauss & Co., 172 N. L. R. B. No. 57, 68 L. R. R. M. 1338, 1341, and n. 7 (1968), that in hearing testimony concerning a card challenge, trial examiners should not neglect their obligation to ensure employee free choice by a too easy mechanical application of the Cumberland rule.27 We also accept the observation that employees are more likely than not, many months after a card drive and in response to questions by company counsel, to give testimony damaging to the union, particularly where company officials have previously threatened reprisals for union activity in violation of 8 (a) (1).28 We therefore reject any rule that requires a probe of an employee's subjective motivations as involving an endless and unreliable inquiry. We nevertheless feel that the trial examiner's findings in General Steel (see n. 5, supra) represent the limits of the Cumberland rule's application. We emphasize that the Board should be careful to guard against an approach any more rigid than that in General Steel. And we reiterate that nothing we say here indicates our approval of the Cumberland Shoe rule when applied to ambiguous, dual-purpose cards.The employers argue as a final reason for rejecting the use of the cards that they are faced with a Hobson's choice29 under current Board rules and will almost inevitably come out the loser. They contend that if they do not make an immediate, personal investigation into possible solicitation irregularities to determine whether in fact the union represents an uncoerced majority, they will have unlawfully refused to bargain for failure to have a good faith doubt of the union's majority; and if they do make such an investigation, their efforts at polling and interrogation will constitute an unfair labor practice in violation of 8 (a) (1) and they will again be ordered to bargain. As we have pointed out, however, an employer is not obligated to accept a card check as proof of majority status, under the Board's current practice, and he is not required to justify his insistence on an election by making his own investigation of employee sentiment and showing affirmative reasons for doubting the majority status. See Aaron Brothers, 158 N. L. R. B. 1077, 1078. If he does make an investigation, the Board's recent cases indicate that reasonable polling in this regard will not always be termed violative of 8 (a) (1) if conducted in accordance with the requirements set out in Struksnes Construction Co., 165 N. L. R. B. No. 102, 65 L. R. R. M. 1385 (1967). And even if an employer's limited interrogation is found violative of the Act, it might not be serious enough to call for a bargaining order. See Aaron Brothers, supra; Hammond & Irving, Inc., 154 N. L. R. B. 1071 (1965). As noted above, the Board has emphasized that not "any employer conduct found violative of Section 8 (a) (1) of the Act, regardless of its nature or gravity, will necessarily support a refusal-to-bargain finding," Aaron Brothers, supra, at 1079. C. Remaining before us is the propriety of a bargaining order as a remedy for a 8 (a) (5) refusal to bargain where an employer has committed independent unfair labor practices which have made the holding of a fair election unlikely or which have in fact undermined a union's majority and caused an election to be set aside. We have long held that the Board is not limited to a cease-and-desist order in such cases, but has the authority to issue a bargaining order without first requiring the union to show that it has been able to maintain its majority status. See NLRB v. Katz, , n. 16 (1962); NLRB v. P. Lorillard Co., . And we have held that the Board has the same authority even where it is clear that the union, which once had possession of cards from a majority of the employees, represents only a minority when the bargaining order is entered. Franks Bros. Co. v. NLRB, . We see no reason now to withdraw this authority from the Board. If the Board could enter only a cease-and-desist order and direct an election or a rerun, it would in effect be rewarding the employer and allowing him "to profit from [his] own wrongful refusal to bargain," Franks Bros., supra, at 704, while at the same time severely curtailing the employees' right freely to determine whether they desire a representative. The employer could continue to delay or disrupt the election processes and put off indefinitely his obligation to bargain;30 and any election held under these circumstances would not be likely to demonstrate the employees' true, undistorted desires.31 The employers argue that the Board has ample remedies, over and above the cease-and-desist order, to control employer misconduct. The Board can, they assert, direct the companies to mail notices to employees, to read notices to employees during plant time and to give the union access to employees during working time at the plant, or it can seek a court injunctive order under 10 (j) (29 U.S.C. 160 (j)) as a last resort. In view of the Board's power, they conclude, the bargaining order is an unnecessarily harsh remedy that needlessly prejudices employees' 7 rights solely for the purpose of punishing or restraining an employer. Such an argument ignores that a bargaining order is designed as much to remedy past election damage32 as it is to deter future misconduct. If an employer has succeeded in undermining a union's strength and destroying the laboratory conditions necessary for a fair election, he may see no need to violate a cease-and-desist order by further unlawful activity. The damage will have been done, and perhaps the only fair way to effectuate employee rights is to re-establish the conditions as they existed before the employer's unlawful campaign.33 There is, after all, nothing permanent in a bargaining order, and if, after the effects of the employer's acts have worn off, the employees clearly desire to disavow the union, they can do so by filing a representation petition. For, as we pointed out long ago, in finding that a bargaining order involved no "injustice to employees who may wish to substitute for the particular union some other ... arrangement," a bargaining relationship "once rightfully established must be permitted to exist and function for a reasonable period in which it can be given a fair chance to succeed," after which the "Board may, ... upon a proper showing, take steps in recognition of changed situations which might make appropriate changed bargaining relationships." Frank Bros., supra, at 705-706.Before considering whether the bargaining orders were appropriately entered in these cases, we should summarize the factors that go into such a determination. Despite our reversal of the Fourth Circuit below in Nos. 573 and 691 on all major issues, the actual area of disagreement between our position here and that of the Fourth Circuit is not large as a practical matter. While refusing to validate the general use of a bargaining order in reliance on cards, the Fourth Circuit nevertheless left open the possibility of imposing a bargaining order, without need of inquiry into majority status on the basis of cards or otherwise, in "exceptional" cases marked by "outrageous" and "pervasive" unfair labor practices. Such an order would be an appropriate remedy for those practices, the court noted, if they are of "such a nature that their coercive effects cannot be eliminated by the application of traditional remedies, with the result that a fair and reliable election cannot be had." NLRB v. Logan Packing Co., 386 F.2d 562, 570 (C. A. 4th Cir. 1967); see also NLRB v. Heck's, Inc., 398 F.2d 337, 338. The Board itself, we should add, has long had a similar policy of issuing a bargaining order, in the absence of a 8 (a) (5) violation or even a bargaining demand, when that was the only available, effective remedy for substantial unfair labor practices. See, e. g., United Steelworkers of America v. NLRBApp. D.C. 215, 376 F.2d 770 (1967); J. C. Penney Co., Inc. v. NLRB, 384 F.2d 479, 485-486 (C. A. 10th Cir. 1967).The only effect of our holding here is to approve the Board's use of the bargaining order in less extraordinary cases marked by less pervasive practices which nonetheless still have the tendency to undermine majority strength and impede the election processes. The Board's authority to issue such an order on a lesser showing of employer misconduct is appropriate, we should reemphasize, where there is also a showing that at one point the union had a majority; in such a case, of course, effectuating ascertainable employee free choice becomes as important a goal as deterring employer misbehavior. In fashioning a remedy in the exercise of its discretion, then, the Board can properly take into consideration the extensiveness of an employer's unfair practices in terms of their past effect on election conditions and the likelihood of their recurrence in the future. If the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order, then such an order should issue (see n. 32, supra).We emphasize that under the Board's remedial power there is still a third category of minor or less extensive unfair labor practices, which, because of their minimal impact on the election machinery, will not sustain a bargaining order. There is, the Board says, no per se rule that the commission of any unfair practice will automatically result in a 8 (a) (5) violation and the issuance of an order to bargain. See Aaron Brothers, supra.With these considerations in mind, we turn to an examination of the orders in these cases. In Sinclair, No. 585, the Board made a finding, left undisturbed by the First Circuit, that the employer's threats of reprisal were so coercive that, even in the absence of a 8 (a) (5) violation, a bargaining order would have been necessary to repair the unlawful effect of those threats.34 The Board therefore did not have to make the determination called for in the intermediate situation above that the risks that a fair rerun election might not be possible were too great to disregard the desires of the employees already expressed through the cards. The employer argues, however, that its communications to its employees were protected by the First Amendment and 8 (c) of the Act (29 U.S.C. 158 (c)), whatever the effect of those communications on the union's majority or the Board's ability to ensure a fair election; it is to that contention that we shall direct our final attention in the next section.In the three cases in Nos. 573 and 691 from the Fourth Circuit, on the other hand, the Board did not make a similar finding that a bargaining order would have been necessary in the absence of an unlawful refusal to bargain. Nor did it make a finding that, even though traditional remedies might be able to ensure a fair election, there was insufficient indication that an election (or a rerun in General Steel) would definitely be a more reliable test of the employees' desires than the card count taken before the unfair labor practices occurred. The employees argue that such findings would not be warranted, and the court below ruled in General Steel that available remedies short of a bargaining order could guarantee a fair election. 398 F.2d 339, 340, n. 3. We think it possible that the requisite findings were implicit in the Board's decisions below to issue bargaining orders (and to set aside the election in General Steel); and we think it clearly inappropriate for the court below to make any contrary finding on its own (see n. 32, supra). Because the Board's current practice at the time required it to phrase its findings in terms of an employer's good or bad faith doubts (see Part II, supra), however, the precise analysis the Board now puts forth was not employed below, and we therefore remand these cases for proper findings. IV. We consider finally petitioner Sinclair's First Amendment challenge to the holding of the Board and the Court of Appeals for the First Circuit. At the outset we note that the question raised here most often arises in the context of a nascent union organizational drive, where employers must be careful in waging their anti-union campaign. As to conduct generally, the above-noted gradations of unfair labor practices, with their varying consequences, create certain hazards for employers when they seek to estimate or resist unionization efforts. But so long as the differences involve conduct easily avoided, such as discharge, surveillance, and coercive interrogation, we do not think that employers can complain that the distinctions are unreasonably difficult to follow. Where an employer's antiunion efforts consist of speech alone, however, the difficulties raised are not so easily resolved. The Board has eliminated some of the problem areas by no longer requiring an employer to show affirmative reasons for insisting on an election and by permitting him to make reasonable inquiries. We do not decide, of course, whether these allowances are mandatory. But we do note that an employer's free speech right to communicate his views to his employees is firmly established and cannot be infringed by a union or the Board. Thus, 8 (c) (29 U.S.C. 158 (c)) merely implements the First Amendment by requiring that the expression of "any views, argument, or opinion" shall not be "evidence of an unfair labor practice," so long as such expression contains "no threat of reprisal or force or promise of benefit" in violation of 8 (a) (1). Section 8 (a) (1), in turn, prohibits interference, restraint or coercion of employees in the exercise of their right to self-organization.Any assessment of the precise scope of employer expression, of course, must be made in the context of its labor relations setting. Thus, an employer's rights cannot outweigh the equal rights of the employees to associate freely, as those rights are embodied in 7 and protected by 8 (a) (1) and the proviso to 8 (c). And any balancing of those rights must take into account the economic dependence of the employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear. Stating these obvious principles is but another way of recognizing that what is basically at stake is the establishment of a nonpermanent, limited relationship between the employer, his economically dependent employee and his union agent, not the election of legislators or the enactment of legislation whereby that relationship is ultimately defined and where the independent voter may be freer to listen more objectively and employers as a class freer to talk. Cf. New York Times Co. v. Sullivan, .Within this framework, we must reject the Company's challenge to the decision below and the findings of the Board on which it was based. The standards used below for evaluating the impact of an employer's statements are not seriously questioned by petitioner and we see no need to tamper with them here. Thus, an employer is free to communicate to his employees any of his general views about unionism or any of his specific views about a particular union, so long as the communications do not contain a "threat of reprisal or force or promise of benefit." He may even make a prediction as to the precise effects he believes unionization will have on his company. In such a case, however, the prediction must be carefully phrased on the basis of objective fact to convey an employer's belief as to demonstrably probable consequences beyond his control or to convey a management decision already arrived at to close the plant in case of unionization. See Textile Workers v. Darlington Mfg. Co., , n. 20 (1965). If there is any implication that an employer may or may not take action solely on his own initiative for reasons unrelated to economic necessities and known only to him, the statement is no longer a reasonable prediction based on available facts but a threat of retaliation based on misrepresentation and coercion, and as such without the protection of the First Amendment. We therefore agree with the court below that "[c]onveyance of the employer's belief, even though sincere, that unionization will or may result in the closing of the plant is not a statement of fact unless, which is most improbable, the eventuality of closing is capable of proof." 397 F.2d 157, 160. As stated elsewhere, an employer is free only to tell "what he reasonably believes will be the likely economic consequences of unionization that are outside his control," and not "threats of economic reprisal to be taken solely on his own volition." NLRB v. River Togs, Inc., 382 F.2d 198, 202 (C. A. 2d Cir. 1967).Equally valid was the finding by the court and the Board that petitioner's statements and communications were not cast as a prediction of "demonstrable `economic consequences,'" 397 F.2d, at 160, but rather as a threat of retaliatory action. The Board found that petitioner's speeches, pamphlets, leaflets, and letters conveyed the following message: that the company was in a precarious financial condition; that the "strike-happy" union would in all likelihood have to obtain its potentially unreasonable demands by striking, the probable result of which would be a plant shutdown, as the past history of labor relations in the area indicated; and that the employees in such a case would have great difficulty finding employment elsewhere. In carrying out its duty to focus on the question: "[W]hat did the speaker intend and the listener understand?" (A. Cox, Law and the National Labor Policy 44 (1960)), the Board could reasonably conclude that the intended and understood import of that message was not to predict that unionization would inevitably cause the plant to close but to threaten to throw employees out of work regardless of the economic realities. In this connection, we need go no further than to point out (1) that petitioner had no support for its basic assumption that the union, which had not yet even presented any demands, would have to strike to be heard, and that it admitted at the hearing that it had no basis for attributing other plant closings in the area to unionism; and (2) that the Board has often found that employees, who are particularly sensitive to rumors of plant closings,35 take such hints as coercive threats rather than honest forecasts.36 Petitioner argues that the line between so-called permitted predictions and proscribed threats is too vague to stand up under traditional First Amendment analysis and that the Board's discretion to curtail free speech rights is correspondingly too uncontrolled. It is true that a reviewing court must recognize the Board's competence in the first instance to judge the impact of utterances made in the context of the employer-employee relationship, see NLRB v. Virginia Electric & Power Co., . But an employer, who has control over that relationship and therefore knows it best, cannot be heard to complain that he is without an adequate guide for his behavior. He can easily make his views known without engaging in "`brinkmanship'" when it becomes all too easy to "overstep and tumble [over] the brink," Wausau Steel Corp. v. NLRB, 377 F.2d 369, 372 (C. A. 7th Cir. 1967). At the least he can avoid coercive speech simply by avoiding conscious overstatements he has reason to believe will mislead his employees.For the foregoing reasons, we affirm the judgment of the Court of Appeals for the First Circuit in No. 585, and we reverse the judgments of the Court of Appeals for the Fourth Circuit in Nos. 573 and 691 insofar as they decline enforcement of the Board's orders to bargain and remand those cases to that court with directions to remand to the Board for further proceedings in conformity with this opinion. It is so ordered. |
8 | Title 42 U.S.C. 1395f(b)(1) requires the Secretary of Health and Human Services to reimburse the lesser of the "customary charges" or the "reasonable cost[s]" of providers of health care services to Medicare beneficiaries, while 1395x(v)(1)(A) empowers the Secretary to issue regulations setting forth the methods to be used in computing reasonable costs, which may include the establishment of appropriate cost limits. Regulations issued pursuant to that authority impose such limits based on a range of factors designed to approximate the cost of providing general routine patient service, but permit various exceptions, exemptions, and adjustments to the limits. After their costs during the relevant period exceeded the corresponding cost limits, petitioner providers filed an administrative appeal challenging the limits' validity. In ruling for petitioners on expedited review, the District Court adopted their interpretation that 1395x(v)(1)(A)(ii) (clause (ii)) - which requires the regulations to "provide for the making of suitable retroactive corrective adjustments where, for a provider of services for any fiscal period, the aggregate reimbursement produced by the methods of determining costs proves to be either inadequate or excessive" - entitled them to reimbursement of all costs they could show to be reasonable, regardless of whether the costs surpassed the amount calculated under the regulations' cost limit schedule. In reversing, the Court of Appeals reasoned that petitioners' request for adjustments would amount to a retroactive change in the methods used to compute costs that would be invalid under Bowen v. Georgetown Univ. Hospital, . Instead, the court adopted the Secretary's interpretation that clause (ii) permits only a year-end book-balancing to reconcile the actual "reasonable" costs under the regulations with the interim, advance payments that the statute requires to be made during the year based on the provider's approximate anticipatory estimates of what its reimbursable costs will be.Held: Clause (ii) does not require the Secretary to afford petitioners an opportunity to establish that they are entitled to reimbursement for costs in excess of the limits stated in the regulations. Pp. 409-420. (a) Clause (ii)'s language does not itself clearly settle the matter at issue, but is ambiguous as to which of the parties' interpretations is correct. Pp. 409-412. (b) While Georgetown, supra, eliminated across-the-board retroactive rulemaking from the scope of clause (ii), it did not foreclose either of the parties' interpretations of the statute. Pp. 412-414. (c) Confronted with an ambiguous statutory provision, this Court generally will defer to a permissible interpretation espoused by the agency entrusted with its implementation, particularly when the agency's construction is contemporaneous. By providing in more than one instance for the year-end book-balancing adjustment that, in the Secretary's view, is mandated by clause (ii), regulations promulgated soon after Medicare's enactment support the Secretary's current approach. On the other hand, those regulations nowhere mentioned a mechanism for implementing the kind of substantive recalculation and deviation from approved methods suggested by petitioners. Moreover, the agency's development - and continued augmentation - of the various exceptions, exemptions, and adjustments to the cost limits is difficult to harmonize with an interpretation of clause (ii) that would give a provider the right to contest the application of any particular and statutorily authorized method to its own circumstances. Rather, it is consistent with a view that the cost limits, by definition, entailed generalizations that would benefit some subscribers while harming others, and with a desire to refine these approximations through the Secretary's creation of exceptions and exemptions. Pp. 414-416. (d) The Court rejects petitioners' argument that any deference to the agency's current position is precluded by the fact that, over the years, the agency has shifted from a book-balancing approach to a retroactive rulemaking approach and then back again. The Secretary responds that such inconsistency is attributable to the lower courts' erroneous interpretations of clause (ii), and points out that the agency returned to its initial position following Georgetown. How much weight should be given to the agency's views in such a situation will depend on the facts of individual cases. Cf. Federal Election Comm'n v. Democratic Senatorial Campaign Comm., . Pp. 416-417. (e) In the circumstances of this case, the Court defers to the Secretary's interpretation of clause (ii). Her restrictive reading of the clause is at least as plausible as petitioners', closely fits the design of the statute as a whole and its objects and policy, and does not exceed her statutory authority, but comports with 1395x(v)(1)(A)'s broad delegation to her. Pp. 417-420. 952 F.2d 1017 (CA8 1991), affirmed. WHITE, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BLACKMUN, O'CONNOR, KENNEDY, and THOMAS, JJ., joined. SOUTER, J., filed a dissenting opinion, in which STEVENS and SCALIA, JJ., joined, post, p. 420.Carel T. Hedlund argued the cause for petitioners. With her on the briefs was Leonard C. Homer.Edward C. DuMont argued the cause for respondent. With him on the brief were Solicitor General Starr, Assistant Attorney General Gerson, Edwin S. Kneedler, Anthony J. Steinmeyer, John P. Schnitker, Susan K. Zagame, Darrel J. Grinstead, and Henry R. Goldberg.* [Footnote *] Joel M. Hamme filed a brief for the American Health Care Association as amicus curiae urging reversal.JUSTICE WHITE delivered the opinion of the Court.As a means of providing health care to the aged and disabled, Congress enacted the Medicare program in 1965. See Title XVIII of the Social Security Act, 79 Stat. 291, as amended, 42 U.S.C. 1395 et seq. Under the program, providers of health care services can enter into agreements with the Secretary of Health and Human Services pursuant to which they are reimbursed for certain costs associated with the treatment of Medicare beneficiaries. To operate the program, the Secretary issued regulations imposing limits on the amount of repayment based on a range of factors designed to approximate the cost of providing general routine patient service. The question before us is whether the Secretary must afford the six petitioning hospitals an opportunity to establish that they are entitled to reimbursement for costs in excess of such limits.IAA complex statutory and regulatory regime governs reimbursement, rough description of which is necessary background to this case. To begin, Congress has required the Secretary to repay the lesser of the "reasonable cost" or "customary charg[e]." See 42 U.S.C. 1395f(b)(1). Rather than attempt to define "reasonable cost" with precision, Congress empowered the Secretary to issue appropriate regulations setting forth the methods to be used in computing such costs. See 1395x(v)(1)(A).1 Prior to 1972, the Secretary's regulations contemplated reimbursement of the entirety of a provider's services to Medicare patients unless its costs were found to be "substantially out of line" with those of similar institutions. See, e.g., 20 CFR 405.451(c) (1967).2 In 1972, apparently fueled by concern that providers were passing on inefficient and excessive expenses, see H.R.Rep. No. 92-231, pp. 82-85 (1971); S.Rep. No. 92-1230, pp. 188-189 (1972), Congress amended the statute to specify that "reasonable costs" meant only those "actually incurred, excluding therefrom any part of incurred cost[s] found to be unnecessary in the efficient delivery of needed health services," 42 U.S.C. 1395x(v)(1)(A), and to authorize the Secretary - as part of the "methods" of determining costs - to establish appropriate cost limits, see ibid.Accordingly, the Secretary promulgated regulations, updated yearly and establishing routine cost limits based on factors such as the type of health care provider (hospital, skilled nursing facility, etc.), type of services it rendered, its geographical location, size, and mix of patients treated. See 20 CFR 405.460 (1975). Hospitals are divided in terms of bed size, and of whether they are urban - i.e., located in a Standard Metropolitan Statistical Area (SMSA) - or rural. As of 1979, the labor-related component of provider costs was to be determined by a wage index keyed to the hospital's location. See, e.g., 46 Fed.Reg. 33637 (1981).The regulations generally provide that reimbursable costs must be within the cost limits. The regulations also allow for adjustments to the limits as applied to a provider's particular claim. A provider classified as a rural hospital can apply for reclassification as an urban one. 42 CFR 413.30(d) (1992). An exemption from the applicable cost limits can be obtained under certain specified situations - e.g., when excess expenses are due to "extraordinary circumstances," or when the provider is the sole hospital in a community, a new provider, or a rural hospital with fewer than 50 beds. 413.30(e). In addition, exceptions are available for, inter alia, "atypical services," extraordinary circumstances beyond the provider's control, unusual labor costs, or essential community services. 413.30(f).3 Two statutory provisions are of central importance to this litigation. First, apparently to protect providers' liquidity, the statute contemplates a system of interim advance payments during the year. Specifically, the Secretary "shall periodically determine the amount which should be paid ... and the provider of services shall be paid, at such time or times as the Secretary believes appropriate (but not less often than monthly) ... the amounts so determined, with necessary adjustments on account of previously made overpayments or underpayments." 42 U.S.C. 1395g(a). These interim payments, by definition, are only approximate ones, based on the provider's preaudit, estimated costs of anticipated services. See 42 CFR 413.64(e), (f) (1992). Second, the regulations were required to "provide for the making of suitable retroactive corrective adjustments where, for a provider of services for any fiscal period, the aggregate reimbursement produced by the methods of determining costs proves to be either inadequate or excessive." 42 U.S.C. 1395x(v)(1)(A)(ii) (clause (ii)).BPetitioners are six Nebraska hospitals certified as "providers" of health care services and classified as "rural" for Medicare purposes. Between 1980 and 1984, their costs exceeded the corresponding cost limits. Pursuant to 42 U.S.C. 1395oo, they filed an appeal to the Provider Reimbursement Review Board (PRRB) in which they challenged the validity of the applicable cost limits on two grounds. First, they claimed that the wage index that was used to calculate reasonable cost of labor did not account for the use of part-time employees. Because petitioners used a greater proportion of part-time employees than the national average, this had the effect of artificially lowering their index values. In support of their claim, they pointed to Congress' decision in 1983 ordering the Secretary to conduct a wage index study to consider the distortion due to part-time employment, Medicare and Medicaid Budget Reconciliation Amendments of 1984, Pub.L. 98-369, 2316(a), 98 Stat. 1081, followed by the Secretary's own revision of the wage index in 1986 which accounted for part-time employees, 51 Fed.Reg. 16772 (1986), and to Congress' directive that the revised index be applied to discharges occurring after May 1, 1986, Medicare and Medicaid Budget Reconciliation Amendments of 1985, Pub.L. 99-272, 9103(a), 100 Stat. 156. Second, they asserted that, under the cost limits, a rural hospital could not show that it incurred the same wage costs as its urban counterparts when, in fact, its location next to urban hospitals forced it to compete for employees by offering equivalent compensation. Petitioners also complained that the cost limits were applied conclusively, rather than presumptively. Invoking clause (ii), which provides for "suitable retroactive corrective adjustments," they argued that they were entitled to reimbursement of all costs they could show to be reasonable, even if they were in excess of the applicable cost limit.4 Because the PRRB believed that it lacked the authority to award the desired relief, it granted petitioners' request for expedited judicial review. See 42 U.S.C. 1395oo(f)(1). Adhering to the Eighth Circuit's decision in St. Paul-Ramsey Medical Center v. Bowen, 816 F.2d 417 (1987), the District Court ruled for petitioners, holding that clause (ii) compelled the Secretary to reimburse all costs shown to be reasonable, regardless of whether they surpassed the amount calculated under the cost limit schedule.5 The United States Court of Appeals for the Eighth Circuit reversed. Good Samaritan Hospital v. Sullivan, 952 F.2d 1017 (1991). The court relied on our decision in Bowen v. Georgetown Univ. Hospital, , in which we held that clause (ii) does not permit retroactive rulemaking. 952 F.2d, at 1023. It reasoned that petitioners' request for adjustments to correct "inequalities in the system ... would amount to a retroactive change in the methods used to compute costs that, after Georgetown, is invalid." Id., at 1024. Instead, the Court of Appeals adopted the Secretary's more modest view of clause (ii) as permitting only a "year-end book balancing of the monthly installments" with the amount determined to be "reasonable" under the applicable regulations. Ibid. Under this approach, clause (ii) establishes the mechanism through which the total of the interim payments extended pursuant to 1395g (which merely purport to be estimates of actual costs) are reconciled with the post-audit amounts determined at year's end to be owed under the methods determining allowable costs.6 We granted certiorari to resolve a conflict among the Courts of Appeals.7 .IIAThe starting point in interpreting a statute is its language, for "[i]f the intent of Congress is clear, that is the end of the matter." Chevron U.S.A. In. v. Natural Resources Defense Council, Inc., . See also NLRB v. Food & Commercial Workers, . Clause (ii) instructs the Secretary to "provide for the making of suitable retroactive corrective adjustments where, for a provider of services for any fiscal period, the aggregate reimbursement produced by the methods of determining costs proves to be either inadequate or excessive." Petitioners argue that the mandate is clear: the methods for determining reasonable costs having been determined pursuant to 1395x(v)(1)(A), clause (ii) must be read to mean that such methods nonetheless might yield "inadequate or excessive" amounts in any particular instance. Where such is the case, it is submitted, the clause mandates a correction that will provide full reimbursement for reasonable costs.In contrast, the Secretary asserts that the "aggregate reimbursement" refers to the sum total of the interim payments made pursuant to 1395g. These payments are, of course, based on the methods chosen by the Secretary to determine reasonable costs, but they are only anticipatory estimates of what the providers' reimbursable costs will be, made before all relevant data are available. At year's end, when the provider's reimbursable costs for services actually provided during that year are on hand, the preaudit "aggregate" of the interim payments can be compared to the post-audit amounts due under the methods. Because the interim payments might have been erroneously calculated, their total might not match amounts owed, and adjustments must be performed to reconcile the two. See 42 CFR 413.64(e), (f) (1992).In our view, the language of clause (ii) does not itself clearly settle the issue before us. The clause is ambiguous in two respects. First, the "aggregate reimbursement produced by the methods of determining costs" could mean either (in petitioners' view) the amount due given proper application of the Secretary's regulations, or (in the Secretary's view) [the total of the interim payments, themselves [derived from application of the methods to rough, incomplete data.]] Second, the clause refers to "inadequate" and "excessive" reimbursements, but without [at any point stating the standard against which inadequacy or excessiveness is to be measured.] Petitioners contend that the implicit referent must be [the reasonable costs as established by the providers, without regard to the methods; the Secretary concludes that it must be the reasonable costs as determined by the agency applying the methods.]Each of the conflicting constructions is plausible, but each has its difficulty. Petitioners contend that, although the interim reimbursements might lead to inaccurate repayments, they are not part of the methods of determining costs to which 1395x(v)(1)(A) refers, but rather are payment methods governed by 1395g. Moreover, the book-balancing role the Secretary would have us assign to clause (ii) arguably is already performed by 1395g, which mandates periodic reimbursement "prior to audit or settlement by the General Accounting Office ... with necessary adjustments on account of previously made overpayments or underpayments." The Secretary counters that, while clause (ii) is directed at year-end adjustments and designed to ensure that providers are reimbursed their reasonable costs, 1395g addresses periodic adjustments to be made during the course of the fiscal year; 1395g thus has its own role to play, and is not surplusage.8 The Secretary also argues that words such as "corrective" and "adjustments" more readily evoke the simple mathematical rectifications that she contemplates than the complex process of revisiting applicable methods and comparing the amounts paid with an ill-defined standard of "reasonable" costs that is called for by petitioners' approach.9 It is true that 1395x(v)(1)(A) defines reasonable cost as "the cost actually incurred, excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services," and petitioners contend that this is the yardstick against which reimbursements must be measured. But the statute proceeds to explain that reasonable cost "shall be determined in accordance with regulations establishing the method or methods to be used." In similar fashion, the 1972 amendments allow for the provision of "limits on the direct or indirect overall incurred costs or incurred costs of specific items or services or groups of items or services to be recognized as reasonable." Ibid. (emphasis added). In short, aside from the implementing agency's determination pursuant to its regulations, as to which Congress granted broad discretion, there is no available standard of reasonableness that could form a ready basis for "correct[ion]" or "adjustmen[t]."10 BBecause both the parties and the Court of Appeals are of the view that Georgetown is controlling, we turn our attention for a moment to our decision in that case. In 1983, a District Court struck down the Secretary's 1981 new cost rule for failure to comply with notice and comment requirements. After following proper procedures, the Secretary promulgated the same rule in 1984, and sought to apply the method retroactively for the time it had been held invalid. 488 U.S., at 206-207. Drawing on the authority of clause (ii), the Secretary thus began to recoup "overpayments" claimed to have been made to hospitals as a result of the District Court's decision. The precise question we faced was whether clause (ii) permitted such retroactive rulemaking. We held that it did not. As we explained, although clause (ii) "permits some form of retroactive action, [it does not] provid[e] authority for the retroactive promulgation of cost-limit rules." Id., at 209. Rather, clause (ii) directs the Secretary to establish a procedure for making case-by-case adjustment to reimbursement payments where the regulations prescribing computation methods do not reach the correct result in individual cases. The structure and language of the statute require the conclusion that the retroactivity provision applies only to case-by-case adjudication, not to rulemaking." Ibid. (footnote omitted) As we further stated" [N]othing in clause (ii) suggests that it permits changes in the methods used to compute costs; rather, it expressly contemplates corrective adjustments to the aggregate amounts or reimbursement produced pursuant to those methods." Id., at 211 (emphasis in original).But while Georgetown eliminated across-the-board, retroactive rulemaking from the scope of clause (ii), it did not foreclose either of the two interpretations urged in this case: case-by-case adjustments based on a comparison of interim payments with "reasonable" costs as determined by the Secretary, and case-by-case adjustments based on a comparison of amounts due under the regulations with "reasonable" costs as demonstrated by the provider. Cf. id., at 209, n. 1.IIIAConfronted with an ambiguous statutory provision, we generally will defer to a permissible interpretation espoused by the agency entrusted with its implementation. See National Railroad Passenger Corporation v. Boston & Maine Corp., ; Department of Treasury, IRS v. FLRA, ; K mart Corp. v. Cartier, Inc., . Of particular relevance is the agency's contemporaneous construction which "we have allowed ... to carry the day against doubts that might exist from a reading of the bare words of a statute." FHA v. The Darlington, Inc., . See also Aluminum Co. of America v. Central Lincoln Peoples' Utility Dist., .In this case, the regulatory framework put in place by the agency in furtherance of the Medicare program supports the book-balancing approach to clause (ii). Nowhere in the regulations was there mention of a mechanism for implementing the kind of substantive recalculation and deviation from approved methods suggested by petitioners. On the other hand, the regulations provided on more than one occasion for the year-end book-balancing adjustment that, in the Secretary's opinion, is mandated by clause (ii). For instance, 20 CFR 405.451(b)(1) (1967) stated:"These regulations also provide for the making of suitable retroactive adjustments after the provider has submitted fiscal and statistical reports. The retroactive adjustment will represent the difference between the amount received by the provider during the year ... and the amount determined in accordance with an accepted method of cost apportionment to be the actual cost of services rendered to beneficiaries during the year."11 Use of the words "suitable retroactive adjustment," borrowed from clause (ii), demonstrates the agency's understanding. As we wrote in Georgetown "[I]t is clear from the language of these provisions that they are intended to implement the Secretary's authority under clause (ii)." 488 U.S., at 211, n. 2 (emphasis added). What is more, "[t]hese are the only regulations that expressly contemplate the making of retroactive corrective adjustments." Id., at 212 (emphasis added). From the outset, then, the agency viewed clause (ii) as a directive for retroactive adjustment of payments for allowable costs, as determined by the methods.In the aftermath of the 1972 amendments adding the cost limit provision, the agency appears to have ascribed the same role to clause (ii), namely, to retroactively correct the difference between interim payments and reasonable costs - only, as a result of the amendments, the adjustment would now be based on the new definition of reasonable costs, which includes the cost limits that, as a general rule, were not to be exceeded. As previously described, however, the regulations promulgated by the Secretary permitted various exceptions, exemptions, and adjustments to the limits. See 20 CFR 405.460(f) (1975); supra, at 406. A provider could obtain a reclassification "on the basis of evidence that [its] classification is at variance with the criteria specified in promulgating limits." 20 CFR 405.460(f)(1) (1975). Exemptions for sole community hospitals have expanded to include new providers, rural hospitals with less than 50 beds; exceptions now extend to atypical services, circumstances such as strike or floods, educational services, essential community services, unusual labor costs. See 42 CFR 413.30 (1992). The agency's development - and continued augmentation - of a list of situations in which the cost limits would be waived is difficult to harmonize with an interpretation of clause (ii) that would give a provider the right to contest the application of any particular and statutorily authorized method to its own circumstances. Rather, it is consistent with a view that the cost limits, by definition, entailed generalizations that would benefit some providers while harming others, and with a desire to refine these approximations through the Secretary's creation of exceptions and exemptions.12 BPetitioners argue that any deference to the agency's current position is unwarranted in light of its shifting views on the matter. It is true that, over the years, the agency has embraced a variety of approaches. Compare, e.g., Regents of the Univ. of California v. Heckler, 771 F.2d 1182 (CA9 1985) (agency contends that clause (ii) permits only bookbalancing); Whitecliff v. United States, 210 Ct.Cl. 53, 536 F.2d 347 (1976) (same), with Georgetown, supra (agency argues that clause (ii) allows retroactive rulemaking). In response, the Secretary attributes such inconsistency to the lower courts' erroneous interpretations of clause (ii). If providers could obtain substantive retroactive adjustments in the event of alleged underpayment, the argument goes, then so, in the face of alleged underpayment, would the agency. However, in the aftermath of Georgetown, she notes that the agency returned to its earlier position.[The Secretary is not estopped from changing a view she believes to have been grounded upon a mistaken legal interpretation.] See Automobile Club of Mich. v. Commissioner, . Indeed, ["[a]n administrative agency is not disqualified from changing its mind; and when it does, the courts still sit in review of the administrative decision, and should not approach the statutory construction issue de novo and without regard to the administrative understanding of the statutes."' NLRB v. Iron Workers, . See also NLRB v. Curtin Matheson Scientific, Inc., ; NLRB v. J. Weingarten, Inc., . On the other hand, the consistency of an agency's position is a factor in assessing the weight that position is due. As we have stated, "An agency interpretation of a relevant provision which conflicts with the agency's earlier interpretation is "entitled to considerably less deference" than a consistently held agency view." INS v. Cardoza-Fonseca, , n. 30 (1987) (quoting Watt v. Alaska, ). How much weight should be given to the agency's views in such a situation, and in particular where its shifts might have resulted from intervening and possibly erroneous judicial decisions and its current position from one of our own rulings, will depend on the facts of individual cases. Cf. Federal Election Comm'n v. Democratic Senatorial Campaign Comm., .CIn the circumstances of this case, [where the agency's interpretation of a statute is at least as plausible as competing ones, there is little, if any, reason not to defer to its construction.] We should be especially reluctant to reject the agency's current view which, as we see it, so closely fits "the design of the statute as a whole and ... its object and policy." Crandon v. United States, .Section 1395 explicitly delegates to the Secretary the authority to develop regulatory [methods for the estimation of reasonable costs.] See 42 U.S.C. 1395x(v)(1)(A).13 To be sure, by virtue of their being generalizations, they necessarily will fail to yield exact numbers - to the detriment of health care providers at times, to their benefit at others.14 Presumably, the methods [could use a more exact mode of calculating] depreciation, cf. Daughters of Miriam Center for the Aged v. Mathews, 590 F.2d 1250 (CA3 1978), or to account for proximity to a college or university because it can distort the wage index, cf. Austin, Texas, Brackenridge Hospital v. Heckler, 753 F.2d 1307, 1316 (CA5 1985), or to a high-crime zone in which heightened, and expensive, security is called for. All of these variables, and many others, affect actual costs; factoring them in the methods undoubtedly would improve their accuracy. But "[w]here, as here, the statute expressly entrusts the Secretary with the responsibility for implementing a provision by regulation, our review is limited to determining whether the regulations promulgated exceeded the Secretary's statutory authority and whether they are arbitrary and capricious." Heckler v. Campbell, (footnote and citations omitted).Besides being textually defensible, the Secretary's restrictive reading of clause (ii) comports with this broad delegation of authority. Congress saw fit to empower the agency to devise methods to estimate actual costs, and the agency has opted for the use of certain generalizations, with additional fine-tuning by way of exceptions, exemptions, reclassifications, and by making allowances for possible variations in costs consistent with efficiency. See, supra, at p. 3, n. 3.15 What the agency forbids is the kind of wide-range, ad hoc reassessments of the accuracy of the chosen methods implicit in petitioners' interpretation. Indeed, and for all practical purposes, petitioners' contention is that the methods chosen by the agency did not take into account sufficient variables, namely the proportion of part-time workers and proximity to urban centers. It is, in all but name, a challenge to the validity of the methods - albeit in an individual case - including the cost limits, the exceptions and the exemptions, and to their adequacy as gauges of reasonable costs. The Secretary has construed the statute to allow such attacks, not via clause (ii), but rather, in keeping with the broad authority with which she is possessed, by way of the arbitrary and capricious provision of the Administrative Procedure Act, 5 U.S.C. 706.16 IVThe issue is not without its difficulties whichever way we turn. Though not the sole permissible one, the agency's interpretation of clause (ii), manifested in regulations promulgated soon after enactment and expressed today, "give[s] reasonable content to the statute's textual ambiguities." Department of Treasury, IRS v. FLRA, 494 U.S., at 933. The judgment of the Court of Appeals isAffirmed. |
2 | Respondent, an American citizen and a former employee of the Central Intelligence Agency, announced a campaign "to expose CIA officers and agents and to take the measures necessary to drive them out of the countries where they are operating." He then engaged in activities abroad that have resulted in identifications of alleged undercover CIA agents and intelligence sources in foreign countries. Because of these activities the Secretary of State revoked respondent's passport, explaining that the revocation was based on a regulation authorizing revocation of a passport where the Secretary determines that an American citizen's activities abroad "are causing or are likely to cause serious damage to the national security or the foreign policy of the United States." The notice also advised respondent of his right to an administrative hearing. Respondent filed suit against the Secretary in Federal District Court, seeking declaratory and injunctive relief and alleging that the regulation invoked by the Secretary has not been authorized by Congress and is impermissibly overbroad; that the passport revocation violated respondent's freedom to travel and his First Amendment right to criticize Government policies; and that the failure to accord him a prerevocation hearing violated his Fifth Amendment right to procedural due process. Granting summary judgment for respondent and ordering the Secretary to restore respondent's passport, the District Court held that the regulation exceeded the Secretary's power under the Passport Act of 1926, which authorizes the Secretary to "grant and issue passports, and cause passports to be granted, issued, and verified in foreign countries by diplomatic representatives of the United States ... under such rules as the President shall designate and prescribe ... ." The Court of Appeals affirmed, holding that the Secretary was required to show that Congress had authorized the regulation either by an express delegation or by implied approval of a "substantial and consistent" administrative practice, and that no such authority had been shown.Held: The 1926 Act authorizes the revocation of respondent's passport pursuant to the policy announced by the challenged regulation, such policy being "sufficiently substantial and consistent" to compel the conclusion that Congress has approved it; and the regulation is constitutional as applied. Pp. 289-310. (a) Although the Act does not in express terms authorize the Secretary to revoke a passport or deny a passport application, neither does it expressly limit those powers. It is beyond dispute that he has the power to deny a passport for reasons not specified in the statutes, and, as respondent concedes, if the Secretary may deny a passport application for a certain reason, he may revoke a passport on the same ground. Pp. 289-291. (b) In light of the broad rulemaking authority granted in the Act, the consistent administrative construction of it must be followed by the courts, absent compelling indications that such construction is wrong. This is especially so in light of the fact that the statute deals with foreign policy and national security, where congressional silence is not to be equated with disapproval. Pp. 291-292. (c) Absent evidence of any legislative intent to repudiate the consistent administrative construction of the prior and similar 1856 Passport Act as preserving the nonstatutory authority of the President and Secretary to withhold passports on national security and foreign policy grounds, it must be concluded that Congress in enacting the 1926 Act adopted such construction. Moreover, the Executive has consistently construed the 1926 Act to work no change in prior practice. Pp. 292-300. (d) A 1978 statute making it unlawful to travel abroad without a passport even in peacetime and a 1978 amendment to the 1926 Act providing that "[u]nless authorized by law," in the absence of war, armed hostilities, or imminent danger to travelers, a passport may not be geographically restricted, are weighty evidence of congressional approval of the Secretary's interpretation of his authority to revoke passports, particularly as set forth in the challenged regulation. Pp. 300-301. (e) An administrative policy or practice may be consistent even though the occasions for invoking it are limited. Although a pattern of actual enforcement is one indicator of Executive policy, it suffices that the Executive has openly asserted the power at issue. Kent v. Dulles, , distinguished. Pp. 301-303. (f) The protection accorded beliefs standing alone is very different from the protection accorded conduct. Here, beliefs and speech are only part of respondent's campaign, which presents a serious danger to American officials abroad and to the national security. Pp. 304-306. (g) In light of the express language in the challenged regulation, which permits revocation of a passport only in cases involving likelihood of "serious damage" to national security or foreign policy, respondent's constitutional claims are without merit. The right to hold a passport is subordinate to national security and foreign policy considerations, and is subject to reasonable governmental regulation. Assuming, arguendo, that First Amendment protections reach beyond our national boundaries, respondent's First Amendment claim is without foundation. See Near v. Minnesota ex rel. Olson, . To the extent the revocation of respondent's passport operates to inhibit him, it is an inhibition of action, rather than of speech. And on the record of this case, the Government is not required to hold a prerevocation hearing, since where there is a substantial likelihood of "serious damage" to national security or foreign policy as the result of a passport holder's activities abroad, the Government may take action to ensure that the holder may not exploit the United States' sponsorship of his travels. The Constitution's due process guarantees call for no more than what was accorded here: a statement of reasons and an opportunity for a prompt postrevocation hearing. Pp. 306-310. App. D.C. 46, 629 F.2d 80, reversed and remanded.BURGER, C. J., delivered the opinion of the court, in which STEWART, WHITE, BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ., joined. BLACKMUN, J., filed a concurring opinion, post, p. 310. BRENNAN, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p. 310.Solicitor General McCree argued the cause for petitioner. With him on the briefs were Assistant Attorney General Daniel, Deputy Solicitor General Geller, Andrew J. Levander, Leonard Schaitman, Michael F. Hertz, and William T. Lake.Melvin L. Wulf argued the cause and filed a brief for respondent.CHIEF JUSTICE BURGER delivered the opinion of the Court.The question presented is whether the President, acting through the Secretary of State, has authority to revoke a passport on the ground that the holder's activities in foreign countries are causing or are likely to cause serious damage to the national security or foreign policy of the United States. IAPhilip Agee, an American citizen, currently resides in West Germany.1 From 1957 to 1968, he was employed by the Central Intelligence Agency. He held key positions in the division of the Agency that is responsible for covert intelligence gathering in foreign countries. In the course of his duties at the Agency, Agee received training in clandestine operations, including the methods used to protect the identities of intelligence employees and sources of the United States overseas. He served in undercover assignments abroad and came to know many Government employees and other persons supplying information to the United States. The relationships of many of these people to our Government are highly confidential; many are still engaged in intelligence gathering.In 1974, Agee called a press conference in London to announce his "campaign to fight the United States CIA wherever it is operating." He declared his intent "to expose CIA officers and agents and to take the measures necessary to drive them out of the countries where they are operating."2 Since 1974, Agee has, by his own assertion, devoted consistent effort to that program, and he has traveled extensively in other countries in order to carry it out. To identify CIA personnel in a particular country, Agee goes to the target country and consults sources in local diplomatic circles whom he knows from his prior service in the United States Government. He recruits collaborators and trains them in clandestine techniques designed to expose the "cover" of CIA employees and sources. Agee and his collaborators have repeatedly and publicly identified individuals and organizations located in foreign countries as undercover CIA agents, employees, or sources.3 The record reveals that the identifications divulge classified information,4 violate Agee's express contract not to make any public statements about Agency matters without prior clearance by the Agency,5 have prejudiced the ability of the United States to obtain intelligence,6 and have been followed by episodes of violence against the persons and organizations identified.7 In December 1979, the Secretary of State revoked Agee's passport and delivered an explanatory notice to Agee in West Germany. The notice states in part: "The Department's action is predicated upon a determination made by the Secretary under the provisions of [22 CFR] Section 51.70 (b) (4) that your activities abroad are causing or are likely to cause serious damage to the national security or the foreign policy of the United States. The reasons for the Secretary's determination are, in summary, as follows: Since the early 1970's it has been your stated intention to conduct a continuous campaign to disrupt the intelligence operations of the United States. In carrying out that campaign you have travelled in various countries (including, among others, Mexico, the United Kingdom, Denmark, Jamaica, Cuba, and Germany), and your activities in those countries have caused serious damage to the national security and foreign policy of the United States. Your stated intention to continue such activities threatens additional damage of the same kind."8 The notice also advised Agee of his right to an administrative hearing9 and offered to hold such a hearing in West Germany on 5 days' notice.Agee at once filed suit against the Secretary.10 He alleged that the regulation invoked by the Secretary, 22 CFR 51.70 (b) (4) (1980), has not been authorized by Congress and is invalid; that the regulation is impermissibly overbroad; that the revocation prior to a hearing violated his Fifth Amendment right to procedural due process; and that the revocation violated a Fifth Amendment liberty interest in a right to travel and a First Amendment right to criticize Government policies. He sought declaratory and injunctive relief, and he moved for summary judgment on the question of the authority to promulgate the regulation and on the constitutional claims. For purposes of that motion, Agee conceded the Secretary's factual averments11 and his claim that Agee's activities were causing or were likely to cause serious damage to the national security or foreign policy of the United States.12 The District Court held that the regulation exceeded the statutory powers of the Secretary under the Passport Act of 1926, 22 U.S.C. 211a,13 granted summary judgment for Agee, and ordered the Secretary to restore his passport. Agee v. Vance, 483 F. Supp. 729 (DC 1980).BA divided panel of the Court of Appeals affirmed. Agee v. MuskieApp. D.C. 46, 629 F.2d 80 (1980). It held that the Secretary was required to show that Congress had authorized the regulation either by an express delegation or by implied approval of a "substantial and consistent" administrative practice, Zemel v. Rusk, . The court found no express statutory authority for the revocation. It perceived only one other case of actual passport revocation under the regulation since it was promulgated and only five other instances prior to that in which passports were actually denied "even arguably for national security or foreign policy reasons." App. D.C., at 51-52, 629 F.2d, at 85-86. The Court of Appeals took note of the Secretary's reliance on "a series of statutes, regulations, proclamations, orders and advisory opinions dating back to 1856," but declined to consider those authorities, reasoning that "the criterion for establishing congressional assent by inaction is the actual imposition of sanctions and not the mere assertion of power." Id., at 52-53, 629 F.2d, at 86-87. The Court of Appeals held that its was not sufficient that "Agee's conduct may be considered by some to border on treason," since "[w]e are bound by the law as we find it." Id., at 53, 629 F.2d, at 87. The court also regarded it as material that most of the Secretary's authorities dealt with powers of the Executive Branch "during time of war or national emergency"14 or with respect to persons "engaged in criminal conduct."15 Id., at 52, 629 F.2d, at 86.We granted certiorari sub nom. Muskie v. Agee, , and stayed the judgment of the Court of Appeals until our disposition of the case on the grant of certiorari.16 IIThe principal question before us is whether the statute authorizes the action of the Secretary pursuant to the policy announced by the challenged regulation.17 A1Although the historical background that we develop later is important, we begin with the language of the statute. See, e. g., Universities Research Assn. v. Coutu, . 771 (1981); Zemel, supra, at 7-8. The Passport Act of 1926 provides in pertinent part: "The Secretary of State may grant and issue passports, and cause passports to be granted, issued, and verified in foreign countries by diplomatic representatives of the United States ... under such rules as the President shall designated and prescribe for and on behalf of the United States, and no other person shall grant, issue, or verify such passports." 22 U.S.C. 211a (1976 ed., Supp. IV). This language is unchanged since its original enactment in 1926.18 The Passport Act does not in so many words confer upon the Secretary a power to revoke a passport. Nor, for that matter, does it expressly authorize denials of passport applications.19 Neither, however, does any statute expressly limit those powers. It is beyond dispute that the Secretary has the power to deny a passport for reasons not specified in the statutes. For example, in Kent v. Dulles, , the Court recognized congressional acquiescence in Executive policies of refusing passports to applicants "participating in illegal conduct, trying to escape the toils of the law, promoting passport frauds, or otherwise engaging in conduct which would violate the laws of the United States." Id., at 127. In Zemel, the Court held that "the weightiest considerations of national security" authorized the Secretary to restrict travel to Cuba at the time of the Cuban missile crisis. 381 U.S., at 16. Agee concedes that if the Secretary may deny a passport application for a certain reason, he may revoke a passport on the same ground.20 2Particularly in light of the "broad rule-making authority granted in the 1926. Act," Zemel, 381 U.S., at 12, a consistent administrative construction of that statute must be followed by the courts "`unless there are compelling indications that it is wrong.'" E. I. du Pont de Nemours & Co. v. Collins, , quoting Red Lion Broadcasting Co. v. FCC, ; see Zemel, supra, at 11. This is especially so in the areas of foreign policy and national security, where congressional silence is not to be equated with congressional disapproval.21 In United States v. Curtiss-Wright Export Corp., , the volatile nature of problems confronting the Executive in foreign policy and national defense was underscored:"In this vast external realm, with its important, complicated, delicate and manifold problems, the President alone has the power to speak or listen as a representative of the nation... . As Marshall said in his great argument of March 7, 1800, in the House of Representatives, `The President is the sole organ of the nation in its external relations, and its sole representative with foreign nations.'" Id., at 319. Applying these considerations to statutory construction, the Zemel Court observed:"[B]ecause of the changeable and explosive nature of contemporary international relations, and the fact that the Executive is immediately privy to information which cannot be swiftly presented to, evaluated by, and acted upon by the legislature, Congress - in giving the Executive authority over matters of foreign affairs - must of necessity paint with a brush broader than that it customarily wields in domestic areas." 381 U.S., at 17 (emphasis supplied). Matters intimately related to foreign policy and national security are rarely proper subjects for judicial intervention. In Harisiades v. Shaughnessy, , the Court observed that matters relating "to the conduct of foreign relations ... are so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference." Id., at 589; accord, Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp., .B1A passport is, in a sense, a letter of introduction in which the issuing sovereign vouches for the bearer and requests other sovereigns to aid the bearer. 3 G. Hackworth, Digest of International Law 268, p. 499 (1942). Very early, the Court observed:"[A passport] is a document, which, from its nature and object, is addressed to foreign powers; purporting only to be a request, that the bearer of it may pass safely and freely; and is to be considered rather in the character of a political document, by which the bearer is recognised, in foreign countries, as an American citizen; and which, by usage and the law of nations, is received as evidence of the fact." Urtetiqui v. D'Arcy, 9 Pet. 692, 698 (1835). With the enactment of travel control legislation making a passport generally a requirement for travel abroad,22 a passport took on certain added characteristics. Most important for present purposes, the only means by which an American can lawfully leave the country or return to it - absent a Presidentially granted exception - is with a passport. See 8 U.S.C. 1185 (b) (1976 ed., Supp. IV). As a travel control document, a passport is both proof of identity and proof of allegiance to the United States. Even under a travel control statute, however, a passport remains in a sense a document by which the Government vouches for the bearer and for his conduct.The history of passport controls since the earliest days of the Republic shows congressional recognition of Executive authority to withhold passports on the basis of substantial reasons of national security and foreign policy. Prior to 1856, when there was no statute on the subject, the common perception was that the issuance of a passport was committed to the sole discretion of the Executive and that the Executive would exercise this power in the interests of the national security and foreign policy of the United States.23 This derived from the generally accepted view that foreign policy was the province and responsibility of the Executive.24 From the outset, Congress endorsed not only the underlying premise of Executive authority in the areas of foreign policy and national security, but also its specific application to the subject of passports. Early Congresses enacted statutes expressly recognizing the Executive authority with respect to passports.25 The first Passport Act, adopted in 1856, provided that the Secretary of State "shall be authorized to grant and issue passports ... under such rules as the President shall designate and prescribe for and on behalf of the United States ... ." 23, 11 Stat. 60.26 This broad and permissive language worked no change in the power of the Executive to issue passports; nor was it intended to do so. The Act was passed to centralize passport authority in the Federal Government27 and specifically in the Secretary of State.28 In all other respects, the 1856 Act"merely confirmed an authority already possessed and exercised by the Secretary of State. This authority was ancillary to his broader authority to protect American citizens in foreign countries and was necessarily incident to his general authority to conduct the foreign affairs of the United States under the Chief Executive." Senate Committee on Government Operations, Reorganization of the Passport Functions of the Department of State, 86th Cong., 2d Sess., 13 (Comm. Print 1960). The President and the Secretary of State consistently construed the 1856 Act to preserve their authority to withhold passports on national security and foreign policy grounds. Thus, as an emergency measure in 1861, the Secretary issued orders prohibiting persons from going abroad or entering the country without passports; denying passports to citizens who were subject to military service unless they were bonded; and absolutely denying passports to persons "on errands hostile and injurious to the peace of the country and dangerous to the Union." 3 J. Moore, A Digest of International Law 920 (1906); U.S. Dept. of State, The American Passport 49-54 (1898).29 An 1869 opinion of Attorney General Hoar held that the granting of a passport was not "obligatory in any case." 13 Op. Atty. Gen. 89, 92. This was elaborated in 1901 in an opinion of Attorney General Knox, in which he stated: "Substantial reasons exist for the use by Congress of the word `may' in connection with authority to issue passports. Circumstances are conceivable which would make it most inexpedient for the public interests for this country to grant a passport to a citizen of the United States." 23 Op. Atty. Gen. 509, 511. In 1903, President Theodore Roosevelt promulgated a rule providing that "[t]he Secretary of State has the right in his discretion to refuse to issue a passport, and will exercise this right towards anyone who, he has reason to believe, desires a passport to further an unlawful or improper purpose."30 Subsequent Executive Orders issued between 1907 and 1917 cast no doubt on this position.31 This policy was enforced in peacetime years to deny passports to citizens whose conduct abroad was "likely to embarrass the United States"32 or who were "disturbing, or endeavoring to disturb, the relations of this country with the representatives of foreign countries."33 By enactment of the first travel control statute in 1918,34 Congress made clear its expectation that the Executive would curtail or prevent international travel by American citizens if it was contrary to the national security. The legislative history reveals that the principal reason for the 1918 statute was fear that "renegade Americans" would travel abroad and engage in "transference of important military information" to persons not entitled to it.35 The 1918 statute left the power to make exceptions exclusively in the hands of the Executive, without articulating specific standards. Unless the Secretary had power to apply national security criteria in passport decisions, the purpose of the Travel Control Act would plainly have been frustrated.Against this background, and while the 1918 provisions were still in effect, Congress enacted the Passport Act of 1926. The legislative history of the statute is sparse. However, Congress used language which is identical in pertinent part to that in the 1856 statute (supra, at 294), as amended,36 and the legislative history clearly shows congressional awareness of the Executive policy.37 There is no evidence of any intent to repudiate the longstanding administrative construction.38 Absent such evidence, we conclude that Congress, in 1926, adopted the longstanding administrative construction of the 1856 statute. See Lorillard v. Pons, .The Executive construed the 1926 Act to work no change in prior practice and specifically interpreted it to authorize denial of a passport on grounds of national security or foreign policy. Indeed, by an unbroken line of Executive Orders,39 regulations,40 instructions to consular officials.41 and notices to passport holders,42 the President and the Department of State left no doubt that likelihood of damage to national security or foreign policy of the United States was the single most important criterion in passport decisions. The regulations are instructive. The 1952 version authorized denial of passports to citizens engaged in activities which would violate laws designed to protect the security of the United States "[i]n order to promote the national interest by assuring that the conduct of foreign relations shall be free from unlawful interference." 17 Fed. Reg. 8013 (1952). The 1956 amendment to this regulation provided that a passport should be denied to any person whose"activities abroad would: (a) Violate the laws of the United States; (b) be prejudicial to the orderly conduct of foreign relations; or (c) otherwise be prejudicial to the interests of the United States." 22 CFR 51.136 (1958). This regulation remained in effect continuously until 1966.This history of administrative construction was repeatedly communicated to Congress, not only by routine promulgation of Executive Orders and regulations, but also by specific presentations, including 1957 and 1966 reports by the Department of State explaining the 1956 regulation43 and a 1960 Senate Staff Report which concluded that "the authority to issue or withhold passports has, by precedent and law, been vested in the Secretary of State as a part of his responsibility to protect American citizens traveling abroad, and what he considered to be the best interests of the Nation."44 In 1966, the Secretary of State45 promulgated the regulations at issue in this case. 22 CFR 51.70 (b)(4), 51.71 (a) (1980). Closely paralleling the 1956 regulation, these provisions authorize revocation of a passport where "[t]he Secretary determines that the national's activities abroad are causing or are likely to cause serious damage to the national security or the foreign policy of the United States."46 2Zemel recognized that congressional acquiescence may sometimes be found from nothing more than silence in the face of an administrative policy. 381 U.S., at 11; see Udall v. Tallman, ; Norwegian Nitrogen Co. v. United States, ; Costanzo v. Tillinghast, . Here, however, the inference of congressional approval "is supported by more than mere congressional inaction." Zemel, 381 U.S., at 11-12. Twelve years after the promulgation of the regulations at issue and 22 years after promulgation of the similar 1956 regulation, Congress enacted the statute making it unlawful to travel abroad without a passport even in peacetime. 8 U.S.C. 1185 (b) (1976 ed., Supp. IV).47 Simultaneously, Congress amended the Passport Act of 1926 to provide that "[u]nless authorized by law," in the absence of war, armed hostilities, or imminent danger to travelers, a passport may not be geographically restricted.48 Title 8 U.S.C. 1185 (b) (1976 ed., Supp. IV) must be read in pari materia with the Passport Act. Zemel, supra, at 11-12; see 2A C. Sands, Sutherland on Statutory Construction 51.03, p. 299 (4th ed. 1973); cf. Erlenbaugh v. United States, .49 The 1978 amendments are weighty evidence of congressional approval of the Secretary's interpretation, particularly that in the 1966 regulations. Despite the longstanding and officially promulgated view that the Executive had the power to withhold passports for reasons of national security and foreign policy, Congress in 1978, "though it once again enacted legislation relating to passports, left completely untouched the broad rule-making authority granted in the earlier Act." Zemel, supra, at 12; accord, NLRB v. Bell Aerospace Co., .50 3Agee argues that the only way the Executive can establish implicit congressional approval is by proof of longstanding and consistent enforcement of the claimed power: that is, by showing that many passports were revoked on national security and foreign policy grounds. For this proposition, he relies on Kent, 357 U.S., at 127-128.51 A necessary premise for Agee's contention is that there were frequent occasions for revocation and that the claimed Executive power was exercised in only a few of those cases. However, if there were no occasions - or few - to call the Secretary's authority into play, the absence of frequent instances of enforcement is wholly irrelevant. The exercise of a power emerges only in relation to a factual situation, and the continued validity of the power is not diluted simply because there is no need to use it.The history is clear that there have been few situations involving substantial likelihood of serious damage to the national security or foreign policy of the United States as a result of a passport holder's activities abroad, and that in the cases which have arisen, the Secretary has consistently exercised his power to withhold passports. Perhaps the most notable example of enforcement of the administrative policy, which surely could not have escaped the attention of Congress, was the 1948 denial of a passport to a Member of Congress who sought to go abroad to support a movement in Greece to overthrow the existing government.52 Another example was the 1954 revocation of a passport held by a man who was supplying arms to groups abroad whose interests were contrary to positions taken by the United States.53 In 1970, the Secretary revoked passports of two persons who sought to travel to the site of an international airplane hijacking.54 See also Note, 61 Yale L. J. 170, 174-176 (1952). The Secretary has construed and applied his regulations consistently, and it would be anomalous to fault the Government because there were so few occasions to exercise the announced policy and practice. Although a pattern of actual enforcement is one indicator of Executive policy, it suffices that the Executive has "openly asserted" the power at issue. Zemel, 381 U.S., at 9; see id., at 10.Kent is not to the contrary. There, it was shown that the claimed governmental policy had not been enforced consistently. The Court stressed that "as respects Communists these are scattered rulings and not consistently of one pattern." 357 U.S., at 128. In other words, the Executive had allowed passports to some Communists, but sought to deny one to Kent. The Court had serious doubts as to whether there was in reality any definite policy in which Congress could have acquiesced. Here, by contrast, there is no basis for a claim that the Executive has failed to enforce the policy against others engaged in conduct likely to cause serious damage to our national security or foreign policy. It would turn Kent on its head to say that simply because we have had only a few situations involving conduct such as that in this record, the Executive lacks the authority to deal with the problem when it is encountered.55 Agee also contends that the statements of Executive policy are entitled to diminished weight because many of them concern the powers of the Executive in wartime. However, the statute provides no support for this argument. History eloquently attests that grave problems of national security and foreign policy are by no means limited to times of formally declared war.56 4Relying on the statement of the Court in Kent that "illegal conduct" and problems of allegiance were, "so far as relevant here, ... the only [grounds] which it could fairly be argued were adopted by Congress in light of prior administrative practice," id., at 127-128, Agee argues that this enumeration was exclusive and is controlling here. This is not correct.The Kent Court had no occasion to consider whether the Executive had the power to revoke the passport of an individual whose conduct is damaging the national security and foreign policy of the United States. Kent involved denials of passports solely on the basis of political beliefs entitled to First Amendment protection. See Aptheker v. Secretary of State, . Although finding it unnecessary to reach the merits of that constitutional problem, the Kent Court emphasized the fact that "[w]e deal with beliefs, with associations, with ideological matters." 357 U.S., at 130 (emphasis supplied). In particular, the Court noted that the applicants were"being denied their freedom of movement solely because of their refusal to be subjected to inquiry into their beliefs and associations. They do not seek to escape the law nor to violate it. They may or may not be Communists. But assuming they are, the only law which Congress has passed expressly curtailing the movement of Communists across our borders has not yet become effective. It would therefore be strange to infer that pending the effectiveness of that law, the Secretary has been silently granted by Congress the larger, the more pervasive power to curtail in his discretion the free movement of citizens in order to satisfy himself about their beliefs or associations." Ibid. (footnote omitted). The protection accorded beliefs standing alone is very different from the protection accorded conduct. Thus, in Aptheker v. Secretary of State, supra, the Court held that a statute which, like the policy at issue in Kent, denied passports to Communists solely on the basis of political beliefs unconstitutionally "establishes an irrebuttable presumption that individuals who are members of the specified organizations will, if given passports, engage in activities inimical to the security of the United States." 378 U.S., at 511. The Court recognized that the legitimacy of the objective of safeguarding our national security is "obvious and unarguable." Id., at 509. The Court explained that the statute at issue was not the least restrictive alternative available: "The prohibition against travel is supported only by a tenuous relationship between the bare fact of organizational membership and the activity Congress sought to proscribe." Id., at 514.Beliefs and speech are only part of Agee's "campaign to fight the United States CIA." In that sense, this case contrasts markedly with the facts in Kent and Aptheker.57 No presumptions, rebuttable or otherwise, are involved, for Agee's conduct in foreign countries presents a serious danger to American officials abroad and serious danger to the national security.58 We hold that the policy announced in the challenged regulations is "sufficiently substantial and consistent" to compel the conclusion that Congress has approved it. See Zemel, 381 U.S., at 12.IIIAgee also attacks the Secretary's action on three constitutional grounds: first, that the revocation of his passport impermissibly burdens his freedom to travel; second, that the action was intended to penalize his exercise of free speech and deter his criticism of Government policies and practices; and third, that failure to accord him a prerevocation hearing violated his Fifth Amendment right to procedural due process.In light of the express language of the passport regulations, which permits their application only in cases involving likelihood of "serious damage" to national security or foreign policy, these claims are without merit.Revocation of a passport undeniably curtails travel, but the freedom to travel abroad with a "letter of introduction" in the form of a passport issued by the sovereign is subordinate to national security and foreign policy considerations; as such, it is subject to reasonable governmental regulation. The Court has made it plain that the freedom to travel outside the United States must be distinguished from the right to travel within the United States. This was underscored in Califano v. Aznavorian, : "Aznavorian urges that the freedom of international travel is basically equivalent to the constitutional right to interstate travel, recognized by this Court for over 100 years. Edwards v. California, ; Twining v. New Jersey, ; Williams v. Fears, ; Crandall v. Nevada, 6 Wall. 35, 43-44; Passenger Cases, 7 How. 283, 492 (Taney, C. J., dissenting). But this Court has often pointed out the crucial difference between the freedom to travel internationally and the right of interstate travel. "`The constitutional right of interstate travel is virtually unqualified, United States v. Guest, ; Griffin v. Breckenridge, . By contrast the "right" of international travel has been considered to be no more than an aspect of the "liberty" protected by the Due Process Clause of the Fifth Amendment. As such this "right," the Court has held, can be regulated within the bounds of due process.' (Citations omitted.) Califano v. Torres, n. 6." It is "obvious and unarguable" that no governmental interest is more compelling than the security of the Nation. Aptheker v. Secretary of State, 378 U.S., at 509; accord Cole v. Young, ; see Zemel, supra, at 13-17. Protection of the foreign policy of the United States is a governmental interest of great importance, since foreign policy and national security considerations cannot neatly be compartmentalized.Measures to protect the secrecy of our Government's foreign intelligence operations plainly serve these interests. Thus, in Snepp v. United States, , n. 3 (1980), we held that "[t]he Government has a compelling interest in protecting both the secrecy of information important to our national security and the appearance of confidentiality so essential to the effective operation of our foreign intelligence service." See also id., at 511-513. The Court in United States v. Curtiss-Wright Export Corp. properly emphasized:"[The President] has his confidential sources of information. He has his agents in the form of diplomatic, consular and other officials. Secrecy in respect of information gathered by them may be highly necessary, and the premature disclosure of it productive of harmful results." 299 U.S., at 320. Accord, Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S., at 111; The Federalist No. 64, pp. 392-393 (Mentor ed. 1961).Not only has Agee jeopardized the security of the United States, but he has also endangered the interests of countries other than the United States59 - thereby creating serious problems for American foreign relations and foreign policy. Restricting Agee's foreign travel, although perhaps not certain to prevent all of Agee's harmful activities, is the only avenue open to the Government to limit these activities.60 Assuming, arguendo, that First Amendment protections reach beyond our national boundaries, Agee's First Amendment claim has no foundation. The revocation of Agee's passport rests in part on the content of his speech: specifically, his repeated disclosures of intelligence operations and names of intelligence personnel. Long ago, however, this Court recognized that "[n]o one would question but that a government might prevent actual obstruction to its recruiting service or the publication of the sailing dates of transports or the number and location of troops." Near v. Minnesota ex rel. Olson, , citing Z. Chafee, Freedom of Speech 10 (1920). Agee's disclosures, among other things, have the declared purpose of obstructing intelligence operations and the recruiting of intelligence personnel. They are clearly not protected by the Constitution. The mere fact that Agee is also engaged in criticism of the Government does not render his conduct beyond the reach of the law.To the extent the revocation of his passport operates to inhibit Agee, "it is an inhibition of action," rather than of speech. Zemel, 381 U.S., at 16-17 (emphasis supplied). Agee is as free to criticize the United States Government as he was when he held a passport - always subject, of course, to express limits on certain rights by virtue of his contract with the Government.61 See Snepp v. United States, supra.On this record, the Government is not required to hold a prerevocation hearing. In Cole v. Young, supra, we held that federal employees who hold "sensitive" positions "where they could bring about any discernible adverse effects on the Nation's security" may be suspended without a presuspension hearing. 351 U.S., at 546-547. For the same reasons, when there is a substantial likelihood of "serious damage" to national security or foreign policy as a result of a passport holder's activities in foreign countries, the Government may take action to ensure that the holder may not exploit the sponsorship of his travels by the United States. "[W]hile the Constitution protects against invasions of individual rights, it is not a suicide pact." Kennedy v. Mendoza-Martinez, . 160 (1963). The Constitution's due process guarantees call for no more than what has been accorded here: a statement of reasons and an opportunity for a prompt postrevocation hearing.62 We reverse the judgment of the Court of Appeals and remand for further proceedings consistent with this opinion. Reversed and remanded. |
11 | Inventory accounting for tax purposes is governed by 446 and 471 of the Internal Revenue Code of 1954. Section 446 provides that taxable income is to be computed under the taxpayer's normal method of accounting unless that method "does not clearly reflect income." in which event taxable income is to be computed "under such method as, in the opinion of the [Commissioner], does clearly reflect income." Section 471 provides that "[w]henever in the opinion of the [Commissioner] the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventory shall be taken by such taxpayer on such basis as the [Commissioner] may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting income." The implementing Regulations require a taxpayer to value inventory for tax purposes at cost unless "market" (defined as replacement cost) is lower. The Regulations specify two situations in which inventory may be valued below "market" as so defined: (1) where the taxpayer in the normal course of business has actually offered merchandise for sale at prices lower than replacement cost; and (2) where the merchandise is defective. In 1964, petitioner, a tool manufacturer, wrote down in accord with "generally accepted accounting principles" what it regarded as "excess" inventory to its own estimate of the "net realizable value" (generally scrap value) of the "excess" goods (mostly spare parts), but continued to hold the goods for sale at their original prices. It offset the write-down against 1964 sales and thereby produced a net operating loss for that year. The Commissioner disallowed the offset, maintaining that the write-down did not reflect income clearly for tax purposes. Deductions for bad debts are covered by 166. Section 166 (c) provides that an accrual-basis taxpayer "shall be allowed (in the discretion of the [Commissioner]) a deduction for a reasonable addition to a reserve for bad debts." In 1965, petitioner added to its reserve and asserted as a deduction under 166 (c) a sum that presupposed a substantially higher charge-off rate for bad debts than it had experienced in immediately preceding years. The Commissioner ruled that the addition was excessive and determined, pursuant to the "six-year moving average" formula derived from Black Motor Co. v. Commissioner, 41 B. T. A. 300, what he regarded as a lesser but "reasonable" amount to be added to petitioner's reserve. On petitioner's petition for redetermination, the Tax Court upheld the Commissioner's exercise of discretion with respect to both the inventory write-down and the bad-debt deduction, and the Court of Appeals affirmed. Held: 1. The Commissioner did not abuse his discretion in determining that the write-down of "excess" inventory failed to reflect petitioner's 1964 income clearly, since the write-down was plainly inconsistent with the governing Regulations. Pp. 531-546. (a) Although conceding that "an active market prevailed" on the inventory date, petitioner made no effort to determine the replacement cost of its "excess" inventory and thus failed to ascertain "market" in accord with the general rule of the Regulations. Petitioner, however, failed to bring itself within either of the authorized exceptions for valuing inventory below "market." Whereas the Regulations demand concrete evidence of reduced market value, petitioner provided no objective evidence whatever that its "excess" inventory had the value management ascribed to it. Pp. 535-538. (b) There is no presumption that an inventory practice conformable to "generally accepted accounting principles" is valid for tax purposes. Such a presumption is insupportable in light of the statute, this Court's past decisions, and the differing objectives of tax and financial accounting. Pp. 538-544. (c) While petitioner argues that it should not be forced to defer a tax benefit for inventory currently deemed unsalable until future years, when the "excess" items are actually disposed of, petitioner's "dilemma" is nothing more than the choice every taxpayer with a paper loss must face. Pp. 545-546. 2. The Commissioner did not abuse his discretion in recomputing a "reasonable" addition to petitioner's bad-debt reserve according to the Black Motor formula. Because petitioner did not show why its debt collections in 1965 would be less likely than in prior years, it failed to carry its "heavy burden" of showing that application of the Black Motor formula would have been arbitrary. Pp. 546-550. 563 F.2d 861, affirmed.BLACKMUN, J., delivered the opinion for a unanimous Court.Mark H. Berens argued the cause for petitioner. With him on the briefs were Lee N. Abrams and Douglas A. Poe. Stuart A. Smith argued the cause for respondent. With him on the brief were Solicitor General McCree, Assistant Attorney General Ferguson, and Ann Belanger Durney.* [Footnote *] Briefs of amici curiae urging reversal were filed by Donald E. Egan, Francis X. Grossi, Jr., Robert S. Connors, Laurence B. Kraus, and Stanley T. Kaleczyc, Jr., for the Chamber of Commerce of the United States; and by Crane C. Hauser, Arthur I. Gould, Richard D. Godown, and John Lucas for the National Association of Manufacturers of the United States.Eric Neisser filed a brief for the Taxation With Representation Fund et al. as amici curiae urging affirmance.MR. JUSTICE BLACKMUN delivered the opinion of the Court.This case, as it comes to us, presents two federal income tax issues. One has to do with inventory accounting. The other relates to a bad-debt reserve.The Inventory Issue. In 1964, petitioner Thor Power Tool Co. (hereinafter sometimes referred to as the taxpayer), in accord with "generally accepted accounting principles," wrote down what it regarded as excess inventory to Thor's own estimate of the net realizable value of the excess goods. Despite this write-down, Thor continued to hold the goods for sale at original prices. It offset the write-down against 1964 sales and thereby produced a net operating loss for that year; it then asserted that loss as a carryback to 1963 under 172 of the Internal Revenue Code of 1954, 26 U.S.C. 172. The Commissioner of Internal Revenue, maintaining that the write-down did not serve to reflect income clearly for tax purposes, disallowed the offset and the carryback.The Bad-Debt Issue. In 1965, the taxpayer added to its reserve for bad debts and asserted as a deduction, under 166 (c) of the Code, 26 U.S.C. 166 (c), a sum that presupposed a substantially higher charge-off rate than Thor had experienced in immediately preceding years. The Commissioner ruled that the addition was excessive, and determined, pursuant to a formula based on the taxpayer's past experience, what he regarded as a lesser but "reasonable" amount to be added to Thor's reserve.On the taxpayer's petition for redetermination, the Tax Court, in an unreviewed decision by Judge Goffe, upheld the Commissioner's exercise of discretion in both respects. 64 T. C. 154 (1975). As a consequence, and also because of other adjustments not at issue here, the court redetermined, App. 264, the following deficiencies in Thor's federal income tax: calendar year 1963 - $494,055.99 calendar year 1965 - $59,287.48 The United States Court of Appeals for the Seventh Circuit affirmed. 563 F.2d 861 (1977). We granted certiorari, , to consider these important and recurring income tax accounting issues.I The Inventory IssueATaxpayer is a Delaware corporation with principal place of business in Illinois. It manufactures hand-held power tools, parts and accessories, and rubber products. At its various plants and service branches, Thor maintains inventories of raw materials, work-in-process, finished parts and accessories, and completed tools. At all times relevant, Thor has used, both for financial accounting and for income tax purposes, the "lower of cost or market" method of valuing inventories. App. 23-24. See Treas. Reg. 1.471-2 (c), 26 CFR 1.471-2 (c) (1978).Thor's tools typically contain from 50 to 200 parts, each of which taxpayer stocks to meet demand for replacements. Because of the difficulty, at the time of manufacture, of predicting the future demand for various parts, taxpayer produced liberal quantities of each part to avoid subsequent production runs. Additional runs entail costly retooling and result in delays in filling orders. App. 54-55.In 1960, Thor instituted a procedure for writing down the inventory value of replacement parts and accessories for tool models it no longer produced. It created an inventory contra-account and credited that account with 10% of each part's cost for each year since production of the parent model had ceased. 64 T. C., at 156-157; App. 24. The effect of the procedure was to amortize the cost of these parts over a 10-year period. For the first nine months of 1964, this produced a write-down of $22,090. 64 T. C., at 157; App. 24.In late 1964, new management took control and promptly concluded that Thor's inventory in general was overvalued.1 After "a physical inventory taken at all locations" of the tool and rubber divisions, id., at 52, management wrote off approximately $2.75 million of obsolete parts, damaged or defective tools, demonstration or sales samples, and similar items. Id., at 52-53. The Commissioner allowed this writeoff because Thor scrapped most of the articles shortly after their removal from the 1964 closing inventory.2 Management also wrote down $245,000 of parts stocked for three unsuccessful products. Id., at 56. The Commissioner allowed this write-down, too, since Thor sold these items at reduced prices shortly after the close of 1964. Id., at 62.This left some 44,000 assorted items, the status of which is the inventory issue here. Management concluded that many of these articles, mostly spare parts,3 were "excess" inventory, that is, that they were held in excess of any reasonably foreseeable future demand. It was decided that this inventory should be written down to its "net realizable value," which, in most cases, was scrap value. 64 T. C., at 160-161; Brief for Petitioner 9; Tr. of Oral Arg. 11.Two methods were used to ascertain the quantity of excess inventory. Where accurate data were available, Thor forecast future demand for each item on the basis of actual 1964 usage, that is, actual sales for tools and service parts, and actual usage for raw materials, work-in-process, and production parts. Management assumed that future demand for each item would be the same as it was in 1964. Thor then applied the following aging schedule: the quantity of each item corresponding to less than one year's estimated demand was kept at cost; the quantity of each item in excess of two years' estimated demand was written off entirely; and the quantity of each item corresponding to from one to two years' estimated demand was written down by 50% or 75%. App. 26.4 Thor presented no statistical evidence to rationalize these percentages or this time frame. In the Tax Court, Thor's president justified the formula by citing general business experience, and opined that it was "somewhat in between" possible alternative solutions.5 This first method yielded a total write-down of $744,030. 64 T. C., at 160. At two plants where 1964 data were inadequate to permit forecasts of future demand, Thor used its second method for valuing inventories. At these plants, the company employed flat percentage write-downs of 5%, 10%, and 50% for various types of inventory.6 Thor presented no sales or other data to support these percentages. Its president observed that "this is not a precise way of doing it," but said that the company "felt some adjustment of this nature was in order, and these figures represented our best estimate of what was required to reduce the inventory to net realizable value." App. 67. This second method yielded a total write-down of $160,832. 64 T. C., at 160.Although Thor wrote down all its "excess" inventory at once, it did not immediately scrap the articles or sell them at reduced prices, as it had done with the $3 million of obsolete and damaged inventory, the write-down of which the Commissioner permitted. Rather, Thor retained the "excess" items physically in inventory and continued to sell them at original prices. Id., at 160-161. The company found that, owing to the peculiar nature of the articles involved,7 price reductions were of no avail in moving this "excess" inventory. As time went on however, Thor gradually disposed of some of these items as scrap; the record is unclear as to when these dispositions took place.8 Thor's total write-down of "excess" inventory in 1964 therefore was:Ten-year amortization of parts for discontinued tools $22,090First method (aging formula based on 1964 usage) 744,030Second method (flat percentage write-downs) 160,832 _________ Total $926,952 Thor credited this sum to its inventory contra-account, thereby decreasing closing inventory, increasing cost of goods sold, and decreasing taxable income for the year by that amount.9 The company contended that, by writing down excess inventory to scrap value, and by thus carrying all inventory at "net realizable value," it had reduced its inventory to "market" in accord with its "lower of cost or market" method of accounting. On audit, the Commissioner disallowed the write-down in its entirety, asserting that it did not serve clearly to reflect Thor's 1964 income for tax purposes.The Tax Court, in upholding the Commissioner's determination, found as a fact that Thor's write-down of excess inventory did conform to "generally accepted accounting principles"; indeed, the court was "thoroughly convinced ... that such was the case." Id., at 165. The court found that if Thor had failed to write down its inventory on some reasonable basis, its accountants would have been unable to give its financial statements the desired certification. Id., at 161-162. The court held, however, that conformance with "generally accepted accounting principles" is not enough; 446 (b), and 471 as well, of the 1954 Code, 26 U.S.C. 446 (b) and 471, prescribe, as an independent requirement, that inventory accounting methods must "clearly reflect income." The Tax Court rejected Thor's argument that its write-down of "excess" inventory was authorized by Treasury Regulations, 64 T. C., at 167-171, and held that the Commissioner had not abused his discretion in determining that the write-down failed to reflect 1964 income clearly.BInventory accounting is governed by 446 and 471 of the Code, 26 U.S.C. 446 and 471. Section 446 (a) states the general rule for methods of accounting: "Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books." Section 446 (b) provides, however, that if the method used by the taxpayer "does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the [Commissioner], does clearly reflect income." Regulations promulgated under 446, and in effect for the taxable year 1964, state that "no method of accounting is acceptable unless, in the opinion of the Commissioner, it clearly reflects income." Treas. Reg. 1.446-1 (a) (2), 26 CFR 1.446-1 (a) (2) (1964).10 Section 471 prescribes the general rule for inventories. It states:"Whenever in the opinion of the [Commissioner] the use of inventories is necessary in order clearly to determine the income of any taxpayer, inventory shall be taken by such taxpayer on such basis as the [Commissioner] may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting the income." As the Regulations point out, 471 obviously establishes two distinct tests to which an inventory must conform. First, it must conform "as nearly as may be" to the "best accounting practice," a phrase that is synonymous with "generally accepted accounting principles." Second, it "must clearly reflect the income." Treas. Reg. 1.471-2 (a) (2), 26 CFR 1.471-2 (a) (2) (1964).It is obvious that on their face, 446 and 471, with their accompanying Regulations, vest the Commissioner with wide discretion in determining whether a particular method of inventory accounting should be disallowed as not clearly reflective of income. This Court's cases confirm the breadth of this discretion. In construing 446 and its predecessors, the Court has held that "[t]he Commissioner has broad powers in determining whether accounting methods used by a taxpayer clearly reflect income." Commissioner v. Hansen, . Since the Commissioner has "[m]uch latitude for discretion," his interpretation of the statute's clear-reflection standard "should not be interfered with unless clearly unlawful." Lucas v. American Code Co., . To the same effect are United States v. Catto, ; Schlude v. Commissioner, ; American Automobile Assn. v. United States, ; Automobile Club of Michigan v. Commissioner, ; Brown v. Helvering, . In construing 203 of the Revenue Act of 1918, 40 Stat. 1060, a predecessor of 471, the Court held that the taxpayer bears a "heavy burden of [proof]," and that the Commissioner's disallowance of an inventory accounting method is not to be set aside unless shown to be "plainly arbitrary." Lucas v. Structural Steel Co., .As has been noted, the Tax Court found as a fact in this case that Thor's write-down of "excess" inventory conformed to "generally accepted accounting principles" and was "within the term, `best accounting practice,' as that term is used in section 471 of the Code and the regulations promulgated under that section." 64 T. C., at 161, 165. Since the Commissioner has not challenged this finding, there is no dispute that Thor satisfied the first part of 471's two-pronged test. The only question, then, is whether the Commissioner abused his discretion in determining that the write-down did not satisfy the test's second prong in that it failed to reflect Thor's 1964 income clearly. Although the Commissioner's discretion is not unbridled and may not be arbitrary, we sustain his exercise of discretion here, for in this case the write-down was plainly inconsistent with the governing Regulations which the taxpayer, on its part, has not challenged.11 It has been noted above that Thor at all pertinent times used the "lower of cost or market" method of inventory accounting. The rules governing this method are set out in Treas. Reg. 1.471-4, 26 CFR 1.471-4 (1964). That Regulation defines "market" to mean, ordinarily, "the current bid price prevailing at the date of the inventory for the particular merchandise in the volume in which usually purchased by the taxpayer." 1.471-4 (a). The courts have uniformly interpreted "bid price" to mean replacement cost, that is, the price the taxpayer would have to pay on the open market to purchase or reproduce the inventory items.12 Where no open market exists, the Regulations require the taxpayer to ascertain "bid price" by using "such evidence of a fair market price at the date or dates nearest the inventory as may be available, such as specific purchases or sales by the taxpayer or others in reasonable volume and made in good faith, or compensation paid for cancellation of contracts for purchase commitments." 1.471-4 (b).The Regulations specify two situations in which a taxpayer is permitted to value inventory below "market" as so defined. The first is where the taxpayer in the normal course of business has actually offered merchandise for sale at prices lower than replacement cost. Inventories of such merchandise may be valued at those prices less direct cost of disposition, "and the correctness of such prices will be determined by reference to the actual sales of the taxpayer for a reasonable period before and after the date of the inventory." Ibid. The Regulations warn that prices "which vary materially from the actual prices so ascertained will not be accepted as reflecting the market." Ibid.The second situation in which a taxpayer may value inventory below replacement cost is where the merchandise itself is defective. If goods are "unsalable at normal prices or unusable in the normal way because of damage, imperfections, shop wear, changes of style, odd or broken lots, or other similar causes," the taxpayer is permitted to value the goods "at bona fide selling prices less direct cost of disposition." 1.471-2 (c). The Regulations define "bona fide selling price" to mean an "actual offering of goods during a period ending not later than 30 days after inventory date." Ibid. The taxpayer bears the burden of proving that "such exceptional goods as are valued upon such selling basis come within the classifications indicated," and is required to "maintain such records of the disposition of the goods as will enable a verification of the inventory to be made." Ibid.From this language, the regulatory scheme is clear. The taxpayer must value inventory for tax purposes at cost unless the "market" is lower. "Market" is defined as "replacement cost," and the taxpayer is permitted to depart from replacement cost only in specified situations. When it makes any such departure, the taxpayer must substantiate its lower inventory valuation by providing evidence of actual offerings, actual sales, or actual contract cancellations. In the absence of objective evidence of this kind, a taxpayer's assertions as to the "market value" of its inventory are not cognizable in computing its income tax.It is clear to us that Thor's procedures for writing down the value of its "excess" inventory were inconsistent with this regulatory scheme. Although Thor conceded that "an active market prevailed" on the inventory date, see 64 T. C., at 169, it "made no effort to determine the purchase or reproduction cost" of its "excess" inventory. Id., at 162. Thor thus failed to ascertain "market" in accord with the general rule of the Regulations. In seeking to depart from replacement cost, Thor failed to bring itself within either of the authorized exceptions. Thor is not able to take advantage of 1.471-4 (b) since, as the Tax Court found, the company failed to sell its excess inventory or offer it for sale at prices below replacement cost. 64 T. C., at 160-161. Indeed, Thor concedes that it continued to sell its "excess" inventory at original prices. Thor also is not able to take advantage of 1.471-2 (c) since, as the Tax Court and the Court of Appeals both held, it failed to bear the burden of proving that its excess inventory came within the specified classifications. 64 T. C., at 171; 563 F.2d, at 867. Actually, Thor's "excess" inventory was normal and unexceptional, and was indistinguishable from and intermingled with the inventory that was not written down.More importantly, Thor failed to provide any objective evidence whatever that the "excess" inventory had the "market value" management ascribed to it. The Regulations demand hard evidence of actual sales and further demand that records of actual dispositions be kept. The Tax Court found, however, that Thor made no sales and kept no records. 64 T. C., at 171. Thor's management simply wrote down its closing inventory on the basis of a well-educated guess that some of it would never be sold. The formulae governing this write-down were derived from management's collective "business experience"; the percentages contained in those formulae seemingly were chosen for no reason other than that they were multiples of five and embodied some kind of anagogical symmetry. The Regulations do not permit this kind of evidence. If a taxpayer could write down its inventories on the basis of management's subjective estimates of the goods' ultimate salability, the taxpayer would be able, as the Tax Court observed, id., at 170, "to determine how much tax it wanted to pay for a given year."13 For these reasons, we agree with the Tax Court and with the Seventh Circuit that the Commissioner acted within his discretion in deciding that Thor's write-down of "excess" inventory failed to reflect income clearly. In the light of the well-known potential for tax avoidance that is inherent in inventory accounting,14 the Commissioner in his discretion may insist on a high evidentiary standard before allowing write-downs of inventory to "market." Because Thor provided no objective evidence of the reduced market value of its "excess" inventory, its write-down was plainly inconsistent with the Regulations, and the Commissioner properly disallowed it.15 CThe taxpayer's major argument against this conclusion is based on the Tax Court's clear finding that the write-down conformed to "generally accepted accounting principles." Thor points to language in Treas. Reg. 1.446-1 (a) (2), 26 CFR 1.446-1 (a) (2) (1964), to the effect that "[a] method of accounting which reflects the consistent application of generally accepted accounting principles ... will ordinarily be regarded as clearly reflecting income" (emphasis added). Section 1.471-2 (b), 26 CFR 1.471-2 (b) (1964), of the Regulations likewise stated that an inventory taken in conformity with best accounting practice "can, as a general rule, be regarded as clearly reflecting ... income" (emphasis added).16 These provisions, Thor contends, created a presumption that an inventory practice conformable to "generally accepted accounting principles" is valid for income tax purposes. Once a taxpayer has established this conformity, the argument runs, the burden shifts to the Commissioner affirmatively to demonstrate that the taxpayer's method does not reflect income clearly. Unless the Commissioner can show that a generally accepted method "demonstrably distorts income," Brief for Chamber of Commerce of the United States as Amicus Curiae 3, or that the taxpayer's adoption of such method was "motivated by tax avoidance," Brief for Petitioner 25, the presumption in the taxpayer's favor will carry the day. The Commissioner, Thor concludes, failed to rebut that presumption here.If the Code and Regulations did embody the presumption petitioner postulates, it would be of little use to the taxpayer in this case. As we have noted, Thor's write-down of "excess" inventory was inconsistent with the Regulations; any general presumption obviously must yield in the face of such particular inconsistency. We believe, however, that no such presumption is present. Its existence is insupportable in light of the statute, the Court's past decisions, and the differing objectives of tax and financial accounting.First, as has been stated above, the Code and Regulations establish two distinct tests to which an inventory must conform. The Code and Regulations, moreover, leave little doubt as to which test is paramount. While 471 of the Code requires only that an accounting practice conform "as nearly as may be" to best accounting practice, 1.446-1 (a) (2) of the Regulations states categorically that "no method of accounting is acceptable unless, in the opinion of the Commissioner, it clearly reflects income" (emphasis added). Most importantly, the Code and Regulations give the Commissioner broad discretion to set aside the taxpayer's method if, "in [his] opinion," it does not reflect income clearly. This language is completely at odds with the notion of a "presumption" in the taxpayer's favor. The Regulations embody no presumption; they say merely that, in most cases, generally accepted accounting practices will pass muster for tax purposes. And in most cases they will. But if the Commissioner, in the exercise of his discretion, determines that they do not, he may prescribe a different practice without having to rebut any presumption running against the Treasury. Second, the presumption petitioner postulates finds no support in this Court's prior decisions. It was early noted that the general rule specifying use of the taxpayer's method of accounting "is expressly limited to cases where the Commissioner believes that the accounts clearly reflect the net income." Lucas v. American Code Co., 280 U.S., at 449. More recently, it was held in American Automobile Assn. v. United States that a taxpayer must recognize prepaid income when received, even though this would mismatch expenses and revenues in contravention of "generally accepted commercial accounting principles." 367 U.S., at 690. "[T]o say that in performing the function of business accounting the method employed by the Association `is in accord with generally accepted commercial accounting principles and practices,'" the Court concluded, "is not to hold that for income tax purposes it so clearly reflects income as to be binding on the Treasury." Id., at 693. "[W]e are mindful that the characterization of a transaction for financial accounting purposes, on the one hand, and for tax purposes, on the other, need not necessarily be the same." Frank Lyon Co. v. United States, . See Commissioner v. Idaho Power Co., . Indeed, the Court's cases demonstrate that divergence between tax and financial accounting is especially common when a taxpayer seeks a current deduction for estimated future expenses or losses. E. g., Commissioner v. Hansen, (reserve to cover contingent liability in event of nonperformance of guarantee); Brown v. Helvering, (reserve to cover expected liability for unearned commissions on anticipated insurance policy cancellations); Lucas v. American Code Co., supra (reserve to cover expected liability on contested lawsuit). The rationale of these cases amply encompasses Thor's aim. By its president's concession, the company's write-down of "excess" inventory was founded on the belief that many of the articles inevitably would become useless due to breakage, technological change, fluctuations in market demand, and the like.17 Thor, in other words, sought a current "deduction" for an estimated future loss. Under the decided cases, a taxpayer so circumstanced finds no shelter beneath an accountancy presumption.Third, the presumption petitioner postulates is insupportable in light of the vastly different objectives that financial and tax accounting have. The primary goal of financial accounting is to provide useful information to management, shareholders, creditors, and others properly interested; the major responsibility of the accountant is to protect these parties from being misled. The primary goal of the income tax system, in contrast, is the equitable collection of revenue; the major responsibility of the Internal Revenue Service is to protect the public fisc. Consistently with its goals and responsibilities, financial accounting has as its foundation the principle of conservatism, with its corollary that "possible errors in measurement [should] be in the direction of understatement rather than overstatement of net income and net assets."18 In view of the Treasury's markedly different goals and responsibilities, understatement of income is not destined to be its guiding light. Given this diversity, even contrariety, of objectives, any presumptive equivalency between tax and financial accounting would be unacceptable.19 This difference in objectives is mirrored in numerous differences of treatment. Where the tax law requires that a deduction be deferred until "all the events" have occurred that will make it fixed and certain, United States v. Anderson, , accounting principles typically require that a liability be accrued as soon as it can reasonably be estimated.20 Conversely, where the tax law requires that income be recognized currently under "claim of right," "ability to pay," and "control" rationales, accounting principles may defer accrual until a later year so that revenues and expenses may be better matched.21 Financial accounting, in short, is hospitable to estimates, probabilities, and reasonable certainties; the tax law, with its mandate to preserve the revenue, can give no quarter to uncertainty. This is as it should be. Reasonable estimates may be useful, even essential, in giving shareholders and creditors an accurate picture of a firm's overall financial health; but the accountant's conservatism cannot bind the Commissioner in his efforts to collect taxes. "Only a few reserves voluntarily established as a matter of conservative accounting," Mr. Justice Brandeis wrote for the Court, "are authorized by the Revenue Acts." Brown v. Helvering, 291 U.S., at 201-202.Finally, a presumptive equivalency between tax and financial accounting would create insurmountable difficulties of tax administration. Accountants long have recognized that "generally accepted accounting principles" are far from being a canonical set of rules that will ensure identical accounting treatment of identical transactions.22 "Generally accepted accounting principles," rather, tolerate a range of "reasonable" treatments, leaving the choice among alternatives to management. Such, indeed, is precisely the case here.23 Variances of this sort may be tolerable in financial reporting, but they are questionable in a tax system designed to ensure as far as possible that similarly situated taxpayers pay the same tax. If management's election among "acceptable" options were dispositive for tax purposes, a firm, indeed, could decide unilaterally - within limits dictated only by its accountants - the tax it wished to pay. Such unilateral decisions would not just make the Code inequitable; they would make it unenforceable. DThor complains that a decision adverse to it poses a dilemma. According to the taxpayer, it would be virtually impossible for it to offer objective evidence of its "excess" inventory's lower value, since the goods cannot be sold at reduced prices; even if they could be sold, says Thor, their reduced-price sale would just "pull the rug out" from under the identical "non-excess" inventory Thor is trying to sell simultaneously. The only way Thor could establish the inventory's value by a "closed transaction" would be to scrap the articles at once. Yet immediate scrapping would be undesirable, for demand for the parts ultimately might prove greater than anticipated. The taxpayer thus sees itself presented with "an unattractive Hobson's choice: either the unsalable inventory must be carried for years at its cost instead of net realizable value, thereby overstating taxable income by such overvaluation until it is scrapped, or the excess inventory must be scrapped prematurely to the detriment of the manufacturer and its customers." Brief for Petitioner 25.If this is indeed the dilemma that confronts Thor, it is in reality the same choice that every taxpayer who has a paper loss must face. It can realize its loss now and garner its tax benefit, or it can defer realization, and its deduction, hoping for better luck later. Thor, quite simply, has suffered no present loss. It deliberately manufactured its "excess" spare parts because it judged that the marginal cost of unsalable inventory would be lower than the cost of retooling machinery should demand surpass expectations. This was a rational business judgment and, not unpredictably, Thor now has inventory it believes it cannot sell. Thor, of course, is not so confident of its prediction as to be willing to scrap the "excess" parts now; it wants to keep them on hand, just in case. This, too, is a rational judgment, but there is no reason why the Treasury should subsidize Thor's hedging of its bets. There is also no reason why Thor should be entitled, for tax purposes, to have its cake and to eat it too.II The Bad-Debt IssueADeductions for bad debts are covered by 166 of the 1954 Code, 26 U.S.C. 166. Section 166 (a) (1) sets forth the general rule that a deduction is allowed for "any debt which becomes worthless within the taxable year." Alternatively, the Code permits an accrual-basis taxpayer to account for bad debts by the reserve method. This is implemented by 166 (c), which states that "[i]n lieu of any deduction under subsection (a), there shall be allowed (in the discretion of the [Commissioner]) a deduction for a reasonable addition to a reserve for bad debts." A "reasonable" addition is the amount necessary to bring the reserve balance up to the level that can be excepted to cover losses properly anticipated on debts outstanding at the end of the tax year.At all times pertinent, Thor has used the reserve method. Its reserve at the beginning of 1965 was approximately $93,000. See 64 T. C., at 162. During 1965, Thor's new management undertook a stringent review of accounts receivable. In the company's rubber division, credit personnel studied all accounts; a 100% reserve was set up for two accounts deemed wholly uncollectible, and a 1% reserve was established for all other receivables. Ibid. In the tool division, credit clerks analyzed all accounts more than 90 days past due with balances over $100; a 100% reserve was established for accounts judged wholly uncollectible, and an identical collectibility ratio was applied to accounts under $100 of the same age. A flat 2% reserve was set up for accounts more than 30 days past due, and a 1% reserve for all other accounts. Id., at 162-163. These judgments, approved by three levels of management, indicated that $136,150 should be added to the bad-debt reserve, bringing its balance at year-end to a figure slightly below $229,000. Id., at 162. Thor claimed this $136,150 as a deduction under 166 (c).The Commissioner ruled that the deduction was excessive. He computed what he believed to be a "reasonable" addition to Thor's reserve by using the "six-year moving average" formula derived from the decision in Black Motor Co. v. Commissioner, 41 B. T. A. 300 (1940), aff'd on other grounds, 125 F.2d 977 (CA6 1942). This formula seeks to ascertain a "reasonable" addition to a bad-debt reserve in light of the taxpayer's recent chargeoff history.24 In this case, the formula indicated that, for the years 1960-1965, Thor's annual chargeoffs of bad debts amounted, on the average, to 3.128% of its year-end receivables. 64 T. C., at 163. Applying that percentage to Thor's 1965 year-end receivables, the Commissioner determined that $154,156.80 of accounts receivable could reasonably be expected to default. The amount required to bring Thor's reserve up to this level was $61,359.20, and the Commissioner decided that this was a "reasonable" addition. Accordingly, he disallowed the remaining $74,790.80 of Thor's claimed 166 (c) deduction. Both the Tax Court, 64 T. C., at 174-175, and the Seventh Circuit, 563 F.2d, at 870, held that the Commissioner had not abused his discretion in so ruling.BSection 166 (c) states that a deduction for an addition to a bad-debt reserve is to be allowed "in the discretion" of the Commissioner. Consistently with this statutory language, the courts uniformly have held that the Commissioner's determination of a "reasonable" (and hence deductible) addition must be sustained unless the taxpayer proves that the Commissioner abused his discretion.25 The taxpayer is said to bear a "heavy burden" in this respect.26 He must show not only that his own computation is reasonable but also that the Commissioner's computation is unreasonable and arbitrary.27 Since it first received the approval of the Tax Court in 1940, the Black Motor bad-debt formula has enjoyed the favor of all three branches of the Federal Government. The formula has been employed consistently by the Commissioner,28 approved by the courts,29 and collaterally recognized by the Congress.30 Thor faults the Black Motor formula because of its retrospectively: By ascertaining current additions to a reserve by reference to past chargeoff experience, the formula assertedly penalizes taxpayers who have delayed in making writeoffs in the past, or whose receivables have just recently begun to deteriorate. Petitioner's objection is not altogether irrational, but it falls short of rendering the formula arbitrary. Common sense suggests that a firm's recent credit experience offers a reasonable index of the credit problems it may suffer currently. And the formula possesses the not inconsiderable advantage of enhancing certainty and predictability in an area peculiarly susceptible of taxpayer abuse. In any event, after its 40 years of near-universal acceptance, we are not inclined to disturb the Black Motor formula now.Granting that Black Motor in principle is valid, then, the only question is whether the Commissioner abused his discretion in invoking the formula in this case. Of course, there will be cases - indeed, the Commissioner has acknowledged that there are cases, see Rev. Rul. 76-362, 1976-2 Cum. Bull. 45, 46 - in which the formula will generate an arbitrary result. If a taxpayer's most recent bad-debt experience is unrepresentative for some reason, a formula using that experience as data cannot be expected to produce a "reasonable" addition for the current year.31 If the taxpayer suffers an extraordinary credit reversal (the bankruptcy of a major customer, for example), the "six-year moving average" formula will fail.32 In such a case, where the taxpayer can point to conditions that will cause future debt collections to be less likely than in the past, the taxpayer is entitled to - and the Commissioner is prepared to allow - an addition larger than Black Motor would call for. See Rev. Rul. 76-362, supra. In this case, however, as the Tax Court found, Thor "did not show that conditions at the end of 1965 would cause collection of accounts receivable to be less likely than in prior years." 64 T. C., at 175. Indeed, the Tax Court "infer[red] from the entire record that collectibility was probably more likely at the end of 1965 than it was [previously] because new management had been infused into petitioner" (emphasis added). Thor cited no changes in the conditions of business generally or of its customers specifically that would render the Black Motor formula unreliable; new management just came in and second-guessed its predecessor, taking a "tougher" approach. Management's pessimism may not have been unreasonable, but the Commissioner had the discretion to take a more sanguine view.33 For these reasons, we agree with the Tax Court and with the Court of Appeals that the Commissioner did not abuse his discretion in recomputing a "reasonable" addition to Thor's bad-debt reserve according to the Black Motor formula. Thor failed to carry its "heavy burden" of showing why the application of that formula would have been arbitrary in this case.The judgment of the Court of Appeals is affirmed. It is so ordered. |
1 | Respondent is a federally licensed Indian trader who operates a general store on an Indian reservation in California. When she was refused an exemption from California's law requiring a state license in order to sell liquor for off-premises consumption, respondent filed suit in Federal District Court seeking a declaratory judgment that she did not need a state license. The District Court dismissed the suit, holding that respondent was required to have a state license under 18 U.S.C. 1161, which provides that liquor transactions in Indian country are not subject to prohibition under federal law if such transactions are "in conformity both with the laws of the State in which [they] occu[r] and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country." The Court of Appeals reversed, holding that 1161 pre-empts state licensing and distribution jurisdiction over tribal liquor sales in Indian country.Held: California may properly require respondent to obtain a state license in order to sell liquor for off-premises consumption. Pp. 718-735. (a) There is no tradition of tribal sovereign immunity or inherent self-government in favor of liquor regulation by Indians. Although in Indian matters Congress usually acts "upon the assumption that the States have no power to regulate the affairs of Indians on a reservation," Williams v. Lee, , that assumption is unwarranted in the narrow context of liquor regulation. In addition to the congressional divestment of tribal self-government in this area, the States have also been permitted, and even required, to impose liquor regulations. The tradition of concurrent state and federal jurisdiction over the use and distribution of alcoholic beverages in Indian country is justified by the relevant state interests. Here, respondent's distribution of liquor has a significant impact beyond the limits of the reservation, and the State, independent of the Twenty-first Amendment, has an interest in the liquor traffic within its borders. Pp. 720-725. (b) Title 18 U.S.C. 1161 authorized, rather than pre-empted, state regulation of Indian liquor transactions. It is clear from the face of the statute and its legislative history both that Congress intended to remove federal prohibition on the sale and use of liquor imposed on Indians and that Congress intended state laws would apply of their own force to govern tribal liquor transactions as long as the tribe itself approved these transactions by enacting an ordinance. Congress contemplated that its absolute but not exclusive power to regulate Indian liquor transactions would be delegated to the tribes themselves, and to the States, which historically shared concurrent jurisdiction with the Federal Government. Because of the lack of tradition of tribal self-government in the area of liquor regulation, it is not necessary that Congress indicate expressly that the State has jurisdiction to license and distribute liquor. This Court will not apply the canon of construction that state laws generally are not applicable to Indians on a reservation except where Congress has expressly provided that state laws shall apply, when application would be tantamount to a formalistic disregard of congressional intent. Thus, application of the state licensing scheme here does not impair a right granted or reserved by federal law, but, on the contrary, is specifically authorized by Congress and does not interfere with federal policies concerning the reservation. Pp. 725-735. 678 F.2d 1340, reversed and remanded.O'CONNOR, J., delivered the opinion of the Court, in which BURGER, C. J., and WHITE, POWELL, REHNQUIST, and STEVENS, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 735.Alan S. Meth, Deputy Attorney General of California, argued the cause for petitioner. With him on the briefs were John K. Van De Kamp, Attorney General, and George Deukmejian, former Attorney General.Stephen V. Quesenberry argued the cause for respondent. With him on the brief were David J. Rapport and Charles Scott.Joshua I. Schwartz argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Lee, Assistant Attorney General Dinkins, Robert L. Klarquist, and Anne S. Almy.* [Footnote *] Briefs of amici curiae urging reversal were filed by Warren Spannaus, Attorney General of Minnesota, and James M. Schoessler, Special Assistant Attorney General, David Albert Mustone, Tom D. Tobin, Mark V. Meierhenry, Attorney General of South Dakota, Robert L. Timm, Chief Deputy Attorney General, and Harold F. X. Purnell for the State of Minnesota et al.; by Michael T. Greely, Attorney General of Montana, and Helena S. Maclay and Deirdre Boggs, Special Assistant Attorneys General, for the State of Montana; and by James M. Goldberg for the National Alcoholic Beverage Control Association.Briefs of amici curiae urging affirmance were filed by Art Bunce for the Agua Caliente Band of Cahuilla Indians; by George E. Fettinger and Kathleen A. Miller for the Mescalero Apache Tribe; by Kim Jerome Gottschalk for the Pala Band of Mission Indians; by Harry R. Sachse for the Shoshone Tribe of the Wind River Indian Reservation et al.; and by Douglas L. Bell, Allen H. Sanders, and Jeffrey Schuster for the Tulalip and Muckleshoot Indian Tribes. JUSTICE O'CONNOR delivered the opinion of the Court.The question presented by this case is whether the State of California may require a federally licensed Indian trader, who operates a general store on an Indian reservation, to obtain a state liquor license in order to sell liquor for off-premises consumption. Because we find that Congress has delegated authority to the States as well as to the Indian tribes to regulate the use and distribution of alcoholic beverages in Indian country,1 we reverse the judgment of the Court of Appeals for the Ninth Circuit.IThe respondent Rehner is a federally licensed Indian trader2 who operates a general store on the Pala Reservation in San Diego, Cal. The Pala Tribe had adopted a tribal ordinance permitting the sale of liquor on the reservation providing that the sales conformed to state law, and this ordinance was approved by the Secretary of the Interior. See 25 Fed. Reg. 3343 (1960). Rehner then sought from the State an exemption from its law requiring a state license for retail sale of distilled spirits for off-premises consumption.3 When she was refused an exemption, Rehner filed suit seeking a declaratory judgment that she did not need a license from the State, and an order directing that liquor wholesalers could sell to her. The District Court granted the State's motion to dismiss, ruling that Rehner was required to have a state license under 18 U.S.C. 1161, which provides that liquor transactions in Indian country are not subject to prohibition under federal law provided those transactions are "in conformity both with the laws of the State in which such act or transaction occurs and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country ... ."4 The Court of Appeals reversed the District Court, holding that 1161 did not confer jurisdiction on the States to require liquor licenses. The court held that "18 U.S.C. 1161 pre-empts state licensing and distribution jurisdiction over tribal liquor sales in Indian country." 678 F.2d 1340, 1351 (1982).5 In deciding the pre-emption issue, the court focused on two aspects of 1161. First, it held that "there is insufficient evidence to show that Congress intended section 1161 to confer on the states regulatory jurisdiction over on-reservation liquor traffic." Id., at 1343. The court reasoned that the liquor transactions at issue were governed exclusively by federal law, and that if Congress wished to remove "its veil of preemption," it needed to do so by an express statement that the State had jurisdiction to impose its licensing requirement. Ibid. Second, the court held that "section 1161 has preemptive effect" because Congress provided for tribal ordinances that were to be certified by the Secretary of the Interior and published in the Federal Register. Id., at 1348-1349, 1349, n. 18. In this way, "the regulatory authority of the tribes ... was safeguarded by federal supervision." Id., at 1349.6 The decisions of this Court concerning the principles to be applied in determining whether state regulation of activities in Indian country is pre-empted have not been static. In Worcester v. Georgia, 6 Pet. 515, 560 (1832), Chief Justice Marshall wrote that an Indian reservation "is a distinct community, occupying its own territory, with boundaries accurately described, in which [state laws] can have no force ... ." Despite this early statement emphasizing the importance of tribal self-government, "Congress has to a substantial degree opened the doors of reservations to state laws, in marked contrast to what prevailed in the time of Chief Justice Marshall," Organized Village of Kake v. Egan, . "[E]ven on reservations, state laws may be applied unless such application would interfere with reservation self-government or would impair a right granted or reserved by federal law." Mescalero Apache Tribe v. Jones, .Although "[f]ederal treaties and statutes have been consistently construed to reserve the right of self-government to the tribes," F. Cohen, Handbook of Federal Indian Law 273 (1982 ed.) (hereafter Cohen), our recent cases have established a "trend ... away from the idea of inherent Indian sovereignty as a bar to state jurisdiction and toward reliance on federal pre-emption." McClanahan v. Arizona State Tax Comm'n, (footnote omitted). The goal of any pre-emption inquiry is "to determine the congressional plan," Pennsylvania v. Nelson, , but tribal sovereignty may not be ignored and we do not necessarily apply "those standards of pre-emption that have emerged in other areas of the law." White Mountain Apache Tribe v. Bracker, . We have instead employed a pre-emption analysis that is informed by historical notions of tribal sovereignty, rather than determined by them. "[C]ongressional authority and the `semi-independent position' of Indian tribes ... [are] two independent but related barriers to the assertion of state regulatory authority over tribal reservations and members." Bracker, 448 U.S., at 142. Although "[t]he right of tribal self-government is ultimately dependent on and subject to the broad power of Congress," id., at 143, we still employ the tradition of Indian sovereignty as a "backdrop against which the applicable treaties and federal statutes must be read" in our pre-emption analysis. McClanahan, supra, at 172. We do not necessarily require that Congress explicitly pre-empt assertion of state authority insofar as Indians on reservations are concerned, but we have recognized that "any applicable regulatory interest of the State must be given weight" and "`automatic exemptions "as a matter of constitutional law"' are unusual." Bracker, supra, at 144 (quoting Moe v. Salish & Kootenai Tribes, , n. 17 (1976)).The role of tribal sovereignty in pre-emption analysis varies in accordance with the particular "notions of sovereignty that have developed from historical traditions of tribal independence." Bracker, supra, at 145. These traditions themselves reflect the "accommodation between the interests of the Tribes and the Federal Government, on the one hand, and those of the State, on the other." Washington v. Confederated Tribes of Colville Indian Reservation, . However, it must be remembered that "tribal sovereignty is dependent on, and subordinate to, only the Federal Government, not the States." Id., at 154. "The sovereignty that the Indian tribes retain is of a unique and limited character. It exists only at the sufferance of Congress and is subject to complete defeasance." United States v. Wheeler, (emphasis added). See also Confederated Tribes, supra, at 178-179 (opinion of REHNQUIST, J.).When we determine that tradition has recognized a sovereign immunity in favor of the Indians in some respect, then we usually are reluctant to infer that Congress has authorized the assertion of state authority in that respect "`except where Congress has expressly provided that State laws shall apply.'" McClanahan, supra, at 171 (quoting U.S. Dept. of the Interior, Federal Indian Law 845 (1958) (hereafter Indian Law)). Repeal by implication of an established tradition of immunity or self-governance is disfavored. Bryan v. Itasca County, . If, however, we do not find such a tradition, or if we determine that the balance of state, federal, and tribal interests so requires, our pre-emption analysis may accord less weight to the "backdrop" of tribal sovereignty. See Confederated Tribes, supra, at 154-159; Mescalero Apache Tribe, supra.AWe first determine the nature of the "backdrop" of tribal sovereignty that will inform our pre-emption analysis. The "backdrop" in this case concerns the licensing and distribution of alcoholic beverages, and we must determine whether there is a tradition of tribal sovereign immunity that may be repealed only by an explicit directive from Congress.We begin by noting that there is nothing in the record to indicate that a federally licensed Indian trader like Rehner may sell liquor for off-premises consumption only to members of the Pala Tribe. Indeed, the State contends, and Rehner does not dispute, that Rehner, or any other federally licensed trader, may sell liquor to Indian and non-Indian buyers alike. See Brief for Petitioner 81; Tr. of Oral Arg. 14. To the extent that Rehner seeks to sell to non-Indians, or to Indians who are not members of the tribe with jurisdiction over the reservation on which the sale occurred, the decisions of this Court have already foreclosed Rehner's argument that the licensing requirements infringe upon tribal sovereignty.7 If there is any interest in tribal sovereignty implicated by imposition of California's alcoholic beverage regulation, it exists only insofar as the State attempts to regulate Rehner's sale of liquor to other members of the Pala Tribe on the Pala Reservation. The only interest that Rehner advances in this regard is that freedom to regulate alcoholic beverages is important to Indian self-governance. To the extent California limits the absolute number of licenses that it distributes, state regulation may effectively preclude this aspect of self-governance. See Brief for Respondent 63-74. Rehner relies on our statement in United States v. Mazurie, , that the distribution and use of intoxicants is a "matte[r] that affect[s] the internal and social relations of tribal life."Rehner's reliance on Mazurie as establishing tribal sovereignty in the area of liquor licensing and distribution is misplaced. In Mazurie, we held that "independent tribal authority is quite sufficient to protect Congress' decision to vest in tribal councils this portion of [Congress'] own authority" to regulate commerce with the Indians. Ibid. (emphasis added). We expressly declined to base our holding on whether "independent [tribal] authority is itself sufficient for the tribes to impose" their own liquor regulations. Ibid. (emphasis added).The reason that we declined is apparent in the light of the history of federal control of liquor in this context, which must be characterized as "one of the most comprehensive [federal] activities in Indian affairs ... ." Cohen, at 307. Unlike the authority to tax certain transactions on reservations that we have characterized as "a fundamental attribute of sovereignty which the tribes retain unless divested of it by federal law or necessary implication of their dependent status," Confederated Tribes, 447 U.S., at 152, tradition simply has not recognized a sovereign immunity or inherent authority in favor of liquor regulation by Indians. The colonists regulated Indian liquor trading before this Nation was formed, and Congress exercised its authority over these transactions as early as 1802. See Indian Law, at 381. Congress imposed complete prohibition by 1832, and these prohibitions are still in effect subject to suspension conditioned on compliance with state law and tribal ordinances.8 Although in Indian matters Congress usually acts "upon the assumption that the States have no power to regulate the affairs of Indians on a reservation," Williams v. Lee, , that assumption would be unwarranted in the narrow context of the regulation of liquor. In addition to the congressional divestment of tribal self-government in this area, the States have also been permitted, and even required, to impose regulations related to liquor transactions. As a condition of entry into the United States, Arizona, New Mexico, and Oklahoma were required by Congress to enact prohibitions against the sale of liquor to Indians and introduction of liquor into Indian country.9 Several States, including California, pursuant to state police power, long prohibited liquor transactions with Indians.10 These state prohibitions indicate that "`absolute' federal jurisdiction is not invariably exclusive jurisdiction." Kake Village, 369 U.S., at 68. Indeed, we have recognized expressly that "[t]he federal prohibition against taking intoxicants into this Indian colony does not deprive the State of Nevada of its sovereignty over the area in question. The Federal Government does not assert exclusive jurisdiction within the colony. Enactments of the Federal Government passed to protect and guard its Indian wards only affect the operation, within the colony, of such state laws as conflict with the federal enactments." United States v. McGowan, (footnote omitted; emphasis added).This historical tradition of concurrent state and federal jurisdiction over the use and distribution of alcoholic beverages in Indian country is justified by the relevant state interests involved. See Confederated Tribes, supra, at 156. Rehner's distribution of liquor has a significant impact beyond the limits of the Pala Reservation. The State has an unquestionable interest in the liquor traffic that occurs within its borders, and this interest is independent of the authority conferred on the States by the Twenty-first Amendment. Crowley v. Christensen, . Liquor sold by Rehner to other Pala tribal members or to nonmembers can easily find its way out of the reservation and into the hands of those whom, for whatever reason, the State does not wish to possess alcoholic beverages, or to possess them through a distribution network over which the State has no control. This particular "spillover" effect is qualitatively different from any "spillover" effects of income taxes or taxes on cigarettes. "A State's regulatory interest will be particularly substantial if the State can point to off-reservation effects that necessitate state intervention." New Mexico v. Mescalero Apache Tribe, .There can be no doubt that Congress has divested the Indians of any inherent power to regulate in this area. In the area of liquor regulation, we find no "congressional enactments demonstrating a firm federal policy of promoting tribal self-sufficiency and economic development." Bracker, 448 U.S., at 143 (footnote omitted). With respect to the regulation of liquor transactions, as opposed to the state income taxation involved in McClanahan, Indians cannot be said to "possess the usual accoutrements of tribal self-government." McClanahan, 411 U.S., at 167-168. The court below erred in thinking that there was some single notion of tribal sovereignty that served to direct any pre-emption analysis involving Indians. See 678 F.2d, at 1348.11 Because we find that there is no tradition of sovereign immunity that favors the Indians in this respect, and because we must consider that the activity in which Rehner seeks to engage potentially has a substantial impact beyond the reservation, we may accord little if any weight to any asserted interest in tribal sovereignty in this case.BWe must next determine whether the state authority to license the sale of liquor is pre-empted by federal law. Bracker, supra, at 142; McClanahan, supra, at 172. The court below held that 1161 pre-empted state regulation of licensing and distribution, and that the reference to state law in 1161 was not sufficiently explicit to permit application of the state licensing law. We disagree with both aspects of the court's analysis. As we explained in Part II-A above, the tribes have long ago been divested of any inherent self-government over liquor regulation by both the explicit command of Congress and as a "necessary implication of their dependent status." Confederated Tribes, 447 U.S., at 152. Congress has also historically permitted concurrent state regulation through the imposition of criminal penalties on those who supply Indians with liquor, or who introduce liquor into Indian country. Therefore, this is not a case in which we apply a presumption of a lack of state authority.The presumption of pre-emption derives from the rule against construing legislation to repeal by implication some aspect of tribal self-government. See Bryan v. Itasca County, 426 U.S., at 391-392; Morton v. Mancari, . Because there is no aspect of exclusive tribal self-government that requires the deference reflected in our requirement that Congress expressly provide for the application of state law, we have only to determine whether application of the state licensing laws would "impair a right granted or reserved by federal law." Mescalero Apache Tribe, 411 U.S., at 148; Kake Village, 369 U.S., at 75. Our examination of 1161 leads us to conclude that Congress authorized, rather than pre-empted, state regulation over Indian liquor transactions.The legislative history of 1161 indicates both that Congress intended to remove federal prohibition on the sale and use of alcohol imposed on Indians in 1832, and that Congress intended that state laws would apply of their own force to govern tribal liquor transactions as long as the tribe itself approved these transactions by enacting an ordinance. It is clear that by 1953, federal law curtailing liquor traffic with the Indians came to be "viewed as discriminatory." Indian Law, at 382. As originally introduced, the bill that was later to become 1161 was intended only to "[t]o terminate Federal discriminations against the Indians of Arizona." See Hearings on H. R. 1055 before the Subcommittee on Indian Affairs of the House Committee on Interior and Insular Affairs, 83d Cong., 1st Sess. (Jan. 6, 1953) (Hearings), reprinted in App. to Brief for Petitioner A-4.12 In hearings on this original bill, Representative Rhodes of Arizona, speaking on behalf of Representative Patten, who introduced the bill, stated that the sole purpose of the bill was to eliminate federal prohibition because it was discriminatory and had a detrimental effect on the Indians. He also commented that the bill would permit Arizona to amend its Constitution to remove the state prohibitions on sale of liquor to Indians and on introduction of liquor into Indian country. At these same hearings, Dillon S. Myer, Commissioner of the Bureau of Indian Affairs of the Department of the Interior, submitted a revision of the bill proposed by Representative Patten. This revision was different from the original bill in a number of respects, the most important of which for present purposes is that the revision applied to all States, and not just to Arizona. In the context of discussing the bill, Commissioner Myer stated: "We certainly do not intend to try to revise State laws regarding Indians or anyone else, and it should be clear that is provided... . [The revision] is intended to eliminate all of the sections in the statutes which discriminate against Indians and at the same time not interfere with State laws, and at the same time provide opportunity for the tribes to have prohibition on the reservation if they wish to, if it is not covered by State law." Id., at A-26 - A-27.In a later hearing, the Department of the Interior submitted an unofficial report in which it was again urged that federal Indian liquor prohibition be ended generally, and not just in Arizona, as long as liquor "transactions are in conformity with the ordinances of the tribes concerned and are not contrary to state law." See Hearings (May 6, 1953), reprinted in App. to Brief for Petitioner A-54. Representative D'Ewart read into the record a telegram sent by the Chairman of the Navajo Tribal Council. The telegram indicated that the Navajo people supported the "anti-discrimination bill" as a measure to ensure "equal rights." Id., at A-59.Representative Patten, the sponsor of the original bill, stated that "if this bill were passed to remove all discrimination, the Indians would still have to comply with State law in every regard ... ." See Hearings (June 2, 1953), reprinted in App. to Brief for Petitioner A-69. Representative Patten's remarks are particularly valuable in determining the meaning of 1161. As the sponsor of the bill, Representative Patten's interpretation is an "`authoritative guide to the statute's construction.'" Bowsher v. Merck & Co., (quoting North Haven Board of Education v. Bell, .The House Report explained the bill as eliminating discrimination caused by legislation "applicable only to Indians." H. R. Rep. No. 775, 83d Cong., 1st Sess., 2 (1953). It included an official report of the Department of the Interior stating that federal prohibition would be lifted only if liquor "transactions are in conformity with the ordinances of the tribes concerned and are not contrary to State law." Id., at 3. The Senate Report also expressed these sentiments: "if this bill is enacted, a State or local municipality or Indian tribes, if they desire, by the enactment of proper legislation or ordinance, to restrict the sales of intoxicants to Indians, they may do so." S. Rep. No. 722, 83d Cong., 1st Sess., 1 (1953) (emphasis added).It is clear then that Congress viewed 1161 as abolishing federal prohibition, and as legalizing Indian liquor transactions as long as those transactions conformed both with tribal ordinances and state law. It is also clear that Congress contemplated that its absolute but not exclusive power to regulate Indian liquor transactions would be delegated to the tribes themselves, and to the States, which historically shared concurrent jurisdiction with the Federal Government in this area. Early administrative practice and our prior decision in United States v. Mazurie, , confirm this understanding of 1161.As noted above, the Bureau of Indian Affairs of the Department of the Interior was heavily involved in drafting the revised bill that eventually became 1161. In a 1954 administrative opinion, ironically rendered in response to California's interpretation of 1161, the Department's Solicitor stated plainly that the Bureau contemplated that liquor transactions on reservations would be subject to state laws, including state licensing laws. Specifically, the Solicitor stated: "The fact that a tribe in California may by ordinance authorize the sale of liquor on its reservation in packages for consumption only off the premises where it is sold would not, in my opinion, impinge upon the foregoing authority of the State Board of Equalization to license sales of liquor on such reservation for consumption both on and off the premises where the liquor is sold. In such circumstances, if any person so licensed by the State were to sell liquor on the reservation for on-premises consumption in accordance with his license, presumably he would be immune from State prosecution and, thus, the license issued by the State agency would be fully effective insofar as State law is concerned." Memo. Sol. M-36241 (Sep 22, 1954), Liquor - Tribal Ordinance Regulating Traffic Within Reservation, 2 Op. Solicitor of Dept. of Interior Relating to Indian Affairs 1917-1974, pp. 1648, 1650 (emphasis added). In the Department of the Interior's Indian Law, at 382-383, the Solicitor, citing the 1954 opinion, stated that "if a tribal ordinance permits only package sales on a reservation for consumption off the premises, a State license to sell for consumption on the premises will give protection only against State prosecutions, but not against Federal prosecutions under section 1156." (Footnote omitted; emphasis added.)13 Both Rehner and the court below believed that 1161 was merely an exemption from federal criminal liability, and affirmatively empowered neither Indian tribes nor the State to regulate liquor transactions. See 678 F.2d, at 1345; Brief for Respondent 9. Our decision in Mazurie, supra, at 554, rejected this argument with respect to Indian tribes, and there is no reason to accept it with respect to the State. In Mazurie we held that in enacting 1161 Congress intended to delegate to the tribes a portion of its authority over liquor transactions on reservations. Since we found this delegation on the basis of the statutory language requiring that liquor transactions conform "both with the laws of the State ... and with an ordinance duly adopted" by the governing tribe (emphasis added), we would ignore the plain language of the statute if we failed to find this same delegation in favor of the States.14 Rehner argues that Mazurie merely acknowledged that Indian tribes "possessed independent authority" over liquor transactions. Brief for Respondent 67. As we noted in the context of our discussion of the doctrine of tribal sovereignty, we expressly declined to base our holding in Mazurie on the doctrine of tribal self-government; rather, we held merely that the tribal authority was sufficient to protect the congressional decision to delegate licensing authority. See 419 U.S., at 557. It cannot be doubted that the State's police power over liquor transactions within its borders is broad enough to protect the same congressional decision in favor of the State.The thrust of Rehner's argument, and the primary focus of the court below, is that state authority in this area is pre-empted because such authority requires an express statement by Congress in the light of the canon of construction that we quoted in McClanahan: "`State laws generally are not applicable to tribal Indians on an Indian reservation except where Congress has expressly provided that State laws shall apply.'" 411 U.S., at 170-171 (quoting Indian Law, at 845). As we have established above, because of the lack of a tradition of self-government in the area of liquor regulation, it is not necessary that Congress indicate expressly that the State has jurisdiction to regulate the licensing and distribution of alcohol.15 Even if this canon of construction were applicable to this case, our result would be the same. The canon is quoted from Indian Law, at 845. In that same volume, the Solicitor of the Interior Department assumed that 1161 would result in state prosecutions for failing to have a state license. See id., at 382-383. Whatever Congress had to do to provide "expressly" for the application of state law, the Solicitor obviously believed that Congress had done it in 1161. Indeed, even in McClanahan, we suggested that 1161 satisfied the canon of construction requiring that Congress expressly provide for application of state law. In discussing statutes that did satisfy the canon, we cited 1161 and stated that "state liquor laws may be applicable within reservations." 411 U.S., at 177, n. 16.16 More important, we have consistently refused to apply such a canon of construction when application would be tantamount to a formalistic disregard of congressional intent. "We give this rule [resolving ambiguities in favor of Indians] the broadest possible scope, but it remains at base a canon for construing the complex treaties, statutes, and contracts which define the status of Indian tribes. A canon of construction is not a license to disregard clear expressions of tribal and congressional intent." DeCoteau v. District County Court, . See also Andrus v. Glover Construction Co., . In the present case, congressional intent is clear from the face of the statute and its legislative history.17 We conclude that 1161 was intended to remove federal discrimination that resulted from the imposition of liquor prohibition on Native Americans. Congress was well aware that the Indians never enjoyed a tradition of tribal self-government insofar as liquor transactions were concerned. Congress was also aware that the States exercised concurrent authority insofar as prohibiting liquor transactions with Indians was concerned. By enacting 1161, Congress intended to delegate a portion of its authority to the tribes as well as to the States, so as to fill the void that would be created by the absence of the discriminatory federal prohibition. Congress did not intend to make tribal members "super citizens" who could trade in a traditionally regulated substance free from all but self-imposed regulations. See 678 F.2d, at 1352 (Goodwin, J., dissenting). Rather, we believe that in enacting 1161, Congress intended to recognize that Native Americans are not "weak and defenseless," and are capable of making personal decisions about alcohol consumption without special assistance from the Federal Government. Application of the state licensing scheme does not "impair a right granted or reserved by federal law." Kake Village, 369 U.S., at 75.18 On the contrary, such application of state law is "specifically authorized by ... Congress ... and [does] not interfere with federal policies concerning the reservations." Warren Trading Post Co. v. Arizona Tax Comm'n, , n. 3 (1965).IIIThe judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. |
0 | In a Federal District Court, petitioner was convicted of robbery in the District of Columbia and sentenced to imprisonment. He subsequently filed in that court a paper entitled "Motion for Dismissal of Sentence and Reversal of Verdict," claiming, inter alia, that materially false testimony had been used against him at the trial. That court treated that motion as one to vacate sentence under 28 U.S.C. 2255 and denied it. The Court of Appeals affirmed, though petitioner had produced in that court, for the first time, an affidavit of a police captain which contradicted the testimony of a prosecution witness. Held: Certiorari granted; judgment vacated; and case remanded to the District Court for a hearing upon petitioner's motion, treated as a motion for a new trial on the ground of newly discovered evidence. Reported below: App. D.C. 322, 293 F.2d 161.John Bodner, Jr. for petitioner.Solicitor General Cox, Assistant Attorney General Miller and Beatrice Rosenberg for the United States.PER CURIAM.The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari, which presents the question whether materially false testimony was used against petitioner at the trial, are granted, the judgment of the Court of Appeals is vacated, and the case is remanded to the District Court for a hearing upon petitioner's motion, treated as a motion for a new trial on the ground of newly discovered evidence. Cf. Mesarosh v. United States, . We, of course, intimate no view upon the merits of the motion.MR. JUSTICE CLARK, with whom MR. JUSTICE HARLAN and MR. JUSTICE STEWART join, dissenting.The Court sua sponte summarily vacates this judgment affirming the denial of a 2255 application and remands the matter for a hearing, treating the case as one involving a motion for a new trial on the ground of newly discovered evidence. I characterize the application below, titled a "Motion for Reversal of Verdict and Dismissal of Sentence," as one under 28 U.S.C. 2255 not only because of its wording but also because the petitioner, the Government, the trial court, and the Court of Appeals (including the dissenting judge) so styled it. Although petitioner in the alternative contends that the wording of this application could serve as "notice of appeal," he never suggests it should be treated as a motion for a new trial. If petitioner had intended the application in question to serve as a motion for a new trial, he would have so labeled it as he did the motion filed four days after the verdict. The Court, despite this treatment by all the parties and judges below, tags the application as a motion for a new trial on the ground of newly discovered evidence in order to escape the limitations of 2255. I cannot give this pleading such a twist, but even if I could I would have to find the allegations insufficient to meet the requirements of Rule 33, which governs motions for new trials.The newly discovered evidence consists of an affidavit by Police Captain Brown which merely corroborates the testimony of petitioner and another witness. It appears that during the investigation of the robbery in question the petitioner and one Adcock were placed in a police line-up supervised by Police Captain Brown. From this line-up Ellis, one of the victims, identified Adcock as the robber. On trial Ellis testified that his identification was not positive and that he only picked Adcock as one who resembled the robber. Both Adcock and petitioner, however, testified that Ellis had positively identified Adcock in the line-up. There is no contention or showing that the Government knew that Ellis' testimony was false. Brown's affidavit was obtained while the case was pending in the Court of Appeals.The affidavit, of course, was not newly discovered evidence. Both Adcock and the petitioner were in the line-up, and both knew that Police Captain Brown was likewise present and saw and heard Ellis' identification. In such a situation petitioner's motion for a new trial would be untimely because Rule 33, Fed. Rules Crim. Proc., permits such a motion to be made more than five days after a verdict of guilty only in the case of newly discovered evidence. However, even if the facts in the affidavit were newly discovered, it would still not be sufficient under Rule 33. As was said in Mesarosh v. United States, , "new evidence which is `merely cumulative or impeaching' is not, according to the often-repeated statement of the courts, an adequate basis for the grant of a new trial. [Citing cases.]"On the other hand, if the Court treats the application as one under 2255, it is insufficient. Under that section the application would be a collateral attack on the conviction. In such a case it is essential for the moving party to establish not only that perjury existed but also that the prosecution used the testimony knowingly and wilfully to obtain a conviction. E. g., Griffin v. United StatesApp. D.C. 317, 258 F.2d 411 (1958); Tilghman v. Hunter, 167 F.2d 661 (C. A. 10th Cir. 1948). This long-standing limitation was not erased by Mesarosh v. United States, supra, which involved a direct attack on the conviction rather than a collateral attack.I regret that the Court, in an effort to avoid the requirements of 2255, treats an application thereunder as a motion for a new trial. In my view this is a new approach to 2255 cases. It extends that section far beyond its intended scope and can only plague us in future cases. I therefore dissent. |
2 | Respondents, prison inmates and members of the Islamic faith, brought suit under 42 U.S.C. 1983 contending that two policies adopted by New Jersey prison officials prevented them from attending Jumu'ah, a Muslim congregational service held on Friday afternoons, and thereby violated their rights under the Free Exercise Clause of the First Amendment. The first such policy, Standard 853, required inmates in respondents' custody classifications to work outside the buildings in which they were housed and in which Jumu'ah was held, while the second, a policy memorandum, prohibited inmates assigned to outside work from returning to those buildings during the day. The Federal District Court concluded that no constitutional violation had occurred, but the Court of Appeals vacated and remanded, ruling that the prison policies could be sustained only if the State showed that the challenged regulations were intended to and did serve the penological goal of security, and that no reasonable method existed by which prisoners' religious rights could be accommodated without creating bona fide security problems. The court also held that the expert testimony of prison officials should be given due weight on, but is not dispositive of, the accommodation issue.Held: 1. The Court of Appeals erred in placing the burden on prison officials to disprove the availability of alternative methods of accommodating prisoners' religious rights. That approach fails to reflect the respect and deference the Constitution allows for the judgment of prison administrators. P. 350. 2. The District Court's findings establish that the policies challenged here are reasonably related to legitimate penological interests, and therefore do not offend the Free Exercise Clause. Both policies have a rational connection to the legitimate governmental interests in institutional order and security invoked to justify them, as is demonstrated by findings that Standard 853 was a response to critical overcrowding and was designed to ease tension and drain on the facilities during that part of the day when the inmates were outside, and that the policy memorandum was necessary since returns from outside work details generated congestion and delays at the main gate, a high risk area, and since the need to decide return requests placed pressure on guards supervising outside work details. Rehabilitative concerns also support the policy memorandum, in light of testimony indicating that corrections officials sought thereby to simulate working conditions and responsibilities in society. Although the policies at issue may prevent some Muslim prisoners from attending Jumu'ah, their reasonableness is supported by the fact that they do not deprive respondents of all forms of religious exercise but instead allow participation in a number of Muslim religious ceremonies. Furthermore, there are no obvious, easy alternatives to the policies since both of respondents' suggested accommodations would, in the judgment of prison officials, have adverse effects on the prison institution. Placing all Muslim inmates in inside work details would be inconsistent with the legitimate concerns underlying Standard 853, while providing weekend labor for Muslims would require extra supervision that would be a drain on scarce human resources. Both proposed accommodations would also threaten prison security by fostering "affinity groups" likely to challenge institutional authority, while any special arrangements for one group would create a perception of favoritism on the part of other inmates. Pp. 350-353. 3. Even where claims are made under the First Amendment, this Court will not substitute its judgment on difficult and sensitive matters of institutional administration for the determinations of those charged with the formidable task of running a prison. P. 353. 782 F.2d 416, reversed.REHNQUIST, C. J., delivered the opinion of the Court, in which WHITE, POWELL, O'CONNOR, and SCALIA, JJ., joined. BRENNAN, J., filed a dissenting opinion, in which MARSHALL, BLACKMUN, and STEVENS, JJ., joined, post, p. 354.Laurie M. Hodian, Deputy Attorney General of New Jersey, argued the cause for petitioners. With her on the briefs were W. Cary Edwards, Attorney General, and James J. Ciancia, Assistant Attorney General.Roger Clegg argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Fried, Assistant Attorney General Weld, and Deputy Solicitor General Bryson.James Katz argued the cause and filed a brief for respondents.* [Footnote *] A brief of amici curiae urging reversal was filed for the Common-wealth of Pennsylvania et al. by LeRoy S. Zimmerman, Attorney General of Pennsylvania, Amy Zapp, Deputy Attorney General, John G. Knorr III, Senior Deputy Attorney General, and Andrew S. Gordon, Chief Deputy Attorney General, Charles A. Graddick, Attorney General of Alabama, Ronald W. Lorensen, Acting Attorney General of Alaska, Robert K. Corbin, Attorney General of Arizona, Steven Clark, Attorney General of Arkansas, John K. Van de Kamp, Attorney General of California, Duane Woodard, Attorney General of Colorado, Charles M. Oberly III, Attorney General of Delaware, Jim Smith, Attorney General of Florida, Corinne K. A. Watanabe, Attorney General of Hawaii, James T. Jones, Attorney General of Idaho, Linley E. Pearson, Attorney General of Indiana, Robert P. Stephan, Attorney General of Kansas, William J. Guste, Jr., Attorney General of Louisiana, Stephen H. Sachs, Attorney General of Maryland, Francis X. Bellotti, Attorney General of Massachusetts, Frank J. Kelley, Attorney General of Michigan, Hubert H. Humphrey III, Attorney General of Minnesota, Edwin Lloyd Pittman, Attorney General of Mississippi, William L. Webster, Attorney General of Missouri, Robert M. Spire, Attorney General of Nebraska, Brian McKay, Attorney General of Nevada, Lacy H. Thornburg, Attorney General of North Carolina, Nicholas J. Spaeth, Attorney General of North Dakota, Anthony J. Celebrezze, Jr., Attorney General of Ohio, Dave Frohnmayer, Attorney General of Oregon, T. Travis Medlock, Attorney General of South Carolina, Mark V. Meierhenry, Attorney General of South Dakota, W. J. Michael Cody, Attorney General of Tennessee, Mary Sue Terry, Attorney General of Virginia, Kenneth O. Eikenberry, Attorney General of Washington, A. G. McClintock, Attorney General of Wyoming, and James R. Murphy, Acting Corporate Counsel of the District of Columbia.Briefs of amici curiae urging affirmance were filed for the American Civil Liberties Union et al. by Eric Neisser, Alvin J. Bronstein, David B. Goldstein, Edward I. Koren, and Elizabeth Alexander; for the American Jewish Congress et al. by Marc D. Stern and Amy Adelson; for the Catholic League for Religious and Civil Rights et al. by Steven Frederick McDowell; for the Christian Legal Society et al. by Michael J. Woodruff and Samuel E. Ericsson; for the Prisoners' Rights Project of the Legal Aid Society of the city of New York et al. by Philip L. Weinstein, David A. Lewis, and Stephen M. Latimer; for Imam Jamil Abdullah Al-Amin et al. by Ellen J. Winner, James G. Abourezk, and Albert P. Mokhiber; and for Len Marek et al. by Steven C. Moore and Walter R. Echo-Hawk. CHIEF JUSTICE REHNQUIST delivered the opinion of the Court.This case requires us to consider once again the standard of review for prison regulations claimed to inhibit the exercise of constitutional rights. Respondents, members of the Islamic faith, were prisoners in New Jersey's Leesburg State Prison.1 They challenged policies adopted by prison officials which resulted in their inability to attend Jumu'ah, a weekly Muslim congregational service regularly held in the main prison building and in a separate facility known as "the Farm." Jumu'ah is commanded by the Koran and must be held every Friday after the sun reaches its zenith and before the Asr, or afternoon prayer. See Koran 62: 9-10; Brief for Imam Jamil Abdullah Al-Amin et al. as Amici Curiae 18-31. There is no question that respondents' sincerely held religious beliefs compelled attendance at Jumu'ah. We hold that the prison regulations here challenged did not violate respondents' rights under the Free Exercise Clause of the First Amendment to the United States Constitution.Inmates at Leesburg are placed in one of three custody classifications. Maximum security and "gang minimum" security inmates are housed in the main prison building, and those with the lowest classification - full minimum - live in "the Farm." Both respondents were classified as gang minimum security prisoners when this suit was filed, and respondent Mateen was later classified as full minimum.Several changes in prison policy prompted this litigation. In April 1983, the New Jersey Department of Corrections issued Standard 853, which provided that inmates could no longer move directly from maximum security to full minimum status, but were instead required to first spend a period of time in the intermediate gang minimum status. App. 147. This change was designed to redress problems that had arisen when inmates were transferred directly from the restrictive maximum security status to full minimum status, with its markedly higher level of freedom. Because of serious overcrowding in the main building, Standard 853 further mandated that gang minimum inmates ordinarily be assigned jobs outside the main building. Ibid. These inmates work in details of 8 to 15 persons, supervised by one guard. Standard 853 also required that full minimum inmates work outside the main institution, whether on or off prison grounds, or in a satellite building such as the Farm. Ibid.Corrections officials at Leesburg implemented these policies gradually and, as the District Court noted, with some difficulty. Shabazz v. O'Lone, 595 F. Supp. 928, 929 (NJ 1984). In the initial stages of outside work details for gang minimum prisoners, officials apparently allowed some Muslim inmates to work inside the main building on Fridays so that they could attend Jumu'ah. This alternative was eventually eliminated in March 1984, in light of the directive of Standard 853 that all gang minimum inmates work outside the main building.Significant problems arose with those inmates assigned to outside work details. Some avoided reporting for their assignments, while others found reasons for returning to the main building during the course of the workday (including their desire to attend religious services). Evidence showed that the return of prisoners during the day resulted in security risks and administrative burdens that prison officials found unacceptable. Because details of inmates were supervised by only one guard, the whole detail was forced to return to the main gate when one prisoner desired to return to the facility. The gate was the site of all incoming foot and vehicle traffic during the day, and prison officials viewed it as a high security risk area. When an inmate returned, vehicle traffic was delayed while the inmate was logged in and searched.In response to these burdens, Leesburg officials took steps to ensure that those assigned to outside details remained there for the whole day. Thus, arrangements were made to have lunch and required medications brought out to the prisoners, and appointments with doctors and social workers were scheduled for the late afternoon. These changes proved insufficient, however, and prison officials began to study alternatives. After consulting with the director of social services, the director of professional services, and the prison's imam and chaplain, prison officials in March 1984 issued a policy memorandum which prohibited inmates assigned to outside work details from returning to the prison during the day except in the case of emergency.The prohibition of returns prevented Muslims assigned to outside work details from attending Jumu'ah. Respondents filed suit under 42 U.S.C. 1983, alleging that the prison policies unconstitutionally denied them their Free Exercise rights under the First Amendment, as applied to the States through the Fourteenth Amendment. The District Court, applying the standards announced in an earlier decision of the Court of Appeals for the Third Circuit, concluded that no constitutional violation had occurred. The District Court decided that Standard 853 and the March 1984 prohibition on returns "plausibly advance" the goals of security, order, and rehabilitation. 595 F. Supp., at 934. It rejected alternative arrangements suggested by respondents, finding that "no less restrictive alternative could be adopted without potentially compromising a legitimate institutional objective." Ibid.The Court of Appeals, sua sponte hearing the case en banc, decided that its earlier decision relied upon by the District Court was not sufficiently protective of prisoners' free exercise rights, and went on to state that prison policies could be sustained only if:"the state ... show[s] that the challenged regulations were intended to serve, and do serve, the important penological goal of security, and that no reasonable method exists by which [prisoners'] religious rights can be accommodated without creating bona fide security problems. The expert testimony of prison officials should be given due weight, but such testimony is not dispositive of the issue whether no reasonable adjustment is possible... . Where it is found that reasonable methods of accommodation can be adopted without sacrificing either the State's interest in security or the prisoners' interest in freely exercising their religious rights, the State's refusal to allow the observance of a central religious practice cannot be justified and violates the prisoner's first amendment rights." Shabazz v. O'Lone, 782 F.2d 416, 420 (CA3 1986) (footnotes omitted). In considering whether a potential method of accommodation is reasonable, the court added, relevant factors include cost, the effects of overcrowding, understaffing, and inmates' demonstrated proclivity to unruly conduct. See id., at 420, n. 3. The case was remanded to the District Court for reconsideration under the standards enumerated in the opinion. We granted certiorari to consider the important federal constitutional issues presented by the Court of Appeals' decision, and to resolve apparent confusion among the Courts of Appeals on the proper standards to be applied in considering prisoners' free exercise claims. .Several general principles guide our consideration of the issues presented here. First, "convicted prisoners do not forfeit all constitutional protections by reason of their conviction and confinement in prison." Bell v. Wolfish, . See Turner v. Safley, ante, at 84; Jones v. North Carolina Prisoners' Labor Union, Inc., . Inmates clearly retain protections afforded by the First Amendment, Pell v. Procunier, , including its directive that no law shall prohibit the free exercise of religion. See Cruz v. Beto, (per curiam). Second, "[l]awful incarceration brings about the necessary withdrawal or limitation of many privileges and rights, a retraction justified by the considerations underlying our penal system." Price v. Johnston, . The limitations on the exercise of constitutional rights arise both from the fact of incarceration and from valid penological objectives - including deterrence of crime, rehabilitation of prisoners, and institutional security. Pell v. Procunier, supra, at 822-823; Procunier v. Martinez, . In considering the appropriate balance of these factors, we have often said that evaluation of penological objectives is committed to the considered judgment of prison administrators, "who are actually charged with and trained in the running of the particular institution under examination." Bell v. Wolfish, supra, at 562. See Turner v. Safley, ante, at 86-87. To ensure that courts afford appropriate deference to prison officials, we have determined that prison regulations alleged to infringe constitutional rights are judged under a "reasonableness" test less restrictive than that ordinarily applied to alleged infringements of fundamental constitutional rights. See, e. g., Jones v. North Carolina Prisoners' Labor Union, Inc., supra, at 128. We recently restated the proper standard: "[W]hen a prison regulation impinges on inmates' constitutional rights, the regulation is valid if it is reasonably related to legitimate penological interests." Turner v. Safley, ante, at 89.2 This approach ensures the ability of corrections officials "to anticipate security problems and to adopt innovative solutions to the intractable problems of prison administration," ibid., and avoids unnecessary intrusion of the judiciary into problems particularly ill suited to "resolution by decree." Procunier v. Martinez, supra, at 405. See also Turner v. Safley, ante, at 89; Bell v. Wolfish, supra, at 548.We think the Court of Appeals decision in this case was wrong when it established a separate burden on prison officials to prove "that no reasonable method exists by which [prisoners'] religious rights can be accommodated without creating bona fide security problems." 782 F.2d, at 420. See also id., at 419 (Prison officials should be required "to produce convincing evidence that they are unable to satisfy their institutional goals in any way that does not infringe inmates' free exercise rights"). Though the availability of accommodations is relevant to the reasonableness inquiry, we have rejected the notion that "prison officials ... have to set up and then shoot down every conceivable alternative method of accommodating the claimant's constitutional complaint." Turner v. Safley, ante, at 90-91. By placing the burden on prison officials to disprove the availability of alternatives, the approach articulated by the Court of Appeals fails to reflect the respect and deference that the United States Constitution allows for the judgment of prison administrators.Turning to consideration of the policies challenged in this case, we think the findings of the District Court establish clearly that prison officials have acted in a reasonable manner. Turner v. Safley drew upon our previous decisions to identify several factors relevant to this reasonableness determination. First, a regulation must have a logical connection to legitimate governmental interests invoked to justify it. Ante, at 89-90. The policies at issue here clearly meet that standard. The requirement that full minimum and gang minimum prisoners work outside the main facility was justified by concerns of institutional order and security, for the District Court found that it was "at least in part a response to a critical overcrowding in the state's prisons, and ... at least in part designed to ease tension and drain on the facilities during that part of the day when the inmates were outside the confines of the main buildings." 595 F. Supp., at 929. We think it beyond doubt that the standard is related to this legitimate concern.The subsequent policy prohibiting returns to the institution during the day also passes muster under this standard. Prison officials testified that the returns from outside work details generated congestion and delays at the main gate, a high risk area in any event. Return requests also placed pressure on guards supervising outside details, who previously were required to "evaluate each reason possibly justifying a return to the facilities and either accept or reject that reason." Id., at 931. Rehabilitative concerns further supported the policy; corrections officials sought a simulation of working conditions and responsibilities in society. Chief Deputy Ucci testified: "One of the things that society demands or expects is that when you have a job, you show up on time, you put in your eight hours, or whatever hours you are supposed to put in, and you don't get off ... . If we can show inmates that they're supposed to show up for work and work a full day, then when they get out at least we've done something." Tr. 89. These legitimate goals were advanced by the prohibition on returns; it cannot seriously be maintained that "the logical connection between the regulation and the asserted goal is so remote as to render the policy arbitrary or irrational." Turner v. Safley, ante, at 89-90.Our decision in Turner also found it relevant that "alternative means of exercising the right ... remain open to prison inmates." Ante, at 90. There are, of course, no alternative means of attending Jumu'ah; respondents' religious beliefs insist that it occur at a particular time. But the very stringent requirements as to the time at which Jumu'ah may be held may make it extraordinarily difficult for prison officials to assure that every Muslim prisoner is able to attend that service. While we in no way minimize the central importance of Jumu'ah to respondents, we are unwilling to hold that prison officials are required by the Constitution to sacrifice legitimate penological objectives to that end. In Turner, we did not look to see whether prisoners had other means of communicating with fellow inmates, but instead examined whether the inmates were deprived of "all means of expression." Ante, at 92. Here, similarly, we think it appropriate to see whether under these regulations respondents retain the ability to participate in other Muslim religious ceremonies. The record establishes that respondents are not deprived of all forms of religious exercise, but instead freely observe a number of their religious obligations. The right to congregate for prayer or discussion is "virtually unlimited except during working hours," Tr. 182 (testimony of O'Lone), and the state-provided imam has free access to the prison. Muslim prisoners are given different meals whenever pork is served in the prison cafeteria. Special arrangements are also made during the month-long observance of Ramadan, a period of fasting and prayer. During Ramadan, Muslim prisoners are awakened at 4 a.m. for an early breakfast, and receive dinner at 8:30 each evening. We think this ability on the part of respondents to participate in other religious observances of their faith supports the conclusion that the restrictions at issue here were reasonable.Finally, the case for the validity of these regulations is strengthened by examination of the impact that accommodation of respondents' asserted right would have on other inmates, on prison personnel, and on allocation of prison resources generally. See Turner v. Safley, ante, at 90. Respondents suggest several accommodations of their practices, including placing all Muslim inmates in one or two inside work details or providing weekend labor for Muslim inmates. See Brief for Respondents 52-53. As noted by the District Court, however, each of respondents' suggested accommodations would, in the judgment of prison officials, have adverse effects on the institution. Inside work details for gang minimum inmates would be inconsistent with the legitimate concerns underlying Standard 853, and the District Court found that the extra supervision necessary to establish weekend details for Muslim prisoners "would be a drain on scarce human resources" at the prison. 595 F. Supp., at 932. Prison officials determined that the alternatives would also threaten prison security by allowing "affinity groups" in the prison to flourish. Administrator O'Lone testified that "we have found out and think almost every prison administrator knows that any time you put a group of individuals together with one particular affinity interest ... you wind up with ... a leadership role and an organizational structure that will almost invariably challenge the institutional authority." Tr. 179-180. Finally, the officials determined that special arrangements for one group would create problems as "other inmates [see] that a certain segment is escaping a rigorous work detail" and perceive favoritism. Id., at 178-179. These concerns of prison administrators provide adequate support for the conclusion that accommodations of respondents' request to attend Jumu'ah would have undesirable results in the institution. These difficulties also make clear that there are no "obvious, easy alternatives to the policy adopted by petitioners." Turner v. Safley, ante, at 93.We take this opportunity to reaffirm our refusal, even where claims are made under the First Amendment, to "substitute our judgment on ... difficult and sensitive matters of institutional administration," Block v. Rutherford, , for the determinations of those charged with the formidable task of running a prison. Here the District Court decided that the regulations alleged to infringe constitutional rights were reasonably related to legitimate penological objectives. We agree with the District Court, and it necessarily follows that the regulations in question do not offend the Free Exercise Clause of the First Amendment to the United States Constitution. The judgment of the Court of Appeals is therefore Reversed. |
7 | In 1985, a small California research company called Cetus began to develop methods for quantifying blood-borne levels of human immunodeficiency virus (HIV), the virus that causes AIDS. A Nobel Prize winning technique developed at Cetus known as PCR was an integral part of these efforts. In 1988, Cetus began to collaborate with scientists at Stanford University's Department of Infectious Diseases to test the efficacy of new AIDS drugs. Dr. Holodniy joined Stanford as a research fellow in the department around that time. When he did so, he signed an agreement stating that he "agree[d] to assign" to Stanford his "right, title and interest in" inventions resulting from his employment there. Holodniy's supervisor arranged for him to conduct research at Cetus to learn about PCR. As a condition of gaining access to Cetus, Holodniy was required to sign an agreement stating that he "will assign and do[es] hereby assign" to Cetus his "right, title and interest in ... the ideas, inventions, and improvements" made "as a consequence of [his] access" to Cetus. Working with Cetus employees, Holodniy devised a PCR-based procedure for measuring the amount of HIV in a patient's blood. Upon returning to Stanford, he and other Stanford employees tested the procedure. Stanford secured three patents to the measurement process. Roche Molecular Systems acquired Cetus's PCR-related assets. After conducting clinical trials on the HIV quantification method developed at Cetus, Roche commercialized the procedure. Today, its HIV test kits are used worldwide. The University and Small Business Patent Procedures Act of 1980 (Bayh-Dole Act or Act) allocates rights in federally funded "subject invention[s]" between the Federal Government and federal contractors. 35 U. S. C. §§201(e), (c), 202(a). The Act defines "subject invention" as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement," §201(e), and provides that contractors may "elect to retain title to any subject invention," §202(a). Because some of Stanford's research on the HIV measurement technique was funded by the National Institutes of Health (NIH), the Bayh-Dole Act applied. In accordance with the Act's requirements, Stanford notified NIH that it was electing to retain title to the invention and conferred on the Government a license to use the patented procedure. Petitioner, the Board of Trustees of Stanford University, filed suit against respondents (Roche), claiming that their HIV test kits infringed Stanford's patents. Roche responded that Holodniy's agreement with Cetus gave it co-ownership of the procedure, and thus Stanford lacked standing to sue it for patent infringement. Stanford countered that Holodniy had no rights to assign because the University had superior rights under the Bayh-Dole Act. The District Court agreed with Stanford and held that under the Bayh-Dole Act, Holodniy had no rights to assign to Cetus. The Court of Appeals for the Federal Circuit disagreed, concluding that Holodniy's agreement with Cetus assigned his rights to Cetus, and thus to Roche. It also found that the Bayh-Dole Act did not automatically void an inventor's rights in federally funded inventions. Thus, the Act did not extinguish Roche's ownership interest in the invention, and Stanford was deprived of standing. Held: The Bayh-Dole Act does not automatically vest title to federally funded inventions in federal contractors or authorize contractors to unilaterally take title to such inventions. Pp. 6-15. (a) Since 1790, patent law has operated on the premise that rights in an invention belong to the inventor. See, e.g., Gayler v. Wilder, 10 How. 477, 493. In most cases, a patent may be issued only to an applying inventor, or — because an inventor's interest in his invention is assignable in law by an instrument in writing — an inventor's assignee. See United States v. Dubilier Condenser Corp., 289 U. S. 178, 187. Absent an agreement to the contrary, an employer does not have rights in an invention "which is the original conception of the employee alone," id., at 189; an inventor must expressly grant those rights to his employer, see id., at 187. Pp. 6-8. (b) Stanford and amicus United States contend that, when an invention is conceived or first reduced to practice with the support of federal funds, the Bayh-Dole Act vests title to those inventions in the inventor's employer — the federal contractor. Congress has in the past divested inventors of their rights in inventions by providing unambiguously that inventions created pursuant to certain specified federal contracts become the Government's property. Such unambiguous language is notably absent from the Bayh-Dole Act. Instead, the Act provides that contractors may "elect to retain title to any subject invention," §202(a), defining a "subject invention" as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement," §201(e). Stanford contends that "invention of the contractor" means all inventions that a contractor's employees make with the aid of federal funds. That reading assumes that Congress subtly set aside two centuries of patent law in a statutory definition. This Court has rejected the idea that mere employment is sufficient to vest title to an employee's invention in the employer. Stanford's reading also renders the phrase "of the contractor" superfluous since the definition already covers inventions made under a funding agreement. Construing the phrase to refer instead to a particular category of inventions conceived or reduced to practice under a funding agreement — inventions "of the contractor," that is, those owned by or belonging to the contractor — makes the phrase meaningful in the statutory definition. And "invention owned by the contractor" or "invention belonging to the contractor" are natural readings of the phrase "invention of the contractor." Section 202(a), which states that contractors may "elect to retain title," confirms that the Act does not vest title. Stanford reaches the opposite conclusion, but only because it reads "retain" to mean "acquire" and "receive." That is certainly not the common meaning of "retain," which is "to hold or continue to hold in possession or use." You cannot retain something unless you already have it. And §210(a)--which provides that the Act "take[s] precedence over any other Act which would require a disposition of rights in subject inventions ... that is inconsistent with" the Act — does not displace the basic principle that an inventor owns the rights to his invention. Only when an invention belongs to the contractor does the Bayh-Dole Act come into play. The Act's disposition of rights does nothing more than clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. The Act's isolated provisions dealing with inventors' rights in subject inventions are consistent with the Court's construction of the Act. See §202(d). That construction is also bolstered by the Act's limited procedural protections, which expressly give contractors the right to challenge a Government-imposed impediment to retaining title to a subject invention, §202(b)(4), but do not provide similar protection for inventor and third-party rights. Stanford's contrary construction would permit title to an employee's inventions to vest in the University even if the invention was conceived before the inventor became an employee, so long as the invention's reduction to practice was supported by federal funding. It also suggests that the school would obtain title were even one dollar of federal funding applied toward an invention's conception or reduction to practice. It would be noteworthy enough for Congress to supplant one of the fundamental precepts of patent law and deprive inventors of rights in their own inventions. To do so under such unusual terms would be truly surprising. Had Congress intended such a sea change in intellectual property rights it would have said so clearly — not obliquely through an ambiguous definition of "subject invention" and an idiosyncratic use of the word "retain." The Court's construction of the Act is also reflected in the common practice of contractors, who generally obtain assignments from their employees, and of agencies that fund federal contractors, who typically expect those contractors to obtain assignments. With effective assignments, federally funded inventions become "subject inventions" and the Act as a practical matter works pretty much the way Stanford says it should. The only significant difference is that it does so without violence to the basic patent law principle that inventors own their inventions. Pp. 8-15.583 F. 3d 832, affirmed. Roberts, C. J., delivered the opinion of the Court, in which Scalia, Kennedy, Thomas, Alito, Sotomayor, and Kagan, JJ., joined. Sotomayor, J., filed a concurring opinion. Breyer, J., filed a dissenting opinion, in which Ginsburg, J., joined.BOARD OF TRUSTEES OF THE LELAND STANFORDJUNIOR UNIVERSITY, PETITIONER v. ROCHEMOLECULAR SYSTEMS, INC., et al.on writ of certiorari to the united states court of appeals for the federal circuit[June 6, 2011] Chief Justice Roberts delivered the opinion of the Court. Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor. The question here is whether the University and Small Business Patent Procedures Act of 1980 — commonly referred to as the Bayh-Dole Act — displaces that norm and automatically vests title to federally funded inventions in federal contractors. We hold that it does not.IA In 1985, a small California research company called Cetus began to develop methods for quantifying blood-borne levels of human immunodeficiency virus (HIV), the virus that causes AIDS. A Nobel Prize winning technique developed at Cetus — polymerase chain reaction, or PCR — was an integral part of these efforts. PCR allows billions of copies of DNA sequences to be made from a small initial blood sample. In 1988, Cetus began to collaborate with scientists at Stanford University's Department of Infectious Diseases to test the efficacy of new AIDS drugs. Dr. Mark Holodniy joined Stanford as a research fellow in the department around that time. When he did so, he signed a Copyright and Patent Agreement (CPA) stating that he "agree[d] to assign" to Stanford his "right, title and interest in" inventions resulting from his employment at the University. App. to Pet. for Cert. 118a-119a. At Stanford Holodniy undertook to develop an improved method for quantifying HIV levels in patient blood samples, using PCR. Because Holodniy was largely unfamiliar with PCR, his supervisor arranged for him to conduct research at Cetus. As a condition of gaining access to Cetus, Holodniy signed a Visitor's Confidentiality Agreement (VCA). That agreement stated that Holodniy "will assign and do[es] hereby assign" to Cetus his "right, title and interest in each of the ideas, inventions and improvements" made "as a consequence of [his] access" to Cetus. Id., at 122a-124a. For the next nine months, Holodniy conducted research at Cetus. Working with Cetus employees, Holodniy devised a PCR-based procedure for calculating the amount of HIV in a patient's blood. That technique allowed doctors to determine whether a patient was benefiting from HIV therapy. Holodniy then returned to Stanford where he and other University employees tested the HIV measurement technique. Over the next few years, Stanford obtained written assignments of rights from the Stanford employees involved in refinement of the technique, including Holodniy, and filed several patent applications related to the procedure. Stanford secured three patents to the HIV measurement process. In 1991, Roche Molecular Systems, a company that specializes in diagnostic blood screening, acquired Cetus's PCR-related assets, including all rights Cetus had obtained through agreements like the VCA signed by Holodniy. After conducting clinical trials on the HIV quantification method developed at Cetus, Roche commercialized the procedure. Today, Roche's HIV test "kits are used in hospitals and AIDS clinics worldwide." Brief for Respondents 10-11.B In 1980, Congress passed the Bayh-Dole Act to "promote the utilization of inventions arising from federally supported research," "promote collaboration between commercial concerns and nonprofit organizations," and "ensure that the Government obtains sufficient rights in federally supported inventions." 35 U. S. C. §200. To achieve these aims, the Act allocates rights in federally funded "subject invention[s]" between the Federal Government and federal contractors ("any person, small business firm, or nonprofit organization that is a party to a funding agreement"). §§201(e), (c), 202(a). The Act defines "subject invention" as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement." §201(e). The Bayh-Dole Act provides that contractors may "elect to retain title to any subject invention." §202(a). To be able to retain title, a contractor must fulfill a number of obligations imposed by the statute. The contractor must "disclose each subject invention to the [relevant] Federal agency within a reasonable time"; it must "make a written election within two years after disclosure" stating that the contractor opts to retain title to the invention; and the contractor must "file a patent application prior to any statutory bar date." §§202(c)(1)-(3). The "Federal Government may receive title" to a subject invention if a contractor fails to comply with any of these obligations. Ibid. The Government has several rights in federally funded subject inventions under the Bayh-Dole Act. The agency that granted the federal funds receives from the contractor "a nonexclusive, nontransferrable, irrevocable, paid-up license to practice ... [the] subject invention." §202(c)(4). The agency also possesses "[m]arch-in rights," which permit the agency to grant a license to a responsible third party under certain circumstances, such as when the con-tractor fails to take "effective steps to achieve practical application" of the invention. §203. The Act further provides that when the contractor does not elect to retain title to a subject invention, the Government "may consider and after consultation with the contractor grant requests for retention of rights by the inventor." §202(d). Some of Stanford's research related to the HIV measurement technique was funded by the National Institutes of Health (NIH), thereby subjecting the invention to the Bayh-Dole Act. Accordingly, Stanford disclosed the in-vention, conferred on the Government a nonexclusive, nontransferable, paid-up license to use the patented proce-dure, and formally notified NIH that it elected to retain title to the invention.C In 2005, the Board of Trustees of Stanford University filed suit against Roche Molecular Systems, Inc., Roche Diagnostics Corporation, and Roche Diagnostics Operations, Inc. (collectively Roche), contending that Roche's HIV test kits infringed Stanford's patents. As relevant here, Roche responded by asserting that it was a co-owner of the HIV quantification procedure, based on Holodniy's assignment of his rights in the Visitor's Confidentiality Agreement. As a result, Roche argued, Stanford lacked standing to sue it for patent infringement. 487 F. Supp. 2d 1099, 1111, 1115 (ND Cal. 2007). Stanford claimed that Holodniy had no rights to assign because the University's HIV research was federally funded, giving the school superior rights in the invention under the Bayh-Dole Act. Ibid.1 The District Court held that the "VCA effectively assigned any rights that Holodniy had in the patented invention to Cetus," and thus to Roche. Id., at 1117. But because of the operation of the Bayh-Dole Act, "Holodniy had no interest to assign." Id., at 1117, 1119. The court concluded that the Bayh-Dole Act "provides that the individual inventor may obtain title" to a federally funded invention "only after the government and the contracting party have declined to do so." Id., at 1118. The Court of Appeals for the Federal Circuit disagreed. First, the court concluded that Holodniy's initial agreement with Stanford in the Copyright and Patent Agreement constituted a mere promise to assign rights in the future, unlike Holodniy's agreement with Cetus in the Visitor's Confidentiality Agreement, which itself assigned Holodniy's rights in the invention to Cetus. See 583 F. 3d 832, 841-842 (2009). Therefore, as a matter of contract law, Cetus obtained Holodniy's rights in the HIV quantification technique through the VCA.2 Next, the court explained that the Bayh-Dole Act "does not automatically void ab initio the inventors' rights in government-funded inventions" and that the "statutory scheme did not automatically void the patent rights that Cetus received from Holodniy." Id., at 844-845. The court held that "Roche possesse[d] an ownership interest in the patents-in-suit" that was not extinguished by the Bayh-Dole Act, "depriv[ing] Stanford of standing." Id., at 836-837. The Court of Appeals then remanded the case with instructions to dismiss Stanford's infringement claim. Id., at 849. We granted certiorari. 562 U. S. ___ (2010).IIA Congress has the authority "[t]o promote the Progress of Science and useful Arts, by securing ... to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." U. S. Const. Art. I, §8, cl. 8. The first Congress put that power to use by enacting the Patent Act of 1790. That Act provided "[t]hat upon the petition of any person or persons ... setting forth, that he, she, or they, hath or have invented or discovered" an invention, a patent could be granted to "such petitioner or petitioners" or "their heirs, administrators or assigns." Act of Apr. 10, 1790, §1, 1 Stat. 109-110. Under that law, the first patent was granted in 1790 to Samuel Hopkins, who had devised an improved method for making potash, America's first industrial chemical. U. S. Patent No. 1 (issued July 31, 1790).3 Although much in intellectual property law has changed in the 220 years since the first Patent Act, the basic idea that inventors have the right to patent their inventions has not. Under the law in its current form, "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter ... may obtain a patent therefor." 35 U. S. C. §101. The inventor must attest that "he believes himself to be the original and first inventor of the [invention] for which he solicits a patent." §115. In most cases, a patent may be issued only to an applying inventor, or — because an inventor's interest in his invention is "assignable in law by an instrument in writing"--an inventor's assignee. §§151, 152, 261. Our precedents confirm the general rule that rights in an invention belong to the inventor. See, e.g., Gayler v. Wilder, 10 How. 477, 493 (1851) ("the discoverer of a new and useful improvement is vested by law with an inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner which the law requires"); Solomons v. United States, 137 U. S. 342, 346 (1890) ("whatever invention [an inventor] may thus conceive and perfect is his individual property"); United States v. Dubilier Condenser Corp., 289 U. S. 178, 188 (1933) (an inventor owns "the product of [his] original thought"). The treatises are to the same effect. See, e.g., 8 Chisum on Patents §22.01, p. 22-2 (2011) ("The presumptive owner of the property right in a patentable invention is the single human inventor"). It is equally well established that an inventor can assign his rights in an invention to a third party. See Dubilier Condenser Corp., supra, at 187 ("A patent is property and title to it can pass only by assignment"); 8 Chisum on Patents, supra, §22.01, at 22-2 ("The inventor ... [may] transfer ownership interests by written assignment to anyone"). Thus, although others may acquire an interest in an invention, any such interest — as a general rule — must trace back to the inventor. In accordance with these principles, we have recognized that unless there is an agreement to the contrary, an employer does not have rights in an invention "which is the original conception of the employee alone." Dubilier Condenser Corp., 289 U. S., at 189. Such an invention "remains the property of him who conceived it." Ibid. In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights. See id., at 187 ("The respective rights and obligations of employer and employee, touching an invention conceived by the latter, spring from the contract of employment"). B Stanford and the United States as amicus curiae contend that the Bayh-Dole Act reorders the normal priority of rights in an invention when the invention is conceived or first reduced to practice with the support of federal funds. In their view, the Act moves inventors from the front of the line to the back by vesting title to federally funded inventions in the inventor's employer — the federal contractor. See Brief for Petitioner 26-27; Brief for United States as Amicus Curiae 6. Congress has in the past divested inventors of their rights in inventions by providing unambiguously that inventions created pursuant to specified federal contracts become the property of the United States. For example, with respect to certain contracts dealing with nuclear material and atomic energy, Congress provided that title to such inventions "shall be vested in, and be the property of, the [Atomic Energy] Commission." 42 U. S. C. §2182. Congress has also enacted laws requiring that title to certain inventions made pursuant to contracts with the National Aeronautics and Space Administration "shall be the exclusive property of the United States," Pub. L. 111-314, §3, 124 Stat. 3339, 51 U. S. C. §20135(b)(1), and that title to certain inventions under contracts with the Department of Energy "shall vest in the United States." 42 U. S. C. §5908. Such language is notably absent from the Bayh-Dole Act. Nowhere in the Act is title expressly vested in contractors or anyone else; nowhere in the Act are inventors expressly deprived of their interest in federally funded inventions. Instead, the Act provides that contractors may "elect to retain title to any subject invention." 35 U. S. C. §202(a). A "subject invention" is defined as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement." §201(e). Stanford asserts that the phrase "invention of the contractor" in this provision "is naturally read to include all inventions made by the contractor's employees with the aid of federal funding." Brief for Petitioner 32 (footnote omitted). That reading assumes that Congress subtly set aside two centuries of patent law in a statutory definition. It also renders the phrase "of the contractor" superfluous. If the phrase "of the contractor" were deleted from the definition of "subject invention," the definition would cover "any invention ... conceived or first actually reduced to practice in the performance of work under a funding agreement." Reading "of the contractor" to mean "all inventions made by the contractor's employees with the aid of federal funding," as Stanford would, adds nothing that is not already in the definition, since the definition already covers inventions made under the funding agreement. That is contrary to our general "reluctan[ce] to treat statutory terms as surplusage." Duncan v. Walker, 533 U. S. 167, 174 (2001) (internal quotation marks omitted). Construing the phrase to refer instead to a particular category of inventions conceived or reduced to practice under a funding agreement — inventions "of the contractor," that is, those owned by or belonging to the contractor — makes the phrase meaningful in the statutory definition. And "invention owned by the contractor" or "invention belonging to the contractor" are natural readings of the phrase "invention of the contractor." As we have explained, "[t]he use of the word 'of' denotes ownership." Poe v. Seaborn, 282 U. S. 101, 109 (1930); see FloresFigueroa v. United States, 556 U. S. ___, ___, ___ (2009) (slip op., at 2, 11) (treating the phrase "identification [papers] of another person" as meaning such items belonging to another person (internal quotation marks omitted)); Ellis v. United States, 206 U. S. 246, 259 (1907) (interpreting the phrase "works of the United States" to mean "works belonging to the United States" (internal quotation marks omitted)). That reading follows from a common definition of the word "of." See Webster's Third New International Dictionary 1565 (2002) ("of" can be "used as a function word indicating a possessive relationship"); New Oxford American Dictionary 1180 (2d ed. 2005) (defining "of" as "indicating an association between two entities, typically one of belonging"); Webster's New Twentieth Century Dictionary 1241 (2d ed. 1979) (defining "of" as "belonging to"). Stanford's reading of the phrase "invention of the contractor" to mean "all inventions made by the contractor's employees" is plausible enough in the abstract; it is often the case that whatever an employee produces in the course of his employment belongs to his employer. No one would claim that an autoworker who builds a car while working in a factory owns that car. But, as noted, patent law has always been different: We have rejected the idea that mere employment is sufficient to vest title to an employee's invention in the employer. Against this background, a contractor's invention — an "invention of the contractor"--does not automatically include inventions made by the contractor's employees.4 The Bayh-Dole Act's provision stating that contractors may "elect to retain title" confirms that the Act does not vest title. 35 U. S. C. §202(a) (emphasis added). Stanford reaches the opposite conclusion, but only because it reads "retain" to mean "acquire" and "receive." Brief for Petitioner 36 (internal quotation marks omitted). That is certainly not the common meaning of "retain." "[R]etain" means "to hold or continue to hold in possession or use." Webster's Third, supra, at 1938; see Webster's New Collegiate Dictionary 980 (1980) ("to keep in possession or use"); American Heritage Dictionary 1109 (1969) ("[t]o keep or hold in one's possession"). You cannot retain something unless you already have it. See Alaska v. United States, 545 U. S. 75, 104 (2005) (interpreting the phrase "the United States shall retain title to all property" to mean that "[t]he United States ... retained title to its property located within Alaska's borders") (emphasis added). The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have. Such a provision makes sense in a statute specifying the respective rights and responsibilities of federal contractors and the Government. The Bayh-Dole Act states that it "take[s] precedence over any other Act which would require a disposition of rights in subject inventions ... that is inconsistent with" the Act. 35 U. S. C. §210(a). The United States as amicus curiae argues that this provision operates to displace the basic principle, codified in the Patent Act, that an inventor owns the rights to his invention. See Brief for United States 21. But because the Bayh-Dole Act, including §210(a), applies only to "subject inventions"--"inventions of the contractor"--it does not displace an inventor's antecedent title to his invention. Only when an invention belongs to the contractor does the Bayh-Dole Act come into play. The Act's disposition of rights — like much of the rest of the Bayh-Dole Act — serves to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more.5 The isolated provisions of the Bayh-Dole Act dealing with inventors' rights in subject inventions are consistent with our construction of the Act. Under the Act, a federal agency may "grant requests for retention of rights by the inventor ... [i]f a contractor does not elect to retain title to a subject invention." §202(d). If an employee inventor never had title to his invention because title vested in the contractor by operation of law — as Stanford submits — it would be odd to allow the Government to grant "requests for retention of rights by the inventor." By using the word "retention," §202(d) assumes that the inventor had rights in the subject invention at some point, undermining the notion that the Act automatically vests title to federally funded inventions in federal contractors.6 The limited scope of the Act's procedural protections also bolsters our conclusion. The Bayh-Dole Act expressly confers on contractors the right to challenge a Government-imposed impediment to retaining title to a subject invention. §202(b)(4). As Roche correctly notes, however, "the Act contains not a single procedural protection for third parties that have neither sought nor received federal funds," such as cooperating private research institutions. Brief for Respondents 29. Nor does the Bayh-Dole Act allow inventors employed by federal contractors to contest their employer's claim to a subject invention. The Act, for example, does not expressly permit an interested third party or an inventor to challenge a claim that a particular invention was supported by federal funding. In a world in which there is frequent collaboration between private entities, inventors, and federal contractors, see Brief for Pharmaceutical Research and Manufacturers of America as Amicus Curiae 22-23, that absence would be deeply troubling. But the lack of procedures protecting inventor and third-party rights makes perfect sense if the Act applies only when a federal contractor has already acquired title to an inventor's interest. In that case, there is no need to protect inventor or third-party rights, because the only rights at issue are those of the contractor and the Government. The Bayh-Dole Act applies to subject inventions "conceived or first actually reduced to practice in the performance of work" "funded in whole or in part by the Federal Government." 35 U. S. C. §§201(e), 201(b) (emphasis added). Under Stanford's construction of the Act, title to one of its employee's inventions could vest in the University even if the invention was conceived before the inventor became a University employee, so long as the invention's reduction to practice was supported by federal funding. What is more, Stanford's reading suggests that the school would obtain title to one of its employee's inventions even if only one dollar of federal funding was applied toward the invention's conception or reduction to practice. It would be noteworthy enough for Congress to supplant one of the fundamental precepts of patent law and deprive inventors of rights in their own inventions. To do so under such unusual terms would be truly surprising. We are confident that if Congress had intended such a sea change in intellectual property rights it would have said so clearly — not obliquely through an ambiguous definition of "subject invention" and an idiosyncratic use of the word "retain." Cf. Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468 (2001) ("Congress ... does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions"). Though unnecessary to our conclusion, it is worth noting that our construction of the Bayh-Dole Act is reflected in the common practice among parties operating under the Act. Contractors generally institute policies to obtain assignments from their employees. See Brief for Respondents 34; Brief for Pharmaceutical Research and Manufacturers of America as Amicus Curiae 13-18. Agencies that grant funds to federal contractors typically expect those contractors to obtain assignments. So it is with NIH, the agency that granted the federal funds at issue in this case. In guidance documents made available to contractors, NIH has made clear that "[b]y law, an inventor has initial ownership of an invention " and that contractors should therefore "have in place employee agreements requiring an inventor to 'assign' or give ownership of an invention to the organization upon acceptance of Federal funds." NIH Policies, Procedures, and Forms, A "20-20" View of Invention Reporting to the National Institutes of Health (Sept. 22, 1995). Such guidance would be unnecessary if Stanford's reading of the statute were correct. Stanford contends that reading the Bayh-Dole Act as not vesting title to federally funded inventions in federal contractors "fundamentally undermin[es]" the Act's frame-work and severely threatens its continued "successful application." Brief for Petitioner 45. We do not agree. As just noted, universities typically enter into agreements with their employees requiring the assignment to the university of rights in inventions. With an effective assignment, those inventions — if federally funded — become "subject inventions" under the Act, and the statute as a practical matter works pretty much the way Stanford says it should. The only significant difference is that it does so without violence to the basic principle of patent law that inventors own their inventions. The judgment of the Court of Appeals for the Federal Circuit is affirmed.It is so ordered.BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, PETITIONER v. ROCHE MOLECULAR SYSTEMS, INC., et al.on writ of certiorari to the united states court of appeals for the federal circuit[June 6, 2011] Justice Sotomayor, concurring. I agree with the Court's resolution of this case and with its reasoning. I write separately to note that I share Justice Breyer's concerns as to the principles adopted by the Court of Appeals for the Federal Circuit in FilmTec Corp. v. Allied-Signal, Inc., 939 F. 2d 1568 (1991), and the application of those principles to agreements that implicate the Bayh-Dole Act. See post, at 6-10 (dissenting opinion). Because Stanford failed to challenge the decision below on these grounds, I agree that the appropriate disposition is to affirm. Like the dissent, however, I understand the majority opinion to permit consideration of these arguments in a future case. See ante, at 5, n. 2.BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, PETITIONER v. ROCHE MOLECULAR SYSTEMS, INC., et al.on writ of certiorari to the united states court of appeals for the federal circuit[June 6, 2011] Justice Breyer, with whom Justice Ginsburg joins, dissenting. The question presented in this case is:"Whether a federal contractor university's statutory right under the Bayh-Dole Act, 35 U. S. C. §§200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual in-ventor through a separate agreement purporting to as-sign the inventor's rights to a third party." Brief for Petitioner i.In my view, the answer to this question is likely no. But because that answer turns on matters that have not been fully briefed (and are not resolved by the opinion of the Court), I would return this case to the Federal Circuit for further argument.I The Bayh-Dole Act creates a three-tier system for patent rights ownership applicable to federally funded research conducted by nonprofit organizations, such as universities, and small businesses. It sets forth conditions that mean (1) the funded firm; (2) failing that, the United States Government; and (3) failing that, the employee who made the invention, will likely obtain (or retain) any resulting patent rights (normally in that just-listed order). 35 U. S. C. §§202-203. The statute applies to "subject in-vention[s]" defined as "any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement." §201(e) (emphasis added). Since the "contractor" (e.g., a university or small business) is unlikely to "conceiv[e]" of an idea or "reduc[e]" it "to practice" other than through its employees, the term "invention of the contractor" must refer to the work and ideas of those employees. We all agree that the term covers those employee inventions that the employee properly assigns to the contractor, i.e., his or her employer. But does the term "subject invention" also include inventions that the employee fails to assign properly?II Congress enacted this statute against a background norm that often, but not always, denies individual inventors patent rights growing out of research for which the public has already paid. This legal norm reflects the fact that patents themselves have both benefits and costs. Patents, for example, help to elicit useful inventions and research and to assure public disclosure of technological advances. See, e.g., Mazer v. Stein, 347 U. S. 201, 219 (1954); Bilski v. Kappos, 561 U. S. ___, ___ (2010) (slip op., at 4); id., at ___ (slip op., at 10) (Stevens, J., concurring in judgment). But patents sometimes mean unnecessarily high prices or restricted dissemination; and they sometimes discourage further innovation and competition by re-quiring costly searches for earlier, related patents or by tying up ideas, which, were they free, would more effectively spur research and development. See, e.g., Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U. S. 124, 128 (2006) (Breyer, J., dissenting from dismissal of certiorari as improvidently granted); Heller & Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 Science 698 (1998). Thus, Thomas Jefferson wrote of "the difficulty of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not." Letter to Isaac McPherson (Aug. 13, 1813), in 6 Writings of Thomas Jefferson 181 (H. Washington ed. 1854). And James Madison favored the patent monopoly because it amounted to "compensation for" a community "benefit." Monopolies. Perpetuities. Corporations. Ecclesiastical Endowments., in J. Madison, Writings 756 (J. Rakove ed. 1999). The importance of assuring this community "benefit" is reflected in legal rules that may deny or limit the award of patent rights where the public has already paid to produce an invention, lest the public bear the potential costs of patent protection where there is no offsetting need for such protection to elicit that invention. Why should the public have to pay twice for the same invention? Legal rules of this kind include an Executive Order that ordinarily gives to the Government "the entire right, title and interest" to inventions made by Government employees who "conduct or perform research, development work, or both." 37 CFR §501.6 (2010) (codifying, as amended, Exec. Order 10096, 3 CFR 292 (1949-1953 Comp.)). See also Heinemann v. United States, 796 F. 2d 451, 455-456 (CA Fed. 1986) (holding Executive Order constitutional and finding "no 'taking' because the invention was not the property of Heinemann"). They also include statutes, which, in specific research areas, give the Government title to inventions made pursuant to Government contracts. See Atomic Energy Act of 1954, §152, 68 Stat. 944 (codified as amended at 42 U. S. C. §2182); National Aeronautics and Space Act of 1958, §305, 72 Stat. 435 (codified at 42 U. S. C. §2457), repealed by §6, 124 Stat. 3444; Federal Nonnuclear Energy Research and Development Act of 1974, §9, 88 Stat. 1887 (codified as amended at 42 U. S. C. §5908(a)). And they have included Government regulations, established prior to the Bayh-Dole Act's enactment, that work in roughly similar ways. See, e.g., 45 CFR §650.4(b) (1977) (National Science Foundation regulations providing that Foundation would "determine the disposition of the invention [made under the grant] and title to and rights under any patent application"); §§8.1(a), 8.2(d) (Department of Health, Education, and Welfare regulations providing that inventions made under department grants "shall be subject to determination" by the agency and that the department may "require that all domestic rights in the invention shall be assigned to the United States"). These legal rules provide the basic background against which Congress passed the Bayh-Dole Act. And the Act's provisions reflect a related effort to assure that rights to inventions arising out of research for which the public has paid are distributed and used in ways that further specific important public interests. I agree with the majority that the Act does not simply take the individual inventors' rights and grant them to the Government. Rather, it assumes that the federal funds' recipient, say a university or small business, will possess those rights. The Act leaves those rights in the hands of that recipient, not because it seeks to make the public pay twice for the same invention, but for a special public policy reason. In doing so, it seeks to encourage those institutions to commercialize inventions that otherwise might not realize their potentially beneficial public use. 35 U. S. C. §200. The Act helps assure that commercialization (while "promot[ing] free competition" and "protect[ing] the public," ibid.) by imposing a set of conditions upon the federal funds recipient, by providing that sometimes the Government will take direct control of the patent rights, and by adding that on occasion the Government will permit the individual inventor to retain those rights. §§202-203. Given this basic statutory objective, I cannot so easily accept the majority's conclusion — that the individual in-ventor can lawfully assign an invention (produced by public funds) to a third party, thereby taking that invention out from under the Bayh-Dole Act's restrictions, conditions, and allocation rules. That conclusion, in my view, is inconsistent with the Act's basic purposes. It may significantly undercut the Act's ability to achieve its objectives. It allows individual inventors, for whose invention the public has paid, to avoid the Act's corresponding restrictions and conditions. And it makes the commercialization and marketing of such an invention more difficult: A potential purchaser of rights from the contractor, say a university, will not know if the university itself possesses the patent right in question or whether, as here, the individual, inadvertently or deliberately, has previously assigned the title to a third party. Moreover, I do not agree that the language to which the majority points — the words "invention of the contractor" and "retain"--requires its result. As the majority concedes, Stanford's alternative reading of the phrase " 'in-vention of the contractor' " is "plausible enough in the abstract." Ante, at 10. Nor do I agree that the Act's lack of an explicit provision for "an interested third party" to claim that an invention was not the result of federal funding "bolsters" the majority's interpretation. Ante, at 13. In any event, universities and businesses have worked out ways to protect the various participants to research. See Brief for Association of American Universities et al. as Amici Curiae 22-24 (hereinafter AAU Brief); App. 118-124 (Materials Transfer Agreement between Cetus and Stanford University). Ultimately, the majority rejects Stanford's reading (and the Government's reading) of the Act because it believes that it is inconsistent with certain background norms of patent law, norms that ordinarily provide an individual inventor with full patent rights. Ante, at 10. But in my view, the competing norms governing rights in inventions for which the public has already paid, along with the Bayh-Dole Act's objectives, suggest a different result.III There are two different legal routes to what I consider an interpretation more consistent with the statute's objectives. First, we could set aside the Federal Circuit's interpretation of the licensing agreements and its related licensing doctrine. That doctrine governs interpretation of licensing agreements made before an invention is conceived or reduced to practice. Here, there are two such agreements. In the earlier agreement — that between Dr. Holodniy and Stanford University — Dr. Holodniy said, "I agree to assign ... to Stanford ... that right, title and interest in and to ... such inventions as required by Contracts and Grants." App. to Pet. for Cert. 119a (emphasis added). In the later agreement — that between Dr. Holodniy and the private research firm Cetus — Dr. Holodniy said, "I will assign and do hereby assign to Cetus, my right, title, and interest in" here relevant "ideas" and "inventions." Id., at 123a (emphasis added; capitalization omitted). The Federal Circuit held that the earlier Stanford agreement's use of the words "agree to assign," when compared with the later Cetus agreement's use of the words "do hereby assign," made all the difference. It concluded that, once the invention came into existence, the latter words meant that the Cetus agreement trumped the earlier, Stanford agreement. 583 F. 3d 832, 841-842 (CA Fed. 2009). That, in the Circuit's view, is because the latter words operated upon the invention automatically, while the former did not. Quoting its 1991 opinion in FilmTec Corp. v. Allied-Signal, Inc., 939 F. 2d 1568, 1572, the Circuit declared that " '[o]nce the invention is made and [the] application for [a] patent is filed, ... legal title to the rights accruing thereunder would be in the assignee [i.e., Cetus] ... , and the assignor-inventor would have nothing remaining to assign.' " 583 F. 3d, at 842. Given what seem only slight linguistic differences in the contractual language, this reasoning seems to make too much of too little. Dr. Holodniy executed his agreement with Stanford in 1988. At that time, patent law appears to have long specified that a present assignment of future inventions (as in both contracts here) conveyed equitable, but not legal, title. See, e.g., G. Curtis, A Treatise on the Law of Patents for Useful Inventions §170, p. 155 (3d ed. 1867) ("A contract to convey a future invention ... cannot alone authorize a patent to be taken by the party in whose favor such a contract was intended to operate"); Comment, Contract Rights as Commercial Security: Present and Future Intangibles, 67 Yale L. J. 847, 854, n. 27 (1958) ("The rule generally applicable grants equitable enforcement to an assignment of an expectancy but demands a further act, either reduction to possession or further assignment of the right when it comes into existence"). Under this rule, both the initial Stanford and later Cetus agreements would have given rise only to equitable interests in Dr. Holodniy's invention. And as between these two claims in equity, the facts that Stanford's contract came first and that Stanford subsequently obtained a postinvention assignment as well should have meant that Stanford, not Cetus, would receive the rights its contract conveyed. In 1991, however, the Federal Circuit, in FilmTec, adopted the new rule quoted above — a rule that distinguishes between these equitable claims and, in effect, says that Cetus must win. The Federal Circuit provided no explanation for what seems a significant change in the law. See 939 F. 2d, at 1572. Nor did it give any explanation for that change in its opinion in this case. See 583 F. 3d, at 841-842. The Federal Circuit's FilmTec rule undercuts the objectives of the Bayh-Dole Act. While the cognoscenti may be able to meet the FilmTec rule in future contracts simply by copying the precise words blessed by the Federal Circuit, the rule nonetheless remains a technical drafting trap for the unwary. See AAU Brief 35-36. But cf. ante, at 15 (assuming ease of obtaining effective assignments). It is unclear to me why, where the Bayh-Dole Act is at issue, we should prefer the Federal Circuit's FilmTec rule to the rule, of apparently much longer vintage, that would treat both agreements in this case as creating merely equitable rights. At the same time, the Federal Circuit's reasoning brings about an interpretation contrary to the intention of the parties to the earlier, Stanford, contract. See App. to Pet. for Cert. 120a (provision in Stanford contract promising that Dr. Holodniy "will not enter into any agreement creating copyright or patent obligations in conflict with this agreement"). And it runs counter to what may well have been the drafters' reasonable expectations of how courts would interpret the relevant language. Second, we could interpret the Bayh-Dole Act as ordinarily assuming, and thereby ordinarily requiring, an assignment of patent rights by the federally funded employee to the federally funded employer. I concede that this interpretation would treat federally funded employees of contractors (subject to the Act) differently than the law ordinarily treats private sector employees. The Court long ago described the latter, private sector principles. In United States v. Dubilier Condenser Corp., 289 U. S. 178 (1933), the Court explained that a "patent is property, and title to it can pass only by assignment." Id., at 187. It then described two categories of private sector employee-to-employer assignments as follows: First, a person who is"employed to make an invention, who succeeds, during his term of service, in accomplishing that task, is bound to assign to his employer any patent obtained." Ibid.But, second,"if the employment be general, albeit it cover a field of labor and effort in the performance of which the employee conceived the invention for which he obtained a patent, the contract is not so broadly construed as to require an assignment of the patent." Ibid.The Court added that, because of "the peculiar nature of the act of invention," courts are "reluctan[t] ... to imply or infer an agreement by the employee to assign his patent." Id., at 188. And it applied these same principles governing assignment to inventions made by employees of the United States. Id., at 189-190. Subsequently, however, the President promulgated Executive Order 10096. Courts have since found that this Executive Order, not Dubilier, governs Federal Government employee-to-employer patent right assignments. See, e.g., Kaplan v. Corcoran, 545 F. 2d 1073, 1076-1077 (CA7 1976); Heinemann, 796 F. 2d, at 455-456; Wright v. United States, 164 F. 3d 267, 269 (CA5 1999); Halas v. United States, 28 Fed. Cl. 354, 364 (1993). The Bayh-Dole Act seeks objectives roughly analogous to the objectives of the Executive Order. At least one agency has promulgated regulations that require Bayh-Dole contractors to insist upon similar assignments. See NIH Policies, Procedures, and Forms, A "20-20" View of Invention Reporting to the National Institutes of Health (Sept. 22, 1995) (available in the Clerk of Court's case file) (requiring a Government contractor, such as Stanford University, to "have in place employee agreements requiring an inventor to 'assign' or give ownership of an invention to the organization upon acceptance of Federal funds," as the Bayh-Dole Act "require[s]"). And an amicus brief, filed by major associations of universities, scientists, medical researchers, and others, argues that we should interpret the rules governing assignments of the employees at issue here (and consequently the Act's reference to "inventions of the con-tractor") in a similar way. AAU Brief 5-14. The District Court in this case adopted roughly this approach. 487 F. Supp. 2d 1099, 1118 (ND Cal. 2007) ("[A]lthough title still vests in the named inventor, the inventor remains under a legal obligation to assign his interest either to the government or the nonprofit contractor unless the inventor acts within the statutory framework to retain title"). And since a university often enters into a grant agreement with the Government for a researcher's benefit and at his request, see J. Hall, Grant Management 205 (2010), implying such a presumption in favor of compliance with the grant agreement, and thus with the Bayh-Dole Act, would ordinarily be equitable.IV As I have suggested, these views are tentative. That is because the parties have not fully argued these matters (though one amicus brief raises the license interpretation question, see Brief for Alexander M. Shukh as Amicus Curiae 18-24, and at least one other can be read as supporting something like the equitable presumption I have described, see AAU Brief 5-14). Cf. ante, at 5, n. 2. While I do not understand the majority to have foreclosed a similarly situated party from raising these matters in a future case, see ibid., I believe them relevant to our efforts to answer the question presented here. Consequently, I would vacate the judgment of the Federal Circuit and remand this case to provide the parties with an opportunity to argue these, or related, matters more fully. Because the Court decides otherwise, with respect, I dissent.FOOTNOTESFootnote 1 Roche submitted a host of other claims to the District Court, including that it had "shop rights" to the patents and was entitled to a license to use the patents. See 583 F. 3d 832, 838 (CA Fed. 2009). None of those claims is now before us; we deal only with Roche's claim to co-ownership to rebut Stanford's standing to bring an infringement action.Footnote 2 Because the Federal Circuit's interpretation of the relevant assignment agreements is not an issue on which we granted certiorari, we have no occasion to pass on the validity of the lower court's construction of those agreements.Footnote 3 The patent was signed by President George Washington, Secretary of State Thomas Jefferson, and Attorney General Edmund Randolph. See Maxey, Samuel Hopkins, The Holder of the First U. S. Patent: A Study of Failure, 122 Pa. Magazine of Hist. and Biography 6 (1998).Footnote 4 The dissent suggests that "we could interpret the Bayh-Dole Act as ordinarily assuming, and thereby ordinarily requiring, an assignment of patent rights by the federally funded employee to the federally funded employer." Post, at 8. That suggestion is based in large part on Executive Order 10096, which "governs Federal Government employee-to-employer patent right assignments." Post, at 9. Lest there be any doubt, employees of nonfederal entities that have federal funding contracts — like Holodniy — are not federal employees. And there is no equivalent executive order governing invention rights with respect to federally funded research; that issue is of course addressed by the Bayh-Dole Act.Footnote 5 Far from superseding the Patent Act in such a backhanded way, it is clear that §210(a)'s concern is far narrower. That provision specifies 21 different statutory provisions that the Bayh-Dole Act "take[s] precedence over," the vast majority of which deal with the division of ownership in certain inventions between a contractor and the Government. 35 U. S. C. §§210(a)(1)-(21); see, e.g., §§210(a)(19)-(20) (the Bayh-Dole Act takes precedence over "section 6(b) of the Solar Photovoltaic Energy Research Development and Demonstration Act" and "section 12 of the Native Latex Commercialization and Economic Development Act").Footnote 6 Stanford contends that it cannot be the case "that the contractor can only 'retain title' to an invention that it already owns, while an inventor may be considered for 'retention' of title only when he has assigned title away." Reply Brief for Petitioner 8. That argument has some force. But there may be situations where an inventor, by the terms of an assignment, has subsidiary rights in an invention to which a contractor has title, as §202(d) suggests. Compare §202(d) ("retention of rights") with §202(a) ("retain title") (emphasis added). And at the end of the day, it is Stanford's contention that "retain" must be "read as a synonym for 'acquire' or 'receive' " that dooms its argument on this point. Brief for Petitioner 37. |
2 | Certiorari granted; judgment reversed.Marshall W. Krause for petitioner.Thomas C. Lynch, Attorney General of California, and Robert R. Granucci and Michael J. Phelan, Deputy Attorneys General, for respondent.PER CURIAM.The motion to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment is reversed. Redrup v. New York, .MR. JUSTICE HARLAN would affirm for the reasons set forth in his separate opinion in Roth v. United States, , 500-503, and in his dissenting opinion in Memoirs v. Massachusetts, . |
1 | Complainants, certain Virginia voters, brought this action against appellants, various officials having state election duties, challenging the statutory provisions apportioning seats in the Virginia Legislature as violative of the Equal Protection Clause. While the Virginia Constitution provides for decennial reapportionment the establishment of districts rests in the discretion of the legislature, which has been guided chiefly by population but which has also considered factors such as compactness and contiguity of territory, geographic features, and community of interests. Under the existing apportionment, the State is divided into 36 senatorial districts, with 40 senators, and 70 House districts with 100 delegates. The maximum population-variance ratios between the most populous and least populous senatorial and House districts are, respectively, 2.65-to-1 and 4.36-to-1; and under the 1962 apportionment about 41.1% of the State's total population reside in districts electing a majority of the Senate, and about 40.5% in districts electing a majority of the House. No adequate political remedy for legislative reapportionment exists in Virginia and no initiative procedure is provided for. Appellants before the three-judge court which was convened to decide the case showed the number of military or military-related personnel in the areas where complainants resided, disparities from population-based representation among the various States in the Federal Electoral College, and results of a comparative study showing Virginia as eighth among the States in population-based legislative representativeness. The District Court entered an interlocutory order holding Virginia's legislative apportionment unconstitutional and refused to abstain pending the obtaining of the state courts' views on the validity of the apportionment. The Court refused to defer deciding the case until after the January 1964 regular session of the legislature and retained jurisdiction for the entry of necessary orders. Held: 1. Neither of the houses of the Virginia General Assembly is apportioned sufficiently on a population basis to be constitutionally sustainable. P. 690. 2. Where a federal court's jurisdiction is properly invoked and the relevant state constitutional and statutory provisions are plain and unambiguous, abstention is not necessary. P. 690. 3. The Equal Protection Clause applies to failure to meet federal constitutional requirements whether the legislature periodically reapportions or fails to act. P. 691. 4. The fact that large numbers of military or military-related personnel reside in the same areas as appellees cannot justify under-representation of those areas because the nature of their employment alone provides no proper basis for discrimination; there was no showing that the legislature took this factor into account in making the apportionment; and even if it had the maximum population-variance ratios would have remained impermissible. Pp. 691-692. 5. The apportionment was not sustainable, either factually or legally, as involving an attempt to balance urban and rural power in the legislature. P. 692. 6. Analogy to deviations from population in the Federal Electoral College provides no constitutional basis for sustaining a state apportionment scheme under the Equal Protection Clause. P. 692. 7. It would be inappropriate for this Court to consider the remedies for malapportionment of the legislature since the next election of Virginia legislators does not occur until 1965; the legislature has ample time to effect a valid reapportionment; and the District Court has retained jurisdiction to grant relief under equitable principles if necessary to ensure that no further elections are held under an unconstitutional scheme. Pp. 692-693. 213 F. Supp. 577, affirmed and remanded.David J. Mays and R. D. McIlwaine III, Assistant Attorney General of Virginia, argued the cause for appellants. With them on the briefs were Robert Y. Button, Attorney General of Virginia, and Henry T. Wickham.Edmund D. Campbell and Henry E. Howell, Jr. argued the cause for appellees. With Mr. Campbell on the brief for appellees Mann et al. was E. A. Prichard. With Mr. Howell on the brief for appellees, the citizens and voters of Norfolk, Virginia, were Leonard B. Sachs and Sidney H. Kelsey.Solicitor General Cox, by special leave of Court, argued the cause for the United States, as amicus curiae, urging affirmance. With him on the brief were Bruce J. Terris and Richard W. Schmude.Briefs of amici curiae were filed by Leo Pfeffer, Melvin L. Wulf, Jack Greenberg and Robert B. McKay for the American Jewish Congress et al., and by W. Scott Miller, Jr. and George J. Long for Schmied, President of the Board of Aldermen of Louisville, Kentucky.MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.Presented for decision in this case is the validity, under the Equal Protection Clause of the Fourteenth Amendment to the Federal Constitution, of the apportionment of seats in the legislature of the Commonwealth of Virginia.I.Plaintiffs below, residents, taxpayers and qualified voters of Arlington and Fairfax Counties, filed a complaint on April 9, 1962, in the United States District Court for the Eastern District of Virginia, in their own behalf and on behalf of all voters in Virginia similarly situated, challenging the apportionment of the Virginia General Assembly. Defendants, sued in their representative capacities, were various officials charged with duties in connection with state elections. Plaintiffs claimed rights under provisions of the Civil Rights Act, 42 U.S.C. 1983, 1988, and asserted jurisdiction under 28 U.S.C. 1343 (3).The complaint alleged that the present statutory provisions apportioning seats in the Virginia Legislature, as amended in 1962, result in invidious discrimination against plaintiffs and "all other voters of the State Senatorial and House districts" in which they reside, since voters in Arlington and Fairfax Counties are given substantially less representation than voters living in other parts of the State. Plaintiffs asserted that the discrimination was violative of the Fourteenth Amendment as well as the Virginia Constitution, and contended that the requirements of the Equal Protection Clause of the Federal Constitution, and of the Virginia Constitution, could be met only by a redistribution of legislative representation among the counties and independent cities of the State "substantially in proportion to their respective populations." Plaintiffs asserted that they "possess an inherent right to vote for members of the General Assembly ... and to cast votes that are equally effective with the votes of every other citizen" of Virginia, and that this right was being diluted and effectively denied by the discriminatory apportionment of seats in both houses of the Virginia Legislature under the statutory provisions attacked as being unconstitutional. Plaintiffs contended that the alleged inequalities and distortions in the allocation of legislative seats prevented the Virginia Legislature from "being a body representative of the people of the Commonwealth," and resulted in a minority of the people of Virginia controlling the General Assembly.The complaint requested the convening of a three-judge District Court. With respect to relief, plaintiffs sought a declaratory judgment that the statutory scheme of legislative apportionment in Virginia, prior as well as subsequent to the 1962 amendments, contravenes the Equal Protection Clause of the Fourteenth Amendment and is thus unconstitutional and void. Plaintiffs also requested the issuance of a prohibitory injunction restraining defendants from performing their official duties relating to the election of members of the General Assembly pursuant to the present statutory provisions. Plaintiffs further sought a mandatory injunction requiring defendants to conduct the next primary and general elections for legislators on an at-large basis throughout the State.A three-judge District Court was promptly convened. Residents and voters of the City of Norfolk were permitted to intervene as plaintiffs against the original defendants and against certain additional defendants, election officials in Norfolk. On June 20, 1962, all of the plaintiffs obtained leave to amend the complaint by adding an additional prayer for relief which requested that, unless the General Assembly "promptly and fairly" reapportioned the legislative districts, the Court should reapportion the districts by its own order so as to accord the parties and others similarly situated "fair and proportionate" representation in the Virginia Legislature.Evidence presented to the District Court by plaintiffs included basic figures showing the populations of the various districts from which senators and delegates are elected and the number of seats assigned to each. From that data various statistical comparisons were derived. Since the 1962 reapportionment measures were enacted only two days before the complaint was filed and made only small changes in the statutory provisions relating to legislative apportionment, which had been last amended in 1958, the evidence submitted covered both the present and the last previous apportionments. Defendants introduced various exhibits showing the numbers of military and military-related personnel in the City of Norfolk and in Arlington and Fairfax Counties, disparities from population-based representation among the various States in the Federal Electoral College, and results of a comparative study of state legislative apportionment which show Virginia as ranking eighth among the States in population-based legislative representativeness, as reapportioned in 1962. On November 28, 1962, the District Court, with one judge dissenting, sustained plaintiffs' claim and entered an interlocutory order holding the apportionment of the Virginia Legislature violative of the Federal Constitution. 213 F. Supp. 577. The Court refused to dismiss the case or stay its action on the ground, asserted by defendants, that plaintiffs should be required first to procure the views of the state courts on the validity of the apportionment scheme. Instead, it held that, since neither the 1962 legislation nor the relevant state constitutional provisions were ambiguous, no question of state law necessitating abstention by the Federal District Court was presented. In applying the Equal Protection Clause to the Virginia apportionment scheme, the Court stated that, although population is the predominant consideration, other factors may be of some relevance "in assaying the justness of the apportionment." Stating that the Federal Constitution requires a state legislative apportionment to "accord the citizens of the State substantially equal representation," the Court held that the inequalities found in the statistical information relating to the population of the State's various legislative districts, if unexplained, sufficiently showed an "invidious discrimination" against plaintiffs and those similarly situated. The Court rejected any possibility of different bases of representation being applicable in the two houses of the Virginia Legislature, stating that, in Virginia, each house has "a direct, indeed the same, relation to the people," and that the principal present-day justification for bicameralism in state legislatures is to insure against precipitate action by imposing greater deliberation upon proposed legislation. Because of the gross inequalities in representation among various districts in both houses of the Virginia Legislature, the Court put the burden of explanation on defendants, and found that they had failed to meet it. Consequently, the Court concluded that the discrimination against Arlington and Fairfax Counties and the City of Norfolk was a grave and "constitutionally impermissible" deprivation, violative of the Equal Protection Clause of the Fourteenth Amendment.With respect to relief, the Court stated that, while it would have preferred that the General Assembly itself correct the unconstitutionality of the 1962 apportionment legislation, it would not defer deciding the case until after the next regular session of the Virginia Legislature in January 1964, because senators elected in November 1963 would hold office until 1968 and delegates elected in 1963 would serve until 1966. Deferring action would thus result in unreasonable delay in correcting the injustices in the apportionment of the Senate and the House of Delegates, concluded the Court.The District Court's interlocutory order declared that the 1962 apportionment violated the Equal Protection Clause and accordingly was void and of no effect. It also restrained and enjoined defendants from proceeding with the conducting of elections under the 1962 legislation, but stayed the operation of the injunction until January 31, 1963, so that either the General Assembly could act or an appeal could be taken to this Court, provided that, if neither of these steps was taken, plaintiffs might apply to the District Court for further relief. Finally, the court below retained jurisdiction of the case for the entry of such orders as might be required.An appeal to this Court was timely noted by defendants. On application by appellants, THE CHIEF JUSTICE, on December 15, 1962, granted a stay of the District Court's injunction pending final disposition of the case by this Court. Because of this stay, the November 1963 election of members of the Virginia Legislature was conducted under the existing statutory provisions. We noted probable jurisdiction on June 10, 1963. . II.The Virginia Constitution provides for a Senate of not more than 40 nor less than 33 members, in Art. IV, 41, and for a House of Delegates of not more than 100 nor less than 90 seats, in Art. IV, 42. Senators are elected quadrennially and delegates biennially. At all relevant times, state statutes have fixed the number of senators at 40 and the number of delegates at 100. Pursuant to the state constitutional requirement of legislative reapportionment at least decennially, contained in Art. IV, 43, the General Assembly has reapportioned senatorial and House seats in 1932, 1942, and 1952, as well as in 1962, and in 1958 the apportionment statutes were amended.1 The Virginia Constitution contains no express standards, however, for the apportionment of legislative representation, and leaves the task of establishing districts solely up to the discretion of the legislature.With respect to political subdivisions, Virginia has 98 counties and 32 independent cities. Despite the absence of any specific provisions in the State Constitution, population has generally been traditionally regarded as the most important factor for legislative consideration in reapportioning and redistricting. Because cities and counties have consistently not been split or divided for purposes of legislative representation, multimember districts have been utilized for cities and counties whose populations entitle them to more than a single representative, resulting in there always being less than 100 delegate districts and less than 40 senatorial districts. And, because of a tradition of respecting the integrity of the boundaries of cities and counties in drawing district lines, districts have been constructed only of combinations of counties and cities and not by pieces of them. This has resulted in the periodic utilization of floterial districts2 where contiguous cities or counties cannot be combined to yield population totals reasonably close to a population ratio figure determined by dividing the State's total population by the number of seats in the particular legislative body. Various other factors, in addition to population, which have historically been considered by Virginia Legislatures in enacting apportionment statutes include compactness and contiguity of territory in forming districts, geographic and topographic features, and community of interests among people in various districts.Section 24-14 of the Virginia Code, as amended in 1962, provides for the apportionment of the Virginia Senate, and divides the State into 36 senatorial districts for the allocation of the 40 seats in that body. With a total state population of 3,966,949, according to the 1960 census, and 40 Senate seats, the ideal ratio would be one senator for each 99,174 persons. Under the 1962 statute, however, Arlington County is given but one senator for its 163,401 persons, only .61 of the representation to which it would be entitled on a strict population basis. The City of Norfolk has only .65 of its ideal share of senatorial representation, with two senators for a population of 305,872. And Fairfax County (including the cities of Fairfax and Falls Church), with two senators for 285,194 people, has but .70 of its ideal representation in the Virginia Senate. In comparison, the smallest senatorial district, with respect to population, has only 61,730, and the next smallest 63,703.3 Thus, the maximum population-variance ratio between the most populous and least populous senatorial districts is 2.65-to-1. Under the 1962 senatorial apportionment, applying 1960 population figures, approximately 41.1% of the State's total population reside in districts electing a majority of the members of that body.4 Apportionment of seats in the Virginia House of Delegates is provided for in 24-12 of the Virginia Code, as amended in 1962, which creates 70 House districts and distributes the 100 House seats among them. Dividing the State's total 1960 population by 100 results in an ideal ratio of one delegate for each 39,669 persons. Fair-fax County, with a population of 285,194, is allocated only three House seats under the 1962 apportionment provisions, however, thus being given only .42 of its ideal representation. While the average population per delegate in Fairfax County is 95,064, Wythe County, with only 21,975 persons, and Shenandoah County, with a population of only 21,825, are each given one seat in the Virginia House.5 The maximum population-variance ratio, between the most populous and least populous House districts, is thus 4.36-to-1. The City of Norfolk, with 305,872 people, is given only six House seats, and Arlington County, with a population of 163,401, is allocated only three. Under the 1962 reapportionment of the House of Delegates, 40.5% of the State's population live in districts electing a majority of the House members. Twenty-seven House districts have more than three times the representation of the people of Fairfax County, 12 districts have twice the representation of Arlington County, and six, twice that of Norfolk.No adequate political remedy to obtain legislative reapportionment appears to exist in Virginia.6 No initiative procedure is provided for under Virginia law. Amendment of the State Constitution or the calling of a constitutional convention initially requires the vote of a majority of both houses of the Virginia General Assembly.7 Only after such legislative approval is obtained is such a measure submitted to the people for a referendum vote. Legislative apportionment questions do not appear to have been traditionally regarded as nonjusticiable by Virginia state courts, however,8 and appellees could possibly have sought and obtained relief in a state court as well as in a Federal District Court.9 III.In Reynolds v. Sims, ante, p. 533, decided also this date, we held that the Equal Protection Clause requires that seats in both houses of a bicameral state legislature must be apportioned substantially on a population basis. Neither of the houses of the Virginia General Assembly, under the 1962 statutory provisions here attacked, is apportioned sufficiently on a population basis to be constitutionally sustainable. Accordingly, we hold that the District Court properly found the Virginia legislative apportionment invalid.Appellants' contention that the court below should have abstained so as to permit a state court to decide the questions of state law involved in this litigation is without merit. Where a federal court's jurisdiction is properly invoked, and the relevant state constitutional and statutory provisions are plain and unambiguous, there is no necessity for the federal court to abstain pending determination of the state law questions in a state court. McNeese v. Board of Education, . This is especially so where, as here, no state proceeding had been instituted or was pending when the District Court's jurisdiction was invoked. We conclude that the court below did not err in refusing to dismiss the proceeding or stay its action pending recourse to the state courts.Undoubtedly, the situation existing in Virginia, with respect to legislative apportionment, differs not insignificantly from that in Alabama. In contrast to Alabama, in Virginia the legislature has consistently reapportioned itself decennially as required by the State Constitution. Nevertheless, state legislative malapportionment, whether resulting from prolonged legislative inaction or from failure to comply sufficiently with federal constitutional requisites, although reapportionment is accomplished periodically, falls equally within the proscription of the Equal Protection Clause.We reject appellants' argument that the underrepresentation of Arlington, Fairfax and Norfolk is constitutionally justifiable since it allegedly resulted in part from the fact that those areas contain large numbers of military and military-related personnel. Discrimination against a class of individuals, merely because of the nature of their employment, without more being shown, is constitutionally impermissible. Additionally, no showing was made that the Virginia Legislature in fact took such a factor into account in allocating legislative representation.10 And state policy, as evidenced by Virginia's election laws, actually favors and fosters voting by military and military-related personnel.11 Furthermore, even if such persons were to be excluded in determining the populations of the various legislative districts, the discrimination against the disfavored areas would hardly be satisfactorily explained, because, after deducting military and military-related personnel, the maximum population-variance ratios would still be 2.22-to-1 in the Senate and 3.53-to-1 in the House.We also reject appellants' claim that the Virginia apportionment is sustainable as involving an attempt to balance urban and rural power in the legislature. Not only does this explanation lack legal merit, but it also fails to conform to the facts. Some Virginia urban areas, such as Richmond, by comparison with Arlington, Fairfax and Norfolk, appear to be quite adequately represented in the General Assembly. And, for the reasons stated in Reynolds,12 in rejecting the so-called federal analogy, and in Gray v. Sanders, , appellants' reliance on an asserted analogy to the deviations from population in the Federal Electoral College is misplaced. The fact that the maximum variances in the populations of various state legislative districts are less than the extreme deviations from a population basis in the composition of the Federal Electoral College fails to provide a constitutionally cognizable basis for sustaining a state apportionment scheme under the Equal Protection Clause.We find it unnecessary and inappropriate to discuss questions relating to remedies at the present time.13 Since the next election of Virginia legislators will not occur until 1965, ample time remains for the Virginia Legislature to enact a constitutionally valid reapportionment scheme for purposes of that election. After the District Court has provided the Virginia Legislature with an adequate opportunity to enact a valid plan, it can then proceed, should it become necessary, to grant relief under equitable principles to insure that no further elections are held under an unconstitutional scheme. Since the District Court stated that it was retaining jurisdiction and that plaintiffs could seek further appropriate relief, the court below presumably intends to take further action should the Virginia Legislature fail to act promptly in remedying the constitutional defects in the State's legislative apportionment plan. We therefore affirm the judgment of the District Court on the merits of this litigation, and remand the case for further proceedings consistent with the views stated here and in our opinion in Reynolds v. Sims. It is so ordered.MR. JUSTICE CLARK concurs in the affirmance for the reasons stated in his concurring opinion in Reynolds v. Sims, ante, p. 587, decided this date.[For dissenting opinion of MR. JUSTICE HARLAN, see ante, p. 589.] |
8 | Respondents, present or former mental patients at a Massachusetts state hospital, instituted a class action against petitioner officials and staff of the hospital in Federal District Court, alleging that forcible administration of antipsychotic drugs to patients violated rights protected by the Federal Constitution. The court held that mental patients enjoy constitutionally protected liberty and privacy interests in deciding for themselves whether to submit to drug therapy; that under state law an involuntary commitment provides no basis for an inference of legal "incompetency" to make such decision; and that without consent either by the patient or the guardian of a patient who has been adjudicated incompetent, the patient's liberty interests may be overridden only in an emergency. The Court of Appeals affirmed in part and reversed in part. It agreed with the District Court's first two holdings above, but reached different conclusions as to the circumstances under which state interests might override the patient's liberty interests. The Court of Appeals reserved to the District Court, on remand, the task of developing mechanisms to ensure adequate procedural protection of the patient's interests. This Court granted certiorari to determine whether an involuntarily committed mental patient has a constitutional right to refuse treatment with antipsychotic drugs. Shortly thereafter the Massachusetts Supreme Judicial Court ruled on the rights - under both Massachusetts common law and the Federal Constitution - of a noninstitutionalized incompetent mental patient as to involuntary treatment with antipsychotic drugs.Held: The Court of Appeals' judgment is vacated, and the case is remanded for that court's consideration, in the first instance, of whether the correct disposition of this case is affected by the Massachusetts Supreme Judicial Court's intervening decision. Pp. 298-306. (a) Assuming (as the parties agree) that the Constitution recognizes a liberty interest in avoiding the unwanted administration of antipsychotic drugs, a substantive issue remains as to the definition of that protected constitutional interest, as well as identification of the conditions under which competing state interests might outweigh it. There is also a procedural issue concerning the minimum procedures required by the Constitution for determining that an individual's liberty interest actually is outweighed in a particular instance. As a practical matter both issues are intertwined with questions of state law, which may create liberty interests and procedural protections broader than those protected by the Federal Constitution. If so, the minimal requirements of the Federal Constitution would not be controlling, and would not need to be identified in order to determine the legal rights and duties of persons within the State. Pp. 298-300. (b) While the record is unclear as to respondents' position in the District Court concerning the effect of state law on their asserted federal rights, in their brief in this Court they clearly assert state-law arguments as alternative grounds for affirming both the "substantive" and "procedural" decisions of the Court of Appeals. In applying the policy of avoiding unnecessary decisions of constitutional issues, it is not clear which, if any, constitutional issues now must be decided to resolve the controversy between the parties. Because of its greater familiarity both with the record and with Massachusetts law, the Court of Appeals is better situated than this Court to determine how the intervening state-court decision may have changed the law of Massachusetts and how any changes may affect this case. Pp. 304-306. 634 F.2d 650, vacated and remanded.POWELL, J., delivered the opinion for a unanimous Court.Stephen Schultz argued the cause for petitioners. With him on the briefs was Francis X. Bellotti, Attorney General of Massachusetts.Richard Cole argued the cause for respondents. With him on the brief was Robert Burdick.* [Footnote *] Briefs of amici curiae urging reversal were filed by Paul L. Perito and C. Frederick Ryland for the American College of Neuropsychopharmacology; by Joel I. Klein and H. Bartow Farr III for the American Psychiatric Association; and by Robert H. Weber and Jonathan Brant for the Mental Health Legal Advisors Committee.Briefs of amici curiae urging affirmance were filed by Joseph R. Tafelski for Advocates for Basic Legal Equality, Inc.; by Paul R. Friedman, Jane Bloom Yohalem, John Townsend Rich, and Donald N. Bersoff for the American Psychological Association et al.; and by William Alsup for Barbara Jamison et al.Louis M. Aucoin III filed a brief for Patients' Rights Advocacy Services, Inc., as amicus curiae. JUSTICE POWELL delivered the opinion of the Court.The Court granted certiorari in this case to determine whether involuntarily committed mental patients have a constitutional right to refuse treatment with antipsychotic drugs.IThis litigation began on April 27, 1975, when respondent Rubie Rogers and six other persons filed suit against various officials and staff of the May and Austin Units of the Boston State Hospital. The plaintiffs all were present or former mental patients at the institution. During their period of institutionalization all had been forced to accept unwanted treatment with antipsychotic drugs.1 Alleging that forcible administration of these drugs violated rights protected by the Constitution of the United States, the plaintiffs - respondents here - sought compensatory and punitive damages and injunctive relief.2 The District Court certified the case as a class action. See Rogers v. Okin, 478 F. Supp. 1342, 1352, n. 1 (Mass. 1979). Although denying relief in damages, the court held that mental patients enjoy constitutionally protected liberty and privacy interests in deciding for themselves whether to submit to drug therapy.3 The District Court found that an involuntary "commitment" provides no basis for an inference of legal "incompetency" to make this decision under Massachusetts law. Id., at 1361-1362.4 Until a judicial finding of incompetency has been made, the court concluded, the wishes of the patients generally must be respected. Id., at 1365-1368. Even when a state court has rendered a determination of incompetency, the District Court found that the patient's right to make treatment decisions is not forfeited, but must be exercised on his behalf by a court-appointed guardian. Id., at 1364. Without consent either by the patient or his guardian, the court held, the patient's liberty interests may be overridden only in an emergency.5 The Court of Appeals for the First Circuit affirmed in part and reversed in part. Rogers v. Okin, 634 F.2d 650 (1980). It agreed that mental patients have a constitutionally protected interest in deciding for themselves whether to undergo treatment with antipsychotic drugs. Id., at 653.6 It also accepted the trial court's conclusion that Massachusetts law recognizes involuntarily committed persons as presumptively competent to assert this interest on their own behalf. See id., at 657-659. The Court of Appeals reached different conclusions, however, as to the circumstances under which state interests might override the liberty interests of the patient.The Court of Appeals found that the State has two interests that must be weighed against the liberty interests asserted by the patient: a police power interest in maintaining order within the institution and in preventing violence, see id., at 655, and a parens patriae interest in alleviating the sufferings of mental illness and in providing effective treatment, see id., at 657. The court held that the State, under its police powers, may administer medication forcibly only upon a determination that "the need to prevent violence in a particular situation outweighs the possibility of harm to the medicated individual" and that "reasonable alternatives to the administration of antipsychotics [have been] ruled out." Id., at 656. Criticizing the District Court for imposing what it regarded as a more rigid standard, the Court of Appeals held that a hospital's professional staff must have substantial discretion in deciding when an impending emergency requires involuntary medication.7 The Court of Appeals reserved to the District Court, on remand, the task of developing mechanisms to ensure that staff decisions under the "police power" standard accord adequate procedural protection to "the interests of the patients."8 With respect to the State's parens patriae powers, the Court of Appeals accepted the District Court's state-law distinction between patients who have and patients who have not been adjudicated incompetent. Where a patient has not been found judicially to be "incompetent" to make treatment decisions under Massachusetts law,9 the court ruled that the parens patriae interest will justify involuntary medication only when necessary to prevent further deterioration in the patient's mental health. See id., at 660. The Court of Appeals reversed the District Court's conclusion that a guardian must be appointed to make nonemergency treatment decisions on behalf of incompetent patients. Even for incompetent patients, however, it ruled that the State's parens patriae interest would justify prescription only of such treatment as would be accepted voluntarily by "the individual himself ... were he competent" to decide. Id., at 661.10 The Court of Appeals held that the patient's interest in avoiding undesired drug treatment generally must be protected procedurally by a judicial determination of "incompetency."11 If such a determination were made, further on-the-scene procedures still would be required before antipsychotic drugs could be administered forcibly in a particular instance. Ibid.12 Because the judgment of the Court of Appeals involved constitutional issues of potentially broad significance,13 we granted certiorari. Okin v. Rogers, .IIAThe principal question on which we granted certiorari is whether an involuntarily committed mental patient has a constitutional right to refuse treatment with antipsychotic drugs.14 This question has both substantive and procedural aspects. See 634 F.2d, at 656, 661; Rennie v. Klein, 653 F.2d 836, 841 (CA3 1981). The parties agree that the Constitution recognizes a liberty interest in avoiding the unwanted administration of antipsychotic drugs.15 Assuming that they are correct in this respect, the substantive issue involves a definition of that protected constitutional interest, as well as identification of the conditions under which competing state interests might outweigh it. See Youngberg v. Romeo, post, at 319-320; Bell v. Wolfish, ; Roe v. Wade, ; Jacobson v. Massachusetts, . The procedural issue concerns the minimum procedures required by the Constitution for determining that the individual's liberty interest actually is outweighed in a particular instance. See Parham v. J. R., ; Mathews v. Eldridge, .As a practical matter both the substantive and procedural issues are intertwined with questions of state law. In theory a court might be able to define the scope of a patient's federally protected liberty interest without reference to state law.16 Having done so, it then might proceed to adjudicate the procedural protection required by the Due Process Clause for the federal interest alone. Cf. Vitek v. Jones, . For purposes of determining actual rights and obligations, however, questions of state law cannot be avoided. Within our federal system the substantive rights provided by the Federal Constitution define only a minimum. State law may recognize liberty interests more extensive than those independently protected by the Federal Constitution. See Greenholtz v. Nebraska Penal Inmates, , 12 (1979); Oregon v. Hass, ; see also Brennan, State Constitutions and the Protection of Individual Rights, 90 Harv. L. Rev. 489 (1977). If so, the broader state protections would define the actual substantive rights possessed by a person living within that State.Where a State creates liberty interests broader than those protected directly by the Federal Constitution, the procedures mandated to protect the federal substantive interests also might fail to determine the actual procedural rights and duties of persons within the State. Because state-created liberty interests are entitled to the protection of the federal Due Process Clause, see, e. g., Vitek v. Jones, supra, at 488; Greenholtz v. Nebraska Penal Inmates, supra, at 7, the full scope of a patient's due process rights may depend in part on the substantive liberty interests created by state as well as federal law. Moreover, a State may confer procedural protections of liberty interests that extend beyond those minimally required by the Constitution of the United States. If a State does so, the minimal requirements of the Federal Constitution would not be controlling, and would not need to be identified in order to determine the legal rights and duties of persons within that State.BRoughly five months after the Court of Appeals decided this case, and shortly after this Court granted certiorari, the Supreme Judicial Court of Massachusetts announced its decision in Guardianship of Roe, 383 Mass. 415, 421 N. E. 2d 40 (1981) (Roe). Roe involved the right of a noninstitutionalized but mentally incompetent person to refuse treatment with antipsychotic drugs. Expressly resting its decision on the common law of Massachusetts as well as on the Federal Constitution,17 Massachusetts' highest court held in Roe that a person has a protected liberty interest in "`decid[ing] for himself whether to submit to the serious and potentially harmful medical treatment that is represented by the administration of antipsychotic drugs.'" Id., at 433, n. 9, 421 N. E. 2d, at 51, n. 9.18 The court found - again apparently on the basis of the common law of Massachusetts as well as the Constitution of the United States - that this interest of the individual is of such importance that it can be overcome only by "an overwhelming State interest." Id., at 434, 421 N. E. 2d, at 51. Roe further held that a person does not forfeit his protected liberty interest by virtue of becoming incompetent, but rather remains entitled to have his "substituted judgment" exercised on his behalf. Ibid. Defining this "substituted judgment" as one for which "[n]o medical expertise is required," id., at 435, 421 N. E. 2d, at 52, the Massachusetts Supreme Judicial Court required a judicial determination of substituted judgment before drugs could be administered in a particular instance,19 except possibly in cases of medical emergency.20 CThe Massachusetts Supreme Court stated that its decision was limited to cases involving noninstitutionalized mental patients. See id., at 417, 441, 452-453, 421 N. E. 2d, at 42, 55, 61-62.21 Nonetheless, respondents have argued in this Court that Roe may influence the correct disposition of the case at hand.22 We agree.Especially in the wake of Roe, it is distinctly possible that Massachusetts recognizes liberty interests of persons adjudged incompetent that are broader than those protected directly by the Constitution of the United States. Compare Roe, supra, at 434, 421 N. E. 2d, at 51 (protected liberty interest in avoiding unwanted treatment continues even when a person becomes incompetent and creates a right of incompetents to have their "substituted judgment" determined), with Addington v. Texas, (because a person "who is suffering from a debilitating mental illness" is not "wholly at liberty," and because the complexities of psychiatric diagnosis "render certainties virtually beyond reach," "practical considerations" may require "a compromise between what it is possible to prove and what protects the rights of the individual"). If the state interest is broader, the substantive protection that the Constitution affords against the involuntary administration of antipsychotic drugs would not determine the actual substantive rights and duties of persons in the State of Massachusetts.Procedurally, it also is quite possible that a Massachusetts court, as a matter of state law, would require greater protection of relevant liberty interests than the minimum adequate to survive scrutiny under the Due Process Clause. Compare Roe, supra, at 434, 421 N. E. 2d, at 51 ("We have ... stated our preference for judicial resolution of certain legal issues arising from proposed extraordinary medical treatment ..."), with Youngberg v. Romeo, post, at 322-323 ("[T]here certainly is no reason to think judges or juries are better qualified than appropriate professionals in making [treatment] decisions"), and with Parham v. J. R., 442 U.S., at 608, n. 16 (Courts must not "unduly burde[n] the legitimate efforts of the states to deal with difficult social problems. The judicial model for factfinding for all constitutionally protected interests, regardless of their nature, can turn rational decisionmaking into an unmanageable enterprise").23 Again on this hypothesis state law would be dispositive of the procedural rights and duties of the parties to this case.Finally, even if state procedural law itself remains unchanged by Roe, the federally mandated procedures will depend on the nature and weight of the state interests, as well as the individual interests, that are asserted. To identify the nature and scope of state interests that are to be balanced against an individual's liberty interests, this Court may look to state law. See, e. g., Roe v. Wade, 410 U.S., at 148, and n. 42, 151, and nn. 48-50; Ingraham v. Wright, . Here we view the underlying state-law predicate for weighing asserted state interests as being put into doubt, if not altered, by Roe.24 DIt is unclear on the record presented whether respondents, in the District Court, did or did not argue the existence of "substantive" state-law liberty interests as a basis for their claim to procedural protection under the federal Due Process Clause, or whether they may have claimed state-law procedural protections for substantive federal interests.25 In their brief in this Court, however, respondents clearly assert state-law arguments as alternative grounds for affirming both the "substantive" and "procedural" decisions of the Court of Appeals. See Brief for Respondents, especially at 61, 71-72, 92-95.Until certain questions have been answered, we think it would be inappropriate for us to attempt to weigh or even to identify relevant liberty interests that might be derived directly from the Constitution, independently of state law. It is this Court's settled policy to avoid unnecessary decisions of constitutional issues. See, e. g., City of Mesquite v. Aladdin's Castle, Inc., ; New York Transit Authority v. Beazer, , n. 22 (1979); Poe v. Ullman, ; Ashwander v. TVA, , 347-348 (1936) (Brandeis, J., concurring). This policy is supported, although not always required, by the prohibition against advisory opinions. Cf. United States v. Hastings, (review of one basis for a decision supported by another basis not subject to examination would represent "an expression of an abstract opinion"). In applying this policy of restraint, we are uncertain here which if any constitutional issues now must be decided to resolve the controversy between the parties. In the wake of Roe, we cannot say with confidence that adjudication based solely on identification of federal constitutional interests would determine the actual rights and duties of the parties before us. And, as an additional cause for hesitation, our reading of the opinion of the Court of Appeals has left us in doubt as to the extent to which state issues were argued below and the degree to which the court's holdings may rest on subsequently altered state-law foundations.Because of its greater familiarity both with the record and with Massachusetts law, the Court of Appeals is better situated than we to determine how Roe may have changed the law of Massachusetts and how any changes may affect this case. Accordingly, we think it appropriate for the Court of Appeals to determine in the first instance whether Roe requires revision of its holdings or whether it may call for the certification of potentially dispositive state-law questions to the Supreme Judicial Court of Massachusetts, see Bellotti v. Baird, .26 The Court of Appeals also may consider whether this is a case in which abstention now is appropriate. See generally Colorado River Water Conservation Dist. v. United States, .The judgment of the Court of Appeals is therefore vacated, and the case is remanded for further proceedings consistent with this opinion. So ordered. |
6 | Section 302 (a) (1) of the Labor Management Relations Act prohibits agreements of employers to pay money to any representative of their employees, but 302 (c) (5) and (6) exempt from this proscription agreements to pay money to trust funds jointly created and administered by trustees representing employer associations and a labor union for the purpose of providing medical or hospital care, pensions, or pooled vacations for employees of signatory employers, or to defray the costs of apprenticeship or other training programs. A collective-bargaining agreement between petitioner general contractor and a carpenters' union required signatory employers to pay contributions at an aggregate rate of 96 cents per hour worked by carpenter employees to certain trust funds (Health and Welfare, Pension, Vacation Savings, Apprenticeship and Training, and Construction Industry Advancement (CIAF)) administered by respondent trustees. With respect to nonsignatory subcontractors, a subcontractor's clause of the agreement specified that petitioner should require the subcontractor to be bound by the agreement or that petitioner should maintain daily records of the subcontractor's employees' hours and to be liable for payment of the contributions to the trust funds with respect to these employees. Petitioner subcontracted certain carpentry work on a federally subsidized low-income apartment project in Oregon to a nonsignatory employer (whose employees were not entitled to benefits in the trust funds), but did not exercise either of the above options. Instead, the subcontractor paid directly to his employees, as fringe benefits, 96 cents per hour in addition to their wages at union scale, thus paying out the same aggregate of wages and fringe benefits paid by signatory employers in the form of wages to their employees and contributions to the trust funds. Upon completion of the project, respondents sued petitioner in Oregon state court to enforce the subcontractor's clause, and petitioner defended on the ground that the clause violated 302 (a) (1). The trial court sustained respondents' demurrer, and while holding that it would be "inequitable" to require contributions to the Health and Welfare, Pension, and Vacation Savings Funds because they would amount to a double payment with respect to the subcontractor's employees, ordered an accounting limited to contributions to the Apprenticeship and CIAF trusts that did "not accrue benefits directly to the workmen." The Oregon Supreme Court affirmed sustainment of the demurrer, but, construing the subcontractor's clause as giving all the funds equal standing, reversed the judgment insofar as it limited the accounting to the Apprenticeship and CIAF trusts. Held: 1. Federal- rather than state-law principles of contract construction apply in determining the meaning of the subcontractor's clause, since it is a provision of a collective-bargaining agreement and application of federal law is necessary to avoid the "possibility that individual contract terms might have different meanings under state and federal law," Teamsters Local v. Lucas Flour Co., . Pp. 407-408. 2. The subcontractor's clause, as construed by the Oregon Supreme Court to require petitioner to make contributions to the trust funds measured by the hours worked by his subcontractor's employees, the benefits being payable only to carpenters employed by petitioner or other signatory employers, does not violate 302 (a) (1) but is authorized by 302 (c) (5) and (6). Enforcement of the clause as so construed not only is consistent with the wording of 302 (c) (5) and (6) but also does no disservice to the congressional purpose in enacting 302 to combat "corruption of collective bargaining through bribery of employee representative by employers, ... extortion by employee representatives, and ... the possible abuse by union officers of the power which they might achieve if welfare funds were left to their sole control." Arroyo v. United States, . Pp. 408-411. 3. The objective of the Davis-Bacon Act to protect contractors' employees from substandard earnings by fixing a floor under wages on Government projects, is not "frustrated" by the subcontractor's clause, since such objective is clearly not "frustrated" when contractual arrangements between employers and their employees result in higher compensation and benefits than the floor established by that Act. P. 411. 273 Ore. 221, 540 P.2d 1011, affirmed.BRENNAN, J., delivered the opinion of the Court, in which BURGER, C. J., and STEWART, MARSHALL, BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ., joined. WHITE, J., filed a dissenting opinion, post, p. 411.Carl R. Neil argued the cause and filed briefs for petitioner. Paul T. Bailey argued the cause for respondents. With him on the brief was George Kaufmann.* [Footnote *] Briefs of amici curiae were filed by Steven R. Semler for Huico, Inc.; and by Richard M. Stanislaw for the Mechanical Contractor Associations of Washington.MR. JUSTICE BRENNAN delivered the opinion of the Court.The question presented by this case is whether the provision of a collective-bargaining agreement between petitioner, a general contractor, and the Oregon State Council of Carpenters, requiring that petitioner pay contributions to certain trust funds with respect to hours of carpentry work performed by employees of a nonsignatory subcontractor, violated 302 (a) (1) of the Labor Management Relations (Taft-Hartley) Act, 29 U.S.C. 186 (a) (1). That section generally prohibits agreements of employers to pay money to any representative of their employees. Sections 302 (c) (5) and (6), however, exempt from this general proscription written agreements to pay money to trust funds jointly created and administered by trustees representing employer associations and the union for the purpose of providing medical or hospital care, pensions, pooled vacations for employees of signatory employers, or to defray the costs of apprenticeship or other training programs.1 Petitioner constructed a federally subsidized low-income apartment project in Salem, Ore. A collective-bargaining agreement between petitioner and the Oregon State Council of Carpenters required petitioner to pay contributions to five employer-union trust funds jointly created by the carpenters' union and multiemployer general contractors associations, and jointly administered by respondents, trustees designated in equal numbers by the employers and union. The trusts are, respectively, the Health and Welfare Trust Fund, the Pension Trust Fund, the Vacation Savings Trust Fund, the Apprenticeship and Training Trust Fund, and the Construction Industry Advancement Fund (CIAF). Only signatory employers may contribute to the funds; and no carpenter employee of a nonsignatory employer is entitled to benefits in the Health and Welfare, Pension, and Vacation Savings Funds, the three funds that provide benefits for carpenter employees.2 Contributions were payable at the aggregate rate of 96 cents per hour of carpentry work done at the project.Petitioner subcontracted the framing work on the project to Lloyd Jackson, a framing specialist, who was a nonsignatory employer and whose employees were therefore not eligible for trust fund benefits. In such cases petitioner had the option under a "subcontractor's clause," Art. IV of the collective-bargaining agreement, of requiring "such subcontractor to be bound to all the provisions of this Agreement," or of maintaining "daily records of the subcontractors employees jobsite hours and be liable for payment of these employees [sic] ... [trust fund] contributions in accordance with this Agreement."3 Petitioner did neither. He did not require that the subcontractor "be bound" to the agreement and the subcontractor made no contributions to the funds. Instead the subcontractor paid directly to his carpenter employees, as fringe benefits, 96 cents per hour in addition to their wages at union scale,4 thus paying out the same aggregate of wages and fringe benefits paid by signatory employers in the form of wages to their employees and contributions to the trust funds.Nor did petitioner maintain daily records of and pay contributions to the trust funds with respect to the hours of carpentry work performed on the project by the subcontractor's carpenter employees. Therefore, after completion of the project, respondent trustees brought this action in the Circuit Court of Multnomah County, Ore., to enforce the provision of Art. IV. Grounded upon petitioner's agreement to "be liable for payment of these [the subcontractor's] employees [sic] ... [trust fund] contributions ...," the complaint sought, inter alia, an accounting of the hours of carpentry work performed by the subcontractor's employees on the project, and a judgment for the amount of such work at 96 cents per hour. Petitioner's principal defense was that the subcontractor's clause violated 302 (a) (1). The Circuit Court sustained respondents' demurrer to that defense. The Circuit Court held, however, that it would be "inequitable" to require contributions to the Health and Welfare, Pension, and Vacation Savings Funds because they would in effect amount "to double fringe benefits" with respect to the subcontractor's employees. It therefore ordered an accounting limited to contributions to the Apprenticeship and CIAF trusts that did "not accrue benefits directly to the workmen." The Supreme Court of Oregon affirmed the judgment insofar as it sustained the demurrer to petitioner's defense based on 302 (a) (1) but, construing the subcontractor's clause as giving all the "funds ... equal standing under the terms of the contract ...," reversed the judgment insofar as it limited the accounting to the Apprenticeship and CIAF trusts. 273 Ore. 221, 225-226, 540 P.2d 1011, 1013-1014 (1975). We granted certiorari, . We affirm.IThe parties agree that the determinative question for decision is that of the proper construction of the subcontractor's clause: whether that clause binds petitioner to make contributions to the trust funds "on behalf of" or "for the benefit of" the subcontractor's employees, so that they may participate in the benefits provided carpenters by the funds. Thus interpreted, the clause would violate 302 (a) (1) because the subcontractor is not a signatory to the collective-bargaining agreement and his employees are therefore ineligible for trust fund benefits based on carpentry work performed for him. On the other hand, if the clause merely obligates petitioner to pay contributions to the funds measured by the hours of carpentry work performed at the project by the subcontractor's employees, the benefits being payable only to carpenters employed by petitioner and other signatory employers, then the clause is authorized by the exceptions to the general prohibition of 302 (a) enacted in 302 (c) (5) and (6).Before turning to the question of the meaning of the clause we must address a threshold question - whether federal or state law principle of contract construction, if they differ, are to be applied. Plainly federal law principles apply. Although the Oregon courts were not foreclosed from entertaining this suit merely because petitioner's defense invoked 302 (a) (1) of the Taft-Hartley Act, Charles Dowd Box Co. v. Courtney, , we have proceeded "upon the hypothesis that state courts would apply federal law in exercising [such] jurisdiction" and that "incompatible doctrines of local law must give way to principles of federal labor law." Teamsters v. Lucas Flour Co., (citations omitted). Application of federal law is necessary to avoid the "possibility that individual contract terms might have different meanings under state and federal law ...," id., at 103.The Oregon courts did not specify in this case whether federal or state principles of contract construction guided their concurring conclusions that the subcontractor's clause was not to be read as violating 302 (a) (1). We shall therefore assume that federal principles were applied. In any event, if in fact state rules of contract interpretation were employed, federal rules would require agreement with the Oregon courts' construction. Since a general rule of construction presumes the legality and enforceability of contracts, 6A A. Corbin, Contracts 1499, 1533 (1962), ambiguously worded contracts should not be interpreted to render them illegal and unenforceable where the wording lends itself to a logically acceptable construction that renders them legal and enforceable. The subcontractor's clause although inartfully worded, lends itself to a construction that ties signatory employer contributions to the trust funds as measured both by hours worked by his own employees and hours worked by his nonsignatory subcontractor's employees, and, so construed, Art. IV does not violate 302 (a) (1).Petitioner argues that the Oregon Supreme Court's opinion reads the clause as requiring petitioner to make payments "on behalf of" Jackson's employees in order that they may participate in the benefits of the trusts. This reading, he contends, is implicit in the following passage from the State Supreme Court's opinion: "In this case the requirement of such a written contract was satisfied in that defendant had a written contract with the union which required that he make contributions to the trust funds for his own employees and also specifically provided that in the event he engaged a subcontractor to do any work covered by the agreement he would be liable for payments into the various trust funds for the employees of such a subcontractor." 273 Ore., at 229, 540 P.2d, at 1015 (emphasis added). Read in isolation, this somewhat ambiguous passage might appear to support petitioner's argument. In the context of the entire opinion, however, particularly its reliance upon lower federal court decisions upholding the legality of payments measured in whole or in part by wages paid to employees ineligible to receive benefits, it becomes clear that the Oregon Supreme Court read the subcontractor's clause as an agreement by petitioner to make contributions to the funds measured by the hours of carpentry work performed by the subcontractor's employees, not "on behalf of" or "for the benefit of" the nonsignatory contractor's ineligible employees, but solely for the benefit of the employees of petitioner and other signatory employers. This conclusion follows, we think, from the Oregon Supreme Court's treatment of Moglia v. Geoghegan, 403 F.2d 110 (CA2 1968), and Kreindler v. Clarise Sportswear Co., 184 F. Supp. 182 (SDNY 1960). In rejecting petitioner's argument that 302 (a) (1) prohibits an employer from making any contributions except for the benefit of his own and other signatory employers' employees, the court characterized language in Moglia, cited by petitioner in support of this construction, as "not necessary to ... decision in that case, in which there was no written agreement, and it is not binding upon this court in this case." 273 Ore., at 229 n. 4, 540 P.2d, at 1015 n. 4.5 Rather, the Oregon Supreme Court relied on Kreindler, also involving payments to a trust fund for employees of a nonunion contractor, where the contention was rejected that an employer's contributions measured by the hours worked of another employer's employees violated 302 (a) (1). The court quoted extensively from the Kreindler opinion's reasoning in concluding that payments might be legal even though measured by hours worked by employees of another employer. The court stated flatly: "We agree with [the] statement" from Kreindler that "`[t]he fact that the employees of Clarise's contractors cannot share in the payments based on their payrolls which Clarise has agreed to make does not give Clarise the right to avoid its agreement as illegal.'" 273 Ore., at 230, 540 P.2d, at 1015.6 Accord, Budget Dress Corp. v. Joint Board of Waistmakers' Union, 198 F. Supp. 4 (SDNY 1961), aff'd, 299 F.2d 936 (CA2 1962); Minkoff v. Scranton Frocks, Inc., 181 F. Supp. 542 (SDNY), aff'd, 279 F.2d 115 (CA2 1960); Greenstein v. National Skirt & Sportswear Assn., 178 F. Supp. 681 (SDNY 1959).We agree that enforcement of the subcontractor's clause, as so construed by the Oregon Supreme Court to require petitioner to make contributions measured by the hours worked by his subcontractor's employees, not only is consistent with the wording of 302 (c) (5) and (6) but also does no disservice to the congressional purpose in enacting 3027 to combat "corruption of collective bargaining through bribery of employee representatives by employers, ... extortion by employee representatives, and ... the possible abuse by union officers of the power which they might achieve if welfare funds were left to their sole control." Arroyo v. United States, .IIPetitioner also advances an argument, apparently not made in the Oregon courts, that the subcontractor's clause "frustrates" the objectives of the Davis-Bacon Act, 40 U.S.C. 276a, by increasing his labor costs over the minimum required by that Act. However, the Davis-Bacon Act "was not enacted to benefit contractors, but rather to protect their employees from substandard earnings by fixing a floor under wages on Government projects." United States v. Binghamton Constr. Co., . That objective is clearly not "frustrated" when contractual arrangements between employers and their employees result in higher compensation and benefits than the floor established by the Act. Affirmed. |
6 | This suit under 301 (a) of the Labor Management Relations Act, 1947, was brought by a labor union to compel arbitration of a grievance based upon the employer's practice of contracting out work while laying off employees who could have performed such work. The collective bargaining agreement between the parties contained "no strike" and "no lock-out" provisions and set up a grievance procedure culminating in arbitration. It provided that "matters which are strictly a function of management shall not be subject to arbitration"; but it also provided that "Should differences arise ... as to the meaning and application of the provisions of this Agreement, or should any local trouble of any kind arise," the grievance procedure should be followed. The Court of Appeals ruled that deciding whether to contract out work was "strictly a function of management" within the meaning of the agreement, and it sustained a judgment of the District Court dismissing the complaint. Held: It erred in doing so, and the judgment is reversed. Pp. 575-585. (a) In a suit under 301 (a), judicial inquiry must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or 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; and doubts should be resolved in favor of coverage. Pp. 582-583. (b) In the absence of any express provision excluding a particular grievance from arbitration, 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. Pp. 583-585. (c) Since, in this case, the parties had agreed that any dispute "as to the meaning of this Agreement" would be determined by arbitration, it was for the arbitrator, not the courts, to decide whether the contracting out here involved violated the agreement. P. 585. 269 F.2d 633, reversed.David E. Feller argued the cause for petitioner. With him on the brief were Arthur J. Goldberg, Elliot Bredhoff, James P. Clowes and Carney M. Layne.Samuel Lang argued the cause for respondent. With him on the brief were Richard C. Keenan and T. K. Jackson, Jr.Opinion of the Court by MR. JUSTICE DOUGLAS, announced by MR. JUSTICE BRENNAN.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: "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. "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. "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." 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; "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. "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: "A. For Maintenance Employees: "First, between the aggrieved employees, and the Foreman involved; "Second, between a member or members of the Grievance Committee designated by the Union, and the Foreman and Master Mechanic. ... . . "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 will be made. The decision of the umpire shall be final." Settlement of this grievance was not had and respondent refused arbitration. This suit was then commenced by the union to compel it.1 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 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, 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. .We held in Textile Workers v. Lincoln Mills, , 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., at 456-457. The present federal policy is to promote industrial stabilization through the collective bargaining agreement.3 Id., at 453-454. A major factor in achieving industrial peace is the inclusion of a provision for arbitration of grievances in the collective bargaining agreement.4 Thus the run of arbitration cases, illustrated by Wilko v. Swan, , 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.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 "... [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." 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 preexists 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.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.The labor arbitrator performs functions which are not normal to the courts; the considerations which help him fashion judgments may indeed be foreign to the competence of courts. "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. The labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial common law - the practice 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.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 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.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."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. 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.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.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. Reversed.MR. JUSTICE FRANKFURTER concurs in the result.MR. JUSTICE BLACK took no part in the consideration or decision of this case.[For opinion of MR. JUSTICE BRENNAN, joined by MR. JUSTICE FRANKFURTER and MR. JUSTICE HARLAN, see ante, p. 569.] |
9 | Federal law preempts prescriptions by "a State [or] political subdivision of a State ... related to a price, route, or service of any motor carrier ... with respect to the transportation of property," 49 U. S. C. §14501(c)(1). Exceptions to this general rule provide that the preemption directive "shall not restrict the safety regulatory authority of a State with respect to motor vehicles," §14501(c)(2)(A); "does not apply to the transportation of household goods," §14501(c)(2)(B); and "does not apply to the authority of a State or a political subdivision of a State" to regulate "the price of for-hire motor vehicle transportation by a tow truck ... performed without the prior consent ... of the [towed vehicle's] owner or operator," §14501(c)(2)(C). Petitioner Columbus, Ohio (City), extensively regulates the operation of tow trucks seeking to pick up vehicles within city limits. Plaintiff-respondents, a tow-truck operator and a trade association of such operators, brought this suit to enjoin enforcement of the City's tow-truck regulations on the ground that they were preempted by §14501(c)(1). The Federal District Court granted the plaintiffs summary judgment. The Sixth Circuit affirmed based on its earlier decision in Petrey v. Toledo, in which it held that city tow-truck regulations similar to those of Columbus were preempted. Observing that §14501(c)(1)'s preemption rule explicitly applies to "a State [or] political subdivision of a State," while the exception for safety regulations, §14501(c)(2)(A), refers only to the "authority of a State," the Petrey court determined that the contrast in statutory language indicated that Congress meant to limit the safety exception to States alone. This reading, the court further reasoned, was consistent with Congress' deregulatory purpose of encouraging market forces by eliminating a myriad of complicated and potentially conflicting state regulations. Yet another level of regulation at the local level, the court inferred, would be disfavored. Held: Section 14501(c) does not bar a State from delegating to municipalities and other local units the State's authority to establish safety regulations governing motor carriers of property, including tow trucks. Pp. 5-16. (a) Had §14501(c) contained no reference at all to "political subdivision[s] of a State," §14501(c)(2)(A)'s exception for exercises of the "safety regulatory authority of a State" undoubtedly would have embraced both state and local regulation under Wisconsin Public Intervenor v. Mortier, 501 U. S. 597. It was there held that the exclusion of political subdivisions cannot be inferred from a federal law's express authorization to the "States" to take action, for such subdivisions are components of the very entity the statute empowers, and are created as convenient agencies to exercise such of the State's powers as it chooses to entrust to them, id., at 607-608. This case is a closer call than Mortier because, in contrast to §14501(c)(2)(A)'s singularly bare reference to "[s]tate" authority, almost every other provision of §14501 links States and their political subdivisions. Nevertheless, that does not mean that Congress intended to limit the exception to States alone, as respondents contend. Respondents rely on Russello v. United States, 464 U. S. 16, 23, in which the Court observed that, where particular language is included in one section of a federal statute but omitted from another, Congress is generally presumed to have acted intentionally and purposely. Reading §14501(c)'s exceptions in combination and context, however, leads the Court to conclude that §14501 does not provide the requisite "clear and manifest indication that Congress sought to supplant local authority." Mortier, 518 U. S. 470, 485. Preemption analysis "start[s] with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Ibid. Because a State's "safety regulatory authority" includes the choice to delegate power to localities, forcing a State to refrain from doing so would effectively "restrict" that very authority. Absent a basis more reliable than statutory language insufficient to demonstrate a "clear and manifest purpose" to the contrary, federal courts should resist attribution to Congress of a design to disturb a State's decision on the division of authority between the State's central and local units over safety on municipal streets and roads. Pp. 5-13. (b) Contrary to the Sixth Circuit's reading, declarations of deregulatory purpose in the statute and legislative history do not justify interpreting through a deregulatory prism aspects of the state regulatory process that Congress determined should not be preempted. Giving §14501(c)(2)(A)'s safety exception the narrowest possible construction is resistible here, for that provision does not necessarily conflict with Congress' deregulatory purposes. The area Congress sought to deregulate was state economic regulation; the exemption in question is for state safety regulation. Local regulation of tow-truck prices, routes, or services that is not genuinely responsive to safety concerns garners no exemption from preemption. The construction of §14501 that respondents advocate, moreover, does not guarantee uniform regulation. On their reading as on petitioners', for example, a State could, without affront to the statute, pass discrete, nonuniform safety regulations applicable to each of its several constituent municipalities. Furthermore, §31141 — which authorizes the Secretaryof Transportation to void any state safety law or regulation upon finding that it has no safety benefit or would cause an unreason-able burden on interstate commerce — affords a means to prevent §14501(c)(2)(A)'s safety exception from overwhelming Congress' deregulatory purpose. Pp. 13-16. (c) The Court expresses no opinion on whether Columbus' particular regulations, in whole or in part, qualify as exercises of "safety regulatory authority" or otherwise fall within §14501(c)(2)(A)'s compass. This question, which was not reached by the Sixth Circuit, remains open on remand. P. 16.257 F. 3d 506, reversed and remanded. Ginsburg, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, Kennedy, Souter, Thomas, and Breyer, JJ., joined. Scalia, J., filed a dissenting opinion, in which O'Connor, J., joined.CITY OF COLUMBUS, et al., PETITIONERS v. OURS GARAGE AND WRECKER SERVICE, INC., et al.on writ of certiorari to the united states court of appeals for the sixth circuit[June 20, 2002] Justice Ginsburg delivered the opinion of the Court. Federal preemption prescriptions relating to motor carriers, contained in 49 U. S. C. §14501(c) (1994 ed., Supp. V), specifically save to States "safety regulatory authority ... with respect to motor vehicles," §14501(c)(2)(A). This case presents the question whether the state power preserved in §14501(c)(2)(A) may be delegated to munici-palities, permitting them to exercise safety regulatory authority over local tow-truck operations. The federal legislation preempts provisions by "a State [or] political subdivision of a State ... related to a price, route, or service of any motor carrier ... with respect to the transportation of property." §14501(c)(1). As an exception to this general rule, Congress provided that the preemption directive "shall not restrict the safety regulatory authority of a State with respect to motor vehicles." §14501(c)(2)(A). Section 14501(c)(1)'s statement of the general rule explicitly includes "State[s]" and their "political subdivision[s]." The exception for safety regulation, however, specifies only "State[s]" and does not mention "political subdivision[s]." §14501(c)(2)(A). We hold that §14501(c) does not bar a State from delegating to municipalities and other local units the State's authority to establish safety regulations governing motor carriers of property, including tow trucks. A locality, as §14501(c) recognizes, is a "political subdivision" of the State. Ordinarily, a political subdivision may exercise whatever portion of state power the State, under its own constitution and laws, chooses to delegate to the subdivision. Absent a clear statement to the contrary, Congress' reference to the "regulatory authority of a State" should be read to preserve, not preempt, the traditional prerogative of the States to delegate their authority to their constituent parts.I The Interstate Commerce Act, as amended by the Federal Aviation Administration Authorization Act of 1994, 108 Stat. 1606, and the ICC Termination Act of 1995, 109 Stat. 899, generally preempts state and local regulation "related to a price, route, or service of any motor carrier ... with respect to the transportation of property"; enumerated matters, however, are not covered by the preemption provision. The Act prescribes: "(1) General Rule.--Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... with respect to the transportation of property. "(2) Matters not covered.--Paragraph (1)-- "(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles ... or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization; "(B) does not apply to the transportation of household goods; and "(C) does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law, regulation, or other provision relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle. "(3) State standard transportation practices.-- "(A) Continuation.--[Section 14501(c)(1)] shall not affect any authority of a State, political subdivision of a State, or political authority of 2 or more States to enact or enforce a law, regulation, or other provision, with respect to the intrastate transportation of property by motor carriers, related to--[inter alia] uniform cargo liability rules ... if such law, regulation, or provision meets [various enumerated] requirements." 49 U. S. C. §14501(c). Tow trucks, all parties to this case agree, are "motor carrier[s] of property" falling within §14501(c)'s compass. This reading is corroborated by §14501(c)(2)(C), which relates to nonconsensual tows, e.g., of illegally parkedor abandoned vehicles. That provision plainly indi-cates that tow trucks qualify as "motor carrier[s] of property"; it exempts from federal preemption state and local regulation of "the price of for-hire motor vehicle transportation by a tow truck" when the towing "is performed without the prior consent ... of the [towed vehicle's] owner or operator." Petitioner, the City of Columbus, Ohio (City), extensively regulates the operation of any tow truck that seeks to pick up vehicles within city limits. Columbus' regulations require tow-truck operators to obtain city licenses, submit to city inspections, meet city standards for insurance and recordkeeping, and conform their vehicles to the City's detailed equipment requirements. See Columbus, Ohio, City Code §§549.02-549.06 (1991); App. to Pet. for Cert. 37a-52a. Plaintiff-respondent Ours Garage and Wrecker Service, Inc., joined by a trade association of tow-truck operators, the Towing and Recovery Association of Ohio (TRAO), brought suit in Federal District Court against the City of Columbus and two city officials to enjoin enforcement of the City's tow-truck regulations. The complaint alleged that Columbus' regulations were preempted by §14501 (c)(1). On cross-motions for summary judgment, the District Court ruled for the plaintiffs; the court declared the City's tow-truck regulations preempted and enjoined their enforcement. Columbus and its officials appealed to the United States Court of Appeals for the Sixth Circuit. During the pendency of Columbus' appeal, the Sixth Circuit decided Petrey v. Toledo, 246 F. 3d 548 (2001). Petrey held that city of Toledo tow-truck regulations, resembling those of Columbus, were preempted by §14501(c).1 The court observed first that §14501(c)(1)'s preemption rule explicitly applies to "a State [or] political subdivision of a State," while the exception for safety regulations, §14501(c)(2)(A), refers only to the "authority of a State." The contrast in statutory language indicated to the court that Congress meant to limit the safety exception to States alone. Id., at 563. This reading, the court further reasoned, was consistent with Congress' deregulatory purpose. "Congress intended to encourage market forces ... through the elimination of a myriad of complicated and potentially conflicting state regulations," the court observed; "yet another level of regulation at the local level," the court inferred, "would be disfavored." Ibid. Eleven weeks after rendering its judgment in Petrey, the Sixth Circuit decided this case. Holding Petrey dispositive, the appeals court affirmed the District Court's injunction against enforcement of Columbus' tow-truck regulations. 257 F. 3d 506, 507-508 (2001). The Courts of Appeals have divided on the question whether §14501(c)(2)(A)'s safety regulation exception to preemption encompasses municipal regulations. Compare Petrey, 246 F. 3d 548; Stucky v. San Antonio, 260 F. 3d 424 (CA5 2001); Tocher v. Santa Ana, 219 F. 3d 1040, 1051 (CA9 2000); and R. Mayer of Atlanta, Inc. v. Atlanta, 158 F. 3d 538 (CA11 1998) (all holding that local safety and insurance regulations are preempted), with Ace Auto Body & Towing, Ltd. v. New York, 171 F. 3d 765 (CA2 1999) (holding that local safety and insurance regulations are not preempted). We granted certiorari to resolve the conflict, see 534 U. S. 1073 (2002), and now reverse the Sixth Circuit's judgment.II We begin our consideration of the question presented with an observation that is beyond genuine debate. Had 49 U. S. C. §14501(c) contained no reference at all to "political subdivision[s] of a State," the preemption provision's exception for exercises of the "safety regulatory authority of a State," §14501(c)(2)(A), undoubtedly would have embraced both state and local regulation. Accord, post, at 3 (Scalia, J., dissenting). The Court's decision in Wisconsin Public Intervenor v. Mortier, 501 U. S. 597 (1991), would have been definitive. There the Court considered a provision of the Federal Insecticide, Fungicide, and Rodenticide Act authorizing a "State [to] regulate the sale or use of any federally registered pesticide or device in the State," 7 U. S. C. §136v(a); the provision was "silent with reference to local governments." Mortier, 501 U. S., at 607. "Mere silence," we held, "cannot suffice to establish a clear and manifest purpose to pre-empt local authority." Ibid. (internal quotation marks omitted). As Justice White stated for the Court in Mortier, "[w]hen considering pre-emption, `we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.' " Id., at 605 (quoting Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947)). Furthermore, Justice White explained:"The principle is well settled that local governmental units are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in its absolute discretion. The exclusion of political subdivisions cannot be inferred from the express authorization to the States because political subdivisions are components of the very entity the statute empowers." 501 U. S., at 607-608(internal quotation marks, citations, and alterations omitted). This case is a closer call than Mortier. Here, the general preemption provision, §14501(c)(1)--from which §14501(c) (2)(A) excepts "the safety regulatory authority of a State"--explicitly preempts regulation both by "a State" and by a "political subdivision of a State." The exception for state safety regulation is the first in a series of four statutory exceptions to the preemption rule. The third exception in the series, covering regulation of prices for nonconsensual tow-truck services, matches the general preemption provision; it explicitly applies to the "authority of a State or a political subdivision of a State." §14501(c)(2)(C). States and their political subdivisions are likewise linked in almost every other provision of §14501. See §§14501(a), 14501(b)(1), 14501(c)(3)(A), 14501(c)(3)(B), 14501(c)(3)(C). Respondents Ours Garage and TRAO, in line with several Courts of Appeals, home in on the statute's repeated references to both States and their political subdivisions; in contrast, they urge, the singularly bare reference to "[s]tate" authority in §14501(c)(2)(A)'s exception for safety regulation must mean that Congress intended to limit the exception to States alone. See Brief for Respondents 15-16, 26-29. Respondents rely particularly on Russello v. United States, 464 U. S. 16 (1983). In that case, we observed: "Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Id., at 23 (internal quotation marks omitted) (cited in Petrey, 246 F. 3d, at 561; Stucky, 260 F. 3d, at 441; and Tocher, 219 F. 3d, at 1051). The dissent asserts the same argument vigorously. In its words: "The only conceivable reason" for the separate enumeration of States and their political subdivisions in §14501(c)(1) is to "establish ... two separate categories of state power — state power exercised through political subdivisions and state power exercised by the State directly — that are later treated differently in the exceptions to the rule." Post, at 4. We acknowledge that §14501(c)'s "disparate inclusion [and] exclusion" of the words "political subdivisions" support an argument of some force, one that could not have been made in Mortier. Nevertheless, reading §14501(c)'s set of exceptions in combination, and with a view to the basic tenets of our federal system pivotal in Mortier, we conclude that the statute does not provide the requisite "clear and manifest indication that Congress sought to supplant local authority." 501 U. S., at 611. Respondents Ours Garage and TRAO, as just noted, contrast the first statutory exception to §14501(c)'s preemption rule, i.e., the exception preserving "the safety regulatory authority of a State," §14501(c)(2)(A), with the third exception, preserving the "authority of a State or a political subdivision to enact or enforce a law, regulation, or other provision relating to the price" charged for nonconsensual towing, §14501(c)(2)(C). See Brief for Respondents 15-16. The nonconsensual towing exception tracks the language and structure of the general preemption rule, omitting only the reference to a "political authority of 2 or more States." Similarly styled, the fourth exception, for carrier-requested regulations in areas such as "uniform cargo liability" and antitrust immunity, §14501(c)(3), completely parallels the wording of §14501(c)(1): It provides that preemption "shall not affect any authority of a State, political subdivision of a State, or political authority of 2 or more States to enact or enforce a law, regulation, or other provision" in those areas. The safety exception of §14501(c)(2)(A), however, does not borrow language from §14501(c)(1). It simply states that preemption "shall not restrict the safety regulatory authority of a State." Notably, the second statutory exception, on which respondents train no attention, is stated with similar economy. That exception mentions neither States nor political subdivisions; it simply says that the general preemption rule, §14501(c)(1), "does not apply to the transportation of household goods," §14501(c)(2)(B). Yet it is abundantly clear that, notwithstanding this difference in verbal formulation, §14501(c)(2)(B), like its neighbor §14501(c)(2)(C), permits both state and local regulation. Accord, post, at 4-5 (Scalia, J., dissenting). The inclusion of the phrase "the authority of a Stateor a political subdivision of a State to enact or enforce a law, regulation, or other provision" no doubt synchronizes the nonconsensual towing provision with §14501(c)(1)'s main rule. The parallel structure of §§14501(c)(1)and 14501(c)(2)(C) does not imply, however, that §14501(c)(2)(A)'s concise statement must be read to use the term "State" restrictively. Respondents' inference from the absence of "political subdivision of a State" in §14501(c)(2)(A) would be more persuasive if the omission were the sole difference in the expression of the general rule and the safety exception. In contrast to §§14501(c)(2)(C) and (c)(3), however, neither the safety exception nor the household-goods exception refers to the "authority ... to enact or enforce a law, regulation, or other provision."2 The Russello presumption — that the presence of a phrase in one provision and its absence in another reveals Congress' design — grows weaker with each difference in the formulation of the provisions under inspection. Respondents' restrictive reading of the term "State," we note, introduces an interpretive conundrum of another kind. Section 14501(c)(1) preempts the power of both States and localities to "enact or enforce a law, regulation, or other provision." (Emphasis added.) Those conjoined words travel together. If, as Ours Garage and TRAO argue, the safety exception of §14501(c)(2)(A) reaches only States, then localities are preempted not only from enacting, but equally from enforcing, safety regulations governing motor carriers of property — even if those regulations are enacted by the state legislature. It is unlikely that Congress would preserve States' power to enact safety rules and, at the same time, bar the ordinary method by which States enforce such rules — through their local instrumentalities.3 Finally, we reiterate, reading the term "State" as used in §14501 to exclude political subdivisions would yield a decision at odds with our federal system's traditional comprehension of "the safety regulatory authority of a State," §14501(c)(2)(A). To repeat the essential observation made in Mortier: "The principle is well settled that local governmental units are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in its absolute discretion." 439 U. S. 60, 71 (1978) (States enjoy "extraordinarily wide latitude ... in creating various types of political subdivisions and conferring authority upon them"). In Ohio, as in other States, the delegation of governing authority from State to local unit has long occupied the attention of the State's lawmakers. See D. Wilcox, Municipal Government in Michigan and Ohio: A Study in the Relations of City and Commonwealth 52-54, 63 (1896) (citing Ohio Const., Art. XIII (1851)). The Ohio Constitution currently grants municipalities within the State general authority "to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with the general laws." Art. XVIII, §3. Ohio's Legislature has enacted several statutes empowering cities to regulate motor vehicles and highways. See, e.g., Ohio Rev. Code Ann. §715.22 (Anderson 2000) (municipality may regulate motor vehicles and highways); §723.01 ("Municipal corporations shall have special power to regulate the use of the streets."). Particularly relevant here, Ohio has exempted tow trucks from the State's regulation of motor carriers, §4921.02(A)(8), thus leaving tow-truck regulation largely to the cities, Cincinnati v. Reed, 27 Ohio App. 3d 115, 500 N. E. 2d 333 (1985). It is the expressed intent of §14501(c)(2)(A) that the preemption rule of §14501(c)(1) "not restrict" the exist-ing "safety regulatory authority of a State." Compare §14501(c)(2)(A) with §§14501(c)(2)(B) and (C) (preemption "does not apply" to state or local power to regulate in particular areas), and §14501(c)(3) (preemption rule "shall not affect" multistate, state, or local authority to regulate particular areas at the behest of carriers). Preemption analysis "start[s] with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Medtronic, Inc. v. Lohr, 518 U. S. 470, 485 (1996) (internal quotation marks and citation omitted). Section 14501(c)(2)(A) seeks to save from preemption state power "in a field which the States have traditionally occupied." Ibid. (internal quotation marks and citation omitted). A saving provision of that order is hardly comparable to exercises of congressional spending authority that, as a condition for receipt of funds, explicitly restrict the prerogative of States to entrust governance of a matter to localities. Such programs typically make uniform statewide regulation a condition of funding, or, conversely, provide funds to localities on the condition that they be spent at that level in accordance with federal prescriptions and without state interference. See, e.g., 23 U. S. C. §153 (grants to support traffic safety conditioned on a motorcycle helmet law that applies "throughout the State"); §158 (highway grants withheld unless "State has in effect a law" setting the drinking age at 21); 42 U. S. C. §1396a(a)(1) (1994 ed. and Supp. V) (Medicaid grants available only if a State ensures that its plan for medical assistance is "in effect in all political subdivisions of the State, and, if administered by them, be mandatory upon them"); Lawrence County v. Lead-Deadwood School Dist. No. 40-1, 469 U. S. 256, 270 (1985) (State may not restrict local use of funds that the United States makes available to localities to spend at their discretion).4 This case, by contrast, deals not with States' voluntary agreements to relinquish authority vis-à-vis their political subdivisions in exchange for federal funds, but with preemption stemming from Congress' power to regulate commerce, in a field where States have traditionally allowed localities to address local concerns. Congress' clear pur-pose in §14501(c)(2)(A) is to ensure that its preemption of States' economic authority over motor carriers of property, §14501(c)(1), "not restrict" the preexisting and traditional state police power over safety. That power typically includes the choice to delegate the State's "safety regulatory authority" to localities. Forcing a State to refrain from doing so would effectively "restrict" that very authority. Absent a basis more reliable than statutory language insufficient to demonstrate a "clear and manifest purpose" to the contrary, federal courts should resist attribution to Congress of a design to disturb a State's decision on the division of authority between the State's central and local units over safety on municipal streets and roads.III The Court of Appeals supported its reading of §14501(c)(2)(A) to disallow delegation from State to city in part by reference to the statute's deregulatory purpose. See Petrey, 246 F. 3d, at 563; accord, Stucky, 260 F. 3d, at 444-446; Tocher, 219 F. 3d, at 1048, 1051; R. Mayer, 158 F. 3d, at 546. We now turn to that justification. The Conference Report on the Federal Aviation Administration Authorization Act of 1994 observed that "[s]tate economic regulation of motor carrier operations ... is a huge problem for national and regional carriers attempting to conduct a standard way of doing business." H. R. Conf. Rep. No. 103-677, p. 87 (1994). Carrying more weight, in the Act itself Congress reported its finding that "the regulation of intrastate transportation of property by the States" unreasonably burdened free trade, interstate commerce, and American consumers. Pub. L. 103-305, §601(a)(1), 108 Stat. 1605. Congress therefore concluded that "certain aspects of the State regulatory process should be preempted." §601(a)(2). These declarations of deregulatory purpose, however, do not justify interpreting through a deregulatory prism "aspects of the State regu-latory process" that Congress determined should not be preempted. A congressional decision to enact both a general policy that furthers a particular goal and a specific exception that might tend against that goal does not invariably call for the narrowest possible construction of the exception. Such a construction is surely resistible here, for §14501(c)(1)'s preemption rule and §14501(c)(2)(A)'s safety exception to it do not necessarily conflict. The problem to which the congressional conferees attended was "[s]tate economic regulation"; the exemption in question is for state safety regulation. Corroboratively, the measure's legislative history shows that the deregulatory aim of the legislation had been endorsed by a key interest group — the American Trucking Association — subject to "some conditions that would allow regulatory protection to continue for non-economic factors, such as ... insurance [and] safety." H. R. Conf. Rep. No. 103-677, at 88. The conferees believed that the legislation "address[ed] theseconditions." Ibid.; see also Ace Auto Body, 171 F. 3d, at 776. The construction of §14501 that respondents Ours Garage and TRAO advocate, moreover, does not guarantee uniform regulation. On respondents' reading as on petitioners', a State could, without affront to the statute, pass discrete, nonuniform safety regulations applicable to each of its several constituent municipalities. Ohio thus could adopt the Columbus regulations to govern in that city, the Toledo regulations to govern there, and so on downthe line. See Tr. of Oral Arg. 37-38. Indeed, because §14501(c)(2)(A) refers only to "political" subdivisions, nothing in the statute's text would impede a State from creating an administrative agency organized into local offices, each of which could craft local rules suitable to its assigned jurisdiction. There is no reason to suppose that Congress meant to stop the States from spreading their authority among municipalities unless they employ such artificial or inefficient schemes. Furthermore, 49 U. S. C. §31141 (1994 ed.) affords the Secretary of Transportation a means to prevent the safety exception from overwhelming the lawmakers' deregulatory purpose. That provision authorizes the Secretary to void any "State law or regulation on commercial motor vehi-cle safety" that, in the Secretary's judgment, "has no safety benefit ... [or] would cause an unreasonable burden on interstate commerce." §§31141(a), (c)(4); see also §31132(8) (" `State law' includes [for the purposes of §31141] a law enacted by a political subdivision of a State"); §31132(9) (parallel definition of "State regulation"). Under this authority, the Secretary can in-validate local safety regulations upon finding that their content or multiplicity threatens to clog the avenues of commerce. We reiterate that §14501(c)(2)(A) shields from preemption only "safety regulatory authority" (and "authority of a State to regulate ... with regard to minimum amounts of financial responsibility relating to insurance requirements"). Local regulation of prices, routes, or services of tow trucks that is not genuinely responsive to safety concerns garners no exemption from §14501(c)(1)'s preemption rule.* * * For the reasons stated, we hold that §14501(c)(2)(A) spares from preemption local as well as state regulation. We express no opinion, however, on the question whether Columbus' particular regulations, in whole or in part, qualify as exercises of "safety regulatory authority" or otherwise fall within §14501(c)(2)(A)'s compass. This question, which was not reached by the Court of Appeals,5 remains open on remand. The judgment of the United States Court of Appeals for the Sixth Circuit is reversed, and the case is remandedfor further proceedings consistent with this opinion.It is so ordered.CITY OF COLUMBUS, et al., PETITIONERS v. OURS GARAGE AND WRECKER SERVICE, INC., et al.on writ of certiorari to the united states court of appeals for the sixth circuit[June 20, 2002] Justice Scalia, with whom Justice O'Connor joins, dissenting. The dispute in the present case arises from the fact that a reference to "State" power or authority can be meant to include all that power or authority, including the portion exercised by political subdivisions (as, for example, in the ordinary reference to "the State's police power"); but can also be meant to include only that power or authority exercised at the state level (as, for example, in the phrase "State and local governmental authority"). The issue iswhether, when 49 U. S. C. §14501(c)(2)(A) (1994 ed.,Supp. V) excepts from the preclusionary command of §14501(c)(1) "the safety regulatory authority of a State with respect to motor vehicles," it means to except the safety regulatory authority of cities and counties as well. In my view it plainly does not.I There are four exceptions to the preclusionary rule of §14501(c)(1), which read as follows:"(2) Matters not covered.--[The preemption rule]-- "(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization; "(B) does not apply to the transportation of household goods; and "(C) does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law, regulation, or other provision relating to the price of for-hire motor vehicle transportation by a tow truck, if such transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle."(3) State standard transportation practices.-- "(A) Continuation.--[The preemption rule] shall not affect any authority of a State, political subdivision of a State, or political authority of 2 or more States to enact or enforce a law, regulation, or other provision, with respect to the intrastate transportation of property by motor carriers, related to--[inter alia] uniform cargo liability rules, ... if such law, regulation, or provision meets the requirements of subparagraph (B)." §§14501(c)(2), (3) (emphases added). It is impossible to read this text without being struck by the fact that the term "political subdivision of a State" is added to the term "State" in some of the exceptions, §§14501(c)(2)(C), (c)(3), but not in the exception at issue here, §14501(c)(2)(A). " `Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.' " Russello v. United States, 464 U. S. 16, 23 (1983). The only way to impart some purpose and intent here is to assume that the word "State" is used in its narrower sense, so that political subdivisions are not covered by the term. The Court admits that the rule applied in Russello "supports an argument of some force," ante, at 7, that the exception for the "safety regulatory authority of a State" does not include local safetyregulation. But while the Russello argument is strong, it alone does not fully describe the clarity with which §14501(c)(2)(A) excludes political subdivisions. For the clarity begins not just with the various exceptions, but with the very preemption rule to which the exceptions are appended. That rule reads:"Except as provided [in §§14501(c)(2), (3)], a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... or any motor private carrier, broker, or freight forwarder with respect to the transportation of property." 49 U. S. C. §14501(c)(1).Since the law-making power of a political subdivision of a State is a subset of the law-making power of the State, Hess v. Port Authority Trans-Hudson Corporation, 513 U. S. 30, 47 (1994); Wisconsin Public Intervenor v. Mortier, 501 U. S. 597, 607-608 (1991), the preemption rule would have precisely the same scope if it omitted the reference to "political subdivision of a State." It is a well-established principle of statutory construction (and of common sense) that when such a situation occurs, when "two words or expressions are coupled together, one of which generically includes the other, it is obvious that the more general term is used in a meaning excluding the specific one." J. Sutherland, Statutes and Statutory Construction §266, p. 349 (1891). The only conceivable reason for this specification of "political subdivision" apart from "State" is to establish, in the rule, the two separate categories of state power — state power exercised through political subdivisions and state power exercised by the State directly — that are later treated differently in the exceptions to the rule. The situation is comparable to the following hypothetical using the term "football" (which may be used to include soccer, see Webster's New International Dictionary 983 (2d ed. 1950)): Assume a statute which says that "football and soccer shall not be played on the town green" (§14501(c)(1)), except that "football and soccer may be played on Saturdays" (§14501(c)(2)(C)), "football and soccer may be played on summer nights" (14501(c)(3)(A)), and "football may be played on Mondays" (§14501(c)(2)(A)). In today's opinion, the Court says soccer may be played on Mondays. I think it clear that soccer is not to be regarded as a subset of football but as a separate category. And the same is true of "political subdivision" here.II The Court reaches the opposite conclusion merely because §14501(c) exhibits uneven drafting. First the Court notes that §14501(c)(2)(A) does not "trac[k] the language and structure of the general preemption rule." Ante, at 8. Whereas other exceptions to the rule refer to the authority of a State or other political entity "to enact or enforce a law, regulation, or other provision," §14501(c)(2)(A) merely refers to the "safety regulatory authority of a State." Second, the Court notes that another exception to the preemption rule, §14501(c)(2)(B), is "stated with similar economy." Ante, at 8. It addresses merely the subject of regulation (transportation of household goods) instead of both the subject and the source of regulation (a State, political subdivision, or political authority of 2 or more States). This has, the Court notes, the same effect as its neighbor, §14501(c)(2)(C), of permitting both state and local regulation.1 Ibid. These inconsistencies in the statute's drafting style, the Court contends, undermine the conclusion we would ordinarily draw from the absence of the term "political subdivision" in §14501(c)(2)(A). Ante, at 9. The weakness of this argument should be self-evident. How can inconsistencies of style, on points that have nothing to do with the issue of separating state and local authority, cause the text's crystal-clear distinction between state and local authority to disappear? It would certainly reflect more orderly draftsmanship if the statute consistently used the formulation "to enact or enforce a law, regulation, or other provision," rather than replacing it in §14501(c)(2)(A) with the equivalent phrase "regulatory authority of a State"; and if the statute referred to subject matter alone (à la §14501(c)(2)(B)) either never at all, or else whenever the exception applied to all three categories of States, subdivisions of States, and political authorities of 2 or more States. But it is impossible to imagine how this imperfect draftsmanship in unrelated matters casts any doubt upon the precise meaning of the subject-matter-plus-source provisions where they appear. Unless the Court is appealing to some hitherto unknown canon of interpretation — perhaps (borrowed from the law of evidence) negligens in uno, negligens in omnibus — the diverse styles of §14501(c)'s exceptions have nothing to do with whether we should take seriously the references to States and subdivisions of States where they appear. What is truly anomalous here is not the fact that the terminology of §14501(c) is diverse with regard to presently irrelevant matters, but the fact that the Court has today come up with a judicial interpretation of §14501(c) that renders the term "political subdivision of a State," which appears throughout, utterly superfluous throughout. Although the Court claims that the "Russello presumption ... grows weaker with each difference in the formulation of the provisions under inspection," ante, at 9, it cites no authority for that proposition — nor could it, because we have routinely applied the Russello presumption in cases where a statute employs different "verbal formulation[s]" in sections that include particular language and in sections that omit such language. See, e.g., Barnhart v. Sigmon Coal Co., 534 U. S. 438, __ (2002) (slip op., at 12-13); Duncan v. Walker, 533 U. S. 167, 173-174 (2001); Hohn v. United States, 524 U. S. 236, 249-250 (1998); United States v. Gonzales, 520 U. S. 1, 5 (1997).III Lacking support in the text of the statute, the Court invokes federalism concerns to justify its decision. "Absent a basis more reliable than statutory language insufficient to demonstrate a `clear and manifest purpose' to the contrary," the Court reasons, "federal courts should resist attribution to Congress of a design to disturb a State's decision on the division of authority between the State's central and local units over safety on municipal streets and roads." Ante, at 13. Well of course we think there is "clear and manifest purpose here"; but besides that, the Court`s federalism concerns are overblown. To begin with, it should not be thought that the States' power to control the relationship between themselves and their political subdivisions — their "traditional prerogative ... to delegate" (or to refuse to delegate) "their authority to their constituent parts," ante, at 2 — has hitherto been regarded as sacrosanct. To the contrary. To take only a few examples,2 the Federal Government routinely gives directly to municipalities substantial grants of funds that cannot be reached or directed by "the politicians upstate" (or "downstate"), see, e.g., Office of Management and Budget, 2001 Catalog of Federal Domestic Assistance AEI-1 to AEI-29; Lawrence County v. Lead-Deadwood School Dist. No. 40-1, 469 U. S. 256, 270 (1985); and many significant federal programs require laws or regulations that must be adopted by the state government and cannot be delegated to political subdivisions, see, e.g., 42 U. S. C. §1396a(a) (1994 ed. and Supp. V) (Medicaid); 23 U. S. C. §§153, 158 (Federal-Aid Highway System); 42 U. S. C. §§7407(a), 7410 (1994 ed.) (Clean Air Act).3 This "interference" of the Federal Government with the States' "traditional prerogative ... to delegate their authority to their constituent parts" has long been a subject of considerable debate and controversy. See, e.g., Hills, Dissecting the State: The Use of Federal Law to Free State and Local Officials from State Legislatures' Control, 97 Mich. L. Rev. 1201 (1999). With such major impositions as these already on the books, treating §14501(c)(1) as some extraordinary federal obstruction of state allocation of power is absurd. That provision preempts the authority of political subdivisions to regulate "a price, route, or service of any motor carrier ... or any motor private carrier, broker, or freight forwarder with respect to the transportation of property." (Emphasis added.) The italicized language massively limits the scope of preemption to include only laws, regulations, and other provisions that single out for special treatment "motor carriers of property." §14501(c). States and political sub-divisions remain free to enact and enforce general traf-fic safety laws, general restrictions on the weight of carsand trucks that may enter highways or pass over bridges, and other regulations that do not target motor carriers "with respect to the transportation of property." In addition, the exception contained in §14501(c)(2)(A) allows a State — but not a political subdivision — to apply special safety rules (rules adopted under its "safety regulatory authority") to motor carriers of property.4 This relatively modest burden on the "historic powers of the States" to delegate authority to political subdivisions, Gregory v. Ashcroft, 501 U. S. 452, 461 (1991) (internal quotation marks omitted), is unambiguously imposed by the statute. The Court repeatedly emphasizes the fact that §14501(c)(2)(A) declares that §14501(c)(1) shall "not restrict the safety regulatory authority of a State," ante, at 11, 13 — which, it says, "includes the choice to delegate ... to localities," ante, at 13. This entirely begs the question, which is precisely whether the statute's reference to the authority of a "State" includes authority possessed by a municipality on delegation from the State. As I have described, the text and structure of the statute leave no doubt that it does not — that "State" does not include "subdivision of a State." Even when we are dealing with the traditional powers of the States, "[e]vidence of pre-emptive purpose is sought in the text and structure of the statute at issue." CSX Transp., Inc. v. Easterwood, 507 U. S. 658, 664 (1993) (emphasis added); see also Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947).* * * I believe the text and structure of §14501(c) show plainly that "the safety regulatory authority of a State" does not encompass the authority of a political subdivision. For this reason, I respectfully dissent.FOOTNOTESFootnote 1 The court excepted regulations governing the city's own purchase of towing services, which it held fell within the "municipal proprietor" exception applicable to federal preemption rules. See Petrey, 246 F. 3d, at 558-559.Footnote 2 The dissent insists that §14501(c)(2)(B) is irrelevant because its phrasing "ha[s] nothing to do with the issue of separating State and local authority." Post, at 5 (emphasis omitted). We ultimately draw the same conclusion, of course, regarding the phrasing of the safety exception in §14501(c)(2)(A). The dissent, although it urges that "we should take seriously the references to States and subdivisions of States where they appear," post, at 5-6, rests upon the fact that subdivisions of States do not appear in the safety exception — as they also do not in the household-goods exception of §14501(c)(2)(B). That §14501(c)(2) comprises three exceptions, each differently stated, seems to us indeed relevant to the interpretive weight that may be attached to the variation among them.Footnote 3 Faced with this argument, the dissent is converted, however temporarily, to the view that "federal interference with the `historic powers of the States' must be evinced by a `plain statement.' " Post, at 8-9, n. 4 (quoting Gregory v. Ashcroft, 501 U. S. 452, 461 (1991)). The dissent finds no plain statement in §14501(c)(1)'s prohibition on local enforcement because it can be read to mean only that "a political subdivision may not enact new laws or enforce its previously enacted laws" relating to motor carriage of property. Ibid. This is by no means the most natural reading of the preemption provision. The suggestion of the dissent is that, as applied to localities, §14501(c)(1) preempts only local enforcement of locally enacted laws. See ibid. This interpretation raises the startling possibility that, although §14501(c)(1) forbids both States and localities from "enact[ing]" new laws, it permits localities (but not States) to enforce previously enacted state laws relating to motor carriage of property.Footnote 4 Nor, the dissent's suggestion notwithstanding, see post, at 7, is §14501 similar to the Clean Air Act, which mandates that States undertake an environmental planning process that of necessity cannot respect local political boundaries. See 42 U. S. C. §§7407(c), 7410(a)(1) (1994 ed.) (States must develop implementation plans for air quality in each of its "air quality control region[s]," whose borders are defined by the Administrator of the Environmental Protection Agency based not upon local jurisdictional lines but upon criteria she "deems necessary or appropriate for the attainment ... of [national] ambient air quality standards"); cf. 33 U. S. C. §1313(d) (under the Clean Water Act, each State must develop pollution abatement plans based upon a "priority ranking" of all "waters within its boundaries for which ... effluent limitations ... are not stringent enough to implement [applicable] water quality standard[s]"). Even so, States may delegate implementation authority under the Clean Air Act to their political subdivisions, subject to the requirement that the State bear ultimate oversight responsibility. See §7410(a)(2)(E)(iii) (State must provide "necessary assurances that, where the State has relied on a local or regional government, agency, or instrumentality for the implementation of any [state] plan provision, the State has responsibility for ensuring adequate implementation of such plan provision").Footnote 5 Nor was it reached in Petrey, which the Sixth Circuit stated "controls the disposition of this case," 257 F. 3d 506, 508 (2001). See Petrey v. Toledo, 246 F. 3d 548, 563-564 (2001).FOOTNOTESFootnote 1 Not only is this point (as the text proceeds to discuss) irrelevant in principle; it is misleading in its description of fact, suggesting that the two neighboring sections produce the same result with different language. It is true enough that §14501(c)(2)(C), like §14501(c)(2)(B), permits both state and local regulation. But 14501(c)(2)(C), unlike §14501(c)(2)(B), also permits regulation by a "political authority of 2 or more States."Footnote 2 The Court thinks these examples are "hardly comparable" to §14501(c) because many involve Spending Clause legislation. Ante, at 11-12. A sufficient answer is that one of them does not, see 42 U. S. C. §7410 (1994 ed.) (Clean Air Act), and that other examples not involving Spending Clause legislation could be added, see, e.g., 33 U. S. C. §§1313(d), 1362(3) (Clean Water Act). But in any event, a siphoning off of the States' "historic powers" to delegate has equally been achieved, whether it has come about through the coercion of deprivation of Spending Clause funds or through other means. The point is that it is not unusual for Congress to interfere in this matter. Footnote 3 The Court thinks the Clean Air Act is a bad example merely because a State can rely on political subdivisions to enforce the State's im-plementation plan. Ante, at 12-13, n. 4; see 42 U. S. C. §§7407(a), 7410(a)(2)(E)(iii). So what? Only States may adopt implementation plans; this duty cannot be delegated to localities. Moreover, as I explain n. 4, infra, the statute at issue here is no different. Under 49 U. S. C. §§14501(c)(1) and (c)(2)(A), a State may enact regulations pursuant to its "safety regulatory authority" and rely on localities to enforce those regulations.Footnote 4 This interpretation of the statutory scheme "introduces an inter-pretive conundrum of another kind," the Court asserts, because §14501(c)(1) declares that a political subdivision may not "enact or enforce" laws, regulations, or other provisions relating to motor carriers of property. Ante, at 9. In the Court's view, if the term "State" does not include "subdivision of a State," §14501(c)(1) will prevent a State from relying on localities to "enforce" rules adopted under its "safety regulatory authority." Ibid. But the conclusion that §14501(c)(1) prevents a political subdivision from enforcing regulations enacted by the State can only be reached by ignoring (for this issue) the rule that the Court is so insistent upon elsewhere: that federal interference with the "historic powers of the States" must be evinced by a "plain statement," Gregory v. Ashcroft, 501 U. S. 452, 461 (1991). A natural reading of the phrase "a ... political subdivision of a State ... may not enact or enforce a law"--and a reading faithful to Gregory's plain statement rule — is that a political subdivision may not enact new laws or enforce its previously enacted laws. The Court believes this reading "raises the startling possibility," ante, at 10, n. 3, that §14501(c)(1) prevents States but not political subdivisions from enforcing previously enacted State regulations relating to motor carriage of property. I think not. A possibility so startling (and unlikely to occur) is well enough precluded by the rule that a statute should not be interpreted to produce absurd results. The municipalities' reserved power to enforce state law does not include the power to enforce state law that the State has no continuing power to enact or enforce. |
0 | Petitioner, an officer of a labor union, was summoned to testify before a congressional committee investigating alleged Communist infiltration of labor unions in defense plants. He refused to answer eight questions concerning his alleged membership and activities in the Communist Party, two questions concerning his alleged membership in two other organizations which had been cited by the committee as Communist-front organizations, and 58 questions as to whether he knew certain individuals who had been charged with having Communist affiliations and whether they had ever held official positions in the union. He based his refusal to answer on "primarily the first amendment, supplemented by the fifth." The committee did not ask him to state more specifically the ground for his refusal to answer, and it did not specifically overrule his objection or direct him to answer. Held: In his trial for a violation of 2 U.S.C. 192, the District Court should have entered a judgment of acquittal. Pp. 191-202. (a) Petitioner's reference to "primarily the first amendment, supplemented by the fifth" was sufficient to invoke his constitutional privilege against self-incrimination. Quinn v. United States, ante, p. 155. Pp. 194-195. (b) Petitioner's equivocal answer of "No" to a question as to whether he felt that revealing his knowledge would subject him to criminal prosecution did not constitute an effective waiver or disclaimer of his privilege against self-incrimination. Smith v. United States, . Pp. 195-198. (c) The eight questions concerning petitioner's alleged membership in the Communist Party fell within the scope of the privilege against self-incrimination. Blau v. United States, . Pp. 198-199. (d) So did the two questions concerning his alleged membership in two other organizations which had previously been cited by the committee as Communist-front organizations. P. 199. (e) Since the record reveals that they were asked in a setting of possible incrimination, the 58 questions concerning petitioner's associations were also within the scope of the privilege against self-incrimination. Pp. 199-201. (f) The committee did not adequately apprise petitioner that an answer was required notwithstanding his objection; and, without such an apprisal, there is lacking the element of deliberateness necessary for conviction under 192 for a refusal to answer. Quinn v. United States, ante, p. 155. P. 202. App. D.C. 378, 203 F.2d 54, reversed.David Scribner argued the cause for petitioner on the original argument. With him on the reargument was Frank J. Donner. With them on the brief were Arthur Kinoy and Allan R. Rosenberg.Robert L. Stern, then Acting Solicitor General, argued the cause for the United States on the original argument. With him on the brief were Assistant Attorney General Olney and John R. Wilkins. Robert W. Ginnane argued the cause for the United States on the reargument.Ernest Angell, Osmond K. Fraenkel, Arthur Garfield Hays and Herbert Monte Levy filed a brief for the American Civil Liberties Union, as amicus curiae, urging reversal.MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.This is a companion case to Quinn v. United States, ante, p. 155. Challenged in each proceeding is a conviction under 2 U.S.C. 192 in the District Court for the District of Columbia.1 The two cases arose out of the same investigation by the Committee on Un-American Activities of the House of Representatives. Because of the similarity of the legal issues presented, the cases were consolidated for argument in this Court.Pursuant to subpoena, petitioner appeared on December 5, 1949, before a subcommittee of the Committee on Un-American Activities. The subcommittee consisted of a single member, Rep. Morgan M. Moulder. Petitioner was then the General Secretary-Treasurer of the United Electrical, Radio & Machine Workers of America as well as Editor of the UE News, the union's official publication. The subcommittee's hearings had previously been announced as concerning "the question of Communist affiliation or association of certain members" of the union and "the advisability of tightening present security requirements in industrial plants working on certain Government contracts."2 Petitioner was asked a total of 239 questions. Most dealt with the structure of the union, the duties of its officers, the scope of its membership and bargaining commitments, the alleged similarity in policies of the UE News and the Communist Party, the non-Communist affidavit that petitioner had filed with the National Labor Relations Board, and related matters. Petitioner answered all of these questions. He declined, however, to answer 68 of the 239 questions. These 68 questions dealt exclusively with petitioner's associations and affiliations. He based his refusal on "primarily the first amendment, supplemented by the fifth."3 Of the 68 questions, 58 asked in substance that he state whether or not he was acquainted with certain named individuals and whether or not those individuals had ever held official positions in the union. Two of the questions concerned petitioner's alleged membership in the National Federation for Constitutional Liberties and the Civil Rights Congress. Eight questions concerned petitioner's alleged membership and activity in the Communist Party.On November 20, 1950, petitioner was indicted under 192 for his refusal to answer the 68 questions.4 Sitting without a jury, the District Court held that petitioner's references to "primarily the first amendment, supplemented by the fifth" were insufficient to invoke the Fifth Amendment's privilege against self-incrimination.5 The District Court accordingly found petitioner guilty on all 68 counts and sentenced him to a term of six months and a fine of $500. The Court of Appeals for the District of Columbia Circuit, three judges dissenting, affirmed en banc.6 From that decision this Court granted certiorari.7 I.As pointed out in Quinn v. United States, supra, no ritualistic formula or talismanic phrase is essential in order to invoke the privilege against self-incrimination. All that is necessary is an objection stated in language that a committee may reasonably be expected to understand as an attempt to invoke the privilege. In the Quinn case we hold that Quinn's references to "the First and Fifth Amendments" and "the First Amendment to the Constitution, supplemented by the Fifth Amendment" were sufficient to meet this standard. It would be unwarranted, we think, to reach a different conclusion here as to petitioner's plea based on "primarily the first amendment, supplemented by the fifth."The Government does not even attempt to distinguish between the two cases in this respect. Apparently conceding that petitioner as well as Quinn intended to invoke the privilege, the Government points out "the probability" that his references to the Fifth Amendment were likewise deliberately phrased in muffled terms "to obtain the benefit of the privilege without incurring the popular opprobrium which often attaches to its exercise."8 On this basis the Government contends that petitioner's plea was not adequate. The answer to this contention is threefold. First, an objection that is sufficiently clear to reveal a probable intention to invoke the privilege cannot be ignored merely because it is not phrased in an orthodox manner. Second, if it is true that in these times a stigma may somehow result from a witness' reliance on the Self-Incrimination Clause, a committee should be all the more ready to recognize a veiled claim of the privilege. Otherwise, the great right which the Clause was intended to secure might be effectively frustrated by private pressures. Third, it should be noted that a committee is not obliged to either accept or reject an ambiguous constitutional claim the very moment it is first presented. The way is always open for the committee to inquire into the nature of the claim before making a ruling. If the witness intelligently and unequivocally waives any objection based on the Self-Incrimination Clause, or if the witness refuses a committee request to state whether he relies on the Self-Incrimination Clause, he cannot later invoke its protection in a prosecution for contempt for refusing to answer that question.The Government argues that petitioner did in fact waive the privilege, at least as to one count of the indictment, and that the conviction can be sustained on that count alone.9 In response to a question concerning his associations, petitioner expressed apprehension that the committee was "trying to perhaps frame people for possible criminal prosecution" and added that "I think I have the right to reserve whatever rights I have ... ."10 The following colloquy then took place:11 "Mr. MOULDER. Is it your feeling that to reveal your knowledge of them would subject you to criminal prosecution? "Mr. EMSPAK. No. I don't think this committee has a right to pry into my associations. That is my own position." Petitioner's reply, it is contended, constituted an effective disclaimer of the privilege. We find this contention without merit. As this Court declared in Smith v. United States, : "Although the privilege against self-incrimination must be claimed, when claimed it is guaranteed by the Constitution... . Waiver of constitutional rights ... is not lightly to be inferred. A witness cannot properly be held after claim to have waived his privilege ... upon vague and uncertain evidence."The Smith case, we believe, is controlling here. The witness in that case, at the outset of questioning by an OPA examiner, stated "I want to claim privilege as to anything I say." The examiner accepted this statement as a plea of possible self-incrimination and a request for the immunity afforded to involuntary witnesses by the Price Control Act of 1942. The questioning proceeded on that basis. In response to one question, however, the witness made a statement that appeared to the examiner to be voluntary. This colloquy then ensued: "Question: This is a voluntary statement. You do not claim immunity with respect to that statement? "Answer: No." In a subsequent prosecution of the witness for violation of the Price Control Act, it was held that his "No" answer waived his immunity at least as to the one statement.12 This Court unanimously reversed, stating (337 U.S., at 151): "Without any effort to clarify the `No,' the examiner went ahead and had the witness restate the substance of the long answer ... without any further intimation that the subsequent answers were considered by the examiner to be voluntary. We do not think under these circumstances this equivocal `No' is a waiver of the previous definite claim of general privilege against self-incrimination." Similarly, in the instant case, we do not think that petitioner's "No" answer can be treated as a waiver of his previous express claim under the Fifth Amendment. At most, as in the Smith case, petitioner's "No" is equivocal.13 It may have merely represented a justifiable refusal to discuss the reasons underlying petitioner's assertion of the privilege; the privilege would be of little avail if a witness invoking it were required to disclose the precise hazard which he fears.14 And even if petitioner's "No" answer were taken as responsive to the question, the answer would still be consistent with a claim of the privilege. The protection of the Self-Incrimination Clause is not limited to admissions that "would subject [a witness] to criminal prosecution"; for this Court has repeatedly held that "Whether such admissions by themselves would support a conviction under a criminal statute is immaterial"15 and that the privilege also extends to admissions that may only tend to incriminate.16 In any event, we cannot say that the colloquy between the committee and petitioner was sufficiently unambiguous to warrant finding a waiver here. To conclude otherwise would be to violate this Court's own oft-repeated admonition that the courts must "indulge every reasonable presumption against waiver of fundamental constitutional rights."17 Throughout this entire proceeding - in the trial in the District Court, on appeal in the Court of Appeals, and here on certiorari - the Government has never denied that petitioner would be entitled to the protection of the privilege if he did in fact invoke it. And during argument in this Court the Government expressly conceded that all 68 questions were of an incriminatory character. In addition, neither the District Court nor the Court of Appeals saw fit to introduce the issue into the case. We are therefore reluctant to do so now. But doubts on the issue by some members of the Court make its consideration necessary."To sustain the privilege," this Court has recently held, "it need only be evident from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result."18 And nearly 150 years ago Chief Justice Marshall enunciated a similar test: "Many links frequently compose that chain of testimony which is necessary to convict any individual of a crime. It appears to the court to be the true sense of the rule that no witness is compellable to furnish any one of them against himself."19 Applying this test to the instant case, we have no doubt that the eight questions concerning petitioner's alleged membership in the Communist Party fell within the scope of the privilege.20 The same is true of the two questions concerning petitioner's alleged membership in the National Federation for Constitutional Liberties and the Civil Rights Congress; both organizations had previously been cited by the committee as Communist-front organizations. There remains for consideration the 58 questions concerning petitioner's associations. This Court has already made abundantly clear that such questions, when asked in a setting of possible incrimination, may fall within the scope of the privilege.21 What was the setting - as revealed by the record - in which these questions were asked? Each of the named individuals had previously been charged with having Communist affiliations. On October 14, 1949, less than two months prior to petitioner's appearance before the committee, eleven principal leaders of the Communist Party in this country had been convicted under the Smith Act for conspiring to teach and advocate the violent overthrow of the United States.22 Petitioner was identified at their trial as a Communist and an associate of the defendants. It was reported that Smith Act indictments against other Communist leaders were being prepared. On November 23, 1949, two weeks prior to petitioner's appearance, newspapers carried the story that the Department of Justice "within thirty days" would take "an important step" toward the criminal prosecution of petitioner in connection with his non-Communist affidavit filed with the National Labor Relations Board.23 Under these circumstances, it seems clear that answers to the 58 questions concerning petitioner's associations "might be dangerous because injurious disclosure could result." To reveal knowledge about the named individuals - all of them having been previously charged with Communist affiliations - could well have furnished "a link in the chain" of evidence needed to prosecute petitioner for a federal crime, ranging from conspiracy to violate the Smith Act to the filing of a false non-Communist affidavit under the Taft-Hartley Act. That being so, it is immaterial that some of the questions sought information about associations that petitioner might have been able to explain away on some innocent basis unrelated to Communism. If an answer to a question may tend to be incriminatory, a witness is not deprived of the protection of the privilege merely because the witness if subsequently prosecuted could perhaps refute any inference of guilt arising from the answer.24 II.There is here, as in the Quinn case, a second ground for our decision. At no time did the committee specifically overrule petitioner's objection based on the Fifth Amendment, nor did the committee indicate its overruling of the objection by specifically directing petitioner to answer. In the absence of such committee action, petitioner was never confronted with a clear-cut choice between compliance and noncompliance, between answering the question and risking prosecution for contempt. For the reasons set out in the Quinn opinion, we believe the committee - by failing to meet these minimal procedural standards, originally recognized by the committee and recently re-adopted - did not adequately apprise petitioner that an answer was required notwithstanding his objections. And without such apprisal, there is lacking the element of deliberateness necessary for a conviction under 192 for a refusal to answer.III.Our disposition of the case makes it unnecessary to pass on petitioner's other contentions as to the First Amendment and the grand jury. The judgment below is reversed and the case remanded to the District Court with directions to enter a judgment of acquittal. Reversed. [For dissenting opinion of MR. JUSTICE REED, joined by MR. JUSTICE MINTON, insofar as it applies to this case, see ante, p. 171.] |
0 | Mr. Robert W. Ginnane, of Washington, D.C., for petitioner. Mr. Daniel F. Mathews, of Syracuse, N.Y., for respondent. Mr. Justice BLACK delivered the opinion of the Court. The respondent, Bernard W. Smith, an American soldier, was convicted by an Army court-martial for rape of one woman and assault with intent to rape another in violation of the 92d and 93d Articles of War. 10 U.S.C. 1564 and 1565, 10 U.S.C.A. 1564, 1565. His punishment was dishonorable discharge, forfeiture of all pay and allowances, [ Humphrey v. Smith ], 696] and imprisonment for life. Army reviewing authorities approved the conviction and sentence, but the President reduced the punishment to sixteen years' imprisonment. This habeas corpus proceeding was brought in a District Court challenging the validity of the conviction. The District Court denied relief. 72 F.Supp. 935. The Court of Appeals reversed, ordering respondent's discharge. 170 F.2d 61. We granted certiorari because the petition raises questions concerning important phases of court- martial statutory powers and the scope of judicial review of court-martial convictions. We may at once dispose of the concention that the respondent should not have been convicted on the evidence offered. That evidence was in sharp dispute. But our authority in habeas corpus proceedings to review court-martial judgments does not permit us to pass on the guilt or innocence of persons convicted by courts-martial. 1 It is contended that the court-martial was without jurisdiction to try respondent. If so the court-martial exceeded its lawful authority and can be invalidated despite the limited powers of a court in habeas corpus proceedings. 2 The soundness of this contention depends upon an interpretation of the 70th Article of War, the pertinent part of which is set out below. 3 It , 697] provides the manner in which pre-trial investigations shall be made preliminary to trials of soldiers before general courts-martial. A part of the language is that 'No charge will be referred to a general court martial for trial until after a thorough and impartial investigation thereof shall have been made.' The contention is that this requirement is jurisdictional in nature; that the kind of pre-trial investigation prescribed is an indispensable prerequisite to exercise of general court- martial jurisdiction; and that absent such prior investigation a judgment of conviction is wholly void. Here there was an investigatio. The claim is that it was neither 'thorough' nor 'impartial' as the 70th Article requires. The Court of Appeals, one judge dissenting, so held, and its reversal was rested on that finding. There was no finding that there was unfairness in the court- martial trial itself. We do not think that the pre-trial investigation procedure required by Article 70 can properly be construed as an indispensable prerequisite to exercise of Army general court-martial jurisdiction. The Article does serve important functions in the administration of court-martial procedures and does provide safeguards to an accused. Its language is clearly such that a defendant could object to trial in the absence of the required investigation. In that event the court-martial could itself postpone trial pending the investigation. And the military re- , 698] viewing authorities could consider the same contention, reversing a court- martial conviction where failure to comply with Article 70 has substantially injured an accused. 4 But we are not persuaded that Congress intended to make otherwise valid court-martial judgments wholly void because pre-trial investigations fall short of the standards prescribed by Article 70. That Congress has not required analogous pre-trial procedure for Navy courts-martial is an indication that the investigatory plan was not intended to be exalted to the jurisdictional level. Nothing in the legislative history of the Article supports the contention that Congress intended that a conviction after a fair trial should be nullified because of the manner in which an investigation was conducted prior to the filing of charges. Its original purposes were to insure adequate preparation of cases, to guard against hasty, ill- considered charges, to save innocent persons from the stigma of unfounded charg s, and to prevent trivial cases from going before general courts- martial. , 699] War Department, Military Justice During the War, 63 (1919). All of these purposes relate solely to actions required in advance of formal charges or trial. All the purposes can be fully accomplished without subjecting court- martial convictions to judicial invalidation where pre-trial investigations have not been made. Shortly after enactment of Article 70 in 1920 the Judge Advocate General of the Army did hold that where there had been no pre-trial investigation, court-martial proceedings were void ab initio.5 But this holding has been expressly repudiated in later holdings of the Judge Advocate. 6 This later interpretation has been that the pre-trial requirements of Article 70 are directory, not mandatory, and in no way affect the jurisdiction of a court-martial. The War Department's interpretation was pointedly called to the attention of Congress in 1947 after which Congress amended Article 70 but left unchanged the language here under consideration. 7 , 700] We hold that a failure to conduct pre-trial investigations as required by Article 70 does not deprive a general court-martial of jurisdiction so as to empower courts in habeas corpus proceedings to invalidate court-martial judgments. It is contended that this interpretation of Article 70 renders it meaningless, practically making it a dead letter. This contention must rest on the premise that the Army will comply with the 70th Article of War only if courts in habeas corpus proceedings can invalidate any court-martial conviction which does not follow an Article 70 pre-trial procedure. We cannot assume that judicial coercion is essential to compel the Army to obey this Article of War. It was the Army itself that initiated the pre-trial investigation procedure and recommended congressional enactment of Article 70.8 A reasonable assumption is that the Army will require compliance with the Article 70 investigatory procedure to the end that Army work shall not be unnecessarily impeded and that Army personnel shall not be wronged as the result of unfounded and frivolous court-martial charges and trials. 9 , 701] This court-martial conviction resulting from a trial fairly conducted cannot be invalidated by a judicial finding that the pre-trial investigation was not carried on in the manner prescribed by the 70th Article of War. 10 Reversed. Mr. Justice MURPHY, with whom Mr. Justice DOUGLAS and Mr. Justice RUTTLEDGE concur, dissenting. Pretrial investigation under the seventieth Article of War performs a dual function. It saves the Army's time by eliminating frivolous cases; it protects an accused from the ignominy of a general court martial when the charges against him are groundless. These policies, of course, mean more than the protection of the respondent in this case. Their primary service appears when the defendant is clearly innocent. If the Article is ignored, and the court martial finds the defendant innocent, the error can never be corrected-the officers' time has been wasted and the defendant's record is forever besmirched by the words 'general court martial.' Yet if the prisoner is found guilty, there is still no sanction. For military authorities will not set aside a conviction unless the very accused asking reversal has been prejudiced. And if the trial has been fair, and resulted in conviction, who will say that the defendant has been prejudiced because preliminary investigation was wanting? Unless a civilian court is able to enforce the requirement, then, it is not a requirement at all, but only a suggestion which should be observed. Today the Court , 702] adopts the latter alternative. It holds that the error of noncompliance with A.W. 70 is not jurisdictional. It makes A.W. 70 a virtual dead letter. I cannot impute so bland a rule to the Congress. And no evidence of such sterility has been brought to our attention. What the Eightieth Congress thought about the problem is irrelevant, of course, for A.W. 70 was the product of the Sixty-Sixth Congress, in 1920, and respondent was tried in 1944, long before the Eightieth Congress convened. Had respondent's trial taken place in 1948, the result might be entirely different. The available evidence indicates clearly that the Sixty-Sixth Congress considered preliminary investigation vital before trial. The language of the Article is that of command-'no charge will be referred' without investigation. The report accompanying the 1920 statute, after referring to an investigation of unfairness in administering military justice, and concluding that 'the personal element entered too largely into these cases,' listed twenty-three changes in the law. The second change mentioned was this: 'Speedy but thorough and impartial preliminary investigation will be had in all cases.' H.R. Rep. No. 940, 66th Cong., 2d Sess. (1920), p. 2. In 1924, just four years after A.W. 70 became the law, the Board of Review construed the language directly opposite to the Court's present interpretation. It held that the error was jurisdictional. Cm 161728, Clark. Two later holdings, both in 1928, confirmed this view. CM 182225, Keller; Cm 183183, Claybaugh. In Keller, the investigation took place, but was not 'thorough.' The Board held that a thorough investigation was 'an absolute right given to the accused by statute.' And in 1937 Congress reenacted the same language we are construing now, the same language the Board of Review expounded in 1924 and 1928. 50 Stat. 724. It seems extraordinary to say that reversals of the prior rulings , 703] in 1943, CM 229477, Floyd, 17 B.R. 149, should govern when Congress has apparently acquiesced in the first, and contemporary, interpretations. Congressional belief in the importance of preliminary investigation should not now be frustrated by a holding that noncompliance cannot be attacked by habeas corpus. I agree with the court below that the preliminary investigation in this case did not meet the proper standard, and would affirm the judgment. |
3 | Part B of the Medicare program under the Social Security Act provides federally subsidized insurance against the cost of certain physician services, outpatient physical therapy, X-rays, laboratory tests, and certain other medical and health care. The Secretary of Health and Human Services is authorized to contract with private insurance carriers to administer the payment of Part B claims. If the carrier refuses on the Secretary's behalf to pay a portion of a claim, the claimant is entitled to a "review determination," based on the submission of written evidence and arguments, and, if the amount in dispute is $100 or more, a still-dissatisfied claimant then has a right to an oral hearing, at which an officer chosen by the carrier presides. The statute and regulations make no further provision for review of the hearing officer's decision. After decisions by hearing officers were rendered against them, appellee claimants sued in Federal District Court to challenge the constitutional adequacy of the hearings afforded to them. The court held that the hearing procedures violated appellees' rights to due process insofar as the final, unappealable decision regarding their claims was made by carrier appointees, that due process required additional safeguards to reduce the risk of erroneous deprivation of Part B benefits, and that appellees were entitled to a de novo hearing conducted by an administrative law judge of the Social Security Administration.Held: The hearing procedures in question do not violate due process requirements. Pp. 195-200. (a) While due process demands impartiality on the part of those who function in a quasi-judicial capacity, such as the hearing officers involved in this case, there is a presumption that these officers are unbiased. This presumption can be rebutted by a showing of conflict of interest or some other specific reason for disqualification. But the factual findings here disclose no disqualifying interest. The officers' connection with the private insurance carriers would be relevant only if the carriers themselves are biased or interested, and there is no basis in the record for such a conclusion. The carriers pay Part B claims from federal, not their own, funds, the hearing officers' salaries are paid by the Federal Government, and the carriers operate under contracts requiring compliance with standards prescribed by the statute and the Secretary. In the absence of proof of financial interest on the carriers' part, there is no basis for assuming a derivative bias among their hearing officers. Pp. 195-197. (b) Nor does the record support the contention that accuracy of Part B decisionmaking may suffer because the carriers appoint unqualified hearing officers and that thus additional procedures would reduce the risk of erroneous decisions. Pp. 198-200. 503 F. Supp. 409, reversed and remanded.POWELL, J., delivered the opinion for a unanimous court.Deputy Solicitor General Geller argued the cause for appellant. With him on the briefs were Solicitor General Lee, Edwin S. Kneedler, Lynne K. Zusman, Robert P. Jaye, and Henry Eigles.Harvey Sohnen argued the cause for appellees. With him on the brief were Stefan M. Rosenzweig, Clifford Sweet, Sally Hart Wilson, and Gill Deford.* [Footnote *] Briefs of amici curiae urging affirmance were filed by David R. Brink for the American Bar Association; and by Mary Ellen McCarthy for Coalition of Senior Citizens, Inc., et al.JUSTICE POWELL delivered the opinion of the Court.The question is whether Congress, consistently with the requirements of due process, may provide that hearings on disputed claims for certain Medicare payments be held by private insurance carriers, without a further right of appeal.ITitle XVIII of the Social Security Act, 79 Stat. 291, as amended, 42 U.S.C. 1395 et seq. (1976 ed. and Supp. IV), commonly known as the Medicare program, is administered by the Secretary of Health and Human Services. It consists of two parts. Part A, which is not at issue in this case, provides insurance against the cost of institutional health services, such as hospital and nursing home fees. 1395c-1395i-2 (1976 ed. and Supp. IV). Part B is entitled "Supplementary Medical Insurance Benefits for the Aged and Disabled." It covers a portion (typically 80%) of the cost of certain physician services, outpatient physical therapy, X-rays, laboratory tests, and other medical and health care. See 1395k, 1395l, and 1395x(s) (1976 ed. and Supp. IV). Only persons 65 or older or disabled may enroll, and eligibility does not depend on financial need. Part B is financed by the Federal Supplementary Medical Insurance Trust Fund. See 1395t (1976 ed. and Supp. IV). This Trust Fund in turn is funded by appropriations from the Treasury, together with monthly premiums paid by the individuals who choose voluntarily to enroll in the Part B program. See 1395j, 1395r, and 1395w (1976 ed. and Supp. IV). Part B consequently resembles a private medical insurance program that is subsidized in major part by the Federal Government.Part B is a social program of substantial dimensions. More than 27 million individuals presently participate, and the Secretary pays out more than $10 billion in benefits annually. Brief for Appellant 9. In 1980, 158 million Part B claims were processed. Ibid. In order to make the administration of this sweeping program more efficient, Congress authorized the Secretary to contract with private insurance carriers to administer on his behalf the payment of qualifying Part B claims. See 42 U.S.C. 1395u (1976 ed. and Supp. IV). (In this case, for instance, the private carriers that performed these tasks in California for the Secretary were Blue Shield of California and the Occidental Insurance Co.) The congressional design was to take advantage of such insurance carriers' "great experience in reimbursing physicians." H. R. Rep. No. 213, 89th Cong., 1st Sess., 46 (1965). See also 42 U.S.C. 1395u(a); S. Rep. No. 404, 89th Cong., 1st Sess., 53 (1965).The Secretary pays the participating carriers' costs of claims administration. See 42 U.S.C. 1395u(c). In return, the carriers act as the Secretary's agents. See 42 CFR 421.5(b) (1980). They review and pay Part B claims for the Secretary according to a precisely specified process. See 42 CFR part 405, subpart H (1980). Once the carrier has been billed for a particular service, it decides initially whether the services were medically necessary, whether the charges are reasonable, and whether the claim is otherwise covered by Part B. See 42 U.S.C. 1395y(a) (1976 ed. and Supp. IV); 42 CFR 405.803(b) (1980). If it determines that the claim meets all these criteria, the carrier pays the claim out of the Government's Trust Fund - not out of its own pocket. See 42 U.S.C. 1395u(a)(1), 1395u(b)(3), and 1395u(c) (1976 ed. and Supp. IV).Should the carrier refuse on behalf of the Secretary to pay a portion of the claim, the claimant has one or more opportunities to appeal. First, all claimants are entitled to a "review determination," in which they may submit written evidence and arguments of fact and law. A carrier employee, other than the initial decisionmaker, will review the written record de novo and affirm or adjust the original determination. 42 CFR 405.807-405.812 (1980); McClure v. Harris, 503 F. Supp. 409, 411 (ND Cal. 1980). If the amount in dispute is $100 or more, a still-dissatisfied claimant then has a right to an oral hearing. See 42 U.S.C. 1395u(b)(3)(C); 42 CFR 405.820-405.860 (1980). An officer chosen by the carrier presides over this hearing. 405.823. The hearing officers "do not participate personally, prior to the hearing [stage], in any case [that] they adjudicate." 503 F. Supp., at 414. See 42 CFR 405.824 (1980).Hearing officers receive evidence and hear arguments pertinent to the matters at issue. 405.830. As soon as practicable thereafter, they must render written decisions based on the record. 405.834. Neither the statute nor the regulations make provision for further review of the hearing officer's decision.1 See United States v. Erika, Inc., post, p. 201. IIThis case arose as a result of decisions by hearing officers against three claimants.2 The claimants, here appellees, sued to challenge the constitutional adequacy of the hearings afforded them. The District Court for the Northern District of California certified appellees as representatives of a nationwide class of individuals whose claims had been denied by carrier-appointed hearing officers. 503 F. Supp., at 412-414. On cross-motions for summary judgment, the court concluded that the Part B hearing procedures violated appellees' right to due process "insofar as the final, unappealable decision regarding claims disputes is made by carrier appointees ... ." Id., at 418.The court reached its conclusion of unconstitutionality by alternative lines of argument. The first rested upon the principle that tribunals must be impartial. The court thought that the impartiality of the carrier's hearing officers was compromised by their "prior involvement and pecuniary interest." Id., at 414. "Pecuniary interest" was shown, the District Court said, by the fact that "their incomes as hearing officers are entirely dependent upon the carrier's decisions regarding whether, and how often, to call upon their services."3 Id., at 415. Respecting "prior involvement," the court acknowledged that hearing officers personally had not been previously involved in the cases they decided. But it noted that hearing officers "are appointed by, and serve at the will of, the carrier [that] has not only participated in the prior stages of each case, but has twice denied the claims [that] are the subject of the hearing," and that five out of seven of Blue Shield's past and present hearing officers "are former or current Blue Shield employees."4 Id., at 414. (Emphasis in original.) See also 42 CFR 405.824 (1980). The District Court thought these links between the carriers and their hearing officers sufficient to create a constitutionally intolerable risk of hearing officer bias against claimants.The District Court's alternative reasoning assessed the costs and benefits of affording claimants a hearing before one of the Secretary's administrative law judges, "either subsequent to or substituting for the hearing conducted by a carrier appointee." 503 F. Supp., at 415. The court noted that Mathews v. Eldridge, , makes three factors relevant to such an inquiry:"First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail." Considering the first Mathews factor, the court listed three considerations tending to show that the private interest at stake was not overwhelming.5 The court then stated, however, that "it cannot be gainsaid" that denial of a Medicare beneficiary's claim to reimbursement may impose "considerable hardship." 503 F. Supp., at 416.As to the second Mathews factor of risk of erroneous deprivation and the probable value of added process, the District Court found the record "inconclusive." 503 F. Supp., at 416. The court cited statistics showing that the two available Part B appeal procedures frequently result in reversal of the carriers' original disposition.6 But it criticized these statistics for failing to distinguish between partial and total reversals. The court stated that hearing officers were required neither to receive training nor to satisfy "threshold criteria such as having a law degree." Ibid. On this basis it held that "it must be assumed that additional safeguards would reduce the risk of erroneous deprivation of Part B benefits." Ibid.On the final Mathews factor involving the Government's interest, the District Court noted that carriers processed 124 million Part B claims in 1978. 503 F. Supp., at 416. The court stated that "[o]nly a fraction of those claimants pursue their currently-available appeal remedies," and that "there is no indication that anything but an even smaller group of claimants will actually pursue [an] additional remedy" of appeal to the Secretary. Ibid. Moreover, the court said, the Secretary already maintained an appeal procedure using administrative law judges for appeals by Part A claimants. Increasing the number of claimants who could use this Part A administrative appeal "would not be a cost-free change from the status quo, but neither should it be a costly one." Ibid.Weighing the three Mathews factors, the court concluded that due process required additional procedural protection over that presently found in the Part B hearing procedure. The court ordered that the appellees were entitled to a de novo hearing of record conducted by an administrative law judge of the Social Security Administration.7 App. to Juris. Statement 36a. We noted probable jurisdiction, , and now reverse.IIIAThe hearing officers involved in this case serve in a quasi-judicial capacity, similar in many respects to that of administrative law judges. As this Court repeatedly has recognized, due process demands impartiality on the part of those who function in judicial or quasi-judicial capacities. E. g., Marshall v. Jerrico, Inc., , and n. 2 (1980). We must start, however, from the presumption that the hearing officers who decide Part B claims are unbiased. See Withrow v. Larkin, ; United States v. Morgan, . This presumption can be rebutted by a showing of conflict of interest or some other specific reason for disqualification.8 See Gibson v. Berryhill, ; Ward v. Village of Monroeville, . See also In re Murchison, ("to perform its high function in the best way `justice must satisfy the appearance of justice' ") (quoting Offutt v. United States, ). But the burden of establishing a disqualifying interest rests on the party making the assertion.Fairly interpreted, the factual findings made in this case do not reveal any disqualifying interest under the standard of our cases. The District Court relied almost exclusively on generalized assumptions of possible interest, placing special weight on the various connections of the hearing officers with the private insurance carriers.9 The difficulty with this reasoning is that these connections would be relevant only if the carriers themselves are biased or interested. We find no basis in the record for reaching such a conclusion.10 As previously noted, the carriers pay all Part B claims from federal, and not their own, funds. Similarly, the salaries of the hearing officers are paid by the Federal Government. Cf. Marshall v. Jerrico, Inc., supra, at 245, 251. Further, the carriers operate under contracts that require compliance with standards prescribed by the statute and the Secretary. See 42 U.S.C. 1395u(a)(1)(A)-(B), 1395u(b)(3), and 1395u(b) (4) (1976 ed. and Supp. IV); 42 CFR 421.200, 421.202, and 421.205(a) (1980). In the absence of proof of financial interest on the part of the carriers, there is no basis for assuming a derivative bias among their hearing officers.11 BAppellees further argued, and the District Court agreed, that due process requires an additional administrative or judicial review by a Government rather than a carrier-appointed hearing officer. Specifically, the District Court ruled that "[e]xisting Part B procedures might remain intact so long as aggrieved beneficiaries would be entitled to appeal carrier appointees' decisions to Part A administrative law judges."12 503 F. Supp., at 417. In reaching this conclusion, the District Court applied the familiar test prescribed in Mathews v. Eldridge, 424 U.S., at 335. See supra, at 193-195. We may assume that the District Court was correct in viewing the private interest in Part B payments as "considerable," though "not quite as precious as the right to receive welfare or social security benefits." 503 F. Supp., at 416. We likewise may assume, in considering the third Mathews factor, that the additional cost and inconvenience of providing administrative law judges would not be unduly burdensome.13 We focus narrowly on the second Mathews factor that considers the risk of erroneous decision and the probable value, if any, of the additional procedure. The District Court's reasoning on this point consisted only of this sentence:"In light of [appellees'] undisputed showing that carrier-appointed hearing officers receive little or no formal training and are not required to satisfy any threshold criteria such as having a law degree, it must be assumed that additional safeguards would reduce the risk of erroneous deprivation of Part B benefits." 503 F. Supp., at 416 (footnote omitted). Again, the record does not support these conclusions. The Secretary has directed carriers to select as a hearing officer"`an attorney or other qualified individual with the ability to conduct formal hearings and with a general understanding of medical matters and terminology. The [hearing officer] must have a thorough knowledge of the Medicare program and the statutory authority and regulations upon which it is based, as well as rulings, policy statements, and general instructions pertinent to the Medicare Bureau.'" App. 22, quoting Dept. of HEW, Medicare Part B Carriers Manual, ch. VII, p. 12-21 (1980) (emphasis added). The District Court did not identify any specific deficiencies in the Secretary's selection criteria. By definition, a "qualified" individual already possessing "ability" and "thorough knowledge" would not require further training. The court's further general concern that hearing officers "are not required to satisfy any threshold criteria" overlooks the Secretary's quoted regulation.14 Moreover, the District Court apparently gave no weight to the qualifications of hearing officers about whom there is information in the record. Their qualifications tend to undermine rather than to support the contention that accuracy of Part B decisionmaking may suffer by reason of carrier appointment of unqualified hearing officers.15 "[D]ue Process is flexible and calls for such procedural protections as the particular situation demands." Morrissey v. Brewer, . We have considered appellees' claims in light of the strong presumption in favor of the validity of congressional action and consistently with this Court's recognition of "congressional solicitude for fair procedure ... ." Califano v. Yamasaki, . Appellees simply have not shown that the procedures prescribed by Congress and the Secretary are not fair or that different or additional procedures would reduce the risk of erroneous deprivation of Part B benefits.IVThe judgment of the District Court is reversed, and the case is remanded for judgment to be entered for the Secretary. So ordered. |
2 | Petitioner was convicted of mailing obscene materials and advertising brochures for such materials in violation of 18 U.S.C. 1461 (1976 ed.), and the Court of Appeals affirmed. Since the materials were mailed prior to 1973, he was tried under the standards of Roth v. United States, , and Memoirs v. Massachusetts, , rather than under those of Miller v. California, . He claims that the trial court's instructions to the jury were improper because they included children and sensitive persons within the definition of the community by whose standards obscenity was to be judged; charged that members of deviant sexual groups could be considered in determining whether the materials appealed to prurient interest in sex; and also charged that pandering could be considered in determining whether the materials were obscene. Held. 1. Children are not to be included as part of the "community" as that term relates to the "obscene materials" proscribed by 1461, and hence it was error to instruct the jury that children are part of the relevant community. A jury conscientiously striving to define such community, the "average person," by whose standards obscenity is to be judged, might very well reach a much lower "average" when children are part of the equation than it would if it restricted its consideration to the effect of allegedly obscene materials on adults. Pp. 296-298. 2. However, inclusion of "sensitive persons" in the charge advising the jury of whom the community consists was not error. In the context of this case, the community includes all adults who compose it, and a jury can consider them all in determining the relevant community standards, the vice being in focusing upon the most susceptible or sensitive members rather than in merely including them, as the trial court did, along with all others in the community. Pp. 298-301. 3. Nor was the instruction as to deviant groups improper. Nothing prevents a court from giving an instruction on prurient appeal to such groups as part of an instruction pertaining to appeal to the average person when the evidence, as here, would support such a charge. Pp. 301-303. 4. The pandering instruction, which permitted the jury to consider the touting descriptions in the advertising brochures, along with the materials themselves, to determine whether the materials were intended to appeal to the recipient's prurient interest in sex, i. e., whether they were "commercial exploitation of erotica solely for the sake of their prurient appeal," Ginzburg v. United States, , was proper in light of the evidence. To aid a jury in determining whether materials are obscene, the methods of their creation, promotion, or dissemination are relevant. Pp. 303-304. 551 F.2d 1155, reversed and remanded.BURGER, C. J., delivered the opinion of the Court, in which WHITE, BLACKMUN, REHNQUIST, and STEVENS, JJ., joined. STEVENS, J., filed a concurring opinion, post, p. 305. BRENNAN, J., filed a separate opinion, in which STEWART and MARSHALL, JJ., joined, post, p. 305. POWELL, J., filed a dissenting opinion, post, p. 306.Bernard A. Berkman argued the cause for petitioner. With him on the briefs was Larry S. Gordon.Jerome M. Feit argued the cause for the United States. With him on the brief were Solicitor General McCree and Assistant Attorney General Civiletti.MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.We granted certiorari in this case to decide whether the court's instructions in a trial for mailing obscene materials prior to 1973, and therefore tried under the Roth-Memoirs standards, could properly include children and sensitive persons within the definition of the community by whose standards obscenity is to be judged. We are also asked to determine whether the evidence supported a charge that members of deviant sexual groups may be considered in determining whether the materials appealed to prurient interest in sex; whether a charge of pandering was proper in light of the evidence; and whether comparison evidence proffered by petitioner should have been admitted on the issue of contemporary community standards. Petitioner was convicted after a jury trial in United States District Court on 11 counts, charging that he had mailed obscene materials and advertising brochures for obscene materials in violation of 18 U.S.C. 1461 (1976 ed.).1 On appeal, his conviction was reversed on the grounds that the instructions to the jury defining obscenity had been cast under the standards established in Miller v. California, , although the offenses charged occurred in 1971 when the standards announced in Roth v. United States, , and particularized in Memoirs v. Massachusetts, , were applicable. Accordingly, the case was remanded to the District Court for a new trial under the standards controlling in 1971. No. 73-2900 (CA9 Feb. 5, 1975, rehearing denied May 13, 1975); see Marks v. United States, .On retrial in 1976, petitioner was again convicted on the same 11 counts. He was sentenced to terms of four years' imprisonment on each count, the terms to be served concurrently, and fined $500 on each count, for a total fine of $5,500. The Court of Appeals affirmed. 551 F.2d 1155 (CA9 1977).IThe evidence presented by the Government in its case in chief consisted of materials mailed by the petitioner accompanied by a stipulation of facts which, among other things, recited that petitioner, knowing the contents of the mailings,2 had "voluntarily and intentionally" used the mails on 11 occasions to deliver brochures illustrating sex books, magazines, and films, and to deliver a sex magazine (one count) and a sex film (one count), with the intention that these were for the personal use of the recipients. From the stipulation and the record, it appears undisputed that the recipients were adults who resided both within and without the State of California. Because of the basis of our disposition of this case, it is unnecessary for us to review the contents of the exhibits in detail.The defense consisted of expert testimony and surveys offered to demonstrate that the materials did not appeal to prurient interest, were not in conflict with community standards, and had redeeming social value. Two films were proffered by the defense for the stated purpose of demonstrating that comparable material had received wide box office acceptance, thus demonstrating that the materials covered by the indictment were not obscene and complied with community standards.As a rebuttal witness, the Government presented an expert who testified as to what some of the exhibits depicted and that in his opinion they appealed to the prurient interest of the average person and to that of members of particular deviant groups.IIIn this Court, as in the Court of Appeals, petitioner challenges four parts of the jury instructions and the trial court's rejection of the comparison films.A. Instruction as to ChildrenPetitioner challenges that part of the jury instruction which read: "In determining community standards, you are to consider the community as a whole, young and old, educated and uneducated, the religious and the irreligious, men, women and children, from all walks of life." (Emphasis added.) The Court of Appeals concluded that the inclusion of children was "unnecessary" and that it would "prefer that children be excluded from the court's [jury] instruction until the Supreme Court clearly indicates that inclusion is proper." 551 F.2d, at 1158. It correctly noted that this Court had been ambivalent on this point, having sustained the conviction in Roth, supra, where the instruction included children, and having intimated later in Ginzburg v. United States, n. 3 (1966), that it did not necessarily approve the inclusion of "children" as part of the community instruction.3 Reviewing the charge as a whole under the traditional standard of review, cogent arguments can be made that the inclusion of children was harmless error, see Hamling v. United States, ; however, the courts, the bar, and the public are entitled to greater clarity than is offered by the ambiguous comment in Ginzburg on this score. Since this is a federal prosecution under an Act of Congress, we elect to take this occasion to make clear that children are not to be included for these purposes as part of the "community" as that term relates to the "obscene materials" proscribed by 18 U.S.C. 1461 (1976 ed.). Cf. Cupp v. Naughten, .Earlier in the same Term in which Roth was decided, the Court had reversed a conviction under a state statute which made criminal the dissemination of a book "found to have a potentially deleterious influence on youth." Butler v. Michigan, . The statute was invalidated because its "incidence ... is to reduce the adult population ... to reading only what is fit for children." Ibid. The instruction given here, when read as a whole, did not have an effect so drastic as the Butler statute. But it may well be that a jury conscientiously striving to define the relevant community of persons, the "average person," Smith v. United States, , by whose standards obscenity is to be judged, would reach a much lower "average" when children are part of the equation than it would if it restricted its consideration to the effect of allegedly obscene materials on adults. Cf. Ginsberg v. New York, . There was no evidence that children were the intended recipients of the materials at issue here, or that petitioner had reason to know children were likely to receive the materials. Indeed, an affirmative representation was made that children were not involved in this case.4 We therefore conclude it was error to instruct the jury that they were a part of the relevant community, and accordingly the conviction cannot stand.B. Instruction as to Sensitive PersonsIt does not follow, however, as petitioner contends, that the inclusion of "sensitive persons" in the charge advising the jury of whom the community consists was error. The District Court's charge was:"Thus the brochures, magazines and film are not to be judged on the basis of your personal opinion. Nor are they to be judged by their effect on a particularly sensitive or insensitive person or group in the community. You are to judge these materials by the standard of the hypothetical average person in the community, but in determining this average standard you must include the sensitive and the insensitive, in other words, you must include everyone in the community." (Emphasis added.) Petitioner's reliance on passages from Miller, 413 U.S., at 33, and Smith v. United States, supra, at 304, for the proposition that inclusion of sensitive persons in the relevant community was error is misplaced. In Miller we said,"[T]he primary concern with requiring a jury to apply the standard of `the average person, applying contemporary community standards' is to be certain that, so far as material is not aimed at a deviant group, it will be judged by its impact on an average person, rather than a particularly susceptible or sensitive person - or indeed a totally insensitive one. See Roth v. United States, supra, at 489." This statement was essentially repeated in Smith:"[T]he Court has held that 1461 embodies a requirement that local rather than national standards should be applied. Hamling v. United States, supra. Similarly, obscenity is to be judged according to the average person in the community, rather than the most prudish or the most tolerant. Hamling v. United States, supra; Miller v. California, supra; Roth v. United States, . Both of these substantive limitations are passed on to the jury in the form of instructions." (Footnote omitted.) The point of these passages was to emphasize what was an issue central to Roth, that "judging obscenity by the effect of isolated passages upon the most susceptible persons, might well encompass material legitimately treating with sex, and so it must be rejected as unconstitutionally restrictive of the freedoms of speech and press." 354 U.S., at 489.5 But nothing in those opinions suggests that "sensitive" and "insensitive" persons, however defined, are to be excluded from the community as a whole for the purpose of deciding if materials are obscene. In the narrow and limited context of this case, the community includes all adults who constitute it, and a jury can consider them all in determining relevant community standards. The vice is in focusing upon the most susceptible or sensitive members when judging the obscenity of materials, not in including them along with all others in the community. See Mishkin v. New York, .Petitioner relies also on Hamling v. United States, , to support his argument. Like Miller and Smith, supra, though, Hamling merely restated the by now familiar rule that jurors are not to base their decision about the materials on their "personal opinion, nor by its effect on a particularly sensitive or insensitive person or group." 418 U.S., at 107. It is clear the trial court did not instruct the jury to focus on sensitive persons or groups. It explicitly said the jury should not use sensitive persons as a standard, and emphasized that in determining the "average person" standard the jury "must include the sensitive and the insensitive, in other words ... everyone in the community."The difficulty of framing charges in this area is well recognized. But the term "average person" as used in this charge means what it usually means, and is no less clear than "reasonable person" used for generations in other contexts. Cf. Hamling v. United States, supra, at 104-105. Cautionary instructions to avoid subjective personal and private views in determining community standards can do no more than tell the individual juror that in evaluating the hypothetical "average person" he is to determine the collective view of the community, as best as it can be done.Simon E. Sobeloff, then Solicitor General, later Chief Judge of the United States Court of Appeals for the Fourth Circuit, very aptly stated the dilemma:"Is the so-called definition of negligence really a definition? What could be fuzzier than the instruction to the jury that negligence is a failure to observe that care which would be observed by a `reasonable man' - a chimerical creature conjured up to give an aura of definiteness where definiteness is not possible... . "Every man is likely to think of himself as the happy exemplification of `the reasonable man'; and so the standard he adopts in order to fulfill the law's prescription will resemble himself, or what he thinks he is, or what he thinks he should be, even if he is not. All these shifts and variations of his personal norm will find reflection in the verdict. The whole business is necessarily equivocal. This we recognize, but we are reconciled to the impossibility of discovering any form of words that will ring with perfect clarity and be automatically self-executing. Alas, there is no magic push-button in this or in other branches of the law." (Emphasis added.)6 However one defines "sensitive" or "insensitive" persons, they are part of the community. The contention that the instruction was erroneous because it included sensitive persons is therefore without merit.C. Instruction as to Deviant GroupsChallenge is made to the inclusion of "members of a deviant sexual group" in the charge which recited: "The first test to be applied, in determining whether a given picture is obscene, is whether the predominant theme or purpose of the picture, when viewed as a whole and not part by part, and when considered in relation to the intended and probable recipients, is an appeal to the prurient interest of the average person of the community as a whole or the prurient interest of members of a deviant sexual group at the time of mailing. ... . . "In applying this test, the question involved is not how the picture now impresses the individual juror, but rather, considering the intended and probable recipients, how the picture would have impressed the average person, or a member of a deviant sexual group at the time they received the picture." Examination of some of the materials could lead to the reasonable conclusion that their prurient appeal would be more acute to persons of deviant persuasions, but it is equally clear they were intended to arouse the prurient interest of any reader or observer. Nothing prevents a court from giving an instruction on prurient appeal to deviant sexual groups as part of an instruction pertaining to appeal to the average person when the evidence, as here would support such a charge. See Hamling v. United States, supra, at 128-130. Many of the exhibits depicted aberrant sexual activities. These depictions were generally provided along with or as a part of the materials which apparently were thought likely to appeal to the prurient interest in sex of nondeviant persons. One of the mailings even provided a list of deviant sexual groups which the recipient was asked to mark to indicate interest in receiving the type of materials thought appealing to that particular group.Whether materials are obscene generally can be decided by viewing them; expert testimony is not necessary. Ginzburg v. United States, 383 U.S., at 465; Hamling v. United States, supra, at 100; see Jacobellis v. Ohio, (STEWART, J., concurring). But petitioner claims that to support an instruction on appeal to the prurient interest of deviants, the prosecution must come forward with evidence to guide the jury in its deliberations, since jurors cannot be presumed to know the reaction of such groups to stimuli as they would that of the average person. Concededly, in the past we have "reserve[d] judgment ... on the extreme case ... where contested materials are directed at such a bizarre deviant group that the experience of the trier of fact would be plainly inadequate to judge whether the material appeals to the [particular] prurient interest." Paris Adult Theatre I v. Slaton, n. 6 (1973). But here we are not presented with that "extreme" case because the Government did in fact present expert testimony on rebuttal which, when combined with the exhibits themselves, sufficiently guided the jury. This instruction, therefore, was acceptable.D. Instruction as to PanderingPandering is "the business of purveying textual or graphic matter openly advertised to appeal to the erotic interest of their customers." Ginzburg v. United States, supra, at 467, citing Roth v. United States, 354 U.S., at 495-496 (Warren, C. J., concurring). We have held, and reaffirmed, that to aid a jury in its determination of whether materials are obscene, the methods of their creation, promotion, or dissemination are relevant. Splawn v. California, ; Hamling v. United States, 418 U.S., at 130. In essence, the Court has considered motivation relevant to the ultimate evaluation if the prosecution offers evidence of motivation.In this case the trial judge gave a pandering instruction to which the jury could advert if it found "this to be a close case" under the three part Roth-Memoirs test. This was not a so-called finding instruction which removed the jury's discretion; rather it permitted the jury to consider the touting descriptions along with the materials themselves to determine whether they were intended to appeal to the recipient's prurient interest in sex, whether they were "commercial exploitation of erotica solely for the sake of their prurient appeal," Ginzburg, supra, at 466, if indeed the evidence admitted of any other purpose. And while it is true the Government offered no extensive evidence of the methods of production, editorial goals, if any, methods of operation, or means of delivery other than the mailings and the names, locations, and occupations of the recipients, the evidence was sufficient to trigger the Ginzburg pandering instruction.E. Exclusion of Comparison EvidenceAt trial petitioner proffered, and the trial judge rejected, two films which were said to have had considerable popular and commercial success when displayed in Los Angeles and elsewhere around the country. He proffered this assertedly comparable material as evidence that materials as explicit as his had secured community tolerance. Apparently the theory was that display of such movies had altered the level of community tolerance.On appeal the Court of Appeals began an inquiry into whether the comparison evidence should have been admitted. It held that exclusion of the evidence was proper as to the printed materials; but it abandoned the inquiry when, in reliance on the so-called concurrent-sentence doctrine, it concluded that even if the comparison evidence had been improperly excluded as to the count involving petitioner's film, the sentence would not be affected. It therefore exercised its discretion not to pass on the admissibility of the comparison evidence and hence did not review the conviction on the film count.7 However, the sentences on the 11 counts were not in fact fully concurrent; petitioner's 11 prison terms of four years each were concurrent but the $500 fines on each of the counts were cumulative, totaling $5,500 so that a separate fine of $500 was imposed on the film count. Petitioner thus had at least a pecuniary interest in securing review of his conviction on each of the counts.In light of our disposition of the case the issue of admissibility of the comparison evidence is not before us, and we leave it to the Court of Appeals to decide whether or to what extent such evidence is relevant to a jury's evaluation of community standards.Accordingly, the case is remanded to the Court of Appeals for further consideration consistent with this opinion. Reversed and remanded. |
0 | After the jury convicted petitioner Custis of possession of a firearm by a felon and another federal crime, the Government relied on his prior state court convictions for robbery in Pennsylvania and for burglary and attempted burglary in Maryland to support a motion under the Armed Career Criminal Act of 1984, 18 U.S.C. 924(e) (ACCA), which provides for enhancement of the sentence of a convicted firearms possessor who "has three previous convictions ... for a violent felony or a serious drug offense." Custis challenged the use for this purpose of the two Maryland convictions on the ground, among others, of ineffective assistance of counsel during the state prosecutions, but the District Court held that 924(e)(1) provides no statutory right to challenge such convictions, and that the Constitution bars the use of a prior conviction for enhancement only when there was a complete denial of counsel in the prior proceeding. Custis was sentenced to an enhanced term of 235 months in prison, and the Court of Appeals affirmed.Held: 1. With the sole exception of convictions obtained in violation of the right to counsel, a defendant in a federal sentencing proceeding has no right to collaterally attack the validity of previous state convictions that are used to enhance his sentence under the ACCA. Pp. 4-12. (a) Congress did not intend to permit collateral attacks on prior convictions under 924(e). The statute's language - which applies to a defendant who has "three previous convictions" of the type specified - focuses on the fact of the conviction, and nothing therein suggests that the prior final conviction may be subject to attack for potential constitutional errors before it may be counted. Page II That there is no implied right of collateral attack under 924(e) is strongly supported by 921(a)(20), which provides that a court may not count a conviction "which has been ... set aside" by the jurisdiction in which the proceedings were held, and thereby creates a clear negative implication that courts may count a conviction that has not been so set aside; by the contrast between 924(e) and other related statutes that expressly permit repeat offenders to challenge prior convictions that are used for enhancement purposes, see, e.g., 21 U.S.C. 851(c); and by Lewis v. United States, , in which this Court held that one of the predecessors to the current felon in possession of a firearm statute did not allow collateral attack on the predicate conviction. Pp. 4-8. (b) The right, recognized in Burgett v. Texas, , and United States v. Tucker, , to collaterally attack prior convictions used for sentence enhancement purposes cannot be extended beyond the right, established in Gideon v. Wainwright, , to have appointed counsel. Since Johnson v. Zerbst, , and running through Burgett and Tucker, there has been a theme that failure to appoint counsel for an indigent defendant was a unique constitutional defect. None of the constitutional violations alleged by Custis, including the claimed denial of effective assistance of counsel, rises to the level of a jurisdictional defect resulting from the failure to appoint counsel at all. This conclusion is supported by the interest in promoting the finality of judgments and avoiding delay and protraction of the federal sentencing process, and by the relative ease of administering a claim of failure to appoint counsel, as opposed to other constitutional challenges. Pp. 8-12. 2. However, Custis, who was still "in custody" for purposes of his state convictions at the time of his federal sentencing under 924(e), may attack his state sentences in Maryland or through federal habeas corpus review. See Maleng v. Cook, . If he is successful in attacking these state sentences, he may then apply for reopening of any federal sentence enhanced by the state sentences. The Court expresses no opinion on the appropriate disposition of such an application. P. 12. 988 F.2d 1355, affirmed.REHNQUIST, C.J., delivered the opinion of the Court, in which O'CONNOR, SCALIA, KENNEDY, THOMAS, and GINSBURG, JJ., joined. SOUTER, J., filed a dissenting opinion, in which BLACKMUN and STEVENS, JJ., joined. [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 1] CHIEF JUSTICE REHNQUIST delivered the opinion of the Court.The Armed Career Criminal Act, 18 U.S.C. 924(e) (ACCA), raises the penalty for possession of a firearm by a felon from a maximum of 10 years in prison to a mandatory minimum sentence of 15 years and a maximum of life in prison without parole if the defendant "has three previous convictions ... for a violent felony or a serious drug offense." We granted certiorari to determine whether a defendant in a federal sentencing proceeding may collaterally attack the validity of previous state convictions that are used to enhance his sentence under the ACCA. We hold that a defendant has no such right (with the sole exception of convictions obtained in violation of the right to counsel) to collaterally attack prior convictions.Baltimore City Police arrested petitioner Daniel J. Custis on July 1, 1991. A federal grand jury indicted him on three counts: (1) possession of cocaine with intent to distribute in violation of 21 U.S.C. 841(a)(1); (2) use of a firearm in connection with a drug trafficking offense in violation of 18 U.S.C. 924(c); and (3) possession of a firearm by a convicted felon in violation of 18 U.S.C. 922(g)(1). Before trial in the United [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 2] States District Court for the District of Maryland, the Government notified Custis that it would seek an enhanced penalty for the 922(g)(1) offense under 924(e)(1). The notice charged that he had three prior felony convictions: (1) a 1985 Pennsylvania state court conviction for robbery; (2) a 1985 Maryland state court conviction for burglary; and (3) a 1989 Maryland state court conviction for attempted burglary.The jury found Custis not guilty of possession with intent to distribute and not guilty of use of a firearm during a drug offense, but convicted him of possession of a firearm and simple cocaine possession, a lesser included offense in the charge of possession with intent to distribute cocaine. At the sentencing hearing, the Government moved to have Custis' sentence enhanced under 924(e)(1), based on the prior convictions included in the notice of sentence enhancement.Custis challenged the use of the two Maryland convictions for sentence enhancement. He argued that his lawyer for his 1985 burglary conviction rendered unconstitutionally ineffective assistance and that his guilty plea was not knowing and intelligent as required by Boykin v. Alabama, . He claimed that his attorney had failed to advise him of the defense of voluntary intoxication, and that he would have gone to trial, rather than pleaded guilty, had he been aware of that defense. He challenged his 1989 conviction on the ground that it had been based upon a "stipulated facts" trial. He claimed that such a "stipulated facts" trial was tantamount to a guilty plea, and that his conviction was fundamentally unfair because he had not been adequately advised of his rights. Custis further asserts that he had been denied effective assistance of counsel in that case because the stipulated facts established only attempted breaking and entering, rather than attempted burglary under state law. [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 3] The District Court initially rejected Custis' collateral attacks on his two Maryland state court convictions. The District Court's letter ruling determined that the performance of Custis' attorney in the 1985 case did not fall below the standard of professional competence required under Strickland v. Washington, . Order in No. S 91-0334 (D. Md., Feb. 27, 1992), p. 1. It found that counsel's recommendation of a guilty plea was not unreasonable under the circumstances. Id., at 2. The District Court also rejected Custis' claim that the 1989 "stipulated facts" trial was the functional equivalent of a guilty plea. Id., at 2-3.The District Court later reversed field and determined that it could not entertain Custis' challenges to his prior convictions at all. It noted that "[u]nlike the statutory scheme for enhancement of sentences in drug cases, [ 924(e)(1)] provides no statutory right to challenge prior convictions relied upon by the Government for enhancement. 786 F.Supp. 533, 535-536 (Md. 1992). The District Court went on to state that the Constitution bars the use of a prior conviction for sentence enhancement only when there was a complete denial of counsel in the prior proceeding. Id., at 536, citing Gideon v. Wainwright, ; United States v. Tucker, ; and Burgett v. Texas, . Based on Custis' offense level of 33 and his criminal history category of VI, the District Court imposed a sentence of 235 months in prison.The Court of Appeals affirmed. 988 F.2d 1355 (CA4 1993). It recognized the right of a defendant who had been completely deprived of counsel to assert a collateral attack on his prior convictions since such a defendant "has lost his ability to assert all his other constitutional rights." Id., at 1360, citing Johnson v. Zerbst, . Citing the "substantial burden" on prosecutors and the district courts, the Court of Appeals dismissed all of Custis' challenges to his prior convictions [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 4] as the "fact-intensive" type that pose a risk of unduly delaying and protracting the entire sentencing process. 988 F.2d, at 1361. The prospect of such fact-intensive inquiries led it to express great reluctance at forcing district courts to overcome the "`inadequacy or unavailability of state court records and witnesses'" in trying to determine the validity of prior sentences. Id., at 1361, quoting United States v. Jones, 977 F.2d 105, 109 (CA4 1992). In addition to the practical hurdles, the Court of Appeals specified concerns over comity and federalism as other factors weighing against permitting collateral attacks. "`Federal courts are not forums in which to relitigate state trials.'" 988 F.2d, at 1361, quoting Barefoot v. Estelle, . We granted certiorari___ (1993), because the Court of Appeals' decision conflicted with recent decisions from other Courts of Appeals that permitted defendants to challenge prior convictions that are used in sentencing under 924(e)(1).1 Custis argues that the ACCA should be read to permit defendants to challenge the constitutionality of convictions used for sentencing purposes. Looking to the language of the statute, we do not believe 924(e) authorizes such collateral attacks. The ACCA provides an enhanced sentence for any person who unlawfully possesses a firearm in violation of 18 U.S.C. 922(g)2 [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 5] and "has three previous convictions by any court referred to in section 922(g)(1) of this title for a violent felony or a serious drug offense... ." Section 924(e) applies whenever a defendant is found to have suffered "three previous convictions" of the type specified. The statute focuses on the fact of the conviction and nothing suggests that the prior final conviction may be subject to collateral attack for potential constitutional errors before it may be counted.Absent specific statutory authorization, Custis contends that an implied right to challenge the constitutionality of prior convictions exists under 924(e). Again we disagree. The Gun Control Act of 1968, of which 924(e) is a part, strongly indicates that unchallenged prior convictions may be used for purposes of 924(e). At least for prior violent felonies, 921(a)(20) describes the circumstances in which a prior conviction may be counted for sentencing purposes under 924(e):"What constitutes a conviction of ... a crime shall be determined in accordance with the law of the jurisdiction in which the proceedings were held. Any conviction which has been expunged, or set aside or for which a person has been pardoned or has had civil rights restored shall not be considered a conviction for purposes of this chapter [18 U.S.C. 921-930]." The provision that a court may not count a conviction "which has been ... set aside" creates a clear negative implication that courts may count a conviction that has not been set aside. [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 6] Congress' passage of other related statutes that expressly permit repeat offenders to challenge prior convictions that are used for enhancement purposes supports this negative implication. For example, 21 U.S.C. 851(c), which Congress enacted as part of the Comprehensive Drug Abuse Prevention and Control Act of 1970, sets forth specific procedures allowing a defendant to challenge the validity of a prior conviction used to enhance the sentence for a federal drug offense. Section 851(c)(1) states that, "[i]f the person denies any allegation of the information of prior conviction, or claims that any conviction alleged is invalid, he shall file a written response to the information." Section 851(c)(2) goes on to provide:"A person claiming that a conviction alleged in the information was obtained in violation of the Constitution of the United States shall set forth his claim, and the factual basis therefor, with particularity in his response to the information. The person shall have the burden of proof by a preponderance of the evidence on any issue of fact raised by the response. Any challenge to a prior conviction, not raised by response to the information before an increased sentence is imposed in reliance thereon, shall be waived unless good cause be shown for failure to make a timely challenge." The language of 851(c) shows that when Congress intended to authorize collateral attacks on prior convictions at the time of sentencing, it knew how to do so. Congress' omission of similar language in 924(e) indicates that it did not intend to give defendants the right to challenge the validity of prior convictions under this statute. Cf. Gozlon-Perez v. United States, ("`[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 7] presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion'"), quoting Russello v. United States, (internal quotation marks omitted).Our decision in Lewis v. United States, , also supports the conclusion that prior convictions used for sentence enhancement purposes under 924(e) are not subject to collateral attack in the sentence proceeding. Lewis interpreted 18 U.S.C. App. 1202(a)(1) (1982 ed.), one of the predecessors to the current felon in possession of a firearm statute. Section 1202(a)(1) was aimed at any person who "has been convicted by a court of the United States or of a State ... of a felony." We concluded that "`[n]othing on the face of the statute suggests a congressional intent to limit its coverage to persons [whose convictions are not subject to collateral attack].'" Id., at 60, quoting United States v. Culbert, . This lack of such intent in 1202(a)(1) also contrasted with other federal statutes that explicitly permitted a defendant to challenge the validity or constitutionality of the predicate felony. See, e.g., 18 U.S.C. 3575(e) (note following ch. 227) (dangerous special offender) and 21 U.S.C. 851(c)(2) (recidivism under the Comprehensive Drug Abuse Prevention and Control Act of 1970). The absence of expressed intent, and the contrast with other federal statutes, led us to determine that "the firearms prosecution [under 1202(a)(1)] does not open the predicate conviction to a new form of collateral attack." 445 U.S., at 67.Similarly, 924(e) lacks any indication that Congress intended to permit collateral attacks on prior convictions used for sentence enhancement purposes. The contrast between 924(e) and statutes that expressly provide avenues for collateral attacks, as well as our decision in Lewis, supra, point strongly to the conclusion that [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 8] Congress did not intend to permit collateral attacks on prior convictions under 924(e).Custis argues that, regardless of whether 924(e) permits collateral challenges to prior convictions, the Constitution requires that they be allowed. He relies upon our decisions in Burgett v. Texas, , and United States v. Tucker, , in support of this argument. Both of these decisions relied upon our earlier decision in Gideon v. Wainwright, , holding that the Sixth Amendment of the United States Constitution required that an indigent defendant in state court proceedings have counsel appointed for him. Gideon, in turn, overruled our earlier decision in Betts v. Brady, , which had held that the Sixth Amendment right to counsel, long applied in federal court proceedings, was not itself made applicable to the States by the Due Process Clause. The Due Process Clause, Betts had held, required the appointment of counsel for an indigent defendant in state courts only upon a showing of special circumstances. Id., at 473.But even before Betts v. Brady was decided, this Court had held that the failure to appoint counsel for an indigent defendant in a federal proceeding not only violated the Sixth Amendment, but was subject to collateral attack in federal habeas corpus. Johnson v. Zerbst, . At a time when the underlying habeas statute was construed to allow collateral attacks on final judgments of conviction only where the rendering court lacked "jurisdiction" - albeit a somewhat expansive notion of "jurisdiction," see Moore v. Dempsey - this Court attributed a jurisdictional significance to the failure to appoint counsel. The Court said:"If the accused, however, is not represented by counsel and has not competently and intelligently waived his constitutional right, the Sixth Amendment [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 9] stands as a jurisdictional bar to a valid conviction and sentence depriving him of his life or his liberty ... The judgment of conviction pronounced by a court without jurisdiction is void, and one imprisoned thereunder may obtain release by habeas corpus." 304 U.S., at 468. When the Court later expanded the availability of federal habeas to other constitutional violations, it did so by frankly stating that the federal habeas statute made such relief available for them, without claiming that the denial of these constitutional rights by the trial court would have denied it jurisdiction. See, e.g., Waley v. Johnston, (coerced confession); Brown v. Allen, . There is thus a historical basis in our jurisprudence of collateral attacks for treating the right to have counsel appointed as unique, perhaps because of our oft-stated view that "[t]he right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel." Powell v. Alabama.Following our decision in Gideon, the Court decided Burgett v. Texas, supra. There the defendant was charged under a Texas recidivist statute with having been the subject of four previous felony convictions. 389 U.S., at 111. The prosecutor introduced certified records of one of the defendant's earlier convictions in Tennessee. Id., at 112. The defendant objected to the admission of this conviction on the ground that he had not been represented by counsel and had not waived his right to counsel, but his objection was overruled by the trial court. Id., at 113. This Court reversed, finding that the certified records of the Tennessee conviction on their face raised a "presumption that petitioner was denied his right to counsel ..., and therefore that his conviction was void." Id., at 114. The Court held that the admission of a prior criminal conviction which is [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 10] constitutionally infirm under the standards of Gideon is inherently prejudicial and to permit use of such a tainted prior conviction for sentence enhancement would undermine the principle of Gideon. Id., at 115.A similar situation arose in Tucker, supra. The defendant had been convicted of bank robbery in California in 1953. At sentencing, the district court conducted an inquiry into the defendant's background, and, the record shows, gave explicit attention to the three previous felony convictions that the defendant had acknowledged at trial. The District Court sentenced him to 25 years in prison - the stiffest term authorized by the applicable federal statute, 18 U.S.C. 2113(d). 404 U.S., at 444. Several years later, after having obtained a judicial determination that two of his prior convictions were constitutionally invalid, the defendant filed a writ of habeas corpus in the District Court in which he had been convicted of bank robbery. He challenged the use at his 1953 bank robbery trial of his three previous felony convictions. This Court sustained his challenge insofar as his sentence was concerned, saying "Gideon ... established an unequivocal rule `making it unconstitutional to try a person for a felony in a state court unless he had a lawyer or had validly waived one.'" Id., at 449, quoting Burgett v. Texas, supra, at 114. The Court held that [e]rosion of the Gideon principle can be prevented here only by affirming the judgment of the Court of Appeals remanding this case to the trial court for reconsideration of the [defendant's] sentence." 404 U.S., at 449.Custis invites us to extend the right to attack collaterally prior convictions used for sentence enhancement beyond the right to have appointed counsel established in Gideon. We decline to do so. We think that, since the decision in Johnson v. Zerbst more than half a century ago, and running through our decisions in Burgett and Tucker, there has been a theme that failure [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 11] to appoint counsel for an indigent defendant was a unique constitutional defect. Custis attacks his previous convictions claiming the denial of the effective assistance of counsel, that his guilty plea was not knowing and intelligent, and that he had not been adequately advised of his rights in opting for a "stipulated facts" trial. None of these alleged constitutional violations rises to the level of a jurisdictional defect resulting from the failure to appoint counsel at all. Johnson v. Zerbst, .Ease of administration also supports the distinction. As revealed in a number of the cases cited in this opinion, failure to appoint counsel at all will generally appear from the judgment roll itself, or from an accompanying minute order. But determination of claims of ineffective assistance of counsel, and failure to assure that a guilty plea was voluntary, would require sentencing courts to rummage through frequently nonexistent or difficult to obtain state court transcripts or records that may date from another era, and may come from any one of the 50 States.The interest in promoting the finality of judgments provides additional support for our constitutional conclusion. As we have explained, "[i]nroads on the concept of finality tend to undermine confidence in the integrity of our procedures," and inevitably delay and impair the orderly administration of justice. United States v. Addonizio, , n. 11 (1979). We later noted in Parke v. Raley___ (1992), that principles of finality associated with habeas corpus actions apply with at least equal force when a defendant seeks to attack a previous convictions used for sentencing. By challenging the previous conviction, the defendant is asking a district court "to deprive [the] [state court judgment] of [its] normal force and effect in a proceeding that ha[s] an independent purpose other than to overturn the prior judgmen[t]." Id., at ___ (slip op., [ CUSTIS v. UNITED STATES, ___ U.S. ___ (1994), 12] at 9). These principles bear extra weight in cases in which the prior convictions, such as one challenged by Custis, are based on guilty pleas, because when a guilty plea is at issue, "the concern with finality served by the limitation on collateral attack has special force." United States v. Timmreck, (footnote omitted).We therefore hold that 924(e) does not permit Custis to use the federal sentencing forum to gain review of his state convictions. Congress did not prescribe and the Constitution does not require such delay and protraction of the federal sentencing process. We recognize, however, as did the Court of Appeals, see 998 F.2d, at 1363, that Custis, who was still "in custody" for purposes of his state convictions at the time of his federal sentencing under 924(e), may attack his state sentences in Maryland or through federal habeas review. See Maleng v. Cook, . If Custis is successful in attacking these state sentences, he may then apply for reopening of any federal sentence enhanced by the state sentences. We express no opinion on the appropriate disposition of such an application.The judgment of the Court of Appeals is accordinglyAffirmed. |
9 | Although 118 of the Clean Air Act obligates federal installations discharging air pollutants to join with nonfederal facilities in complying with state "requirements respecting control and abatement of air pollution," obtaining a permit from a State with a federally approved implementation plan is not among such requirements. There cannot be found in 118, either on its face or in relation to the Act as a whole, nor can there be derived from the legislative history of the Clean Air Amendments of 1970, any clear and unambiguous declaration by Congress that such federal installations may not operate without a state permit. Nor can congressional intention to submit federal activity to state control be implied from the claim that under the State's federally approved plan it is only through the permit system that compliance schedules and other requirements may be administratively enforced against federal installations. Pp. 178-199. 497 F.2d 1172, affirmed.WHITE, J., delivered the opinion of the Court in which BURGER, C. J., and BRENNAN, MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined. STEWART and REHNQUIST, JJ., filed a dissenting statement, post, p. 199.David D. Beals, Assistant Attorney General of Kentucky, argued the cause for petitioner. With him on the briefs were Ed W. Hancock, Attorney General, pro se, and David C. Short, Assistant Attorney General.Deputy Solicitor General Friedman argued the cause for respondents. On the brief were Solicitor General Bork, Assistant Attorney General Johnson, Deputy Solicitor General Randolph, Jacques B. Gelin, Robert L. Klarquist, Robert H. Marquis, Herbert S. Sanger, Jr., and Beauchamp E. Brogan.* [Footnote *] Briefs of amici curiae urging reversal were filed by William J. Baxley, Attorney General, and Henry H. Caddell and Frederick S. Middleton III, Assistant Attorneys General, for the State of Alabama; by Louis J. Lefkowitz, Attorney General, Samuel A. Hirshowitz, First Assistant Attorney General, and Philip Weinberg and Richard G. Berger, Assistant Attorneys General for the State of New York; by John L. Hill, Attorney General, David M. Kendall, First Assistant Attorney General, and Philip K. Maxwell, Assistant Attorney General, for the State of Texas; by Andrew P. Miller, Attorney General, and J. Thomas Steger, Assistant Attorney General, for the Commonwealth of Virginia; and by Evelle J. Younger, Attorney General, Robert H. O'Brien and Carl Boronkay, Assistant Attorneys General, and Nicholas C. Yost, Roderick Walston, Daniel Taaffe, and C. Foster Knight, Deputy Attorneys General, for the State of California et al., joined by Arthur K. Bolton, Attorney General, and Robert E. Hall, Assistant Attorney General, for the State of Georgia.MR. JUSTICE WHITE delivered the opinion of the Court.The question for decision in this case is whether a State whose federally approved implementation plan forbids an air contaminant source to operate without a state permit may require existing federally owned or operated installations to secure such a permit. The case presents an issue of statutory construction requiring examination of the Clean Air Act, as amended, 42 U.S.C. 1857 et seq., and its legislative history in light of established constitutional principles governing the determination of whether and the extent to which federal installations have been subjected to state regulation.1 The specific question is whether obtaining a permit to operate is among those "requirements respecting control and abatement of air pollution" with which existing federal facilities must comply under 118 of the Clean Air Act.2 ILast Term in Train v. Natural Resources Defense Council, , we reviewed the development of federal air pollution legislation through the Clean Air Amendments of 1970 (Amendments)3 and observed that although the Amendments "sharply increased federal authority and responsibility in the continuing effort to combat air pollution," they "explicitly preserved the principle" that "`[e]ach State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State ...,'" id., at 64, quoting from 107 (a) of the Clean Air Act, as added, 84 Stat. 1678, 42 U.S.C. 1857c-2 (a). Consistently with this principle, the Amendments required that within nine months after the Environmental Protection Agency (EPA) promulgated the primary and secondary ambient air quality standards required by 109 (a) of the Clean Air Act, as added, 84 Stat. 1679, 42 U.S.C. 1857c-4 (a),4 for certain air pollutants,5 each State submit to the EPA a plan by which it would implement and maintain those standards within its territory. 110 (a) (1) of the Clean Air Act, as added, 84 Stat. 1680, 42 U.S.C. 1857c-5 (a) (1). See 40 CFR pt. 51 (1975). The EPA was required to approve each State's implementation plan as long as it was adopted after public hearings and satisfied the conditions specified in 110 (a) (2).For existing sources6 the State must propose "emission limitations, schedules, and timetables for compliance with such limitations" necessary to meet the air quality standards. 110 (a) (2) (B). As we observed in Train, supra, at 78-79, given the EPA's nationwide air quality standards, the State is to adopt a plan setting"the specific rules to which operators of pollution sources are subject, and which if enforced should result in ambient air which meets the national standards. "[The EPA] is relegated by the Act to a secondary role in the process of determining and enforcing the specific, source-by-source emission limitations which are necessary if the national standards it has set are to be met... . The Act gives [the EPA] no authority to question the wisdom of a State's choices of emission limitations if they are part of a plan which satisfies the standards of 110 (a) (2)... . Thus, so long as the ultimate effect of a State's choice of emission limitations is compliance with the national standards for ambient air, the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation." (Footnote omitted.) Along with increasing federal authority and "taking a stick to the States"7 by requiring them to implement the federal standards promulgated pursuant to that authority, Congress also intended the Amendments "to strengthen the strictures against air pollution by federal facilities."8 Before 1970, 111 (a) of the Clean Air Act simply declared "the intent of Congress" to be that federal installations "shall, to the extent practicable and consistent with the interests of the United States and within any available appropriations, cooperate with" federal and state air pollution control authorities "in preventing and controlling the pollution of the air in any area insofar as the discharge of any matter from or by such" federal installation "may cause or contribute to pollution of the air in such area."9 Experience with performance by federal sources of air pollution under this voluntary scheme10 led the Congress to conclude that admonishing federal agencies to prevent and control air pollution was inadequate, because "[i]nstead of exercising leadership in controlling or eliminating air pollution"11 "Federal agencies have been notoriously laggard in abating pollution."12 Both to provide the leadership to private industry and to abate violations of air pollution standards by federal facilities, in 1970 Congress added 118 to the Clean Air Act. The first sentence of the section provides: "Each department, agency, and instrumentality of the executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge of air pollutants, shall comply with Federal, State, interstate, and local requirements respecting control and abatement of air pollution to the same extent that any person is subject to such requirements." 42 U.S.C. 1857f. The remainder of 118 authorizes the President, upon a determination that it is "in the paramount interest of the United States to do so" and subject to several limitations, to exempt certain federal emission sources from "compliance with such a requirement."13 After enactment of 118 there is no longer any question whether federal installations must comply with established air pollution control and abatement measures. The question has become how their compliance is to be enforced.IIIn February 1972, Kentucky submitted its implementation plan to the EPA. On May 31, 1972, the plan was approved by the Administrator in relevant part.14 Chapter 7 of the plan included Kentucky Air Pollution Control Commission (Commission) Regulation No. AP-1, 5 (1), which provides: "No person shall construct, modify, use, operate, or maintain an air contaminant source or maintain or allow physical conditions to exist on property owned by or subject to the control of such person, resulting in the presence of air contaminants in the atmosphere, unless a permit therefor has been issued by the Commission and is currently in effect."15 An applicant for a permit must complete a form supplied by the Commission and, "when specifically requested by the Commission, include an analysis of the characteristics, properties, and volume of the air contaminants based upon source or stack samples of the air contaminants taken under normal operating conditions."16 The process of review of the application may include hearings.17 Permits are denied if the applicant does not supply the "information required or deemed necessary by the Commission to enable it to act upon the permit application,"18 or when "the air contaminant source will prevent or interfere with the attainment or maintenance of state or federal air quality standards."19 When granted, a permit may be "subject to such terms and conditions set forth and embodied in the permit as the Commission shall deem necessary to insure compliance with its standards."20 Once issued, a permit may be revoked or modified for failure to comply with the terms and conditions of the permit, with emission standards applicable to the air contaminant source, or with the ambient air standards for the area in which the air contaminant source is located. Reg. AP-1, 5 (5), CA App. 122.Soon after the implementation plan was approved, a Commission official wrote to numerous officials responsible for various Kentucky facilities of the United States Army,21 of the Tennessee Valley Authority (TVA),22 and of the Atomic Energy Commission (AEC)23 requesting that they apply for and obtain permits as requested by the EPA-approved plan. The responses to these requests were to the effect that federally owned or operated facilities located in Kentucky were not required to secure an operating permit. Each response, however, either offered to or did supply the information and data requested on the standard permit application form.24 The Commission continued to press the federal officials to apply for operating permits. In October 1972, the Regional Administrator of the EPA sent a letter to the operators of all federal facilities in the region, including those to which the Kentucky officials had addressed their requests, and to the Commission. Setting forth EPA policy and the agency's interpretation of 118 of the Clean Air Act,25 the Regional Administrator stated: "It is clear that Section 118 ... requires Federal facilities to meet state air quality standards and emission limitations and to comply with deadlines established in the approved state air implementation plans." App. 57. To aid the States in accomplishing these objections, wrote the Administrator, each federal facility should develop a compliance schedule and should provide "reasonable and specific" data requested by the State. Id., at 58. On the question whether federal facilities must apply for state permits, the letter reiterated the EPA position that although "Federal agencies are [not] required to apply for state operating permits ... [o]ur aim is to encourage Federal agencies to provide the states with all the information required to assess compliance of pollution sources with standards, emission and discharge limitations and the needs for additional abatement measures."26 Ibid. Kentucky then brought this suit in the United States District Court for the Western District of Kentucky.27 The complaint sought declaratory and injunctive relief requiring the Army, TVA, and AEC facilities to secure operating permits. Kentucky also named several EPA officials as defendants and asked the District Court to order them to commence appropriate actions under 113 of the Clean Air Act, directing the Army, the TVA, and the AEC facilities to comply with the provisions of Regulation AP-1, 5 (1).28 On cross-motions for summary judgment, the District Court ordered the complaint dismissed. Kentucky ex rel. Hancock v. Ruckelshaus, 362 F. Supp. 360 (1973).The Court of Appeals affirmed, 497 F.2d 1172 (CA6 1974). Like the District Court, 362 F. Supp., at 363 n. 3, the Court of Appeals found it unnecessary to determine whether the federal installations were in compliance with Kentucky's emission limitations or had adopted adequate compliance schedules, for it was Kentucky's position that notwithstanding possible compliance "the Kentucky Plan is so formulated that the State cannot meet its primary responsibility under the Clean Air Act without the use of permits." 497 F.2d, at 1174-1175. After examining 118 and its purposes in relation to other provisions of the Clean Air Act, the court concluded:"We do not believe the congressional scheme for accomplishment of these purposes included subjection of federal agencies to state or local permit requirements. Congress did commit the United States to compliance with air quality and emission standards, and it is undisputed in this record that the federal facilities in Kentucky have cooperated with the Commission toward this end." 497 F.2d, at 1177. We granted Kentucky's petition for certiorari, , to resolve a conflict in the Courts of Appeals,29 and now affirm. IIIIt is a seminal principle of our law "that the constitution and the laws made in pursuance thereof are supreme; that they control the constitution and laws of the respective States, and cannot be controlled by them." M'Culloch v. Maryland, 4 Wheat. 316, 426 (1819). From this principle is deduced the corollary that"[i]t is of the very essence of supremacy to remove all obstacles to its action within its own sphere, and so to modify every power vested in subordinate governments, as to exempt its own operations from their own influence." Id., at 427. The effect of this corollary, which derives from the Supremacy Clause30 and is exemplified in the Plenary Powers Clause31 giving Congress exclusive legislative authority over federal enclaves purchased with the consent of a State, is "that the activities of the Federal Government are free from regulation by any state."32 As Mr. Justice Holmes put it in Johnson v. Maryland, :"[T]he immunity of the instruments of the United States from state control in the performance of their duties extends to a requirement that they desist from performance until they satisfy a state officer upon examination that they are competent for a necessary part of them ... ." Taken with the "old and well-known rule that statutes which in general terms divest pre-existing rights or privileges will not be applied to the sovereign"33 "without a clear expression or implication to that effect,"34 this immunity means that where "Congress does not affirmatively declare its instrumentalities or property subject to regulation," "the federal function must be left free" of regulation.35 Particular deference should be accorded that "old and well-known rule" where, as here, the rights and privileges of the Federal Government at stake not only find their origin in the Constitution, but are to be divested in favor of and subjected to regulation by a subordinate sovereign. Because of the fundamental importance of the principles shielding federal installations and activities from regulation by the States, an authorization of state regulation is found only when and to the extent there is "a clear congressional mandate,"36 "specific congressional action"37 that makes this authorization of state regulation "clear and unambiguous."38 Neither the Supremacy Clause nor the Plenary Powers Clause bars all state regulation which may touch the activities of the Federal Government. See Penn Dairies v. Pennsylvania Milk Control Comm'n, ; Alabama v. King & Boozer, , and cases cited. "Here, however, the State places a prohibition on the Federal Government."39 The permit requirement is not intended simply to regulate the amount of pollutants which the federal installations may discharge. Without a permit, an air contaminant source is forbidden to operate even if it is in compliance with every other state measure respecting air pollution control and abatement. It is clear from the record that prohibiting operation of the air contaminant sources for which the State seeks to require permits, App. 14-17, is tantamount to prohibiting operation of the federal installations on which they are located. Id., at 89-93.Kentucky, like the Court of Appeals for the Fifth Circuit in Alabama v. Seeber, 502 F.2d 1238, 1247-1248 (1974), finds in 118 a sufficient congressional authorization to the States, not only to establish the amount of pollutants a federal installation may discharge, but also to condition operation of federal installations on securing a state permit. We disagree because we are not convinced that Congress intended to subject federal agencies to state permits. We are unable to find in 118, on its face or in relation to the Clean Air Act as a whole, or to derive from the legislative history of the Amendments any clear and unambiguous declaration by the Congress that federal installations may not perform their activities unless a state official issues a permit. Nor can congressional intention to submit federal activity to state control be implied from the claim that under Kentucky's EPA-approved implementation plan it is only through the permit system that compliance schedules and other requirements may be administratively enforced against federal installations.IVThe parties rightly agree that 118 obligates federal installations to conform to state air pollution standards or limitations and compliance schedules.40 With the enactment of the Amendments in 1970 came the end of the era in which it was enough for federal facilities to volunteer their cooperation with federal and state officials. In Kentucky's view that era has been replaced by one in which federal installations are not only required to limit their air pollutant emissions to the same extent as their nonfederal neighbors, but also, subject only to case-by-case Presidential exemption, to submit themselves completely to the state regime by which the necessary information to promulgate emission limitations and compliance schedules is gathered and by which collection of that information and enforcement of the emission limitations and compliance schedules are accomplished. Respondents (hereafter sometimes EPA) take the position that the Congress has not gone so far. While federal and nonfederal installations are governed by the same emission standards, standards which the States have the primary responsibility to develop, the EPA maintains that the authority to compel federal installations to provide necessary information to the States and to conform to state standards necessary to carry out the federal policy to control and regulate air pollution has not been extended to the States. Analysis must begin with 118.41 Although the language of this provision is notable for what it states in comparison with its predecessor,42 it is also notable for what it does not state. It does not provide that federal installations "shall comply with all federal, state, interstate, and local requirements to the same extent as any other person." Nor does it state that federal installations "shall comply with all requirements of the applicable state implementation plan." Section 118 states only to what extent - the same as any person - federal installations must comply with applicable state requirements; it does not identify the applicable requirements. There is agreement that 118 obligates existing federal installations to join nonfederal sources in abating air pollution, that comparable federal and nonfederal sources are expected to achieve the same levels of performance in abating air pollution, and that those levels of performance are set by the States. Given agreement that 118 makes it the duty of federal facilities to comply with state-established air quality and emission standards, the question is, as the Fifth Circuit put it in another case, "whether Congress intended that the enforcement mechanisms of federally approved state implementation plans, in this case permit systems, would be" available to the States to enforce that duty. Alabama v. Seeber, 502 F.2d, at 1247. In the case before us the Court of Appeals concluded that federal installations were obligated to comply with state substantive requirements, as opposed to state procedural requirements, 497 F.2d, at 1177, but Kentucky rejects the distinction between procedural and substantive requirements, saying that whatever is required by a state implementation plan is a "requirement" under 118.The heart of the argument that the requirement that all air contaminant sources secure an operating permit is a "requirement respecting control and abatement of air pollution" is that Congress necessarily implied the power to enforce from the conceded authority to develop and set emission standards. Under Kentucky's EPA-approved implementation plan, the permit requirement "is the mechanism through which [it] is able to compel the production of data concerning air contaminant sources, including the ability to prescribe the monitoring techniques to be employed, and it is the only mechanism which allows [it] to develop and review a source's compliance schedule and insure that schedule is followed."43 When a State is without administrative means of implementing and enforcing its standards against federal sources, a duty to comply with those standards is said to be utterly meaningless.44 The difficulty with this position is threefold. First, it assumes that only the States are empowered to enforce federal installations' compliance with the standards. Second, it assumes the Congress intended to grant the States such authority over the operation of federal installations. Third, it unduly disregards the substantial change in the responsibilities of federal air contaminant sources under 118 in comparison with 42 U.S.C. 1857f (a) (1964 ed., Supp. V), supra, at 171. Contrary to Kentucky's contention that Congress necessarily intended to subject federal facilities to the enforcement mechanisms of state implementation plans, our study of the Clean Air Act not only discloses no clear declaration or implication of congressional intention to submit federal installations to that degree of state regulation and control but also reveals significant indications that in preserving a State's "primary responsibility for assuring air quality within [its] entire geographic area" the Congress did not intend to extend that responsibility by subjecting federal installations to such authority.The Clean Air Act, as amended, does not expressly provide for a permit system as part of a State's implementation plan.45 It is true that virtually every State has adopted a form of permit system much like that adopted by Kentucky, see 40 CFR pt. 52 (1975), as a means of gathering information to determine what emission standards to set and compliance schedules to approve and of assuring compliance with them. Also, only an implementation plan enabling a State to meet these - and other - objectives can be approved by the EPA.46 Nonetheless we find in the 1970 Amendments several firm indications that the Congress intended to treat emission standards and compliance schedules - those requirements which when met work the actual reduction of air pollutant discharge - differently from administrative and enforcement methods and devices - those provisions by which the States were to establish and enforce emission standards, compliance schedules, and the like. This is so in spite of the absence of any definition of the word "requirements" or of the phrase "requirements respecting control and abatement of air pollution."47 In 110 (e) (1) (A), for example, the EPA is authorized to extend for two years a State's three-year deadline for attaining a national primary air quality standard if, upon timely application, it is determined that an emission source is unable to meet "the requirements of such plan which implement such primary standard because the necessary technology" is unavailable. 42 U.S.C. 1857c-5 (e) (1) (A). Although compiling the information necessary for a permit may require familiarity with technology, it is plain that the "requirements" to which this section refers are those for which technologically adequate industrial processes might not be available. Section 110 (e) (2) (A) necessarily contemplates the same meaning of "requirements," that is, emission standards and compliance schedules, as does 110 (f) which provides for one-year postponement of the application of "requirements" to sources the continued operation of which is "essential to national security or to the public health." 42 U.S.C. 1857c-5 (f) (1) (D). See Train, 421 U.S., at 80-84.48 Stronger indications that the term "requirements" as used in 118 does not embrace every measure incorporated in a State's implementation limitations and compliance schedules appear in the emergence of 118 from the House bill and Senate amendment from which it was derived.The House bill provided that federal installations "shall comply with applicable Federal, State, interstate, and local emission standards."49 The House Report stated that this "legislation directs Federal agencies in the executive, legislative, and judicial branches to comply with applicable Federal, State, interstate, and local emission standards."50 The Senate amendment provided that federal agencies "shall provide leadership in carrying out the policy and purposes of this Act and shall comply with the requirements of this Act in the same manner as any person ... ."51 The Senate Report stated that this provision "requires that Federal facilities meet the emission standards necessary to achieve ambient air quality standards as well as those established in other sections of Title I."52 Thus while the House bill spoke of "emission standards," the Senate amendment, like 118 as enacted, spoke of "requirements." In accommodating the different language in the two bills and formulating what is now 118, the Conference Committee simply combined the House and Senate provisions. If, as Kentucky argues, the Conference Committee in taking the Senate language of "requirements" meant thereby to subject federal facilities to enforcement measures obviously not embraced in the language of the House bill, it is remarkable that it made no reference to its having reconciled this difference in favor of extending state regulation over federal installations. Given the interchangeable use of "emission standards" and "emission requirements" in the Senate amendment, see n. 52, supra, the predominance of the language of the Senate version in 118 as enacted,53 and the absence of any mention of disagreement between the two bills, it is more probable that the Conference Committee intended only that federal installations comply with emission standards and compliance schedules than that its intention was to empower a State to require federal installations to comply with every measure in its implementation plan. See Alabama v. Seeber, 502 F.2d, at 1247.The impression that Congress intended only that federal agencies comply with emission limitations and standards is strengthened by the Conference Report, which stated in full: "The House bill and the Senate amendment declared that Federal departments and agencies should comply with applicable standards of air quality and emissions. "The conference substitute modifies the House provision to require that the President rather than the Administrator be responsible for assuring compliance by Federal agencies."54 This examination of 118 and the central phrase "requirements respecting control or abatement of air pollution," discloses a regime of divided responsibility for the mobilization of federal installations in the effort to abate air pollution. Kentucky agrees but persists in its contention that existing federal sources have been subjected to state regulation by differing on where that division places authority to enforce compliance by existing federal facilities - "`sources with respect to which state implementation plans establish the criteria for enforcement.'"55 For such - existing - sources, Kentucky maintains, the States are granted primary enforcement authority while "`the responsibility and authority for enforcement ... is granted to EPA in those instances (i. e., new sources and hazardous pollutants) where EPA establishes the criteria.' "56 Perhaps we could agree if the issue were not whether there is a clear and unambiguous congressional authorization for the regulatory authority petitioner seeks, for as the Fifth Circuit has said, such a "scheme is a reasonable one." Alabama v. Seeber, supra, at 1244. But that is the issue, and the implications Kentucky draws from its evaluation of the manner in which the Congress divided responsibility for regulation of new sources and of hazardous air pollutants do not persuade us.In drawing on the manner in which the Clean Air Act has divided the authority to regulate new sources of air pollutants57 and the emission of hazardous air pollutants58 in comparison with existing air pollutant sources, Kentucky makes two separate though related arguments. The first is that when Congress wanted to exempt federal facilities from compliance with a state requirement, it did so by express exclusionary language. Thus 111 (c) (1) authorizes the Administrator to delegate to a State "any authority he has under this Act to implement and enforce" new-source standards of performance - with which new sources owned or operated by the United States must comply ( 111 (b) (4)) - "except with respect to new sources owned or operated by the United States." 42 U.S.C. 1857c-6 (c) (1). Section 114 (b) (1) of the Clean Air Act, as added, 84 Stat. 1688, is to the same effect respecting inspections, monitoring, and entry of an emission source. 42 U.S.C. 1857c-9 (b) (1). Similarly, 112 (d) (1) authorizes the Administrator, upon finding that a State's plan to enforce emission standards for hazardous pollutants is adequate to the task, to delegate to that State "any authority he has under this Act to implement and enforce such standards (except with respect to stationary sources owned or operated by the United States)." 42 U.S.C. 1857c-7 (d) (1). The argument that these specific exemptions of federal facilities from state enforcement and implementation methods are necessary only because 118 has, as a general matter, subjected federal installations to all state requirements fails on several counts. First, as we have demonstrated, by itself 118 does not have the effect petitioner claims. Second, the relevant portions of 111, 112, and 114 assume that the Administrator possesses the authority to enforce and implement the respective requirements against sources owned or operated by the United States. See 111 (c) (2), 112 (d) (2), and 114 (b) (2). Third, just as in providing for Presidential exemptions in 118 Congress separated the requirements of 111 and 112 from other requirements, Congress naturally treated the submission of federal installations to state regulation under 111, 112, and 114 separately from general provisions for meeting ambient air quality standards under 110 implementation plans devised by the States and approved by the EPA. A State must promulgate an implementation plan. 110 (a). The delegation provisions of 111, 112, and 114, on the other hand, are permissive, providing that "[e]ach State may develop and submit to the Administrator a procedure" to carry out the section. (Emphasis added.)Kentucky's second argument is that the manner in which Congress differentiated treatment of new sources and existing sources in 111 and 114 clearly implies that existing federal sources were to be subject to the enforcement provisions of a State's implementation plan. The implication is said to arise from the different nature of the control required for the two types of installations. The difference is explained as follows: For existing sources the first step for a State is to determine the general quality of air in the relevant air quality region and then to compute the amounts of pollution attributable to each source. Next, appropriate emission standards necessary to meet the national ambient air quality standards must be assigned to the various sources, followed by determining the compliance schedule by which each installation will achieve the assigned standards by the attainment date prescribed in the Act. To carry out this process of gathering information and coordinating control throughout the State, it is said to be necessary for the States to have ready administrative authority over all sources, federal and nonfederal. This administrative authority, concededly a major part of an implementation plan as to nonfederal sources, must therefore have been intended to extend to federal sources as well.In contrast, controlling "new sources" is described as a straightforward task. This is because "standards of performance" for such sources, which are established in light of technologically feasible emission controls and not in relation to ambient air quality standards59 are set by the EPA for various categories of sources and are uniform throughout the Nation. A comprehensive enforcement mechanism to develop and coordinate application of these standards is unnecessary, especially because all new sources must be in compliance before operation begins, 111 (e). The Congress is said, therefore, to have exempted new federal installations from state enforcement of federally promulgated standards of performance because it was unnecessary to submit those installations to the same kind of coordinated control to which existing sources had been submitted.The Act itself belies this contention. It recognizes that a "new source," even one in full compliance with applicable standards of performance, may hinder or prevent attainment or maintenance of air quality standards within the air quality region in which it is located, and requires a state implementation plan to include procedures for averting such problems. See 110 (a) (2) (D), (a) (4).The arguments respecting the federal new-source exception in 114 also fail to bear the weight they must carry if Kentucky is to prevail. Section 114 provides for the establishment of various means by which to collect information "[f]or the purpose (i) of developing or assisting in the development of any implementation plan under section 110 or 111 (d), any standard of performance under section 111, or any emission standard under section 112, [or] (ii) of determining whether any person is in violation of any such standard or any requirement of such a plan ... ." 84 Stat. 1687, as added, 42 U.S.C. 1857c-9 (a). Unlike 111 and 112, 114 is doubly permissive. First, although the Administrator "shall" publish 111 new-source standards of performance and 112 hazardous air-pollutant-emission standards, under 114 (a) the Administrator "may," but need not, require operators of emission sources to keep records, to make reports, to install, use, and maintain monitoring equipment, and to sample its emissions. Second, as with 111 and 112, the States "may" develop procedures to carry out the section. That Congress provided for this slight possibility that existing federal sources would be obliged to conform to state procedures for carrying out 114 in addition to emission standards and compliance schedules scarcely implies, as petitioner suggests, that Congress intended existing federal sources to comply with all state regulatory measures, not only emission standards and compliance schedules. Rather than exempting new federal sources from an obligation to which they would otherwise have been subject, Congress may as well have been extending the obligation to conform to state 114 regulatory procedures to existing - but not to new - federal sources which would not otherwise have been thought subject to such regulation.Finally, we reject the argument that 304 of the Clean Air Act, reveals congressional intention to grant the States authority to subject existing federal sources to the enforcement mechanisms of their enforcement plan. The section provides in part: "(a) Except as provided in subsection (b), any person may commence a civil action on his own behalf - "(1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the Eleventh Amendment to the Constitution) who is alleged to be in violation of (A) an emission standard or limitation under this Act or (B) an order issued by the Administrator or a State with respect to such a standard or limitation ... ." 42 U.S.C. 1857h-2. Section 302 (e) includes a "State" in the definition of a "person," 42 U.S.C. 1857h (e), and 304 (f) provides: "For purposes of this section, the term `emission standard or limitation under this Act' means - (1) a schedule or timetable of compliance, emission limitation, standard of performance or emission standard ... which is in effect under this Act (including a requirement applicable by reason of section 118) or under an applicable implementation plan." 42 U.S.C. 1857h-2 (f). Although it is argued that 304 was not intended to permit a State to sue violators under the Act, we agree with the EPA that 304 is the only means provided by the Act for the States to remedy noncompliance by federal facilities with 118. That 304 was so intended is plain from both the language of 304 (f) and the legislative origins of 304. The Senate version of 118 provided that a State "in which any Federal property, facility, or activity is located may seek to enforce the provisions of this section pursuant to section 304 of this Act."60 When the Conference Committee eliminated this subsection from the Senate amendment, it retained the definition of "person," which included a "State" in 302 (e), and added 304 (f) with the parenthetical phrase "including a requirement applicable by reason of section 118." This made clear that 118 was to be enforced through 304, and 304 is the only provision in the Act for state enforcement of the duties of a federal installation under 118. In short, 118 establishes the duty of federal installations to comply with state "requirements," and 304 provides the means of enforcing that duty in federal court. In light of this close relationship between the two sections, we find it significant that 304 (f) extends the enforcement power only to "a schedule or timetable of compliance, emission limitation, standard of performance or emission standard," and not to all state implementation measures. Thus circumscribed, the scope of the 304 power to enforce 118 strongly suggests that 118 duties themselves are similarly limited, for it seems most unlikely that in providing that a State might bring suit in district court to enforce the duties of federal installations under 118, the Congress would not make all of those duties enforceable in district court. Yet this is exactly what Kentucky argues, saying: "There can be no explanation for the existence of Section 118 if it imposes no obligations other than those imposed under Section 304."61 The argument is defective on another count. Even if, standing alone, 304 could be read to require federal facilities to comply with the matters within 304 (f), the assumption that the two sections independently impose duties on federal installations conflicts with the legislative history. Section 304 (a) was first extended to apply to federal sources of pollution in Conference, at the same point at which the express provision for enforcement authority over federal installations was removed from 118.62 Given this relationship between the two measures, we cannot credit the argument that 118 was intended to impose on federal installations any broader duty to comply with state implementation measures than specified in 304. The absence in 304 of any express provision for enforcing state permit requirements in federal court is therefore too substantial an indication that congressional understanding was that the "requirements" federal facilities are obliged to meet under 118 did not include permit requirements to be overcome by assertions to the contrary.VIn view of the undoubted congressional awareness of the requirement of clear language to bind the United States,63 our conclusion is that with respect to subjecting federal installations to state permit requirements, the Clean Air Act does not satisfy the traditional requirement that such intention be evinced with satisfactory clarity. Should this nevertheless be the desire of Congress, it need only amend the Act to make its intention manifest.64 Absent such amendment, we can only conclude that to the extent it considered the matter in enacting 118 Congress has fashioned a compromise which, while requiring federal installations to abate their pollution to the same extent as any other air contaminant source and under standards which the States have prescribed, stopped short of subjecting federal installations to state control.This conclusion does not mean that we are persuaded that the States are as able to administer their implementation plans as they would be if they possessed the degree of authority over federal installations urged here, although, as Kentucky acknowledged at oral argument, the EPA, acting under the impetus of Executive Order No. 11752, 3 CFR 380 (1974), has promulgated guidelines for compliance by federal agencies with stationary source air pollution standards, 40 Fed. Reg. 20664 (1975), which will lead to federal agencies' entering "consent agreements which are exactly identical in every respect to what a compliance schedule would have been."65 The judgment of the Court of Appeals is Affirmed. |
8 | [Footnote *] No. 915, New York, New Haven & Hartford Railroad Co. First Mortgage 4% Bondholders Committee v. United States et al., No. 917, Manufacturers Hanover Trust Co., Trustee v. United States et al., and No. 921, Chase Manhattan Bank, N. A., Trustee v. United States et al., on appeal from the United States District Court for the Southern District of New York. No. 914, New York, New Haven & Hartford Railroad Co. First Mortgage 4% Bondholders Committee v. Smith, Trustee, et al., No. 916, Manufacturers Hanover Trust Co., Trustee v. United States et al., No. 920, Chase Manhattan Bank, N. A., Trustee v. Penn Central Co. et al., No. 1038, Penn Central Co. v. Manufacturers Hanover Trust Co., Trustee, et al., and No. 1057, United States et al. v. New York, New Haven & Hartford Railroad Co. First Mortgage 4% Bondholders Committee et al., on certiorari to the United States Court of Appeals for the Second Circuit in advance of judgment. When this Court sustained the Penn-Central merger (), it upheld the action of the Interstate Commerce Commission (ICC) in conditioning its approval of the merger on inclusion as an operating entity of the New York, New Haven & Hartford R. Co. (New Haven), whose continued operation the ICC had found to be essential. Since 1961 the New Haven had been under reorganization proceedings under 77 of the Bankruptcy Act and was close to financial collapse. The basic issue in these cases concerns the propriety of the financial terms for the inclusion. The ICC had remitted the parties to negotiate the terms of the inclusion, and after considering their appraisals issued its inclusion report, in which it concluded that the net liquidation value of New Haven's assets (after deducting liquidation expenses and making a discount to present worth on the basis of hypothesized receipts over the six-year period anticipated for liquidation) was $125,000,000, a figure that the ICC found "just and reasonable" as a condition of the merger under 5 of the Interstate Commerce Act and "fair and equitable" as part of a plan of reorganization under 77 of the Bankruptcy Act. The New Haven bondholders thereupon commenced litigation for review of the inclusion report (in its aspect as a condition of the merger) in the three-judge District Court for the Southern District of New York, which was called upon to review the order under 5 of the Interstate Commerce Act. The ICC certified to the reorganization court in Connecticut the sale of New Haven's assets to Penn Central, and the New Haven bondholders filed their objections in that court. The bondholders' group and the United States each tried to avoid duplicate litigation - the bondholders by an application in the three-judge court to enjoin the ICC's certification of its plan to the reorganization court (which was denied), and the United States by a motion to dismiss the complaints in the three-judge court (which was also denied). Each court, after hearings, concluded that New Haven's assets had been substantially undervalued and remanded the case to the ICC. The ICC then revalued New Haven's assets at a higher figure than that first reached, which, after deductions for certain factors not previously considered ("the added deductions"), came to $140,600,000. In addition, the ICC directed Penn Central to pay $5,000,000 toward New Haven's interim operating expenses. The reorganization court ordered New Haven's assets transferred to Penn Central, which was done on December 31, 1968. The bondholders filed objections to the revised evaluation with the reorganization court and brought actions against the United States and the ICC in the three-judge court. The reorganization court rejected the plan, though it accepted some of the ICC's determinations. The three-judge court sustained the plan with modifications. Though the two courts agreed on many substantial issues, the total evaluation reached by the reorganization court exceeded that reached by the three-judge court by $28,000,000. The bondholders appealed directly to this Court from the three-judge court's judgment and this Court noted probable jurisdiction. The bondholders appealed to the Court of Appeals from the order of the reorganization court; the United States, the ICC, and Penn Central cross-appealed; and this Court granted certiorari in advance of judgment. The disputed items of valuation, plus one issue affecting the consideration given by Penn Central, are as follows: (1) Though the parties have agreed that New Haven, as Penn Central's partner in the development of the Grand Central Terminal Properties, is entitled to the capitalized value of 50% of the "excess income" from those properties, the bondholders claim that no recognition has been given to New Haven's right to have its share of basic Terminal income, used to defray its share of Terminal expenses, for purposes of determining the fair price Penn Central should pay. (2) The New Haven owned two large freight yards in the Bronx, which service important industrial enterprises in a 160-acre area and a vital municipal food market installation. The reorganization court ruled that the ICC had erred in rejecting an appraisal by a witness premised upon the yards' availability for continued industrial occupancy with existing trackage and electrical facilities, in favor of a lower appraisal based on his assumption that on New Haven's liquidation the yards would be stripped of those facilities, depressing the value of the land, and necessitating substantial removal expenses. The three-judge court approved the ICC's valuation. (3) The reorganization court rejected, but the three-judge court approved, the added deductions, one made by the ICC in the net liquidation value as an adjustment for the assumed effect of a year's anticipated delay in securing a certificate of abandonment, the other that the ICC made on the basis of a hypothetical sale of all New Haven's land assets at a bulk discount. (4) The reorganization court found that the ICC had overstated the discount for the projected six-year liquidation. (5) The ICC ordered Penn Central to assume interim losses during the actual 11-month period from merger to inclusion to the extent of a ceiling of $5,000,000 (which constituted about 61% of the total loss). The reorganization court upheld the ICC and dismissed the bondholders' contention that Penn Central bear all operating losses. (6) The bondholders attack the ICC's order that New Haven transfer to Penn Central its ownership of stock, which the ICC found worthless, in two concerns. (7) The bondholders urge that Penn Central should pay an added amount to reflect New Haven's "going-concern" value as a supplement to the liquidation value. (8) The New Haven received, in partial payment for the assets transferred to Penn Central, 950,000 shares of Penn Central common stock which were valued at $87.50 per share at the time of the valuation date used by the ICC but which had declined to $63.38 as of the inclusion date. To remedy "the unfairness [arising from] the fact that the purchaser is getting assets of sure present value while the seller is asked to gamble on the future of Penn Central," the reorganization court provided for (and the three-judge court adopted) an "underwriting" formula under which Penn Central would be called upon to make up in cash the difference between the market price of Penn Central stock in 1978 and $87.50 per share, unless before that time the market price had attained $87.50 for a five-day period. The bondholders contend that this formula fails to cure the overvaluation. The bondholders also urge that the continued deficit operation of the New Haven from the inception of the reorganization proceeding in 1961 to the inclusion in Penn Central in 1968 resulted in their being deprived of property without just compensation in violation of the Fifth Amendment. Held: 1. The three-judge court erred in not granting the Government's motion to dismiss to the extent of deferring to the reorganization court in proceedings ultimately involving only the price to be paid for the assets of the debtor's estate. Pp. 419-430. (a) The reorganization court under 77 of the Bankruptcy Act and the ICC had full power over the debtor and its property, including the power to formulate and confirm a reorganization plan providing for sale of the debtor's property, and it would have disrupted that plan for the three-judge court to have enjoined certification of the plan by the ICC to the reorganization court. Pp. 419-421. (b) Though transfer of the New Haven assets was also a part of the merger under 5 of the Interstate Commerce Act, and neither court had "complete" jurisdiction when the litigation started, the statutory interrelationship between 5 and 77 and the ability of the reorganization court to adjudicate all the inclusion issues made it advisable for the three-judge court to have yielded to the reorganization court, in which primary jurisdiction had vested. Pp. 423-427. (c) When the merger occurred and no question remained of Penn Central's obligation to assume the assets of New Haven, the jurisdiction of the reorganization court became "complete" and the three-judge court had virtually nothing to decide. Pp. 427-428. 2. The reorganization court is empowered by Congress to review the plan to determine whether the ICC has followed the statutory mandate that the plan be "fair and equitable" and whether there was material evidence to support the agency's conclusion. Pp. 431-435. 3. There was no error in the finding of the reorganization court that, under the contractual arrangements, only after Terminal income had been applied to meeting Terminal expenses would the residue be distributed to the two railroads, and thus the basic income could not be "freed up" from the obligation to meet Terminal expenses. Nor did that court err in concluding that New Haven's access rights to the Terminal under the agreements were not entitled to recognition in evaluating New Haven's assets, since those rights were more than offset by New Haven's deficit operations which Penn Central assumed. Pp. 438-451. 4. The ICC's adherence to the lower of an expert witness' two estimates of the valuation of the Bronx freight yards was clearly erroneous as it was based on the premise that New Haven would dismantle the yards upon liquidation of the rest of the railroad even though Penn Central already had a link by which service to the yards would continue, and implied that a common carrier could deny service to industrial and public activities simply because ownership of adjoining trackage had changed hands. Pp. 451-457. 5. The reorganization court did not err in disallowing the added deductions. Pp. 457-473. (a) The ICC should not have made a deduction for costs that New Haven would incur during the year's period anticipated to obtain approval for abandonment of train operations, since the valuation date (December 31, 1966) represented not the date on which New Haven would have sought a certificate of abandonment but the date on which it would have commenced its six-year liquidation sale. Moreover, since the interested public bodies have not arranged to continue New Haven's transportation system during the long period New Haven has been in reorganization, there is no justification for assuming that if confronted with an abandonment application they would do so now and that a delay would be necessary for the ICC to hear from those communities. Pp. 459-466. (b) The ICC's deduction from the estate's liquidation value, based on a hypothetical sale of all New Haven's land assets in bulk was properly rejected by the reorganization court as the ICC had concluded that only its power to compel the sale of the real estate to a single buyer for continued operation justified the bulk-sale discount, and there is no evidence in the record that a bulk buyer would agree to take over New Haven properties for continued service at any price. Pp. 468-473. 6. The adjustment made by the reorganization court in the ICC's erroneous computation of the discount to present values of New Haven's liquidation proceeds over the six-year liquidation period is affirmed as being substantially free from error. Pp. 473-476. 7. The payment made by Penn Central for New Haven's interim operating losses between the effective date of the merger and the date of inclusion, was in accordance with a formula devised by the ICC in its inclusion report that constituted a pragmatic compromise between the competing interests of the Penn Central and the bondholders. The reorganization court's acceptance of that disposition is affirmed. Pp. 476-479. 8. The argument of the Bondholders Committee that the ICC erred in ordering the transfer to Penn Central of stocks that New Haven held in two concerns, which the ICC found were valueless, is foreclosed by res judicata since the bondholders had not appealed the order of the reorganization court directing the transfer of New Haven assets. Pp. 479-481. 9. The bondholders' contention that Penn Central should pay an added amount for New Haven's "going-concern" value is without merit, being entirely at odds with the liquidation hypothesis on which appraisal of New Haven's assets was predicated. Pp. 481-482. 10. The "underwriting plan" of the reorganization court added to the assessment of present worth of the Penn Central stock both a reasonable assurance of realization of such worth and the opportunity of additional gain, and on the basis of the record before that court at the time of its order the package constituted full compensation for the assets transferred to Penn Central. In view, however, of the impact of recent events, which make it possible that this aspect of the decree is not realistic, further proceedings will be needed to reassess the consideration that Penn Central must give in exchange for the New Haven properties. Pp. 483-489. 11. The substantial losses to the bondholders that occurred during the course of the reorganization proceedings did not result in any unconstitutional taking of the property of the bondholders, whose rights are not absolute and who will be receiving the highest and best price for the debtor's assets as of the valuation date. Moreover, the bondholders did not petition the reorganization court to dismiss the proceedings and thereby permit foreclosure on the mortgage liens until well after the valuation date. Nor is the price Penn Central must pay unfair, in view of the benefits that were anticipated from the merger. Pp. 489-495. Nos. 914, 916, 920, 1038, and 1057, 304 F. Supp. 793 and 1136, affirmed in part and vacated and remanded in part; Nos. 915, 917, and 921, 305 F. Supp. 1049, vacated and remanded. Whitney North Seymour argued the cause for Manufacturers Hanover Trust Co. With him on the brief were Horace J. McAfee and Albert X. Bader, Jr. Lester C. Migdal argued the cause for New York, New Haven & Hartford Railroad Co. First Mortgage 4% Bondholders Committee. With him on the briefs was Lawrence W. Pollack. Joseph Auerbach argued the cause for Smith, Trustee of the property of New York, New Haven & Hartford Railroad Co. With him on the briefs were James Wm. Moore, Robert G. Bleakney, Jr., and Morris Raker. Leonard S. Goodman argued the cause for the United States et al. With him on the brief were Solicitor General Griswold, Assistant Attorney General McLaren, Deputy Solicitor General Springer, John H. D. Wigger, and Robert W. Ginnane. Hugh B. Cox argued the cause for Penn Central Transportation Co. With him on the brief were Roswell B. Perkins, Ulrich Schweitzer, Samuel E. Gates, Robert L. King, and Harvey J. Goldschmid. Joseph Schreiber and Wilkie Bushby filed briefs for the Chase Manhattan Bank, N. A. Louis J. Lefkowitz, Attorney General, Dunton F. Tynan, Assistant Solicitor General, and Walter J. Myskowski filed a brief for the State of New York. Robert K. Killian, Attorney General, Samuel Kanell, Special Assistant Attorney General, and Jack Rubin, Assistant Attorney General, filed a brief for the State of Connecticut. Herbert F. De Simone, Attorney General of Rhode Island, and W. Slater Allen, Jr., Special Assistant Attorney General, joined in the briefs for the States of New York and Connecticut.MR. JUSTICE STEWART delivered the opinion of the Court.These cases represent the latest stage of the litigation arising from the merger of the Pennsylvania and New York Central railroads, which we upheld two Terms ago in the Penn-Central Merger Cases, . A condition of that merger was Penn Central's promise to take in the New York, New Haven & Hartford Railroad Company as an operating entity - a promise that Penn Central fulfilled on December 31, 1968, 11 months after its own formation. The ultimate question presented by the cases now before us is the price Penn Central must pay for the assets of the New Haven.FnI1. The Penn Central. The proposed combination of the Pennsylvania and New York Central railroads first came under consideration by the parties and the Interstate Commerce Commission more than 12 years ago, a decade prior to its eventual consummation.1 The two railroads formally sought permission to merge under the Interstate Commerce Act, 49 U.S.C. 1 et seq., on March 9, 1962.2 On April 6, 1966, the Commission authorized the merger of the two roads.3 The union of the two carriers was the largest railroad merger in the history of the Nation,4 bringing together the companies that "dominate rail transportation in the Northeast."5 In 1965 the component roads enjoyed a total operating revenue in excess of $1,500,000,000 and a net annual income of over $75,000,000.6 The two companies held some $72,000,000 in working capital and $1,242,000,000 in combined investments.7 With about 19,600 miles of road "sprawling between the Great Lakes on the north ... and the Ohio and Potomac Rivers on the south,"8 Penn Central was at its inception nearly twice the size of the next largest railroad system in the East and three times that of the third largest.9 The predicted economies effected by the merger were likewise enormous; it was thought that within about eight years of the combination they would exceed $80,000,000 annually.10 Those savings represented a value, capitalized at 8%, of $1,000,000,000.On June 9, 1967, after considerable litigation involving protective conditions for various affected railroad competitors,11 the Commission issued a modified order authorizing the Penn-Central merger.12 On October 19, 1967, a court of three judges, convened in the United States District Court for the Southern District of New York to review the Commission's order pursuant to 28 U.S.C. 1336, 2284, and 2321-2325, upheld the Commission's action.13 On January 15, 1968, this Court affirmed with minor modifications, and thereby sustained the validity of the merger.14 Two weeks later, on February 1, 1968, Pennsylvania and New York Central merged.2. The New Haven. The New York, New Haven & Hartford Railroad is now an operating division of the Penn Central system. At the time of the merger, however, it was an independent Class I railroad operating some 1,500 miles of line in the Commonwealth of Massachusetts and the States of Rhode Island, Connecticut, and New York; as such, it was the sixth largest railroad in the northeast region and the largest in New England.15 With an operations area extending from Boston to New York and connecting with nine other Class I railroads, the New Haven served 12 cities of greater than 100,000 population, as well as a number of important defense establishments.16 In 1964 the railroad employed about 9,800 people and paid them annual wages amounting to $70,000,000.17 About 30,000 commuters used the line every day to reach work in New York City alone.18 As described by the Commission, "The New Haven has both a large passenger and freight business. It is the fourth largest passenger carrying railroad in the United States, and has the second highest commuter revenue of all such roads... . The volume of its freight business ... is substantially greater ... . It is the largest freight railroad in New England and ranks tenth in freight traffic among all railroads in the eastern district... . Its freight service is considered to be of extreme importance to the industrial well-being of southern New England."19 The financial history of the New Haven was for decades a history of extreme vicissitudes. The company's decline and fall, with passage into, out of, and back into railroad reorganization, have been chronicled elsewhere.20 It first went into reorganization under 77 of the Bankruptcy Act, 11 U.S.C. 205, on October 23, 1935. Due in large measure to the difficulties of including formerly leased lines in the reorganized road, nearly 12 years elapsed from the filing of the debtor's petition in the United States District Court for the District of Connecticut to that court's eventual order approving consummation of the Commission's plan of reorganization.21 The railroad emerged from reorganization in 1947 with a vastly simplified debt structure in which only the most senior holders of secured interests survived.22 But in the following years the financial condition of the company again deteriorated, prompting it to seek at first partial and then total discontinuance of passenger service on the former Old Colony lines in Massachusetts.23 By 1959 the financial condition of the New Haven was such as to render the chance of surplus earnings "slight at best."24 Through late 1960 and into early 1961 the company's management expended great efforts to stave off bankruptcy by obtaining loans or grants from the Federal and State Governments.25 By the middle of 1961, current liabilities exceeded current assets by $36,310,000,26 and the company was losing cash at the annual rate of $18,000,000.27 Finally, on July 7, 1961, the New Haven again petitioned for reorganization under 77 in the United States District Court for the District of Connecticut, a step that the court was later to find had been far too long delayed: "[I]n the interest of its creditors, its employees and the public [the railroad] should have petitioned ... long before it did. The grave problems which ... beset the reorganization would have been much less acute and infinitely more manageable if bankruptcy had not been put off until its cash was almost entirely depleted, credit was practically gone, maintenance was down and in all other respects the bottom was out of the barrel."28 Immediately upon their taking over the New Haven, the trustees appointed by the reorganization court were obliged to borrow $8,000,000 to meet the payroll.29 The situation did not improve with the passage of time. "[I]n spite of spartan economies and a sizeable reduction in numbers of employees, the costs of operation ... offset savings and eroded away the accumulated cash."30 On July 6, 1964, the New Haven trustees petitioned the Commission, pursuant to 13a (2) of the Interstate Commerce Act, 49 U.S.C. 13a (2), for authority to discontinue suburban passenger train service in the Boston area. There followed a public hearing, an adjournment to afford Massachusetts authorities an opportunity - ultimately unavailing - to negotiate a contract with New Haven for continuation of some service, and a motion by the New Haven for expedited disposition "by reason of the critical nature of New Haven's finances, the irretrievable drain which the operations in question impose upon New Haven's resources, and the increasing adverse effect which New Haven's situation has upon the public interest and upon New Haven's creditors ... ." The Commission granted the trustees' application, concluding that for a period beginning four years before the 1961 reorganization petition and continuing thereafter, New Haven's financial condition had been "critical" and "drastically weak ... ."31 By 1965 it was evident that the New Haven was on the verge of collapse.32 Its year-end current assets amounted to $20,521,000, some $16,685,000 less than current liabilities plus long-term debt payments due within the coming year. The obligations payable after one year totaled $189,042,000. The retained income account showed a deficit of $81,672,000; the working capital account, a deficit of $16,700,000. For the year the net railway operating income showed a deficit of $16,000,000, with overall net income a deficit only $1,000,000 less. The company was in default in its payments of both principal and interest on its long-term debt.33 In the view of the trustees, New Haven was "absolutely faced with economic obsolescence if it continues as an independent, short-line, terminal railroad."34 On October 11, 1965, the New Haven notified the Commission, pursuant to 13a (1) of the Interstate Commerce Act, 49 U.S.C. 13a (1), of its intention to discontinue all its interstate passenger trains effective March 1, 1966.35 If carried into effect, the proposed discontinuance would have drastically curtailed passenger train service in New York and Massachusetts, and ended it completely in Connecticut and Rhode Island.36 In the spring of 1966 the Commission, noting that over an 11-year period New Haven had experienced "an unending succession of reverses," concluded that "[t]here now is totally lacking any hope or plan for future survival of this carrier, except that held out by its merger into a trunkline railroad."37 The Commission acceded in part to the trustees' notice of discontinuance, but invoked its statutory power to keep many of the trains in operation on the ground that "passenger as well as freight service by the N[ew] H[aven] is a national necessity and that termination of either would lead to distress in Connecticut, Massachusetts, and Rhode Island, and would severely damage New York City and the Nation generally."38 As 1966 gave way to 1967, the New Haven's situation deteriorated still further. As of April 1967 the reorganization court thought "the prospect for the continued operation of the Railroad was very dim."39 The road lacked even a current expense fund from which to satisfy the "six months" creditors, and the court thought it "highly unlikely that there ever will be one."40 In July 1967 the reorganization court found that the New Haven's situation had become "desperately critical"; its cash depletion was "so serious that, if the present rate of loss continues, there will be insufficient left by late September to meet the payroll of approximately $1,400,000 per week."41 As 1967 came to an end, so did the New Haven's cash reserve. By August 31 the cash balance fell to $4,500,000 - a precarious condition for a company requiring $1,750,000 a week simply to meet current operating expenses.42 The trustees estimated that as of December 31, 1967, the balance would decline to $3,100,000 and two months later would fall to $850,000.43 The New Haven's financial position had thus eroded to the point where its shutdown was "imminent ... ."44 3. The inclusion negotiations. From the outset of the 77 proceeding in 1961, the trustees of the New Haven and the reorganization court charged with conservation of the debtor's dwindling assets recognized that "a merger with a large trunk line railroad would be the most promising and feasible means of continuing the viability of the New Haven's transportation system ... ." In re New York, N. H. & H. R. Co., 289 F. Supp. 451, 456; cf. 281 F. Supp. 65. After Pennsylvania and New York Central filed their merger application before the Interstate Commerce Commission in 1962, the New Haven trustees sought inclusion in the new company, both by private negotiations with the component roads and by a petition to the Commission filed June 26, 1962. See In re New York, N. H. & H. R. Co., 378 F.2d 635, 636; Merger Report, 327 I. C. C. 475, 480. As the reorganization court said, it was "apparent that the inclusion of the New Haven in the Penn-Central merger was the only salvation for the New Haven as an operating railroad ... ." In re New York, N. H. & H. R. Co., 289 F. Supp., at 456; see also In re New York, N. H. & H. R. Co., 304 F. Supp. 793, 800.The Commission, as we have noted, authorized the merger of the two roads in 1966. But in so doing, it found that "[w]ithout some radical change in circumstances, even if this merger application were denied, N[ew] H[aven] would face a nearly insuperable task in bringing itself out of bankruptcy." Merger Report, 327 I. C. C., at 522. The Commission concluded that the proposed Penn-Central combination, "without complete inclusion of N[ew] H[aven], would not be consistent with the public interest ... ." Id., at 524. Accordingly, it required "all the New Haven railroad to be included in the applicants' transaction," and conditioned its approval of the merger upon that inclusion, id., at 524, 527. In so doing, the Commission spelled out Penn Central's obligation toward New Haven in unequivocal language. Condition 8 of the Merger Report stipulated as follows: "The Pennsylvania New York Central Transportation Company shall be required to include in the transaction all the New York, New Haven and Hartford Railroad Company ... upon such fair and equitable terms as the parties may agree subject to the approval of the Bankruptcy Court and the Commission. Within 6 months after the date this report is served, the parties shall file with the Commission for its approval, a plan for such inclusion. In the event the parties are unable to reach an agreement (and subject to approval by the Bankruptcy Court) such inclusion shall be upon such fair and equitable terms and conditions as the Commission may impose. ... . . "Jurisdiction is hereby reserved for such purposes. Consummation of the merger by applicants shall indicate their full and complete assent to these requirements." 327 I. C. C., at 553. Condition 16 of the Merger Report reiterated that "Consummation of the transaction approved herein shall constitute on the part of The Pennsylvania Railroad Company and the New York Central Railroad Company, their successors and assigns, acquiescence in and assent to the conditions stated in this appendix and in the attached report." Id., at 555. Having determined to require the inclusion of New Haven in Penn Central as a condition of merger, the Commission remitted the parties to private negotiation of the terms of inclusion. Id., at 527. The New Haven trustees on the one side, and the Pennsylvania and New York Central railroads on the other, had already been bargaining for some time, having drafted preliminary documents, dated December 22, 1964, and February 5, 1965, that provided for Penn Central's assumption of New Haven's freight operations. Oscar Gruss & Son v. United States, 261 F. Supp. 386, 393; Interstate Discontinuance Case, 327 I. C. C. 151, 175 n. 6. On April 21, 1966, two weeks after the Merger Report, they executed a Purchase Agreement for the transfer of substantially all the New Haven assets to Penn Central. Penn-Central Merger Cases, 389 U.S., at 508; see In re New York, N. H. & H. R. Co., 378 F.2d, at 636.45 The Purchase Agreement provided for the transfer of the New Haven properties to Penn Central, with the consideration in exchange to consist in part of cash and in part of stocks and bonds of Penn Central.46 In September 1966 the trustees filed a petition with the reorganization court reciting the background of the negotiations with Penn Central, the New Haven's large and growing deficits, and the insufficiency of internally generated cash to meet operating demands. In the trustees' view, inclusion in Penn Central afforded "the only practicable means for reorganization of the Debtor that is consistent with the best interest of the public and of all parties interested in the Debtor's estate ... ." They submitted that operations should continue so long as inclusion was possible, and that the court should grant them leave to press for inclusion on the basis of the Purchase Agreement. In re New York, N. H. & H. R. Co., 378 F.2d, at 637. On October 24, 1966, the reorganization court authorized the trustees to present the Agreement to the Commission, noting that the goal of preserving the New Haven operations "has been the policy from the beginning of these proceedings ... ." Three days later the trustees and the Pennsylvania and New York Central railroads petitioned the Commission for approval of the New Haven's inclusion on the terms of the Agreement.On November 16, 1967, the Commission ratified the Purchase Agreement as the basis for the inclusion of New Haven in Penn Central. Pennsylvania R. Co. - Merger - New York Central R. Co., 331 I. C. C. 643 ("Second Supplemental Report"). It looked upon the fact that the parties had been able to reach agreement as an indication that even though the New Haven trustees were selling properties having no value as an operating entity, they nevertheless had enjoyed a degree of bargaining power by virtue of the requirement that Penn Central take in New Haven as a condition of the merger. 331 I. C. C., at 657. "[W]here a transaction is bargained at arm's length," said the Commission, "each side is presumably capable of determining its own best interest, and our primary function is to discover whether the transaction will be in the public interest." Id., at 656. The Commission then undertook its independent analysis of the value of the New Haven properties. Although the Purchase Agreement "carrie[d] some probative force as to the values of the properties involved, it [was] by no means controlling." Id., at 657. The Commission must still determine the price "on the basis of all the evidence pertaining thereto, not merely the agreement and supporting evidence." Id., at 660 n. 12.Upon its independent review of the record, the Commission found that the asset value of the New Haven properties to be transferred to Penn Central and of the consideration to be given in exchange was $125,000,000. The Commission concluded that payment of that sum by Penn Central to the New Haven estate would be both "just and reasonable" as a condition of the merger under 5 of the Interstate Commerce Act, and "fair and equitable" as part of a plan of reorganization under 77 of the Bankruptcy Act. Unwilling to defer the merger until inclusion could take place but recognizing that the danger of an end to all New Haven operations was "very real," 331 I. C. C., at 654, the Commission authorized financial aid from Penn Central to prop up the debtor during the interim period between merger and inclusion to ensure New Haven's continued functioning until its acquisition by Penn Central. See Penn-Central Merger Cases, 389 U.S., at 509.4. The inclusion litigations. At this juncture the Commission's determination of the terms of inclusion was subjected to simultaneous judicial review in two separate forums. On January 23, 1968, eight days after this Court's approval of the merger and eight days before the merger itself, the New Haven bondholders commenced five actions in the United States District Court for the Southern District of New York to set aside the Commission's order. The three-judge District Court reconvened to hear the actions and shortly thereafter consolidated the five cases into one. On March 29, 1968, the Commission certified the first step of its plan for the reorganization of the New Haven - the sale of its assets to Penn Central - to the reorganization court.47 Pursuant to 77 (e) of the Bankruptcy Act, 11 U.S.C. 205 (e), the New Haven bondholders filed their objections to the Commission's plan following notice given by the reorganization court. Thus, the identical question of the price Penn Central would have to pay for the New Haven assets came at the same time before the three-judge District Court in New York and the single-judge District Court in Connecticut.On July 10, 1968, the three-judge court, following extensive briefing and argument on the numerous issues underlying the price question, found itself unable to agree with the Commission in several major respects. It therefore vacated so much of the Commission's order as found the terms of Penn Central's acquisition of the New Haven's assets to be just and reasonable and remanded the cause for further proceedings. New York, N. H. & H. R. Co., First Mortgage 4% Bondholders' Committee v. United States, 289 F. Supp. 418. On August 13, 1968, also after extensive briefing and argument, the reorganization court independently returned the Commission's plan for further proceedings. In re New York, N. H. & H. R. Co., 289 F. Supp. 451. On the overriding question of price, the two courts were in accord: by fixing the worth of the New Haven at $125,000,000, the Commission had substantially understated the value of the properties to be transferred. The three-judge court estimated the understatement to be on the order of $45,000,000 to $50,000,000; the reorganization court, $33,000,000 to $55,000,000. 289 F. Supp., at 440, 465.Meanwhile, the continuing drain on the New Haven's dwindling cash reserves called for - and received - drastic action. Upon remanding the Commission's proposed plan under 77, the reorganization court ruled that unless the Commission ordered inclusion by January 1, 1969, the court would entertain a motion to dismiss the reorganization proceedings, resulting in termination of all the New Haven's train service. 289 F. Supp., at 459. The court recommended that the Commission direct the early inclusion of New Haven with a partial payment of the purchase price, deferring other issues to later resolution. Id., at 466.On the remand, the Commission reopened the record for the reception of further evidence and briefing in accordance with the instructions of the two reviewing courts. Its revaluation of the New Haven properties, announced on November 25, 1968, resulted in an increase in total worth of some $37,700,000, yielding a new price of $162,700,000 for the properties to be transferred. Pennsylvania R. Co. - Merger - New York Central R. Co., 334 I. C. C. 25, 53 ("Fourth Supplemental Report"). But the Commission then invoked "other pricing considerations" not taken into account at the time of its prior report. Application of the new considerations effected a reduction of $22,081,000 from the newly calculated asset value, leaving a net value of $140,600,000 - $15,600,000 more than the Commission's initial estimate, but $17,400,000 less than the lowest range of value suggested by either of the two District Courts. In addition, the Commission required Penn Central to pay $5,000,000 toward the New Haven's interim operating expenses and, yielding to the directive of the reorganization court, ordered Penn Central to take over the New Haven properties by January 1, 1969. 334 I. C. C., at 74, 76.The Commission certified its revised plan to the reorganization court on December 2, 1968. Within three weeks the bondholders filed their objections. On December 24, 1968, the reorganization court released the assets of the debtor's estate to Penn Central without approving the price terms set by the Commission. The court reiterated that failure to include New Haven in Penn Central by January 1, 1969, would result in immediate termination of all New Haven train service. On December 31 the estate transferred its assets to Penn Central.At once the bondholders pressed for judicial review of the Commission's revised evaluation. With their objections to the plan of reorganization already pending before the reorganization court, representatives of holders of the debtor's first and refunding mortgage 4% bonds commenced two separate actions against the United States and the Commission before the three-judge District Court in New York. The Manufacturers Hanover Trust Company and the Chase Manhattan Bank, trustees under other mortgage bonds, commenced two more actions against the same defendants.48 The three-judge court consolidated the four cases and granted intervention - to the New Haven trustees as parties plaintiff and to Penn Central, the Commonwealth of Massachusetts, and the States of Rhode Island, Connecticut, and New York as parties defendant.On May 28, 1969, the reorganization court again rejected the plan submitted by the Commission. Although it accepted the Commission's determinations on some issues, the court overruled the Commission with respect to its valuation of the New Haven's Harlem River and Oak Point freight yards and its added deductions introduced for the first time on the remand. The court also instituted its own "underwriting" plan to ensure equivalent value for the estate with respect to the Penn Central common stock given in partial consideration for the transferred New Haven properties. In re New York, N. H. & H. R. Co., 304 F. Supp. 793. An order implementing decision and remanding to the Commission was entered on July 28, 1969. 304 F. Supp. 1136.On June 18, 1969, the three-judge court filed its opinion in the bondholders' action. With one judge in dissent, the court upheld the Commission's valuation of the freight yards and its added deductions on the remand. The court also adopted the underwriting plan devised by the reorganization court. New York, N. H. & H. R. Co., First Mortgage 4% Bondholders' Committee v. United States, 305 F. Supp. 1049. A decree fixing the terms of judgment followed on September 11, 1969.49 With the two District Courts thus in agreement, after two rounds of judicial review, on many of the substantial issues that had come before them, but in disagreement on matters amounting to more than $28,000,000 in value, the bondholders took direct appeals to this Court from the judgment of the three-judge court. They also appealed from the order of the reorganization court to the United States Court of Appeals for the Second Circuit. The United States, the Commission, and Penn Central took no appeals from the decree of the three-judge court but cross-appealed to the Court of Appeals from the order of the reorganization court. The Court of Appeals consolidated the appeals from the reorganization court, and the parties then petitioned this Court to grant certiorari to the Court of Appeals in advance of its judgment, pursuant to 28 U.S.C. 1254 (1) and 2101 (e), and Rule 20 of this Court. We noted probable jurisdiction of the appeals from the order of the three-judge court and, with respect to the judgment of the reorganization court, granted certiorari to the Court of Appeals before judgment, accelerating briefing and argument to permit disposition of these cases at the current Term. .50 IIWe first consider the dual review to which the District Courts in New York and Connecticut subjected the price determinations of the Interstate Commerce Commission. From the outset all the parties in the three-judge court recognized that the pricing questions presented in the litigation there were also destined to come before the reorganization court under 77 of the Bankruptcy Act.51 Confronted with the prospect of duplicate litigation, the New Haven bondholders asked the three-judge court to enjoin the Commission's certification of its plan of reorganization to the District Court in Connecticut. Counsel urged that "if such certification is not restrained, the questions presented by the complaint herein under Section 5 (2) of the Interstate Commerce Act will also be before the Bankruptcy Court under Section 77 of the Bankruptcy Act ... ." The three-judge court denied the bondholders' application for injunctive relief. In its view, "the balance of convenience tilt[ed] heavily in favor of allowing the Connecticut court to proceed to such extent as it is advised," since the grant of such an injunction could delay the reorganization proceedings for a substantial time.In this ruling the three-judge court was correct. The jurisdiction of the reorganization court was not open to question. Upon its approval of the New Haven's petition for reorganization in 1961, that court had acquired "exclusive jurisdiction of the debtor and its property wherever located ... ." Bankruptcy Act, 77 (a), 11 U.S.C. 205 (a).52 Subject to the court's control, the trustees whom it appointed were empowered "to operate the business of the debtor." Id., 77 (c) (2), 11 U.S.C. 205 (c) (2). They were thus charged with the dual responsibility of conserving the debtor's estate for the benefit of creditors and preserving an ongoing railroad in the public interest. Massachusetts v. Bartlett, 384 F.2d 819, 821, cert. denied, ; 5 Collier on Bankruptcy § 77.02, at 469-470 (14th ed. 1969).53 With these goals in view, the statute bestowed a "broad and general" authority upon both the court and the trustees. Cf. Palmer v. Massachusetts, . The provisions of 77 "doubtless suffice[d] to confer upon the [reorganization court] power appropriate for adjusting property rights in the railroad debtor's estate and, as to such rights, beyond that in ordinary bankruptcy proceedings." Id., at 85-86; cf. 5 Collier, supra, § 77.11, at 498-499. Together, the court and the Commission "unquestionably" had "full and complete power not only over the debtor and its property, but also, as a corollary, over any rights that [might] be asserted against it." Callaway v. Benton, .54 One such power was precisely that which the Commission was about to propose that the reorganization court exercise - the power to confirm a plan of reorganization providing for "the sale of all ... of the property of the debtor ... ." Bankruptcy Act, 77 (b) (5), 11 U.S.C. 205 (b) (5). To that end the Commission was required to certify its proposal to the court as a prerequisite to judicial approval. 77 (d), 11 U.S.C. 205 (d). Injunctive intervention by the three-judge court would thus have disrupted an essential statutory phase of the New Haven reorganization.The United States also sought to avoid duplicate litigation - but by bypassing the New York rather than the Connecticut federal court. In a motion filed shortly after the commencement of the New Haven bondholders' suit in the three-judge court, the Government moved to dismiss the complaints for lack of subject-matter jurisdiction. In support of the motion it was argued that (1) until the Commission certified the terms of inclusion to the reorganization court, Condition 8 under which Penn Central had pledged to take in New Haven was not satisfied and the Commission's order was not yet reviewable; (2) by virtue of the 77 aspects of the case, the reorganization court had exclusive jurisdiction over the pricing questions sought to be presented to the three-judge court; and (3) even on the assumption that the three-judge court had jurisdiction, it should stay its hand as a matter of equity to avoid an unnecessary interference with the proceedings before the reorganization court.The Government's motion to dismiss was opposed by Penn Central, the New Haven trustees, the State of New York, and the bondholders. Significantly, the Commission did not oppose the motion. Indeed, the Commission agreed with the United States that "most (and perhaps all) of the issues raised by the plaintiffs in this three-judge Court will be reviewable by the Reorganization Court," conceded that "the resulting concurrent jurisdiction is awkward, at least in theory," and concluded tentatively that "the scope of judicial review ... in the Reorganization Court would, as a practical matter[,] be the same as in this three-judge Court." The three-judge court denied the Government's motion to dismiss. The bondholders' actions, the court said, came within the letter of the statutes authorizing review of orders of the Commission. The court conceded there was "an area of overlap" between the work of the New York and Connecticut forums, but thought nothing in 77 or decisional law superseded that dual arrangement. See 289 F. Supp., at 424 n. 3. The three-judge court correctly observed that in ordering New Haven's inclusion in Penn Central the Commission had properly exercised its authority under both 5 of the Interstate Commerce Act and 77 of the Bankruptcy Act. The fact that the New Haven was in reorganization under the Bankruptcy Act did not preclude the Commission from exercising its statutory power, in passing on the merger application of two railroads, to require the inclusion of a third. Interstate Commerce Act, 5 (2) (d), 49 U.S.C. 5 (2) (d).55 "The Commission can undoubtedly carry on 5 proceedings simultaneously with 77 reorganization proceedings ... ." Callaway v. Benton, 336 U.S., at 140. Here the transfer of the New Haven assets was as much a part of a merger under 5 as it was a plan of reorganization under 77.Moreover, at the outset of the litigation, the jurisdiction of neither the New York nor the Connecticut court was "complete." On the one hand, the reorganization court lacked coercive power over Penn Central: under 77 it could neither approve nor disapprove the merger qua merger, and it could not compel Penn Central to purchase the New Haven assets. So far as 77 was concerned, Penn Central stood in the position of a potential purchaser, willing but not obliged to buy the New Haven properties. Cf. Callaway v. Benton, 336 U.S., at 137; Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., , 550; Old Colony Bondholders v. New York, N. H. & H. R. Co., 161 F.2d 413, 434 n. 5 (Frank, J., dissenting), cert. denied sub nom. Protective Committee v. New York, N. H. & H. R. Co., ; In re New York, N. H. & H. R. Co., 54 F. Supp. 595, 619. On the other hand, the three-judge court could not by itself effect a conveyance of the New Haven properties to Penn Central, nor could it compel the debtor's trustees to do so without the consent of the reorganization court.Moved largely by the concern that neither court might have jurisdiction over the entire case, the three-judge court was of the opinion that matters should proceed simultaneously in both forums with a view to bringing the 5 and 77 aspects before this Court at the same time. Given the complexities of the jurisdictional question and the importance of an expedited determination of the merits, the three-judge court produced an understandable solution to the problem insofar as it ensured that the entire case would come before this Court without the risk that the parties might have spent an extensive period litigating in the wrong forum.But the circumstances of the case did not inexorably command review in two separate courts. There was no danger that application of the "fair and equitable" test under 77 (e) (1) would yield results different from those to be produced by the "just and reasonable" test of 5 (2) (b) for mergers or the "equitable" test for inclusions under 5 (2) (d). See Callaway v. Benton, 336 U.S., at 140.56 The reorganization statute mandates that any disposition of the debtor's properties must not be "inconsistent with the provisions and purposes" of the Interstate Commerce Act, Bankruptcy Act, 77 (f), 11 U.S.C. 205 (f), and "the requisite findings under the two acts are equivalent." In re Chicago, R. I. & P. R. Co., 168 F.2d 587, 594, cert. denied sub nom. Texas v. Brown, . This Court has stressed that 77 incorporates the elements of 5, St. Joe Paper Co. v. Atlantic Coast Line R. Co., , and we have ruled that where the Commission proposes a merger as part of a 77 plan of reorganization, it must act "in accordance with all the requirements and restrictions applicable to mergers" under the Interstate Commerce Act, id., at 309; cf. Ecker v. Western Pacific R. Co., ; New England Coal & Coke Co. v. Rutland R. Co., 143 F.2d 179, 186. Here the Commission had demonstrated its awareness of the statutory interrelationship, specifically devising inclusion terms under 5 to satisfy the requirements of 77. Second Supplemental Report, 331 I. C. C., at 654.Moreover, there was no reason to suppose that the reorganization court would be unable to adjudicate all the questions presented by the terms of the Commission's inclusion order. Although the three-judge court expressed concern that certain issues, such as a loss-sharing arrangement during the interim period between merger and inclusion, might not lie within the jurisdiction of the reorganization court, the reorganization court nevertheless reached those issues without, so far as the record discloses, jurisdictional objections from any party.The three-judge court thus confronted a situation where it was asked to consider the same pricing questions, to be determined by recourse to the same standards of review, as the reorganization court. "[N]ot only would it ... involve ... a duplication of labor to [accept] ... jurisdiction but it might" - and in fact did - "result ... in contradictory rulings upon the same issue[s]." Palmer v. Warren, 108 F.2d 164, 167, aff'd, . In these circumstances the three-judge court might well have stayed its hand under the traditional principle that "the court first taking over the res, draws to itself power to determine all claims upon it." Palmer v. Warren, supra; cf. Oklahoma v. Texas, ; Palmer v. Texas, , 129; Wabash R. Co. v. Adelbert College, ; Farmers' Loan & Trust Co. v. Lake Street Elevated R. Co., . We recognize that that principle has commonly applied in cases where both courts assert in rem jurisdiction over the property in dispute, and that here the three-judge court's jurisdiction was in personam in character. But the conflict was nonetheless one "between two coordinate courts of concurrent, overlapping jurisdiction, neither belonging to a class which by paramount law is categorically given a jurisdiction over the particular subject matter paramount to the jurisdiction of the other." In re New York, N. H. & H. R. Co., 26 F. Supp. 18, 24, aff'd sub nom. Palmer v. Warren, supra. And given that conflict, the three-judge court could have followed the settled proposition that "[t]he court which first acquired jurisdiction through possession of the property is vested, while it holds possession, with the power to hear and determine all controversies relating thereto." Lion Bonding & Surety Co. v. Karatz, .Surely a vesting of primary jurisdiction in the reorganization court comports with the basic purpose of 77. Congress enacted that statute in part "to prevent the notorious evils and abuses of consent receiverships," New England Coal & Coke Co. v. Rutland R. Co., 143 F.2d, at 184, of which one of the more egregious was the requirement of an ancillary filing and order of appointment in the federal court for every district in which the debtor had property. See 5 Collier, supra, § 77.02, at 467. Although, of course, the jurisdiction of the three-judge court was not ancillary to that of the reorganization court in a technical sense, dual review of issues ultimately going only to the valuation of the debtor's estate would resurrect the discredited practice of the equity receivership - it "would tend greatly to foment conflicts between coordinate courts and compel creditors, in the protection of their interests, to ride the circuit, demonstrating the basis of their positions in successive courts." In re New York, N. H. & H. R. Co., 26 F. Supp., at 23.But we need not decide the question exclusively on the grounds just set out. For in the circumstances in which the United States presented its motion to dismiss in this case, the course of prior litigation had left the three-judge court virtually nothing to decide. On January 15, 1968, this Court had upheld the validity of the Penn Central merger under 5 of the Interstate Commerce Act, conditioned on the inclusion of New Haven on terms subject to objections to be "registered and adjudicated in the bankruptcy court or upon judicial review as provided by law." Penn-Central Merger Cases, 389 U.S., at 511. We had permitted a postponement of the inclusion of New Haven on the basis of Penn Central's acceptance of the inclusion requirement, id., at 509, and because by its act of merger Penn Central would "perforce accept ... appropriate conditions respecting the New Haven ... ." Id., at 510.Two weeks later Penn Central merged. At that point the lack of jurisdictional "completeness" in the reorganization court, to which we have earlier referred, was cured; for there now remained no question of Penn Central's obligation to take over the assets of the New Haven. With Penn Central having given its irrevocable consent to the inclusion of New Haven by its act of merger, it was evident that whatever terms the reorganization court might confirm, subject to review on appeal to the Court of Appeals followed by certiorari here, would bind Penn Central by virtue of its merger commitment. Of course, the terms of the inclusion must themselves be "just and reasonable" and "equitable" under 5. But those terms now involved only the value to be accorded the assets transferred, and resolution of that issue was the essence of the 77 process. "The heart of ... a determination [of the validity of a plan of reorganization] is a finding of fact ... as to the value of the debtor's property." In re New York, N. H. & H. R. Co., 147 F.2d 40, 49, cert. denied sub nom. Massachusetts v. New York, N. H. & H. R. Co., . See 5 Collier, supra, § 77.14, at 538-539; cf. Consolidated Rock Prods. Co. v. Du Bois, ; First National Bank v. Flershem, ; Second Supplemental Report, 331 I. C. C., at 652. In short, with identical issues before the two courts, with those issues involving only questions going to the value of a 77 debtor's estate, with congruent standards of review, and with the irrevocable promise of Penn Central to take in New Haven, the three-judge court should have stayed its hand in the New Haven bondholders' litigation.57 Prior decisions of other three-judge courts, affirmed by this Court on direct appeal, lend support to the proposition that the three-judge court should have deferred to the reorganization court. In Chicago & N. W. R. Co. v. United States, 52 F. Supp. 65, the debtor railway company brought suit against the Commission in the United States District Court for the Northern District of Illinois, seeking three-judge-court review of a plan of reorganization previously approved by the Commission and the courts. The District Court noted its "limited power" under the statute providing for review by a court of three judges, 52 F. Supp., at 66. It conceded the "seemingly applicable language" of the three-judge-court statute to "any order of the Interstate Commerce Commission," but held that once the Commission has approved a plan of reorganization under 77, "appeal from Commission orders in connection with bankruptcy proceedings lies only to a district court (of one judge) sitting in bankruptcy, not to a district court (of three judges) assembled under the Urgent Deficiencies Act." Id., at 67.58 On direct appeal, this Court summarily affirmed the District Court's judgment. .Even closer in point is a case that arose during the first reorganization of the New Haven Railroad - Group of Boston & Providence R. Corp. Stockholders v. ICC, 133 F. Supp. 488. Shareholders of the Boston & Providence, also undergoing reorganization, sought judicial review before a three-judge court of the Commission's refusal to provide joint rates as between New Haven and Boston & Providence - exclusively an Interstate Commerce Act function. See Act, 1 (4), 15 (6), 49 U.S.C. 1 (4), 15 (6). The court held that to grant the shareholders the ruling they sought would contravene the revenue-allocation formula already adopted by the New Haven's reorganization court and affirmed by the Court of Appeals and the Supreme Court. The three-judge court accepted the view of the Commission that "so long as the Boston & Providence lines are operated by the New Haven as lessee for the account of the lessor ..., the Connecticut district court ... has exclusive jurisdiction to pass on the accounting for such operation." 133 F. Supp., at 493. Again, this Court summarily affirmed. Boston & Providence R. Corp. Stockholders v. New York, N. H. & H. R. Co., .We therefore hold that the three-judge court here should have granted the Government's motion to the extent of deferring to the reorganization court in proceedings ultimately involving only the price to be paid for the assets of the debtor's estate.59 IIIIn turning to the judgment of the reorganization court, we first review the standards under which that court passed upon the Commission's rulings.After 35 years of 77, as amended, it is unnecessary to recanvass the two basic objectives of the statute - the conservation of the debtor's assets for the benefit of creditors and the preservation of an ongoing railroad in the public interest. See generally 5 Collier, supra, § 77.02, at 469-470. Central to the statutory objective that the reorganized company should, if at all possible, emerge as a "living, not a dying ... enterprise," Van Schaick v. McCarthy, 116 F.2d 987, 993, is the understanding that "a railroad [is] not like an ordinary insolvent estate." Palmer v. Massachusetts, 308 U.S., at 86. (Footnote omitted.) To the traditional equity jurisdiction of the bankruptcy court, 77 adds the oversight of the Interstate Commerce Commission, the agency "specially charged with the public interest represented by the transportation system." Ibid. The statute contemplates that "[t]he judicial functions of the bankruptcy court and the administrative functions of the Commission [will] work cooperatively in reorganizations." Warren v. Palmer, . (Footnote omitted.)In structuring the cooperative endeavor of agency and court, Congress "placed in the hands of the Commission the primary responsibility for the development of a suitable plan" for the debtor railroad. Ecker v. Western Pacific R. Co., 318 U.S., at 468. As the Court said in Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., supra, "The ratio of debt to stock, the amount of fixed as distinguished from contingent interest, the kind of capital structure which a particular company needs to survive the vicissitudes of the business cycle - all these have been reserved by Congress for the expert judgment and opinion of the Commission, which the courts must respect." 318 U.S., at 545. See also In re New York, N. H. & H. R. Co., 54 F. Supp. 595, 604. In the development of the plan of reorganization, 77 also has accorded the Commission primary responsibility for determining wherein lies the "public interest," which does not refer generally to matters of public concern apart from the public interest in the maintenance of an adequate rail transportation system, cf. United States v. Lowden, , but includes "in a more restricted sense," ibid., concern for "the amount and character of the capitalization of the reorganized corporation," Ecker v. Western Pacific R. Co., 318 U.S., at 473-474; cf. Massachusetts v. Bartlett, 384 F.2d, at 821, as well as the "adequacy of transportation service, ... its essential conditions of economy and efficiency, and ... appropriate provision and best use of transportation facilities." Texas v. United States, ; New York Central Securities Corp. v. United States, . As is clear from the legislative history and 77 itself, the deference to the Commission as initiator of the plan of reorganization stems from the "recognition by everyone of the advantages of utilizing the facilities of the Commission for investigation into the many-sided problems of transportation service, finance and public interest involved in even minor railroad reorganizations and utilizing the Commission's experience in these fields for the appraisals of values and the development of a plan of reorganization, fair to the public, creditors and stockholders." Ecker v. Western Pacific R. Co., 318 U.S., at 468. (Footnote omitted.)But the respect given the Commission as draftsman of the plan of reorganization entails no abdication of judicial responsibility for the workings of the administrative agency. As we have had occasion to say in describing other aspects of the Commission's work, "`Congress did not purport to transfer its legislative power to the unbounded discretion of the regulatory body.'" Burlington Truck Lines, Inc. v. United States, . Far from displacing the judicial function, 77 strikes a "balance between the power of the Commission and that of the court." Ecker v. Western Pacific R. Co., supra, at 468. The chancellor remains "a necessary and important factor in railroad reorganization"; the statutory objective is "attained only through properly coordinated action between the Commission and the court." Id., at 474-475. (Footnote omitted.) It remains for the reorganization court to ascertain that the Commission "has given consideration to each element of value concerned in its over-all appraisal, and has not wrongly decided legal questions involved in the problems of valuation and of allotment of equivalent securities ... ." Old Colony Bondholders v. New York, N. H. & H. R. Co., 161 F.2d, at 420.But the reorganization court may also do more. Under 77 (c) (13), 11 U.S.C. 205 (c) (13), the court on its own motion may refer matters to a special master for the hearing of such evidence as the court may desire - a provision which permits the "building up of a group of men [entirely apart from the Commission] thoroughly informed in railroad reorganization matters." H. R. Rep. No. 1897, 72d Cong., 2d Sess., 6 (1933). And under 77 (e), 11 U.S.C. 205 (e), the court may itself hold hearings upon the Commission's certification of its plan of reorganization, at which the court is empowered to take evidence beyond that received by the Commission - a supplementary power, unknown to conventional judicial review, but deemed essential to the reorganization court's exercise of its extraordinary "cram down" powers.60 See S. Rep. No. 1336, 74th Cong., 1st Sess., 3 (1935); H. R. Rep. No. 1283, 74th Cong., 1st Sess., 3 (1935). The statutory authority to appoint special masters and to hold evidentiary hearings reflects the unique powers possessed by the reorganization court in passing upon the Commission's proposed plan of reorganization.In sum, Congress has confided to the reorganization court the "power to review the plan to determine whether the Commission has followed the statutory mandates ... and whether the Commission had material evidence to support its conclusions." Reconstruction Finance Corp. v. Denver & R. G. W. R. Co., ; cf. Penn-Central Merger Cases, 389 U.S., at 498-499. In the reorganization court reposes ultimate responsibility for determining that the plan presented to it by the Commission satisfies the "fair and equitable" requirement of 77. See In re New York, N. H. & H. R. Co., 16 F. Supp. 504, 507. And at the heart of that determination, as we have already noted, is the valuation of the debtor's property. Here, as elsewhere in the reorganization proceedings, the court must look to the conclusion recommended by the Commission. See Ecker v. Western Pacific R. Co., 318 U.S., at 472-473; cf. Freeman v. Mulcahy, 250 F.2d 463, 472-473, cert. denied sub nom. Boston & Providence R. Co. v. New York, N. H. & H. R. Co., ; In re New York, N. H. & H. R. Co., 54 F. Supp. 595, 600. And often the Commission's conclusion will entail less a statement of mathematical certainty than an estimate of what the market will say when it speaks to the subject. "But that estimate must be based on an informed judgment which embraces all ... relevant ... facts ... ." Consolidated Rock Prods. Co. v. Du Bois, 312 U.S., at 526. "The judicial function is to see to it that the Commission's `estimate' is not a mere `guess' but rests upon an informed judgment based upon an appraisal of all ... relevant ... facts ..., and is not at variance with the statutory command." Freeman v. Mulcahy, 250 F.2d, at 473. In performing that function, the court must proceed with awareness that its review of the Commission's conclusion on valuation, as with every other important determination that the court is to make, calls for an "`informed, independent judgment'" of its own. Consolidated Rock Prods. Co. v. Du Bois, 312 U.S., at 520; National Surety Co. v. Coriell, .There remains to consider the scope of review in this Court in passing upon the judicial determinations of the reorganization court. That we have granted certiorari to the Court of Appeals in advance of the appellate court's judgment does not alter the fact that "our task is limited." Penn-Central Merger Cases, 389 U.S., at 498. It is not for us to pass upon the myriad factual and legal issues as though we were trying the cases de novo. "It is not enough to reverse the District Court that we might have appraised the facts somewhat differently. If there is warrant for the action of the District Court, our task on review is at an end." Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., 318 U.S., at 564.IVAs we have earlier noted, the purchase and sale negotiated by Pennsylvania, New York Central, and the New Haven trustees rested upon the estimated liquidation value of the New Haven properties to be transferred, rather than the earning power of the New Haven as an operating entity. Second Supplemental Report, 331 I. C. C., at 657. The parties to the Purchase Agreement thus gave recognition to the reality of New Haven's desperate financial situation, as well as to the power of the reorganization court to order the sale of the debtor's properties at not less than the "fair upset" price under 77 (b) (5) of the Bankruptcy Act. In approving the negotiators' approach to the price question, the Commission observed that asset value rather than earning power was the primary determinant because New Haven had "long been dry of earning power." 331 I. C. C., at 657. "If there is one thing on this record that is clear and undeniable," the Commission concluded, "it is that N[ew] H[aven] has neither earning power nor the prospect of earning power." Id., at 687.In light of "the chronic deficit character" of the New Haven operation, id., at 658, the reorganization court understandably accepted the liquidation approach to valuation. "The concept of `going concern value' is fictional as applied to the New Haven," it said, "because it ignores the Railroad's long and continuing history of deficit operations." 289 F. Supp., at 455. (Footnote omitted.)Before the Commission, the New Haven trustees and Penn Central submitted complete studies of the debtor's liquidation value, consisting of current assets, special funds, investments, real estate, and other assets. As the Commission described it, "Liquidation value as used by both the N[ew] H[aven] trustees and Penn-Central [was] the estimated market value that would be realized in a total liquidation, less the cost of dismantling properties and other liquidation costs and after discounting proceeds to present worth." 331 I. C. C., at 697; cf. In re New York, N. H. & H. R. Co., 304 F. Supp., at 797-798.The New Haven study, based on the assets held by the debtor as of December 31, 1965, was made over a nine-month period by persons who, the Commission found, were familiar with the railroad, its operating area, and the nature and condition of its properties. The Penn Central study valued the assets as of December 31, 1966; it was made in under two months by persons less familiar with the railroad. Both studies revealed that nearly half the New Haven's asset value consisted of its holdings in real estate. The New Haven study produced a gross value for all assets, exclusive of New Haven's interest in the Grand Central Terminal properties, of $230,290,000; the Penn Central study, $150,321,000.Consistent with the liquidation hypothesis, both New Haven and Penn Central deducted from the gross value of the New Haven assets the expenses that would be incurred if a liquidation in fact took place. These included not only the estimated expenses of sale but, in the case of bridges, trestles, and culverts, removal costs for conversion of the realty to nonrailroad use - costs that often left the assets with a net negative value. The New Haven trustees hypothesized both a six- and a 10-year liquidation period, with expenses for liquidation operations plus taxes and interest aggregating $59,481,000 and $76,847,000, respectively; Penn Central estimated the expenses of a 10-year sale to be $62,172,000. The net liquidation value of the assets was arrived at by deducting the liquidation expenses and certain current assets not to be transferred to Penn Central, along with a further discount to present worth to reflect the hypothesis that receipts would be coming in over a six- or 10-year period.The Commission concluded that once the New Haven estate embarked on a liquidation sale, it would dispose of the assets as quickly as practicable; the Commission accordingly found that "the bulk of the liquidation could be completed within a period of 6 years." 331 I. C. C., at 663. The Commission also concluded that the 6% discount rate employed by New Haven and challenged as too low by Penn Central was offset by the conservative valuation of the assets themselves. Id., at 664. The Commission's ultimate finding was that the liquidation value of the New Haven assets to be conveyed to Penn Central "is about $125 million as of December 31, 1966." Id., at 688.As we have noted earlier, the reorganization court did not accept the $125,000,000 figure, with a consequent remand and second round of review. The bulk of the Commission's valuation has now won the approval of the reorganization court and is not challenged by any of the parties here. There remains in dispute, however, the valuation of several items, aggregating nearly $200,000,000, and it is to those items that we now turn.1. The Grand Central Terminal properties. By far the largest component in the dispute over the liquidation value of the New Haven is the debtor's interest in the Grand Central Terminal properties. This real estate complex consists of several parcels in the area of midtown Manhattan bounded by 42d Street on the south, Madison Avenue on the west, 60th Street on the north, and Lexington Avenue on the east. Included in the properties are the Barclay, Biltmore, Commodore, Roosevelt, and Waldorf-Astoria hotels; the Pan American building as well as other office buildings along Park Avenue; and the Yale Club. The total assessed value of the Grand Central Terminal properties as of 1965 was $227,225,000.The New Haven railroad acquired the right to run its trains into Manhattan in 1848, when it entered into an agreement for use of the tracks of the predecessor of the New York Central, to extend for the lives of the respective charters of the two companies. In 1848 New Haven also acquired an easement over the tracks by legislation of the State of New York. See New York, N. H. & H. R. Co. v. ICC, 55 F.2d 1028, 1030. The 1848 agreement underlay various subsequent contracts in the 1870's, '80's, and '90's between the New York Central and the New Haven.In 1903 and 1904 the State of New York enacted further legislation requiring the placement of the railroad tracks below ground through the 15-block stretch north of the present Terminal. It did not take the Central entrepreneurs long to realize that compliance with the legislative edict left the company a vast area of midtown Manhattan suitable for realty development. In 1907 Central entered into the basic contract with New Haven under which the present Grand Central Terminal was built. The 1907 instrument recited that it had become necessary to rebuild the Terminal, including yards and tracks, in order to provide facilities for the proper management and conduct of the two railroads. Central promised to buy needed land and rights-of-way; New Haven, to make payments in connection with the demolition of the old station and the construction of the new. The 1907 agreement further recited that nothing it contained should impair the rights of the parties under the 1848 agreement. It then went on to provide that Central "doth demise, let and lease" the use of the railroad terminal to New Haven in common with Central. "Railroad terminal" was defined to "mean and include the land, and interests in land, and all improvements thereon ..., and all rights in any ways on which said land may abut ... ."Paragraph 4 of the 1907 agreement provided for joint contributions by New Haven and Central to Terminal maintenance and operation, calculated on the parties' respective car and locomotive usage of the station. The paragraph also obligated New Haven to a minimum annual payment of $160,179.92 without regard to the percentage of its use of the Terminal. In addition, § 14 of the agreement stipulated that the manager of the enterprise should credit all rentals and other compensation received from the railroad terminal to "the fixed charges or to the cost of maintenance and operation of the said Railroad Terminal, as the same may be applicable."In 1909, Central and New Haven began the joint financing of construction on the property referred to in the 1907 agreement, and in 1913, they entered into a supplemental agreement in order "to express more fully the intent of the parties hereto as to the right of the New Haven Company and the Central Company with respect to the construction, maintenance and use" of the Terminal properties. The supplemental agreement recited that New Haven's right of user included "the right ... to join with ... Central ... in the construction, holding, maintenance and leasing of buildings ... upon the land included within the Railroad Terminal." The heart of the 1913 amendment was a detailed provision for the sharing and reimbursement of construction and maintenance costs, along with a reaffirmation of the procedure established in § 14 of the 1907 agreement, under which all rentals were to be credited to the Terminal enterprise. In the following years the two parties entered into hundreds of subagreements relating to the leasing, financing, and sharing of rentals from buildings constructed in the Terminal area. Income from the buildings was credited to the fixed charges, and to the maintenance and operation of the Terminal itself.None of the agreements between Central and New Haven expressly provided for the disposition of "excess income" left over after the satisfaction of the Terminal expenses. For half a century after the 1913 agreement, the "excess income" question was of academic interest only, since expenses annually exceeded revenues. But in 1964, and in each succeeding year, the accounts showed excess income. New Haven demanded part of it, and Central refused. The trustees then brought a contract action in the New York Supreme Court to protect New Haven's interest in the income.When the New Haven trustees first began negotiations with Pennsylvania and Central for the inclusion of the debtor's assets in Penn Central, they proposed that New Haven's interest in the nonoperating Terminal properties be excluded from the takeover, with final disposition deferred until the outcome of the then-pending litigation. But Central insisted it would not consider inclusion of New Haven in the merger unless it got absolute title to all the Terminal properties. The New Haven trustees thereupon sought the advice of legal counsel. They were told that under the agreements with Central, New Haven not only had no fee or leasehold interest in the properties, but had no rights at all that would survive cessation of its train service in and out of the Terminal other than the reimbursement of monies already advanced toward construction of buildings in the area. Although the New York lawsuit was pending to determine New Haven's right to participate in the excess income, the trustees concluded that as an alternative to risking "tremendous expense and long delay" in litigation, 289 F. Supp., at 462, resolution of the inclusion negotiations was of sufficient value to warrant their transferring the debtor's interest, whatever it might be, to Penn Central for no consideration whatever in exchange.From the outset the bondholders dissociated themselves from the trustees on the question of the debtor's rights in the Terminal properties. Some of the New Haven creditors claimed the value of those rights to be $20,000,000 - the sum of unreimbursed advances for building construction and capital improvements as carried on the New Haven books. Others said it was $50,000,000 - the capitalization of one-half the excess income at 5%. Still others argued for one-half the value of the fee itself - nearly $115,000,000.In its Second Supplemental Report the Commission eschewed responsibility for determining the legal rights of New Haven in the properties and set out only to value the debtor's claim. Confronting the complex legal relationship between Central and New Haven, with the consequent unpredictability of litigation, and unwilling to defer valuation of New Haven's interest to the completion of all possible contract actions between the two parties, the Commission set the value of the claim at $13,000,000. It arrived at this figure by taking the average of two unrelated sums: $5,000,000, representing Penn Central's estimate of the nuisance value of New Haven's claim; and $20,000,000, representing the capitalization of New Haven's share of the average of the excess income in 1964 and 1965, based upon its proportional usage of the Terminal.Faced with the Commission's disclaimer of responsibility for resolution of the legal controversy between Central and New Haven, and given the Commission's Draconian solution to the question of value, the reorganization court appointed a special master to consider New Haven's legal interest in the Terminal properties.61 Based on his study of the complex contractual relations between the two parties, of which we have touched above only on the salient features, the Special Master concluded that Central and New Haven had entered into a "joint venture or partnership ... of some kind." The Special Master dismissed as untenable both Central's argument that by virtue of its sole ownership of the fee it would acquire full right, title, and interest in the Terminal properties upon the cessation of New Haven's train service, and the bondholders' argument that as a partner the debtor had an undivided one-half interest in the fee. In 1907, when the parties entered into the basic agreement, Central had had title to the realty, and New Haven had had a perpetual right to the use of the tracks by force of state legislation. New Haven thus had "not come to the bargaining table in 1907 in the posture of a supplicant." The two railroads together had joined in the design and construction of a Terminal complex greater than either needed for its own requirements; they had undertaken a "major real estate development to extend over a period of many years"; and to those ends they had provided for a sharing of the Terminal expenses on the basis of their respective car usage, along with a committal of Terminal revenues to the operation of the project. As the Special Master put it, "There can be no question that by mutual agreement these revenues from all of the Grand Central Terminal properties were pooled to apply on the fixed charges and maintenance and operational costs of the Terminal."In light of the conclusion that Central and New Haven had embarked on an enterprise akin to a partnership, the Special Master concluded that once the Terminal revenues satisfied expenses, the excess income belonged equally to each of the railroads. In his view, the car-use formula of the 1907 agreement ceased to be effective once revenue met expenses, and the principle of equality between partners took its place. The Special Master noted that the parties had not expressly dealt with the question whether New Haven's interest in the properties would end if New Haven ceased to use the Terminal. But he concluded that in such an event New Haven would still be entitled to half of the excess income; that right "would not and could not be terminated by the mere discontinuance of [New Haven] passenger service into and out of the Terminal."62 On the first round of review the reorganization court accepted the Special Master's report and incorporated it by reference in its own opinion. The court therefore remanded the matter to the Commission with instructions to value New Haven's one-half interest in the Terminal's future excess income. In addition, the court requested the Commission to "consider and make findings as to what value, if any, attaches to New Haven's present right to share in the income for the purpose of defraying its cost of operating in and out of the terminal." 289 F. Supp., at 463.In its Fourth Supplemental Report the Commission accepted the determination of the reorganization court that New Haven would have retained a right to one-half the excess income even upon liquidation. 334 I. C. C., at 30-31. Following an extensive consideration of future Terminal expenses and office-building and hotel income, the Commission projected a future excess income of $4,550,000 a year, of which New Haven's 50% share, capitalized at 8%, amounted to $28,438,000. 334 I. C. C. at 39. The new figure thus came to more than twice that awarded by the Commission on the first round.The Commission also complied with the request of the reorganization court that it consider the value of New Haven's right of access into the Terminal. The Commission concluded that the right would have no value to New Haven unless a buyer were willing to pay for it; that the only potential buyer in sight was the State of New York, which would not need to bid for use of the Terminal; and, accordingly, that New Haven's right of user was valueless. 334 I. C. C., at 32. The bondholders' claim of value for the right of access, the Commission said, amounted to a demand for one-half of all of the income free of the Terminal expenses. Id., at 32 n. 11. On the second round of review, the reorganization court agreed that the Commission's determinations must stand with respect to both the liquidation value of New Haven's interest in the Terminal properties and its right of free access into the station.63 Many aspects of the controversy over the Grand Central Terminal properties have now dropped from contention.64 The bondholders no longer claim that New Haven is entitled to one-half the value of the fee. Penn Central no longer claims that its fee ownership of the properties reduced New Haven's status to that of a mere grantee retaining only the privilege of entry into the Terminal. All parties accept New Haven's right to the capitalized value of one-half the excess income.65 What remains is the claim of the bondholders that New Haven is entitled to the capitalized value of its share not only of the excess income remaining after satisfaction of the Terminal expenses, but of the basic income meeting the expenses themselves. Yet the central finding of the reorganization court remains unrefuted: that by force of the agreements between New York Central and New Haven, the Terminal income was first to be devoted to meeting Terminal expenses; only then was the residue to become available for distribution to the two railroads. To be sure, the parties customarily referred to their respective shares of the Terminal revenues. But the Special Master found that the Terminal revenues were allocated to Central and New Haven on their respective car-use bases as an accounting convenience. The car-use formula established by the 1907 agreement "resulted, for accounting purposes, in the corresponding proportion of the revenue entering the Terminal Account being treated as the property of each railroad, and in each railroad's being relieved pro tanto from the amount of its liability to meet the charges ... ."The bondholders argue that the basic income of the Terminal could somehow be "freed up" from the obligation to meet Terminal expenses. But the Special Master considered and rejected that theory."Both parties ... committed themselves to pouring these revenues from the entire Grand Central complex into the Terminal Account under paragraph 14 of the Agreement of 1907. The revenues were to enter that account and were to be expended, superior to the individual interests of each railroad, by being applied on payment of the fixed charges and expenses of operation and maintenance of the Terminal. Those revenues were pledged to that purpose regardless of whether New Haven utilized one per cent or fifty per cent of the Terminal's passenger facilities, or whether it used any of those facilities at all. It was not contemplated that if either railroad discontinued passenger trains into Grand Central the other would be saddled with the entire expense of a terminal larger than either railroad needed without being credited with these entire revenues from the Grand Central Terminal properties to the extent that they were required to meet expenditures ... ." Nevertheless, Chase Manhattan argues that the commitment of revenues is merely a creature of the agreement between Central and New Haven as construed by the Special Master, and that the transfer of New Haven's Terminal interests on December 31, 1968 "wiped out" that agreement. "The agreement thereafter was no longer in existence," says Chase, "and Penn Central now has this [basic] income (both the former New York Central's share and the former New Haven's share) free and clear of any restriction against its use in any way Penn Central sees fit." Stated in this fashion, the argument is self-defeating: since New Haven's right to the basic income derives solely from its agreement with Central, a "wiping out" of that agreement necessarily leaves New Haven without the right as well as without the obligation. But, more importantly, it simply is not true that Penn Central now has New Haven's former share in such income without "any restriction of any kind ... ." Penn Central also has New Haven's loss operations into and out of the Terminal, and it must meet the expenses occasioned by those operations from some source. Since by definition New Haven's share of the basic income was, as an accounting matter, equal to its share of the Terminal expenses, by its 1968 transfer it has merely surrendered an amount equal to its gain: it has given up its share of the income pledged to the costs of operations at the Terminal, but it has relieved itself of the obligation to meet those costs. By the same token, Penn Central has gained New Haven's share of income, but with the matching loss of New Haven's expenses.The bondholders' argument must be that entirely apart from the contractual arrangements with Central, New Haven had a valuable right of free access into the Terminal, which Penn Central has now taken over with no compensating payment in exchange. This argument, too, is without merit. It is a misnomer to describe New Haven's right of access to the Terminal as "free." New Haven had a right of entry, rather than a privilege, in the sense that it had access, independently of the consent of the fee owner of the tracks, by force of legislative edict. But the right bestowed by the legislature was conditioned "upon such terms ... as [have] been or may hereafter be agreed upon by and between" New Haven and Central's predecessor. N. Y. Sess. Laws of 1848, c. 143, 6. Thus the New Haven right of access has never been free from the obligations imposed by the agreements with Central. But even if the access right were "free" in the sense that it could survive elimination of New Haven's agreements with Central, we agree with the reorganization court that the Commission correctly concluded it would have no value. And that is the case whether the right is deemed transferred to Penn Central, as in fact it was, on the date of inclusion, or whether, consistent with the liquidation hypothesis on which the parties valued New Haven's other assets, it is deemed to have been offered for sale to a third party upon New Haven's cessation of operations. In the former event, the analysis pertinent to New Haven's contract rights applies with equal force. Penn Central has in fact succeeded to New Haven's right of access, but it has also succeeded to New Haven's deficit operations. Conversely, New Haven has given up a right of entry in exchange for relief from the obligation to provide train service at the station. Indeed, to the extent that the expenses generated by New Haven's use of the Terminal exceeded the revenues attributable to that activity, Penn Central has lost and New Haven gained on the exchange.66 The same result is reached if New Haven is deemed to have gone into liquidation. For the bondholders have never shown that anyone would pay a penny for the right to carry on New Haven's deficit-ridden Terminal operation. If nobody would pay a liquidating New Haven for the right to lose money, the right is, again, worthless. The Commission found that the only potential buyer would be the State of New York, moving to preserve the commuter service in the public interest. 334 I. C. C., at 32. Whether the State would have to pay Penn Central for the use of Penn Central's tracks and its share of Terminal expenses is not before us. On the liquidation hypothesis, the State would not have to pay Penn Central for New Haven's right of access, for Penn Central would not own it. And the State's paying New Haven depends on at least four independent contingencies: whether New Haven's right of access would survive liquidation; whether the right would exclude the power of Central to bestow a similar access right on a third party while New Haven's own went unused; whether, under the agreement with Central, the right would be capable of assignment; and whether the State, if required to pay New Haven anything to enter the Terminal, would choose instead to operate the commuter trains only to subway connections in the Bronx rather than all the way into Manhattan. We agree with the Commission and the reorganization court that these imponderables render the value of New Haven's right of access so speculative as to defy reasoned attribution of any value to it.2. The Bronx freight yards. One of New Haven's principal real estate holdings consisted of two freight yards located on some 160 acres in the south Bronx, New York, between the East River on the one side and the Major Deegan Expressway and Bruckner Boulevard on the other. The Harlem River yard occupies nearly 4,000,000 square feet across the East River from Manhattan and Queens; it has been described by a qualified appraiser as "a unique industrial facility that could be well used by any heavy industrial concern." About a mile north of the Harlem River yard, and connected to it by the existing trackage of New Haven's Harlem Division line, lies the Oak Point yard, characterized by the appraiser as "one of the most desirable industrial facilities in New York City."Two other facilities in the area are worthy of note. The first is the Hunts Point Market, located northeast of the Oak Point yard. The market is a $100,000,000 municipal installation and the central distribution area for the wholesaling of produce for the New York City metropolitan area. It lies on the promontory flanked by the Bronx and East Rivers, and is connected to the New Haven's Harlem Division line through a spur track owned by the city. The market is the largest receiver of rail traffic in the area, and plans are under way for further expansion. Fourth Supplemental Report, 334 I. C. C., at 43-44. The second facility is the former Port Morris yard of Penn Central, situated midway between the Harlem River and Oak Point yards and lying athwart the Harlem Division trackage that connects the two New Haven yards. Port Morris is linked by a branch line to Penn Central's Harlem Branch division, a principal element in the Penn Central System. An interchange track runs from the Port Morris branch line to the border of the Oak Point yard.Before the Commission, the parties submitted five different estimates of the value of the Harlem River and Oak Point yards. The bondholders offered the testimony of an appraiser who thought the land would bring $32,000,000 for residential use and $26,000,000 for industrial use; the New Haven trustees offered the testimony of another appraiser who submitted two studies showing $22,650,000 and $18,090,990, both for industrial use; and Penn Central, that of a third appraiser who set the value, again for industrial use, at $15,585,000. In its Second Supplemental Report the Commission accepted the lower of the values proposed by the trustees' witness - $18,090,990. 331 I. C. C., at 668. On the first round of judicial review the reorganization court thought that on the present record "there was substantial evidence to support the Commission's valuation and not enough to show that it was unfair or inequitable," but concluded that a clarification of the basis of the Commission's valuation was desirable. 289 F. Supp., at 464. On the remand, controversy centered on the alternative appraisals offered by the trustees' witness. It soon became evident that in valuing the freight yards the Commission had pursued the liquidation hypothesis with a vengeance. The higher appraisal of the trustees' witness had rested on the premise that upon cessation of New Haven operations the Bronx yards would be available for continued industrial occupancy, with existing trackage and electrical facilities left in place. The presence of such facilities commanded at least a 10% premium in Bronx realty values. The witness' second appraisal had assumed that upon liquidation New Haven would strip the yards of these facilities, thereby depressing the value of the land and incurring substantial costs of removal. 334 I. C. C., at 42. Adoption of that assumption resulted in the loss of over $4,000,000 in value.67 In its Fourth Supplemental Report the Commission adhered to its acceptance of the lower of the witness' two estimates, reiterating its reliance upon the liquidation premise. That premise justified the assumption that New Haven would dismantle the yards once the rest of the railroad was scrapped, since with no link to Penn Central the yards would have no value either as operating facilities or for industrial use with railroad connections.But the fact of the matter was that even on the liquidation hypothesis the New Haven yards did not lack rail connections to Penn Central. Penn Central already had in place a branch line running from its Port Morris yard to its Harlem Branch division. That Port Morris line, along with the interchange track running up to the border of the Oak Point yard and meeting the New Haven's line at that point, would have continued in place even upon a liquidation of New Haven. The trustees' witness acknowledged that in arriving at the lower of his two values for the New Haven yards, he had been unaware of the Penn Central link at Port Morris. Nevertheless, the Commission attributed no significance to the witness' unawareness of the Port Morris connection, because it concluded that even with the existing link to the New Haven yards, it was "extremely doubtful" that Penn Central would continue to provide service into the area after a New Haven liquidation. Once New Haven vanished, the Commission reasoned, Penn Central would be under no legal obligation to perform switching service beyond its own Port Morris line or to extend its line into the former New Haven yards. And the Commission accepted the testimony of a Penn Central witness that the company would have no economic incentive to provide service, because of the unprofitability of the perishable freight destined for the Hunts Point Market, as well as the absence of necessary track clearances and yard classifying facilities. 334 I. C. C., at 44-45. On the second round of review the reorganization court ruled that the Commission had erred in rejecting the higher of the witness' two appraisals. "It is undisputed that the Port Morris branch was and is there and operating and Penn Central has not been authorized to abandon it." 304 F. Supp., at 807. The court overruled the Commission's determination that Penn Central would cease to provide service not only to the industrial enterprises in the 160-acre area of the two yards, but to the Hunts Point Market as well."The great bulk of produce for feeding of the millions of residents of metropolitan New York is brought in by rail through these yards to this market and distribution point. To assume that the State and City of New York would stand idly by and permit the life line to its huge and costly enterprise to be cut, just as it is in the midst of planning its necessary enlargement, because it was unwilling or unable effectively to bring pressures to bear or take steps on its own to preserve the connection with Penn Central is absurd ... ." 304 F. Supp., at 807-808. The ruling of the reorganization court is, at the least, free from the error that would require us to overturn its judgment on this matter. As the Commission's own report makes evident, the agency based its startling conclusion that Penn Central could deny service to the area, not on the facts of record, but in adherence to the untenable assumption that on liquidation New Haven would have uprooted the valuable trackage and electrical facilities already in place. According to the Commission, "[t]he record does not support any finding of substantial need for Penn Central service that would justify the construction by that carrier of the trackage necessary to connect Harlem River and Oak Point yards and the latter yard and Hunts Point, if N[ew] H[aven] were to be liquidated." 334 I. C. C., at 47. (Emphasis supplied.) Of course we may assume that Penn Central could not be forced to buy land and build track to provide service into areas, noncontiguous to its rail system, to which it did not hold itself out as a common carrier. But it is a far cry from that proposition to the statement that a common carrier could deny service to industrial and public activities simply because ownership of adjoining trackage had changed hands.68 The record facts are that the trackage the Commission said Penn Central would have to construct is already in place, connecting the two yards and the market.69 The Commission nonetheless continued to presuppose the removal of the New Haven's rail facilities. "On this record," the Commission reiterated, "and the assumption of N[ew] H[aven]'s liquidation and the dismantling of its system, Penn Central would not serve, and could not be compelled to serve, the Harlem River or Oak Point industries, or the Hunts Point Market." 334 I. C. C., at 47. (Emphasis supplied.) There is not a shred of record evidence to support the Commission's assumption as applied to the New Haven yards. It is not rational to suppose that the managers of the hypothetical liquidation sale, devoted to obtaining the highest possible price for the assets of the debtor, would have ignored the best use of the yard facilities and stripped them of more than $4,000,000 in value.70 3. The added deductions. On the remand the Commission recalculated the liquidation value of the New Haven, as directed by the reorganization court, and arrived at a new sum of $162,700,000. "A property value of this sort inheres in the assets," the Commission said, "if we assume that the railroad may immediately shut down and begin a 6-year program of selling off the road parcel-by-parcel, and virtually tie-by-tie." 334 I. C. C., at 53. But the Commission declined to approve the new figure as the proper liquidation value of the debtor."The liquidation value that results in this reopened proceeding exceeds the agreed price [of $125,000,000], obliging us to make a new determination as to whether the price resulting from such a valuation is fair. "The establishment of liquidation value as a pricing floor on this record must assume that the N[ew] H[aven] may be shut down at once and be liquidated in parcels. Such a pricing theory assumes that the public may be denied an opportunity to be heard. It is wholly inconsistent with the requirement we have imposed on Penn Central to absorb the N[ew] H[aven], which requirement rests entirely upon the public's need for a continuing N[ew] H[aven]. Any assumption that N[ew] H[aven] may be shut down and broken up must necessarily permit the conclusion that Penn Central may be relieved of its inclusion obligation. It is inequitable to conceive at the same time both a right in the bondholders to break up the N[ew] H[aven] and an obligation on Penn Central to keep it going. The demands of equity are no more satisfied by conceiving that the bondholders have a constitutional right to shut down the N[ew] H[aven] which is superior to the public's right to keep it going. "The foregoing liquidation value assumes that this Commission has no function under the Interstate Commerce Act to decide whether public convenience and necessity permit the abandonment of N[ew] H[aven]'s entire line or portions of it. In view of our often repeated findings that there is a public need for the services of this railroad, there is no warrant for assuming that the creditors may now break up the railroad or devote the properties to another use. The estate is not relieved of its obligation to serve the public. A price that is premised on outright rejection of that obligation is inequitable and awards the estate a windfall that is not supported by any record evidence." 334 I. C. C., at 54-55. On the basis of this reasoning, the Commission then proceeded to take into account "other pricing considerations" - costs of liquidation it had not reached in its earlier report because of its conclusion that the $125,000,000 price arrived at by the parties was proper under the Interstate Commerce and Bankruptcy Acts."The alleged right to liquidation values derives from an alleged right to abandon; and there are recognized limitations on the right to abandon that in themselves limit the creditors' entitlement to the liquidation value we have computed under the court's instructions. Under section 1 (18) of the Interstate Commerce Act, the Commission is empowered to impose reasonable limitations on the abandonment right." 334 I. C. C., at 57. The Commission's new "pricing considerations" consisted of two elements: a one-year delay the New Haven would have incurred in securing the approval of the Commission and the courts to abandon train operations; and a bulk-sale discount that a purchaser of all the debtor's assets, to whom the Commission could order the road to sell, would have commanded. Together the added deductions amounted to $22,081,000.(a) The one-year delay. The Commission found that an application for a certificate of abandonment, as required by 1 (18) of the Interstate Commerce Act, would have precipitated a lengthy process of administrative action and judicial review resulting in at least a one-year delay in the commencement of actual liquidation operations. The Commission assumed that the year's delay would have occasioned a freeze on liquidation activity, following which the sell-off would have proceeded as projected in the Second Supplemental Report. The abandonment delay, the Commission found, would have added costs of $4,940,000 in preserving the assets of the estate, $2,500,000 in real estate taxes, and $7,946,000 in a discount of the sale receipts back to present worth.On review the reorganization court rejected the delay concept, ruling that the added deduction violated the liquidation hypothesis upon which the debtor's assets had been valued. Neither the parties nor the Commission had previously postulated the deduction now imposed, because the liquidation hypothesis itself had presupposed a lawful abandonment of service. 304 F. Supp., at 798. That presupposition was rooted in the hard fact that for more than three years prior to December 31, 1966, the New Haven had been kept alive, despite its hopeless financial condition, solely in the name of the public interest and in anticipation of inclusion in Penn Central. "By late 1963 it was clear to the Trustees of the New Haven and to the Reorganization Court that only two courses were open: the Trustees must press to accomplish the inclusion in a Penn Central merger or they must press for liquidation. The former was obviously in the public interest and the latter was not. The course of inclusion was followed; but because the merger and the reorganization proceedings stretched out far beyond what was originally forecast, the `interim' became seven and a half years; and `losses reasonably incident to working out the solution most consistent with the public interest' eroded the debtor's estate in excess of $60 million. ... . . "Like Laban of old, the Commission would now require further servitude of the debtor - in this case the creditors. But the duty of the debtor's creditors to suffer losses for an interim period has already been fulfilled and the public interest has already been served to the extent that in fairness and equity the public had any right to demand." 304 F. Supp., at 800. (Footnote omitted.) The Commission and Penn Central take issue with the reorganization court's disallowance of the deduction for delay. The dispute between them and the bondholders is not, however, broad in concept. It does not draw into question the right of the Commission to insist that New Haven obtain permission to abandon its operations: no one here quarrels with the proposition that in the event of a liquidation, New Haven would have been obliged to obtain a certificate from the Commission pursuant to 1 (18) of the Interstate Commerce Act. The parties agree that since a delay occasioned by abandonment proceedings before the Commission, followed by judicial review, inheres in the liquidation process, the Commission may exercise its expertise in gauging the extent and expense of such a delay, and Penn Central need not pay for the consequent diminution in the value of the assets of the debtor. The dispute is, rather, a a narrow one. It is simply whether, in the circumstances of this case, the valuation initially arrived at by the Commission already presupposed that the debtor had a certificate of abandonment in hand, so that assignment of a cost attributable to that factor amounts to an unwarranted double deduction.Before this Court the Commission and Penn Central urge the view that until the remand the Commission had not taken the delay factor into account. They justify the deduction on the second round as a development of the governing liquidation hypothesis adopted on the first. Once we enter the world of a liquidation that never occurred, they say, the Commission is more competent than the courts to project incidental costs and delays. On the remand the Commission merely refined the liquidation approach to reflect added expenses not initially considered because of the fairness of the price arrived at by the parties. The new price ordered by the courts compelled re-examination of the elements of liquidation, of which abandonment delay is surely one. And when it comes to predicting the likelihood of delay in passing on an application for a certificate of abandonment, the Commission is, as Penn Central puts it, "a uniquely qualified finder of fact ... ."71 At once the "refinement" rationale confronts an imposing obstacle raised by the Commission's own Second Supplemental Report. That report makes clear that the Commission had the element of delay before it in making its original valuation, but declined to apply any deduction on its account. The Commission considered - and rejected - Penn Central's request "that an allowance be made to the earliest date at which a liquidation could reasonably be anticipated for the constant diminution of N[ew] H[aven]'s assets." 331 I. C. C., at 698. (Emphasis supplied.) That rejection necessarily implied that the Commission had recognized the cost attributable to the delay occasioned by an abandonment proceeding, but determined not to weigh it in the balance. Thus we deal, not with a delay factor brought to light for the first time on the second round, but with one taken into account now even though deliberately excluded before. Justification, if any there be, must begin with the realization that the Commission changed its mind in midstream.The reorganization court rejected the Commission's conclusion that the valuation date selected in the Second Supplemental Report - December 31, 1966 - represented the date on which New Haven would have sought a certificate of abandonment rather than the date on which the railroad would have commenced its six-year sale. In doing so, the court relied on more than the Commission's shift in position between its second and fourth reports. The court rested on its express finding of fact that "but for the adoption by the Trustees of a course to serve the public interest, abandonment proceedings could and would have been commenced in late 1963 and liquidation would have been started, certainly by the valuation date of December 31, 1966." 304 F. Supp., at 801. That finding comes to us from the federal judge who has presided over the second New Haven reorganization since its inception. "In view of the district judge's familiarity with the reorganization, this finding has especial weight with us." Reconstruction Finance Corp. v. Denver & R. G. W. R. Co., . Not only are we unable to say the finding is erroneous; we do not see how the record of these proceedings permits any other conclusion.Indeed, the Commission and Penn Central do not challenge that conclusion. Instead, they seek support for the delay deduction by urging that if confronted with an abandonment application, the Commission would have had to "hear the communities that would be affected by the abandonment. If there is hope of a public takeover of segments, we must allow time for the States and communities to present their plans." 334 I. C. C., at 58. But apart from the fact that this Court itself once characterized the notion that the affected States or the Federal Government might take over the road and its operations as "sheer speculation," Penn-Central Merger Cases, 389 U.S., at 507, the reorganization court specifically rejected the Commission's argument. "During seven and one-half years, the Federal government, the states, the communities and the public in general were fully informed by the Trustees of the Railroad as to the inability of the New Haven to survive as an independent railroad. And, apart from seeking inclusion in a merged Penn Central, the Trustees were engaging in a holding operation to afford the public bodies, as the real guardians of the public interest, the opportunity to act - to take over or adopt measures to preserve the New Haven transportation system. Response to this was partial tax assistance and, in the latter half of the period, grants which covered about 1/3 of the annual passenger losses... . Otherwise nothing has come to the attention of this court, to indicate anything more than a highly speculative prospect, that any or all of the states concerned or their municipalities had the slightest interest in taking over and operating the New Haven or any segment of it. "In spite of full awareness of the situation of the bankrupt line and with nothing to prevent their doing so, no standby legislation, for use if inclusion of the New Haven by Penn Central fell through, was ever enacted or sought to be passed in seven and one-half years by the Federal Government or by any of the states for the take over and operation of the New Haven freight and passenger system or a segment of it (except for the west-end and the Boston commuter services); nor was any plan ever filed by the governmental bodies incorporating such take over and operation." 304 F. Supp., at 800-801.72 We think the reorganization court was entirely correct in concluding that: "The policy of imposing an interim burden of losses, through its deficit operation, on a railroad in reorganization is to afford a reasonable opportunity to the responsible agencies to arrange the continuation of the railroad's operation, but the law does not require the furnishing of two or three or four opportunities. The duty was more than amply fulfilled by the New Haven. The public interest has had one huge bite of the apple; it is not entitled to another." 304 F. Supp., at 801. It is argued that the Commission nonetheless should be permitted to tax New Haven with the cost of a one-year delay because in fact the debtor sought no abandonment certificate from the Commission. The Commission and Penn Central attribute this failure to New Haven's self-interest. "The fact is," the Commission said, "that both the creditors and the trustees exercised options, assuming the risks involved therein, and the bondholders may not now be heard to ascribe to someone else the responsibility for the selection of their course of action, or inaction." 334 I. C. C., at 58. (Footnote omitted.) But the continued operation of the New Haven as a railroad depleted the estate by at least $60,000,000. 304 F. Supp., at 800. We fail to see how the self-interest of either the estate or its creditors was bettered by that operation.Nor is there any substance to the contention that by failing to press for immediate liquidation of the debtor, the bondholders somehow waived their right to object to the imposition of the deduction for delay. The record that shows the preservation of New Haven in the public interest long after it had ceased to be viable as an independent enterprise demonstrates at the most that the bondholders had resigned themselves to bearing the costs of interim operations pending inclusion in Penn Central. It contains no support for the proposition that they consented to the imposition of more than $15,000,000 in hypothetical costs on top of the tens of millions in actual costs they were forced to bear. As the reorganization court put it, "[S]uch a second round of loss superimposed on the first, like Pelion on Ossa, is as unfair and inequitable as can be imagined ... ." 304 F. Supp., at 801. It cannot be sustained under any construction of the Bankruptcy Act.73 (b) The bulk-sale discount. New Haven's land holdings consisted of over 25,000 acres located along its rights-of-way in four States. In its Second Supplemental Report the Commission accepted the New Haven trustees' appraisal of the realty. The New Haven analysis was prepared by the company's general real estate agent, who relied in some instances on the studies of outside appraisers. The agent drew on a fund of actual experience, for the New Haven had long had a real estate department engaged in the disposition of nonoperating properties. From the inception of the New Haven trusteeship through November 1966, that department had completed 853 separate realty sales for a gross consideration of some $13,900,000. The Commission found that the large volume of past sales provided a "firm base" for the New Haven estimate. 331 I. C. C., at 667.The New Haven agent assumed that the company would sell off its lots in normal-sized parcels. He gave specific consideration to each part of the railroad's property and reached his values on a zone-by-zone basis. He based his estimates of fair market value on his expert judgment, sales in the area, existing tax valuations, and the adaptability of the land to nonrailroad use. He discounted by 50% whenever the New Haven's records indicated questionable title; on the six-year liquidation hypothesis, he deducted $15,971,000 as the cost of operating the New Haven realty department; and on the further assumption that the debtor would have to sell some of the property during the final year at vastly reduced prices, he made a further deduction of $8,178,000.On the remand, the Commission ordered a further deduction from the liquidation value of the estate, based on a hypothetical sale in bulk of all the New Haven's land assets."The liquidation value urged by the creditors assumes not only the immediate right to abandon, ... but also the right to break up the railroad and sell the parcels for their highest and best price. We think such a right may be restricted when a buyer for the entire bulk of the N[ew] H[aven] properties appears who will continue the operation of needed services." 334 I. C. C., at 60. (Footnote omitted.) The Commission calculated the deduction on the premise that "[t]he bulk-sale discount merely reflects a market appraisal of the risks that the estate avoids, and the bulk buyer assumes." Id., at 61. The Commission then credited the evidence that Penn Central had presented through a realty expert with respect to a bulk sale of the New Haven land properties. The expert testified to the premium to be charged by a "single purchaser of property who would, in turn, sell off the property probably to many users and who would obtain his profit by reason of its purchase and resale." On the basis of this testimony, the Commission found that a bulk buyer would command at least a 10.5% return on his investment, calculated as the sum of a 75% borrowing at 9% and a 25% self-financing at an internal charge of 15%, and that such an investment rate required an additional 4.5% discount of the New Haven land values over and above the 6% by which they had already been reduced. This bulk-sale discount resulted in a further diminution of $6,695,000 in the valuation of the New Haven assets. 334 I. C. C., at 61-62.On the second round of review the reorganization court rejected the bulk-sale deduction as "improper and without support in law or reason." 304 F. Supp., at 805."Value, under the circumstances of this case, can only be arrived at through the dismantling of the transportation plant and a piece by piece sale of the properties. It is clear from the record that a market existed for the disposition of the properties on this basis. Their value is the best price the market place will give the seller, less the costs and expenses relevant to the sale ... . It makes no difference whether the purchaser wants to use the property as is, or to improve and develop it. The question is how much will the market place give for a particular item of property." Ibid. The court answered the argument that the discount merely reflected the risk of nonsale that the seller transferred to the bulk buyer by pointing to the Commission's prior deduction of over $8,000,000 for that purpose. Moreover, the deduction violated the requirement that the sale price meet the "fair upset" minimum imposed by 77 (b) (5) of the Bankruptcy Act. "That lowest price is what the market would pay, which is implicit in the standard used here, i. e., fair liquidation value. Neither a trustee nor an equity receiver could, with the court's approval, sell for less." 304 F. Supp., at 806.Penn Central now protests that the reorganization court has erred in rejecting the bulk-sale discount. It says its expert witness duplicated no discounts previously taken; he proceeded on the basis of all previous deductions. In addition, it is argued, his analysis took into account the problem of market absorption caused by the mass marketing of some 1,700 sale parcels and the risk of further depression of land values occasioned by cessation of New Haven's operations - factors not considered by New Haven's witness. The hypothetical bulk sale, Penn Central says, was merely a construct for quantifying the risks that New Haven itself would have assumed in undertaking the sale of its realty; it afforded a means to determine "the minimum rates of return necessary to attract capital to the business of owning and disposing of the New Haven's land." Penn Central insists that the bulk-sale analysis thus constituted a "pricing out" of an additional cost of liquidation; it was "simply an analytical device for approximating risks that would occur if the land were retailed over time as promptly as possible ... ."We may assume that Penn Central's "pricing out" theory is a rational one. But the record demonstrates that the Commission rejected it as insufficient to justify application of the bulk-sale theory. Penn Central's analysis, said the Commission,"overlooks what is necessarily the bondholders' position - namely that aside from principles of equity and fairness they have a fixed right to sell off N[ew] H[aven] in parcels, so that even a bulk buyer must pay the per-parcel price. Our answer is that we may compel the bulk sale and the bulk sale discount as a condition of an abandonment certificate, and, therefore, as a reduction of the present price. "... We ... might compel N[ew] H[aven], if it filed for abandonment, to sell in bulk and thereby make a bulk sale price appropriate." 334 I. C. C., at 61. The Commission thus ruled that only by assuming an actual buyer in bulk who would take over the New Haven properties for continued railroad operations could it compel the transfer of the real property at the reduced price. Far from setting forth a theory of compulsory transfer "completely independent" of a "pricing out" analysis, the Commission concluded that only its power to compel the sale of the real estate to a single buyer for continued operation justified the bulk-sale discount.We do not consider whether the Commission could lawfully impose such a bulk-transfer obligation on a railroad in liquidation at the cost of reducing the per-parcel valuation of its assets.74 For the record before us is devoid of evidence that a bulk buyer would agree to take over the New Haven properties for continued service at any price. When a railroad has a lengthy history of deficit operations with no prospect of improvement, and a consequent operating value of zero or even a negative figure, the Commission cannot rationally assume that a deus ex machina will emerge to spend millions for the opportunity to lose millions more.Penn Central's witness gave no testimony in support of any such theory. He was a professional developer of real estate, not a railroad operator. And he testified to what extra charges he would levy, after all previous deductions for the costs and risks of sale, to assume the risk of nonsale as well as the entrepreneurial activity of retailing the realty parcels. His testimony established nothing more than that he would not undertake the task of per-parcel sales that New Haven had assumed unless the company paid him a handsome fee. The Commission could hardly have compelled the New Haven trustees to turn over the assets of the debtor to such an entrepreneur, who would, on his own testimony, have proceeded himself to do just what the Commission said it was empowered to forbid the bondholders to do - dismantle the estate, rid himself of railroad-connected assets, and devote his talents to the disposition of the realty.4. The discount of liquidation factors. In its Second Supplemental Report the Commission accepted the projection offered by the New Haven trustees that they could substantially complete a liquidation sale in six years. 331 I. C. C., at 663. Accordingly, the Commission discounted the estimated receipts of sale over the six-year period to reflect their present value - a deduction of $17,563,000. Id., at 661. It did not, however, discount the estimated expenses of liquidation, although these, too, were projected to occur over the six-year period. The reorganization court was of the view that if future receipts were to be discounted to present value, future expenses should likewise be. 289 F. Supp., at 461; cf. id., at 427-428. On the remand the Commission concurred. It noted that the parties were very close in their estimates of the proper discount, and it concluded that $3,800,000 represented the correct figure. Fourth Supplemental Report, 334 I. C. C., at 39-40.On the second round of review the reorganization court observed that despite three valuation changes netting a $6,600,000 reduction in estimated worth, the Commission had failed to adjust the old, inapplicable discount figure. Accordingly, the court directed the Commission to file "a new formulation and computation of the discount for present value of the New Haven's liquidation proceeds, in accordance with generally recognized accounting principles and based upon the changes made in valuation items through and including those stated in the present opinion." 304 F. Supp., at 810-811. The court added that the Commission could submit its new formulation and computation in the form of a letter or short brief, and afforded other parties in interest one week to file their comments, as well as any formulations and computations of their own, also in a letter or brief. In accordance with this directive of the court, the Commission submitted its new calculations, and the bondholders replied. In its order adjudging the price to be paid, the reorganization court ruled that "[t]he sum of $2,415,899 should be added to liquidation value inasmuch as it was improperly deducted in applying the discount to present value found by the Commission ... ." 304 F. Supp. 1136, 1137.In its brief before this Court the Bondholders Committee states that the reorganization court's directive resulted from the Commission's continued failure to calculate discounts back to present value with respect to four items, three of them to the detriment of New Haven and one to the detriment of Penn Central. The first is the $8,177,633 deducted as the cost of hypothetical forced sales of New Haven realty during the last years of the liquidation. The Commission could have treated the item either as part of the value of the unsold land and then written it off as a cost of sale, with a discount back to present value for both sides of the balance sheet, or as a wash to be eliminated in computing both receipts and expenses. In fact the Commission did neither: it included the figure on both sides of the books, but discounted back only in the asset column. The result, says the Committee, is an error of $2,066,488. A similar shortcoming in determining the liquidation values of road property, such as ties and rails, added another error of $1,474,057. Third, says the Committee, the Commission erroneously spread the sale of certain realty over the full six-year period when the undisputed evidence showed that New Haven could sell the land in 12 to 18 months; this resulted in an overstatement of $118,000 in the discount attributable to the net proceeds. Finally, the Commission assumed that New Haven could sell off $47,121,400 in equipment, investments, and materials during the first year of the liquidation, but failed to spread the assumed receipts over the entirety of that year, with a consequent understatement of $1,372,646 in the applicable discount. A netting of the four items, together with an added correction of $130,000 made by the Commission, results in the $2,415,899 adjustment ordered by the reorganization court.The Commission does not dispute that it made the errors as alleged by the Committee. Its sole reply is that the bondholders have waived their claims in this regard by failing to present them to the Commission. Penn Central concedes that "the first two errors asserted by the bondholders represent miscomputations" in Penn Central's favor. But it argues that the amount of the fourth error and the existence of the third were the subject of conflicting testimony before the Commission, and it joins in the Commission's contention that the bondholders have waived the right to a resolution in their favor by failing to press a timely objection before the Commission when the agency first made its alleged mistakes.The record demonstrates that the bondholders have the better of this argument. It is undisputed that both the bondholders and Penn Central presented witnesses to the Commission on the remand who agreed that the Commission had erred in its discounts and who differed only in minor amounts. See Fourth Supplemental Report, 334 I. C. C., at 40. But the Commission simply bypassed the agreement, unpersuaded that it had erred in its prior opinion. Id., at n. 17. The bondholders then carried the persistent discounting error to the reorganization court on the second round and won corrective relief. The submission of proposed adjustments by way of a letter was not, as is suggested, an untimely filing of claims, but a proper presentation pursuant to the instruction of the court - an instruction made necessary by the Commission's failure to straighten out the discounts after two rounds of hearings and reports, with errors that the bondholders on one side and Penn Central on the other now frankly concede aggregate over $5,000,000. Of the four items advanced by the Committee, only the third is subject to any real doubt, and that $118,000 item can hardly be considered a substantial sum in the context of these cases. A further remand to the Commission to resolve the accuracy of such a figure would serve no useful purpose at this stage of the litigation. The reorganization court resolved the controversy in favor of the bondholders following extensive oral argument on the issue. We affirm its judgment on these issues as free from that degree of error that would require us to overturn its finding.5. The loan-loss formula. In its Second Supplemental Report the Commission, projecting a three-year interim period between merger and inclusion and concluding that a short-term lease would not be appropriate, required Penn Central to extend $25,000,000 in loans to the New Haven in exchange for first-priority trustees' certificates. 331 I. C. C., at 702-706.75 In addition, it ordered Penn Central to share in New Haven's operating losses to the extent of 100% in the first year, 50% in the second, and 25% in the third, not to exceed $5,500,000 in any one year. Id., at 718-719. On the first round of judicial review the sliding-scale aspect of the formula was disapproved as an improper deterrent to the bondholders' assertion of their legal rights, 289 F. Supp., at 444, pursuant to the suggestion of MR. JUSTICE DOUGLAS at an earlier stage of the proceedings, see Penn-Central Merger Cases, 389 U.S., at 557-558 (separate opinion), and on the remand the Commission abandoned it. 334 I. C. C., at 71-72.The $5,500,000 annual ceiling derived from the assumption, based on calculations provided by the New Haven trustees and accepted by the Commission, that despite the massive cash drain in 1967, future annual New Haven operating losses would be unlikely to exceed $5,400,000 in succeeding years. 331 I. C. C., at 718-719. Coupled with the sliding-scale formula, the annual ceiling thus proposed that Penn Central absorb the entirety of New Haven's 1968 cash loss. On the first round the reorganization court expressed the opinion that even with the abrogation of the sliding scale, Penn Central's share of that loss "should be a substantial percentage." 289 F. Supp., at 464.By the time the parties returned to the Commission on the remand, it was evident that the trustees' appraisal of their ability to contain the New Haven's deficits had been far too optimistic. From February through December 1968, the trustees had already drawn down $14,000,000 of the $25,000,000 loan that was supposed to last for three years; at that rate they would exhaust the loan in another six or seven months. 334 I. C. C., at 72. The cash loss was equally grim: the projected 1968 cash deficit stood at $15,672,000, with an estimated operating deficit of $8,200,000. Despite the $2,800,000 increase in the operating deficit over the trustees' initial prediction, the Commission adhered to its original ceiling and, pro-rating over the 11-month period from merger to inclusion, required Penn Central to pay $5,000,000. 334 I. C. C., at 74. On the second round of review the reorganization court affirmed without discussion.The bondholders now urge that Penn Central be required to bear the entire operating loss from merger to inclusion. New Haven incurred that loss as an independent entity, say the bondholders, only because it remained outside of Penn Central after the merger, at Penn Central's request and for Penn Central's convenience. It is urged that the Commission's ceiling was originally calculated to place the entire loss of the first year on Penn Central, and that the original intention should be carried out.76 Penn Central denies responsibility for the fact that inclusion took place some 11 months after merger rather than along with it, and puts the blame at the door of the bondholders for their litigious insistence upon working out the terms of inclusion prior to the event. It also notes that it has been obliged to take over New Haven less than a year after its own formation, rather than at a later point in the three-year period originally envisaged by the Commission. While the issue is not free from doubt, we cannot say the reorganization court committed error in letting the Commission's action stand. Without ascribing fault to any party, we note the unfairness to the bondholders in requiring them to bear whatever portion of the operating loss Penn Central does not pay due to the inability of Penn Central and the trustees to negotiate an interim lease. On the other hand, there is a countervailing unfairness to Penn Central in requiring it to bear the full burden of New Haven's losses while it lacked exclusive and assured control over the operations of the debtor. The $5,000,000 paid by Penn Central is no drop in the bucket; it amounts to 61% of the operating loss as figured by the Commission and nearly one-third of the entire cash loss for the interim period. In no sense did Penn Central's contribution represent a payment for assets received; on the liquidation hypothesis, the Commission could rationally have declined to require any payment at all. Chase Manhattan argues that "[e]ither there was no equitable obligation on the part of Penn Central to pay any of the New Haven loss during the period from the date of the Penn Central merger to the date of its acquisition of the New Haven assets or there was an obligation to pay the entire loss." We cannot agree that the Commission was obliged to adopt such an all-or-nothing approach. Under the circumstances, the Commission's final disposition represents a pragmatic compromise of the competing interests, and in the abence of a controlling contrary principle of law we do not disturb the reorganization court's acceptance of the Commission's judgment.6. New Haven investments. The Bondholders Committee complains that New Haven has transferred its stock ownership in two concerns - the New York Connecting Railroad and the Railway Express Agency - with no value given in exchange. The Connecting Railroad was owned jointly by New Haven and Penn Central on a 50-50 basis, Fourth Supplemental Report, 334 I. C. C., at 44 n. 20, and is now presumably a wholly owned subsidiary of the merged company. REA is owned by various railroads; at the time of inclusion New Haven held about 4.5% of the outstanding stock.In both instances the Commission valued New Haven's investment interest on the liquidation hypothesis. A witness presented by the New Haven trustees, whose testimony the Commission accepted, stated that because of Connecting Railroad's $18,000,000 funded debt its stock would have no liquidation value whatever. As to the REA, he said that its stock would have little or no value because of pending litigation over a tender offer for the stock77 as well as recent legislation increasing the permissible size and weight of parcel post packages. Second Supplemental Report, 331 I. C. C., at 678.The Bondholders Committee does not attack the Commission's finding of zero value for the Connecting Railroad and REA stock. Instead, the Committee says that if the shares were worthless, the Commission erred in requiring their transfer to Penn Central. Were the stock to have had no value on the liquidation of New Haven, the Committee argues, the reorganization court would, in the absence of bids for the shares, have ordered their distribution to the creditors to do with as they pleased. Accordingly, the Committee calls for the return of the stock to New Haven.The Committee's request overlooks the fact that even though the shares in question might be worthless to a New Haven undergoing liquidation, the Commission could nonetheless order their transfer on the ground of their value to an ongoing Penn Central required to take in New Haven as an operating entity. But entirely apart from that consideration, and without pausing to assess the correctness of the zero valuation placed on the stock, we agree with Penn Central that the Committee's request for the return of the stock is foreclosed by res judicata. For the Committee - as well as all the other bondholders - took no appeal from the order of the reorganization court directing the transfer of the New Haven assets subject to a later determination of value.78 7. "Going-concern" value. The bondholders urge that Penn Central should pay an added amount to reflect the "going-concern" value of the New Haven. This sum, it is stressed, would be calculated, not as an alternative to liquidation value, but as a supplement to it. Since it is universally agreed that the New Haven was a losing operation in the form in which Penn Central was obliged to take it over, the bondholders display considerable temerity in pressing for inclusion of what could prove, in an ultimate analysis, to be only a substantial negative figure.79 The Commission rejected the notion that the New Haven had a going-concern value over and above the liquidation value of its physical properties. In the Commission's view, the bondholders' estimate of $55,075,000 for such intangibles as organizational costs was premised on the replacement of a defunct railroad and overlooked the probability that no one would ever have rebuilt the New Haven in its present form. More fundamentally, the Commission correctly repudiated the claims based on going-concern value as antithetical to the liquidation hypothesis on which the appraisal of the New Haven's assets had proceeded. As the Commission said, "It is not realistic to assume that a potential buyer would pay the liquidated value of the N[ew] H[aven] assets and then pay additional amounts representing elements of going concern value in the face of N[ew] H[aven]'s past deficit operations and its bleak prospects for the future." Second Supplemental Report, 331 I. C. C., at 686-687.The Bondholders Committee concedes that the intangible assets in fact acquired by Penn Central "would be worthless to the New Haven in an assumed liquidation ... ." That is enough to end the matter. The bondholders are not entitled to treat the New Haven as a liquidating enterprise with respect to certain items and as an operating railroad with respect to others, depending on which approach happens to yield the higher value. Nothing could be more unfair or inequitable to Penn Central than to permit the New Haven bondholders, at its expense, to have the best of both worlds.80 8. The "underwriting" plan for the Penn Central stock. Thus far we have considered the disputes over the valuation of the New Haven assets transferred to Penn Central. We now reach the one issue raised in connection with the consideration given by Penn Central in exchange. The Purchase Agreement negotiated by Pennsylvania and New York Central on the one side and the New Haven trustees on the other provided that Penn Central should pay in part for the New Haven properties with 950,000 shares of its common stock.81 As a New Haven trustee stated, "[O]ne of the principles for which we negotiated at considerable length was that the bulk of the consideration should be in the form of common stock or, failing that, should be debt instruments having either conversion rights or options which would permit the claimants to the New Haven's Estate to participate in the benefits of the merger." In confirming the terms of the agreement, the Commission accepted the testimony of a New Haven trustee that the value of the stock could range anywhere from $75 to $100 a share on the date of closing and that the average, $87.50, represented his estimate of market value at the time of inclusion. 331 I. C. C., at 688-689. The Commission adopted the $87.50 per share value placed on the Penn Central stock by the trustee as reasonable. Id., at 689-690.On the first round of review the reorganization court agreed that the $87.50 per share figure represented a fair value for the Penn Central stock, based on the Commission's calculation of the estimated future earning power of the new company and the testimony of the New Haven trustee, "a well qualified expert." The court saw "no reason why recent fluctuations in the market value of these shares should change the disposition of the matter ... ." 289 F. Supp., at 462.On the remand, the bondholders challenged the Commission's stock valuation. The Commission cursorily rejected the attack on the ground that the bondholders' witness was unfamiliar with Penn Central's operating and financial plans, gave undue weight to extraordinary past expenses, and generally neglected the future prospects of the company. 334 I. C. C., at 68 n. 40.By the time of the second round of judicial review, inclusion had taken place and the Penn Central had given its consideration in exchange. The bondholders, renewing their charge that the Commission's prophecy had been erroneous, pointed to the actual market performance of the stock. As of the inclusion date, December 31, 1968, the market price stood at 63 3/8, more than 20 points below the Commission's estimated value. If that date should be thought suspect because of year-end sell-offs, the bondholders noted that throughout 1968 the price had fluctuated between 53 1/2 and 86 1/2, with a mean price between February 1 and December 31 of 69 1/2. Thus, the bondholders contended, the primary component of their bundle of consideration had turned out to be worth anywhere from $17,000,000 to $23,000,000 less than it was supposed to be.On the second round the reorganization court rejected the bondholders' contention that the Commission had predicted an $87.50 value as of the closing date."[T]he Commission, presumably in an effort to assure fairness to Penn Central, did not use the market value of December 31, 1966 or an average of the values at or about December 31, 1968, the actual date of transfer. Instead, it adopted the theory that, after all, the purpose of using stock in payment was to tap the expected future economic benefit of the Penn Central merger which would come to full fruition seven to ten years after its effective date on February 1, 1968, but would be reflected in an upward trend of the stock at the time of closing or transfer of New Haven's assets to Penn Central, then estimated to be in 1970. ... . ."[T]he theory of giving recognition to an intrinsic value in the shares, which will be realized when the full economic benefits of the merger have been achieved, not only assists the Penn Central by relieving it of the need to divest itself of a crippling amount of cash, which would be prejudicial to its merger program, but affords the New Haven an opportunity to participate in probable future profits." 304 F. Supp., at 808-809. The court nonetheless recognized an element of unfairness to the New Haven bondholders in that the New Haven was compelled to accept the stock "at a substantial present loss on an assurance of future gain." As the court put it, "The nub of the unfairness and inequity is not the 87 1/2 fixed for present calculations, but the fact that the purchaser is getting assets of sure present value while the seller is asked to gamble for its payment on the future of the Penn Central." Id., at 809. The court concluded that this did not necessitate a change in price or an amendment to the valuations postulated by the Commission. "To be fair and equitable, however, it does require a supplemental provision fulfilling the implicit promise by the purchaser to pay $83.1 million as part of the price for the assets conveyed." Accordingly, the court provided that"if at any time the market price of Penn Central common shares reaches and maintains 87 1/2 per share on the New York Stock Exchange for a period of five consecutive days on which the Exchange is open and doing business (not counting days on which the Exchange is closed to trading) between the date of final consummation of the plan of reorganization and February 1, 1978, then and in that event it will be conclusively presumed that Penn Central has, in transferring the shares to the New Haven, made payment of the $83.1 million of the purchase price represented by the shares. If, however, the common shares of Penn Central do not reach and maintain the price as aforesaid, then the value of the shares will be determined by the average of the means between high and low prices of Penn Central shares on the New York Stock Exchange for the 30 business days next preceding February 1, 1978, on which the Exchange is actually operating and there are sales of Penn Central shares. Penn Central will forthwith become liable to pay in cash to the New Haven, or its successor or successors, the difference between said mean market prices of those 30 days and 87 1/2 for each share ... ." 304 F. Supp., at 809-810. The court provided that the benefit of Penn Central's underwriting of any difference between the mean market price and 87 1/2 would inure only to the New Haven and would not follow the shares into the hands of third-party buyers.In addition, the court afforded Penn Central the option of relieving itself of the 1978 underwriting obligation in the following manner:"The Penn Central is granted an option, operative between the date of final consummation of the plan and February 1, 1978, to discharge its obligation to underwrite and pay the difference between such average market price and the higher 87 1/2 at the end of the ten year period by paying on one or more blocks of 50,000 shares to the New Haven ... the difference between the mean market prices for sales of Penn Central common shares and 87 1/2 per share as of a specific day of sales on the Exchange which shall previously have been designated by Penn Central in a written notice delivered to the New Haven at least 5 days prior to such market date." Id., at 810. The underwriting plan of the reorganization court thus combined a series of essential findings and protective features. First, it ratified the Commission's determination that intrinsic value rather than market price should guide the appraisal of the worth of the Penn Central common stock; second, it predicted that that intrinsic value would be reflected in a market price of at least $87.50 per share by the time Penn Central fully realized the benefits of its merger; third, it provided that Penn Central would secure the New Haven estate against the risk that the market price of its stock would not reflect that minimum intrinsic value within the first nine years after inclusion; and fourth, it contemplated that New Haven would be left free to participate in whatever future appreciations in value Penn Central's stock might enjoy. In sum, the reorganization court devised a plan that added to its assessment of present worth both a reasonable assurance of realization of such worth and the opportunity of additional gain. In so doing, the reorganization court in effect determined that postponement of immediate realization of $87.50 per share was offset by the possibility of even greater future market price of the stock, and that the package constituted fair compensation for the assets transferred to Penn Central.On the basis of the record before the District Court at the time of its order, we would have no hesitancy in accepting its findings, conclusions, and proposed underwriting plan as consistent with the history of the reorganization proceedings and supported by substantial evidence. But we cannot avoid the impact of recent events in assessing the propriety of the decree that that court has entered. See United States v. Aluminum Co. of America, 148 F.2d 416, 445. And those events make it possible that this aspect of the reorganization court's decree may be wholly unrealistic.The fairness and equity that are the essence of a 77 proceeding forbid our approval of a payment for the transferred New Haven properties that may be worth only a fraction of its purported value. And the same considerations of fairness and equity prevent imposing on Penn Central the burden of immediate payment in full, particularly when it is remembered that the New Haven bondholders have never objected to the receipt of Penn Central stock in exchange for the New Haven assets.Accordingly, we set aside the order of the Connecticut District Court insofar as it determines that an intrinsic value of $87.50 inheres in the Penn Central common stock and implements an underwriting plan to secure payment of that sum. Further proceedings before the Commission and the appropriate federal courts will be necessary to determine the form that Penn Central's consideration to New Haven should properly take and the status of the New Haven estate as a shareholder or creditor of Penn Central.VWe turn finally to the contention of the bondholders that quite apart from the specific items that together go to make up the price to be paid for the New Haven assets, the plan of reorganization itself is not only unfair and inequitable under the Bankruptcy Act but violates the Fifth Amendment as a taking of property without just compensation.The purchase price that the Commission and the reorganization court have required Penn Central to pay to the New Haven estate is based upon the liquidation value of the seller's assets, appraised as of December 31, 1966. That price hypothesizes a shutdown of New Haven followed by a sell-off of its assets at their highest and best value. In the circumstances of this case, and for the reasons we have already set out at length, we agree with the reorganization court that it would be unfair and inequitable to allow Penn Central to take the properties for any lesser sum. Moreover, we today require a reassessment of the consideration that Penn Central is to give in exchange for those properties. We thereby accord the bondholders the right to a liquidation and a per-parcel sale that is theirs by virtue of their mortgage liens. The Bankruptcy Act does not require that they be given more. Nor is it necessary to consider the bondholders' claim that anything less than full liquidation value would amount to an uncompensated taking in violation of the Fifth Amendment.But the Bondholders Committee presses another Fifth Amendment argument. It points to the Commission's own finding that from the inception of the New Haven reorganization through 1968 the debtor's estate had amassed more than $70,000,000 in administrative and pre-bankruptcy claims that take priority over the bondholders' liens. Fourth Supplemental Report, 334 I. C. C., at 126. The reorganization court itself noted that "`losses reasonably incident to working out the solution most consistent with the public interest' [have] eroded the debtor's estate in excess of $60 million." 304 F. Supp., at 800. (Footnote omitted.) Although the extent to which the ongoing deficit operation has impaired the bondholders' security is unclear, it is undeniable that the continued operation of the railroad into the late 1960's, together with the legal uncertainties engendered by the doubtful future of the company, have greatly depressed the value of the bondholders' interests. Cf. Penn-Central Merger Cases, 389 U.S., at 509.82 A 77 reorganization court may not, of course, disregard a claim that injurious consequences will result to a secured creditor from the suspension of the right to enforce his lien against the property of a debtor. That claim, however, "presents a question addressed not to the power of the court but to its discretion - a matter not subject to the interference of an appellate court unless such discretion be improvidently exercised." Continental Illinois National Bank & Trust Co. v. Chicago, R. I. & P. R. Co., . Here the reorganization court recognized its duties under the Bankruptcy Act and the Constitution. In August 1968 it ruled as follows:"In view of the history of this deficit operation from the time of the filing of the petition under 77 and even before, the size of the losses, the long period of time necessarily involved in seeking to work out a solution, short of liquidation, through inclusion in the Penn-Central, the present condition of the Railroad and the rate of loss and out-flow of cash in the recent past and in the foreseeable future, this court finds that the continued erosion of the Debtor's estate from operational losses after the end of 1968 will clearly constitute a taking of the Debtor's property and consequently the interests of the bondholders, without just compensation. It is therefore constitutionally impermissible, and obviously no reorganization plan which calls for such a taking can be approved." 289 F. Supp., at 459. We do not doubt that the time consumed in the course of the proceedings in the reorganization court has imposed a substantial loss upon the bondholders. But in the circumstances presented by this litigation we see no constitutional bar to that result. The rights of the bondholders are not absolute. As we have had occasion to say before, security holders"cannot be called upon to sacrifice their property so that a depression-proof railroad system might be created. But they invested their capital in a public utility that does owe an obligation to the public... . [B]y their entry into a railroad enterprise, [they] assumed the risk that in any depression or any reorganization the interests of the public would be considered as well as theirs." Reconstruction Finance Corp. v. Denver & R. G. W. R. Co., . Only two Terms ago, when we last considered the Penn Central merger, we quoted approvingly the Commission's statement that "[i]t is a fundamental aspect of our free enterprise economy that private persons assume the risks attached to their investments, and the N[ew] H[aven] creditors can expect no less because the N[ew] H[aven]'s properties are devoted to a public use." Penn-Central Merger Cases, 389 U.S., at 510. We added:"While the rights of the bondholders are entitled to respect, they do not command Procrustean measures. They certainly do not dictate that rail operations vital to the Nation be jettisoned despite the availability of a feasible alternative. The public interest is not merely a pawn to be sacrificed for the strategic purposes or protection of a class of security holders ... ." Id., at 510-511. In this context we appraise the bondholders' claim that the continued operation of the New Haven from the inception of the reorganization proceeding in 1961 to the inclusion in Penn Central in 1968 worked an unconstitutional taking of their property. There is no longer room for dispute that the bondholders will receive the highest and best price for the assets of the debtor as of December 31, 1966. That price of course reflects the depreciation of the properties and the losses incurred in the operation of the railroad from the commencement of reorganization proceedings under 77 in the middle of 1961. But the Bondholders Committee does not tell us what the depreciation and losses attributable to the prevaluation period are. Moreover, no bondholder formally petitioned the reorganization court to dismiss the proceedings and thereby permit a foreclosure on the mortgage liens until April 1967 - well after the 1966 valuation date.83 Nor can Penn Central be held liable for the further decline in New Haven's value from the valuation date to the actual inclusion. The new company did not even come into existence until midway through that period, and from the point of its own creation until it took in the New Haven, it contributed substantially to recompense the debtor for its operating losses. Moreover, the failure of the bondholders to press for early liquidation of the New Haven meant that their initial application for a dismissal of the reorganization proceedings came just as the objective of salvaging the New Haven appeared possible to achieve. As the reorganization court noted, only two of the several bondholder groups made that initial application; it was not joined by the trustees, nor was it endorsed by other representatives of the bondholders and creditors; and it came just as the Commission was about to certify a feasible plan of reorganization to the court. "To jettison everything achieved and turn back just as a glimmer of light begins to show at the end of a long dark tunnel," said the court, "not only carries with it an aura of unreality but borders on the fantastic." In re New York, N. H. & H. R. Co., 281 F. Supp., at 68.On the other hand, we must also reject any lingering suggestion by Penn Central that the price it must pay for the New Haven assets is unfair in either a statutory or a constitutional sense. At first glance there is a seeming anomaly in the requirement that Penn Central pay a liquidating value for property it must operate at a loss. But it is not correct to say that New Haven's right to liquidate is inconsistent with Penn Central's obligation to operate, or that if the New Haven's creditors had such a right, Penn Central must have it as well. The bondholders had the right by force of their state-created liens under the New Haven's mortgage obligations. Penn Central had no such right, because its merger was expressly conditioned on its assumption of responsibility for continued New Haven service. There was nothing inequitable in an arrangement that permitted the bondholders to recover the value of their liens on the property of the debtor at the same time that it required Penn Central to pay that value in exchange for the nearly $1,000,000,000 worth of benefits that the merger was then anticipated to produce.As the Commission said at the time of its Second Supplemental Report, "Calling upon Penn-Central to pay more than the N[ew] H[aven] is worth as a going concern is not unreasonable within the meaning of section 5 (2)... . The Penn-Central merger (which will bring substantial dollar savings to the merger applicants) was approved with the thought that some of the merger savings would be available specifically to ward off a liquidation and shutdown of the N[ew] H[aven] so that adequate transportation service would remain available to the public which now relies on the N[ew] H[aven]." 331 I. C. C., at 687-688.The reorganization court made the point with clarity and force:"The whole purpose of making the inclusion of the New Haven a condition of the merger was to require Penn-Central, which, in being permitted to merge, was granted the opportunity to realize tremendous economic benefits, to take over and operate a helplessly sick but still needed railroad, which it could well afford to do. It is part of the price Penn-Central is called upon to pay for the right to merge. The right to merge was granted, the merger has taken place, and the price should be paid." 289 F. Supp., at 465-466. For the reasons stated in this opinion, the judgment of the United States District Court for the District of Connecticut, reviewed on writs of certiorari in Nos. 914, 916, 920, 1038, and 1057, is affirmed in part and vacated and remanded in part. The judgment of the United States District Court for the Southern District of New York, appealed from in Nos. 915, 917, and 921, is vacated, and those cases are remanded with instructions to abstain pending the further proceedings before the Interstate Commerce Commission and the reviewing courts under 77 of the Bankruptcy Act. It is so ordered.MR. JUSTICE DOUGLAS took no part in the decision of these cases.MR. JUSTICE MARSHALL and MR. JUSTICE BLACKMUN took no part in the consideration or decision of these cases. Fn On June 21, 1970, the Penn Central Transportation Company filed a petition for reorganization under 77 of the Bankruptcy Act, 11 U.S.C. 205, in the United States District Court for the Eastern District of Pennsylvania. Whether the financial obligations dealt with in the present opinion may become subject to modification in or because of those proceedings is a question with which the present opinion in no way deals. |
5 | Certiorari granted; 378 F.2d 70, reversed.H. H. Gearinger for petitioner.Solicitor General Marshall for respondent.Israel Steingold for the American Trial Lawyers Association, as amicus curiae, in support of the petition.PER CURIAM.The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment is reversed. Hopkins v. Cohen, ante, p. 530.THE CHIEF JUSTICE and MR. JUSTICE WHITE dissent for the reasons stated in the dissenting opinion of MR. JUSTICE WHITE in Hopkins v. Cohen, ante, p. 535.MR. JUSTICE MARSHALL took no part in the consideration or decision of this case. |
2 | The judgment of the Supreme Court of Virginia, affirming the trial court's order adjudging certain magazines obscene and restraining their sale, is vacated and remanded for further proceedings consistent with Miller v. California, ante, p. 15; Paris Adult Theatre I v. Slaton, ante, p. 49; and Heller v. New York, ante, p. 483. Trial by jury is not constitutionally required in this civil action pursuant to Va. Code Ann. 18.1-236.3. 212 Va. 554, 186 S. E. 2d 43, vacated and remanded.Stanley M. Dietz argued the cause and filed a brief for petitioners.James E. Kulp, Assistant Attorney General of Virginia, argued the cause for respondent. With him on the brief were Andrew P. Miller, Attorney General, and Robert E. Shepherd, Jr., Assistant Attorney General.* [Footnote *] Ralph J. Schwarz, Jr., Mel S. Friedman, and Joel Hirschhorn filed a brief for the First Amendment Lawyers' Association as amicus curiae urging reversal.PER CURIAM.The judgment of the Supreme Court of Virginia is vacated and the case is remanded for further proceedings not inconsistent with Miller v. California, ante, at 23-25, Paris Adult Theatre I v. Slaton, ante, at 58 n. 7, and Heller v. New York, ante, p. 483. See United States v. 12 200-ft. Reels of Film, ante, at 129-130 and n. 7. A trial by jury is not constitutionally required in this state civil proceeding pursuant to 18.1-236.3 of the Code of Virginia, 1950, as amended. See Mclancon v. McKeithen, 345 F. Supp. 1025, 1027, 1035-1045, 1048 (ED La.), aff'd sub nom. Mayes v. Ellis, and Hill v. McKeithen. Cf. Kingsley Books, Inc. v. Brown, . Vacated and remanded.MR. JUSTICE DOUGLAS would reverse the judgment of the Supreme Court of Virginia. See Miller v. California, ante, p. 37 (DOUGLAS, J., dissenting).MR. JUSTICE BRENNAN, with whom MR. JUSTICE STEWART and MR. JUSTICE MARSHALL join, dissenting.I would reverse the judgment of the Supreme Court of Virginia and remand the case for further proceedings not inconsistent with my dissenting opinion in Paris Adult Theatre I v. Slaton, ante, p. 73. See my dissent in Miller v. California, ante, p. 47. |
7 | Petitioner, Chemical Waste Management, Inc., operates a commercial hazardous waste land disposal facility in Emelle, Alabama, that receives both in-state and out-of-state wastes. An Alabama Act imposes, inter alia, a fee on hazardous wastes disposed of at in-state commercial facilities, and an additional fee on hazardous wastes generated outside, but disposed of inside, the State. Petitioner filed suit in state court, requesting declaratory relief against respondent state officials and seeking to enjoin the Act's enforcement. The trial court declared, among other things, that the additional fee violated the Commerce Clause, finding that the only basis for the fee is the waste's origin. The State Supreme Court reversed, holding that the fee advanced legitimate local purposes that could not be adequately served by reasonable nondiscriminatory alternatives.Held: 1. Alabama's differential treatment of out-of-state waste violates the Commerce Clause. Pp. 4-13. (a) No State may attempt to isolate itself from a problem common to the several States by raising barriers to the free flow of interstate commerce. Philadelphia v. New Jersey, ; Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dept. of Natural Resources, post, p. 353. The State Act's additional fee facially discriminates against hazardous waste generated outside Alabama, and the Act has plainly discouraged the full operation of petitioner's facility. Such a burdensome tax imposed on interstate commerce alone is generally forbidden and is typically struck down without further inquiry. However, here the State argues that the additional fee serves legitimate local purposes. Pp. 339-343. (b) Alabama has not met its burden of showing the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake. See Hunt v. Washington State Apple Advertising Comm'n, . Alabama's concern about the volume of waste entering the Emelle facility could be alleviated by less discriminatory means - such as applying an additional fee on all hazardous waste disposed of within Alabama, a per-mile tax on all vehicles transporting such waste across state roads, or an evenhanded cap on the total tonnage landfilled at Emelle - which would curtail volume from all sources. Additionally, any concern touching on environmental conservation and Alabama citizens' health and safety does not vary with the waste's point of origin, and the State has the power to monitor and regulate more closely the transportation and disposal of all hazardous waste within its borders. Even possible future financial and environmental risks to be borne by Alabama do not vary with the waste's State of origin in a way allowing foreign, but not local, waste to be burdened. Pp. 343-346. (c) This Court's decisions regarding quarantine laws do not counsel a different conclusion. The additional fee may not legitimately be deemed a quarantine law, because Alabama permits both the generation and landfilling of hazardous waste within its borders and the importation of additional hazardous waste. Moreover, the quarantine laws upheld by this Court "did not discriminate against interstate commerce as such, but simply prevented traffic in noxious articles, whatever their origin." Philadelphia v. New Jersey, supra, at 629. This Court's decision in Maine v. Taylor, - upholding a state ban on the importation of baitfish after Maine showed that such fish were subject to parasites foreign to in-state baitfish and that there were no less discriminatory means of protecting its natural resources - likewise offers no respite to Alabama, since here the hazardous waste is the same regardless of its point of origin and adequate means other than overt discrimination meet Alabama's concerns. Pp. 346-348. 2. On remand, the Alabama Supreme Court must consider the appropriate relief to petitioner. See, e.g., McKesson Corp. v. Fla. Dept. of Business Regulations, Division of Alcoholic Beverages and Tobacco, . Pp. 348-349. 584 So.2d 1367 (Ala. 1991), reversed and remanded.WHITE, J., delivered the opinion of the Court, in which BLACKMUN, STEVENS, O'CONNOR, SCALIA, KENNEDY, SOUTER, and THOMAS, JJ., joined. REHNQUIST, C.J., filed a dissenting opinion, post, p. 349.Andrew J. Pincus argued the cause for petitioner. With him on the briefs were Kenneth S. Geller, Evan M. Tager, Fournier J. Gale III, H. Thomas Wells, Jr., James T. Banks, and John T. Van Gessel.Bert S. Nettles argued the cause for respondents. With him on the brief were William D. Little, Assistant Attorney General of Alabama, William D. Coleman, Jim B. Grant, Jr., J. Wade Hope, Alton B. Parker, Jr., J. Mark Hart, and Mark D. Hess. Edwin S. Kneedler argued the cause for the United States as amicus curiae urging reversal. On the brief were Solicitor General Starr, Acting Assistant Attorney General Hartman, Deputy Solicitor General Wallace, Harriet S. Shapiro, Peter R. Steenland, Jr., Anne S. Almy, Louise F. Milkman, and Gerald H. Yamada.* [Footnote *] Briefs of amici curiae urging reversal were filed for American Trucking Associations, Inc., by Daniel R. Barney, Robert Digges, Jr., and Walter Hellerstein; and for the Hazardous Waste Treatment Council et al. by Stuart H. Newberger, Ridgway M. Hall, Jr., Clifton S. Elgarten, David Case, and Bruce Parker.Briefs of amici curiae urging affirmance were filed for the State of New York by Robert Abrams, Attorney General, Jerry Boone, Solicitor General, and David A. Munro, Assistant Attorney General; for the State of South Carolina et al. by T. Travis Medlock, Attorney General of South Carolina, Edwin E. Evans, Chief Deputy Attorney General, James Patrick Hudson, Deputy Attorney General, Kenneth P. Woodington, Senior Assistant Attorney General, Treva G. Ashworth, Senior Assistant Attorney General, Walton J. McLeod III, Jacquelyn S. Dickman, Samuel L. Finklea III, Charles F. Lettow, and Matthew D. Slater, Robert T. Stephen, Attorney General of Kansas, Paul Van Dam, Attorney General of Utah, and Richard P. Ieyoub, Attorney General of Louisiana; for the National Governors' Association et al. by Richard Ruda and Michael G. Dzialo; and for the State of Ohio et al. by Lee Fisher, Attorney General of Ohio, Mary Kay Smith, Assistant Attorney General, and Nancy J. Miller, Chris Gorman, Attorney General of Kentucky, and Stan Cox, Assistant Attorney General, Linley E. Pearson, Attorney General of Indiana, Robert T. Stephan, Attorney General of Kansas, Richard P. Ieyoub, Attorney General of Louisiana, Frank J. Kelley, Attorney General of Michigan, Tom Udall, Attorney General of New Mexico, Mark W. Barnett, Attorney General of South Dakota, Paul Van Dam, Attorney General of Utah, Joseph B. Meyer, Attorney General of Wyoming, and Charles W. Burson, Attorney General of Tennessee.JUSTICE WHITE delivered the opinion of the Court.Alabama imposes a hazardous waste disposal fee on hazardous wastes generated outside the State and disposed of at a commercial facility in Alabama. The fee does not apply to such waste having a source in Alabama. The Alabama Supreme Court held that this differential treatment does not violate the Commerce Clause. We reverse.IPetitioner, Chemical Waste Management, Inc., a Delaware corporation with its principal place of business in Oak Brook, Illinois, owns and operates one of the Nation's oldest commercial hazardous waste land disposal facilities, located in Emelle, Alabama. Opened in 1977 and acquired by petitioner in 1978, the Emelle facility is a hazardous waste treatment, storage, and disposal facility operating pursuant to permits issued by the Environmental Protection Agency (EPA) under the Resource Conservation and Recovery Act of 1976 (RCRA), 90 Stat. 2795, as amended, 42 U.S.C. 6901 et seq., and the Toxic Substances Control Act, 90 Stat. 2003, as amended, 15 U.S.C. 2601 et seq. (1988 ed. and Supp. II), and by the State of Alabama under Ala.Code 22-3012(i) (1990). Alabama is 1 of only 16 States that have commercial hazardous waste landfills, and the Emelle facility is the largest of the 21 landfills of this kind located in these 16 States. Brief for National Governors' Assn. et al. as Amici Curiae 3, citing E. Smith, EI Digest 26-27 (Mar. 1992).The parties do not dispute that the wastes and substances being landfilled at the Emelle facility "include substances that are inherently dangerous to human health and safety and to the environment. Such waste consists of ignitable, corrosive, toxic and reactive wastes which contain poisonous and cancer-causing chemicals and which can cause birth defects, genetic damage, blindness, crippling and death."1 584 So.2d 1367, 1373 (Ala. 1991). Increasing amounts of out-of-state hazardous wastes are shipped to the Emelle facility for permanent storage each year. From 1985 through 1989, the tonnage of hazardous waste received per year has more than doubled, increasing from 341,000 tons in 1985 to 788,000 tons by 1989. Of this, up to 90% of the tonnage permanently buried each year is shipped in from other States.Against this backdrop, Alabama enacted Act No. 90-326 (Act). Ala. Code 2230B-1 to 22-30B-18 (1990 and Supp. 1991). Among other provisions, the Act includes a "cap" that generally limits the amount of hazardous wastes or substances2 that may be disposed of in any 1-year period, and the amount of hazardous waste disposed of during the first year under the Act's new fees becomes the permanent ceiling in subsequent years. Ala.Code 22-30B-2.3 (1990). The cap applies to commercial facilities that dispose of over 100,000 tons of hazardous wastes or substances per year, but only the Emelle facility, as the only commercial facility operating within Alabama, meets this description. The Act also imposes a "base fee" of $25.60 per ton on all hazardous wastes and substances disposed of at commercial facilities, to be paid by the operator of the facility. Ala.Code 22-30B-2(a) (Supp. 1991). Finally, the Act imposes the "additional fee" at issue here, which states in full: "For waste and substances which are generated outside of Alabama and disposed of at a commercial site for the disposal of hazardous waste or hazardous substances in Alabama, an additional fee shall be levied at the rate of $72.00 per ton." 22-30B-2(b). Petitioner filed suit in state court requesting declaratory relief against respondents and seeking to enjoin enforcement of the Act. In addition to state-law claims, petitioner contended that the Act violated the Commerce, Due Process, and Equal Protection Clauses of the United States Constitution, and was pre-empted by various federal statutes. The trial court declared the base fee and the cap provisions of the Act to be valid and constitutional; but, finding the only basis for the additional fee to be the origin of the waste, the trial court declared it to be in violation of the Commerce Clause. App. to Pet. for Cert. 83a-88a. Both sides appealed. The Alabama Supreme Court affirmed the rulings concerning the base fee and cap provisions, but reversed the decision regarding the additional fee. The court held that the fee at issue advanced legitimate local purposes that could not be adequately served by reasonable nondiscriminatory alternatives, and was therefore valid under the Commerce Clause. 584 So.2d, at 1390.Chemical Waste Management, Inc., petitioned for writ of certiorari, challenging all aspects of the Act. Because of the importance of the federal question and the likelihood that it had been decided in a way conflicting with applicable decisions of this Court, this Court's Rule 10.1(c), we granted certiorari limited to petitioner's Commerce Clause challenge to the additional fee. . We now reverse.IINo State may attempt to isolate itself from a problem common to the several States by raising barriers to the free flow of interstate trade.3 Today, in Fort Gratiot Sanitary Landfill, Inc. v. Michigan Dept. of Natural Resources, post, p. 353, we have also considered a Commerce Clause challenge to a Michigan law prohibiting private landfill operators from accepting solid waste originating outside the county in which their facilities operate. In striking down that law, we adhered to our decision in Philadelphia v. New Jersey, , where we found New Jersey's prohibition of solid waste from outside that State to amount to economic protectionism barred by the Commerce Clause: "`[T]he evil of protectionism can reside in legislative means, as well as legislative ends. Thus, it does not matter whether the ultimate aim of ch. 363 is to reduce the waste disposal costs of New Jersey residents or to save remaining open lands from pollution, for we assume New Jersey has every right to protect its residents' pocketbooks as well as their environment. And it may be assumed as well that New Jersey may pursue those ends by slowing the flow of all waste into the State's remaining landfills, even though interstate commerce may incidentally be affected. But whatever New Jersey's ultimate purpose, it may not be accompanied by discriminating against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently. Both on its face and in its plain effect, ch. 363 violates this principle of nondiscrimination. "`The Court has consistently found parochial legislation of this kind to be constitutionally invalid, whether the ultimate aim of the legislation was to assure a steady supply of milk by erecting barriers to allegedly ruinous outside competition, Baldwin v. G. A. F. Seelig, Inc.[511,] 522-524 [(1935)]; or to create jobs by keeping industry within the State, Foster-Fountain Packing Co. v. Haydel, [(1928)]; Johnson v. Haydel, [(1928)]; Toomer v. Witsell[385,] 403-404 [(1948)]; or to preserve the State's financial resources from depletion by fencing out indigent immigrants, Edwards v. California, [(1941)].'" Fort Gratiot Sanitary Landfill, post, at 360 (quoting Philadelphia v. New Jersey, supra, at 626-627). To this list may be added cases striking down a tax discriminating against interstate commerce, even where such tax was designed to encourage the use of ethanol, and thereby reduce harmful exhaust emissions, New Energy Co. of Ind. v. Limbach, , or to support inspection of foreign cement to ensure structural integrity, Hale v. Bimco Trading, Inc., . For in all of these cases, "a presumably legitimate goal was sought to be achieved by the illegitimate means of isolating the State from the national economy." Philadelphia v. New Jersey, supra, at 627.The Act's additional fee facially discriminates against hazardous waste generated in States other than Alabama, and the Act overall has plainly discouraged the full operation of petitioner's Emelle facility.4 Such burdensome taxes imposed on interstate commerce alone are generally forbidden: "[A] State may not tax a transaction or incident more heavily when it crosses state lines than when it occurs entirely within the State." Armco Inc. v. Hardesty, ; see also Walling v. Michigan, ; Guy v. Baltimore, . Once a state tax is found to discriminate against out-of-state commerce, it is typically struck down without further inquiry. See, e.g., Westinghouse Electric Corp. v. Tully, ; Maryland v. Louisiana, ; Boston Stock Exchange v. State Tax Comm'n, .The State, however, argues that the additional fee imposed on out-of-state hazardous waste serves legitimate local purposes related to its citizens' health and safety. Because the additional fee discriminates both on its face and in practical effect, the burden falls on the State "to justify it both in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake." Hunt v. Washington Apple State Advertising Comm'n, ; see also Fort Gratiot Sanitary Landfill, post, at 359; New Energy Co., supra, at 278-279. "At a minimum such facial discrimination invokes the strictest scrutiny of any purported legitimate local purpose and of the absence of nondiscriminatory alternatives." Hughes v. Oklahoma, .5 The State's argument here does not significantly differ from the Alabama Supreme Court's conclusions on the legitimate local purposes of the additional fee imposed, which were: "The Additional Fee serves these legitimate local purposes that cannot be adequately served by reasonable nondiscriminatory alternatives: (1) protection of the health and safety of the citizens of Alabama from toxic substances; (2) conservation of the environment and the state's natural resources; (3) provision for compensatory revenue for the costs and burdens that out-of-state waste generators impose by dumping their hazardous waste in Alabama; (4) reduction of the overall flow of wastes traveling on the state's highways, which flow creates a great risk to the health and safety of the state's citizens." 584 So.2d, at 1389. These may all be legitimate local interests, and petitioner has not attacked them. But only rhetoric, and not explanation, emerges as to why Alabama targets only interstate hazardous waste to meet these goals. As found by the trial court, "[a]lthough the Legislature imposed an additional fee of $72.00 per ton on waste generated outside Alabama, there is absolutely no evidence before this Court that waste generated outside Alabama is more dangerous than waste generated in Alabama. The Court finds under the facts of this case that the only basis for the additional fee is the origin of the waste." App. to Pet. for Cert. 83a-84a. In the face of such findings, invalidity under the Commerce Clause necessarily follows, for "whatever [Alabama's] ultimate purpose, it may not be accomplished by discriminating against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently." Philadelphia v. New Jersey, 437 U.S., at 626-627; see New Energy Co., 486 U.S., at 279-280. The burden is on the State to show that "the discrimination is demonstrably justified by a valid factor unrelated to economic protectionism,"6 Wyoming v. Oklahoma, (emphasis added), and it has not carried this burden. Cf. Fort Gratiot Sanitary Landfill, post, at 361.Ultimately, the State's concern focuses on the volume of the waste entering the Emelle facility.7 Less discriminatory alternatives, however, are available to alleviate this concern, not the least of which are a generally applicable per-ton additional fee on all hazardous waste disposed of within Alabama, cf. Commonwealth Edison Co. v. Montana, , or a per-mile tax on all vehicles transporting hazardous waste across Alabama roads, cf. American Trucking Assns., Inc. v. Scheiner, , or an evenhanded cap on the total tonnage landfilled at Emelle, see Philadelphia v. New Jersey, supra, at 626, which would curtail volume from all sources.8 To the extent Alabama's concern touches environmental conservation and the health and safety of its citizens, such concern does not vary with the point of origin of the waste, and it remains within the State's power to monitor and regulate more closely the transportation and disposal of all hazardous waste within its borders. Even with the possible future financial and environmental risks to be borne by Alabama, such risks likewise do not vary with the waste's State of origin in a way allowing foreign, but not local, waste to be burdened.9 In sum, we find the additional fee to be "an obvious effort to saddle those outside the State" with most of the burden of slowing the flow of waste into the Emelle facility. Philadelphia v. New Jersey, 437 U.S., at 629. "That legislative effort is clearly impermissible under the Commerce Clause of the Constitution." Ibid.Our decisions regarding quarantine laws do not counsel a different conclusion.10 The Act's additional fee may not legitimately be deemed a quarantine law, because Alabama permits both the generation and landfilling of hazardous waste within its borders and the importation of still more hazardous waste subject to payment of the additional fee. In any event, while it is true that certain quarantine laws have not been considered forbidden protectionist measures, even though directed against out-of-state commerce, those laws "did not discriminate against interstate commerce as such, but simply prevented traffic in noxious articles, whatever their origin." Philadelphia v. New Jersey, supra, at 629.11 As the Court has stated in Guy v. Baltimore, 100 U.S., at 443: "In the exercise of its police powers, a State may exclude from its territory, or prohibit the sale therein of any articles which, in its judgment, fairly exercised, are prejudicial to the health or which would endanger the lives or property of its people. But if the State, under the guise of exerting its police powers, should make such exclusion or prohibition applicable solely to articles, of that kind, that may be produced or manufactured in other States, the courts would find no difficulty in holding such legislation to be in conflict with the Constitution of the United States." See also Reid v. Colorado, ; Railroad Co. v. Husen, . The law struck down in Philadelphia v. New Jersey left local waste untouched, although no basis existed by which to distinguish interstate waste . But "[i]f one is inherently harmful, so is the other. Yet New Jersey has banned the former, while leaving its landfill sites open to the latter." 437 U.S., at 629. Here, the additional fee applies only to interstate hazardous waste, but at all points from its entrance into Alabama until it is landfilled at the Emelle facility, every concern related to quarantine applies perforce to local hazardous waste, which pays no additional fee. For this reason, the additional fee does not survive the appropriate scrutiny applicable to discriminations against interstate commerce.Maine v. Taylor, , provides no additional justification. Maine there demonstrated that the out-of-state baitfish were subject to parasites foreign to in-stat baitfish. This difference posed a threat to the State's natural resources, and absent a less discriminatory means of protecting the environment - and none was available - the importation of baitfish could properly be banned. Id., at 140. To the contrary, the record establishes that the hazardous waste at issue in this case is the same regardless of its point of origin. As noted in Fort Gratiot Sanitary Landfill, "our conclusion would be different if the imported waste raised health or other concerns not presented by [Alabama] waste." Post, at 367. Because no unique threat is posed, and because adequate means other than overt discrimination meet Alabama's concerns, Maine v. Taylor provides the State no respite.IIIThe decision of the Alabama Supreme Court is reversed, and the cause is remanded for proceedings not inconsistent with this opinion, including consideration of the appropriate relief to petitioner. See McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Fla. Dept. of Business Regulations, ; Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, .So ordered. |
0 | Rehearing Denied June 21, 1948. [ Phyle v. Duffy ], 432] Mr. Morris Lavine, of Los Angeles, Cal., for petitioner. Mr. Clarence Alinn, of San Francisco, Cal., for respondent. Mr. Justice BLACK delivered the opinion of the Court. The petitioner is under sentence of death for murder in the first degree imposed by a California superior court and affirmed by the State Supreme Court. People v. Phyle, 28 Cal.2d 671, 171 P.2d 428. The validity of that sentence is , 433] not here challenged. 1 But 1367 of the California Penal Code provides that 'A person cannot be tried, adjudged to punishment, or punished for a public offense, while he is insane.' Thus if petitioner is insane, California law prohibits his execution under the death sentence which he received. The legal questions here presented relate to the procedures adopted by California to determine whether petitioner is sane or insane as a matter of fact. It is petitioner's contention that, though having been pronounced insane in a judicial proceeding after his conviction, and though he in fact is still insane, he is about to be execute because a state doctor, acting under authority of state statutes, has declared him restored to sanity. The doctor reached his determination without notice or hearings, and without any opportunity on petitioner's part to obtain an orginal court hearing and adjudication of his sanity, or even to obtain a court review of the doctor's conclusion that he is sane. This procedure it is argued constitutes a denial to petitioner of , 434] that due process of law guaranteed him by the Fourteenth Amendment. This contention was urged upon the California Supreme Court in habeas corpus proceedings there instituted. That court entertained and considered the petition, but, with two judges dissenting, denied relief, sustaining the validity of the power of the state's executive agents to follow the prescribed statutory procedures. In re Phyle, 30 Cal.2d 838, 843, 186 P.2d 134. We granted certiorari because of the serious nature of the due process contentions presented in the petition. . Here the California attorney general, while supporting the State Supreme Court's denial of habeas corpus, asserts that California affords petitioner an adequate judicial remedy by way of mandamus, a procedure which has not yet been sought by petitioner. The California procedure may perhaps be better understood by explaining the application of the controlling California statutes to petitioner's case. While he was in prison awaiting execution of the death sentence a question arose concerning the petitioner's sanity at that time. Section 3701 of the State Penal Code2 prescribes that if 'there is good reason to believe' that a defendant under sentence of death 'has become insane, the warden must call such fact to the attention of the district attorney.' It is the district attorney's 'duty' immediately , 435] to institute proceedings in an appropriate trial court to determine the sanity of the defendant, and the court 'must at once' summon a jury of twelve to 'hear such inquiry.' In petitioner's case this prescribed course was followed, a judicial hearing was held as provided by 3702,3 and petitioner was adjudged insane. In accordance with 37034 the court then ordered that petitioner 'be taken to a state hospital for the insane and be there kept in safe confinement until his reason is restored.' It will be noted that the petitioner obtained a judicial hearing as to sanity only because the warden instituted proceedings after determining that there was 'good reason to believe' that the petitioner was insane. Thus, the opportunity for a person under sentence of death to have a hearing before judge and jury on the question of his sanity depends in the first instance solely on the warden. After adjudication of insanity the petitioner was taken to a state hospital for the insane in compliance with the trial court's order of commitment. In accordance with 37045 the warden then suspended the death sen- , 436] tence and delivered certified copies of the court's order to the governor and to the medical superintendent of the state hospital to which petitioner was sent. As 3704 provides, the superintendent was directed that when petitioner 'recovers his reason,' the superintendent 'must certify that fact' to the governor, who is then required to issue to the warden his warrant appointing a day for the execution of the judgment. The warden then returns the defendant to the State prison pending the execution of the judgment. This course was followed with reference to the petitioner. Eighteen days after his admission to the state hospital the medical superintendent certified to the governor that the petitioner was then sane. He was returned to the custody of the prison warden, and the governor set a new date for his execution. The medical superintendent's determination of petitioner's sanity was based on his own ex parte investigation, no notice or hearings having been afforded petitioner or any person on his behalf. It is thus clear that the California statutory scheme here challenged provides neither an administrative nor a judicial hearing as a prerequisite to a determination that a condemned defendant judicially adjudicated to be insane has been restored to sanity; one man in an ex parte investigation decides the question upon which hangs the defendant's life, in the absence of a later request by the prison warden for , 437] a judicial hearing on the ground that there is then 'reason to believe' the defendant has become insane. The holding of the State Supreme Court in habeas corpus proceeding was: 'There is no authority * * * for the proposition that defendant has a right to habeas corpus or other judicial proceeding to determine the question of his sanity after his release from the state hospital. In fact section 3700 of the Penal Code6 expressly prohibits such a proceeding. Once the superintendent certifies that defendant is sane, he is remanded to the custody of the warden for execution and 'No judge, court, or officer other than the Governor' can then suspend the execution of the judgment, 'except the warden of the State prison to whom he is delivered * * *." In re Phyle, 30 Cal.2d at page 842, 843, 186 P.2d at page 137. For the statements in its opinion that the due process clause of the Fourteenth Amendment conferred no right on a condemned defendant to any kind of judicial adjudication or review on the question of sanity, the State Supreme Court primarily relied on Nobles v. Georgia, 168 U.. 398. We do not think that either the actual holding or what was said in the opinion in that case would necessarily require a rejection of the contentions made here against the California procedures. The Georgia law under scrutiny in the Nobles case provided that the sanity of a person previously condemned to death should be determined by a tribunal formed in the following manner: 'The Sheriff of the , 438] county, with concurrence and assistance of the Ordinary thereof, (emphasis added) shall summon a jury of twelve men to inquire into such insanity * * *.' Code 1882, 4666. If this tribunal found insanity the sheriff was required to suspend execution of sentence and report his action to the presiding judge. Restoration of sanity so as to justify execution was to be determined by the presiding judge 'by inquisition or otherwise.' Thus 'the only question' in the Nobles case, as the Court there said, was 'whether * * * in order to constitute due process of law' the question of insanity of a condemned defendant must 'be tried by a jury in a judicial proceeding surrounded by all the safeguards and requirements of a commonlaw jury trial, and even although by the state law full and adequate administrative and quasi judicial process is created for the purpose of investigating the suggestion.' at page 405, 18 S.Ct. at page 90. This agency for a hearing to inquire into the prisoner's sanity, composed as it was of sheriff, county judge and jury, was referred to as an 'apt and special tribunal.' There is provision in the California statutes for a hearing before a judge and jury when, but only when, the warden is of opinion that there 'is reason to believe' a defendant is insane. The Nobles case does stand for the proposition that a condemned defendant has no 'absolute right' to a hearing on the question of his sanity on his mere 'suggestion.' Such an absolute right, this Court thought, would make the punishment of a defendant 'depend solely upon his fecundity in making suggestion after suggestion of insanity, to be followed by trial upon trial.' at page 406, 18 S.Ct. at page 90. For this reason, the Court in the Nobles opinion cited and quoted from legal commentators and from judicial opinions which emphasized, as the opinion in the Nobles case itself emphasized, the importance of leaving to the 'discretion of a judge' the most appropriate procedure for determining , 439] the sanity of a defendant already sentenced to death. It was in this connection that the Court made the statemen in the Nobles case upon which the California Supreme Court particularly relied, that 'the manner in which such question should be determined was purely a matter of legislative regulation.' Reading this statement in its context and in relation to the Georgia procedure, we do not understand that the Court in the Nobles case passed upon the question here urged: whether a state which bars the execution of insane persons can submit to a single individual this question, crucial to life, to be decided by that individual ex parte, with or without notice and hearings as the individual may choose, and without any judicial supervision, control or review whatever. The Nobles case we do understand to be an authority for the principle that a condemned defendant cannot automatically block execution by suggestions of insanity, and that a state tribunal, particularly a judge, must be left free to exercise a reasonable discretion in determining whether the facts warrant a full inquiry and hearing upon the sanity of a person sentenced to death. 7 What has been said previously indicates the gravity of the questions here raised under the due process clause as heretofore construed by this Court, both the contention that execution of an insane man is offensive to the fundamental principles of liberty and justice which lie at the base of all our civil and political institutions, d amson v. California, , 1677, 171 A.L.R. 1223; Carter v. Illinois, , 175, 179, 218, 220, and the different contention that life shall not be taken by a state as the result of the unreviewable ex parte determination of a crucial fact made by a single excutive officer. See Ng Fung Ho v. White, 440] 276.8 It is not appropriate for us to pass on such constitutional questions in this habeas corpus case if, as the California attorney general contends, there is a state remedy by mandamus available to petitioner under which he can invoke judicial action to compel the warden to initiate judicial proceedings, and in which mandamus proceedings the court will hear and consider evidence to determine whether there is 'reason to believe' that the petitioner is insane. State of New York ex rel. Whitman v. Wilson, Warden, ; Woods v. Nierstheimer, ; Carter v. Illinois, . See also Simon v. Craft, , 840. The State Supreme Court in denying habeas corpus said that the state statutes made 'no provision for a judicial determination of the question of the sanity of a defendant delivered to the warden of a state prison for execution except as set forth in section 3701.' That is the section which requires a judicial inquiry with a court and jury only when and if the warden certifies that 'there is good reason to believe' that a person sentenced to death has 'become insane.' But it does not necessarily follow from the fact that petitioner cannot obtain a full-fledged judicial hearing as to sanity on his own motion made directly to a state court that he is without some other adequate state remedy. And the state attorney general asserts here that the petitioner does have an 'ample remedy, if the facts support him, by application to the California courts for a writ of mandamus' to compel the warden to institute proceedings under 3701. , 441] Thus we have an unequivocal declaration by the state attorney general that petitioner has not attempted to take advantage of an available state remedy. The attorney general is the highest non-judicial legal officer of California, and is particularly charged with the duty of supervising administration of the criminal laws. 9 His statement on this question is entitled to great weight in the absence of controlling state statutes and court decisions. 10 Nor is there anything in the State Supreme Court's opinion in this case that need be considered in conflict with the attorney general's opinion. While that court held that there was no statutory provision for petitioner to obtain a sanity hearing except through action by the warden as prescribed in 3701, it did not hold or even considerwhether there was judicial power under state law to compel the warden to do his duty under 3701. It did declare, clearly and emphatically, that the statute imposed a mandatory obligation on the warden to initiate judicial proceedings if there was good reason to believe a condemned defendant insane, an obligation that continued to rest upon the warden even after e rtification of restoration to sanity by the medical superintendent. The Supreme Court also declared that this duty would continue up to the very time of execution. Failure of the warden to perform this obligation, so the court said, would be a 'violation of Penal Code section 1367,' which section prohibits execution of an insane man. In view of this mandatory obligation upon the warden to initiate proceedings if 'there is good reason to believe' a defendant sentenced to death is insane, it would be somewhat anomalous, to say the least, if California courts were wholly without power to correct an executive agent's abuse of authority in a , 442] matter of such great significance as the execution of insane persons. The jurisdiction of California courts to issue mandamus has its source in art. VI, 4, 4b, 5 of the state constitution. The writ can issue to any inferior tribunal or person to compel an act which the law specifically enjoins. Code of Civil Procedure of California, 1085. It has been held that the writ may issue against the secretary of state, Hutchinson v. Brown, 122 Cal. 189, 54 P. 738, 42 L.R.A. 232, or even against the governor. Elliott v. Pardee, Governor, 149 Cal. 516, 520, 86 P. 1087, 1089. Petitioner contends, however, that mandamus would not be available under California law if there is another adequate remedy, see Kahn v. Smith, 23 Cal.2d 12, 142 P.2d 13, that here habeas corpus is available, and hence mandamus is not. This contention is fully answered by the State Supreme Court's opinion in this case, holding that neither habeas corpus nor any other remedy is available to test sanity of a condemned defendant, except that remedy under 3701 which only the warden can institute. Hence, so far as it here appears, mandamus to compel action by the warden is the only available remedy. Petitioner contends that this remedy is inadequate because under California law no relief could be hoped for in a mandamus proceeding without a showing that the warden's non-action was arbitrary and capricious. We cannot know, of course, just what precise standards the State Supreme Court may hold must be met by petitioner in order to obtain the judicial inquiry provided in 3701. We are persuaded by the attorney general's statements and brief, and by the state constitution, state statutes, and state decisions to which he referred, that mandamus is probably available, and that in a mandamus proceeding some issues of fact concerning petitioner's sanity can be drawn by the parties, resolved by the courts, , 443] and provide support for relief. Different language has been used in different opinions concerning the conditions upon which the writ will issue in California. Although it has been said that generally the writ will issue only to correct an abuse of discretion, Bank of Italy v. Johnson, 200 Cal. 1, 31-33, 251 P. 784, 795, 796 and cases cited, it has also been pointed out that in some circumstances writs can issue to compel action in a particular way. Wood v. Strother, 76 Cal. 545, 549, 18 P. 766, 769, 9 Am.St.Rep. 249; Landsborough v. Kelly, 1 Cal.2d 739, 744, 37 P.2d 93, 95, 96 A.L.R. 707. In considering what the issues may be in a mandamus proceeding, it must be borne in mind that the warden is under a mandatory duty to initiate judicial proceedings, not when a defendant is insane, but when 'there is good reason to believe' he is insane. We cannot say at this time that California's remedy by mandamus will be less than a substantial equivalent11 of one which authorized him to apply directly to a court for a full hearing. For this Court held in Nobles v. Georgia, supra, that in the absence of sufficient reasons for holding a full hearing into the sanit of a defendant sentenced to death, a state judge may deny such a hearing consistently with due process. As previously pointed out, the decision in the Nobles case emphasized that due process of law had never necessarily envisioned a full court hearing every time the insanity of a condemned defendant was suggested. Applications for inquiries into sanity made by a defendant sentenced to death, unsupported by facts, and buttressed by no good reasons for believing that the defendant has lost his sanity, cannot, with any appropriate regard for society and for the judicial process, call for the delays in execution incident to full judicial inquiry. And a court can just as satisfac- , 444] torily determine by mandamus as by direct application whether there are good reasons to have a full-fledged judicial inquiry into a defendant's sanity. In this situation we find no federal constitutional question presented which is ripe for decision here. So here, as in Woods v. Nierstheimer, supra, being unable to say that the judgment denying habeas corpus may not rest on an adequate non-federal ground, the writ of certiorari is Dismissed. Mr. Justice FRANKFURTER, whom Mr. Justice DOUGLAS, Mr. Justice MURPHY, and Mr. Justice RUTLEDGE join, concurring. Where life is at stake one cannot be too careful. I's had better be dotted and t's crossed. And so I deem it proper to state my understanding of the opinion of the Court, on the basis of which I concur in it. We granted certiorari to review a decision of the Supreme Court of California which dismissed habeas corpus proceedings brought in that court. We did so on the assumption that the case raised questions under the Fourteenth Amendment-more particularly, whether an unreviewable determination by the superintendent of a State hospital, that one convicted of murder and found to have become insane after conviction had been restored to sanity and therefore was subject to execution, was consistent with the due process which the Fourteenth Amendment secures. The Court now finds that all that the California Supreme Court did was to hold that as a matter of California procedure the petitioner's claim could not be passed on by the direct remedy of habeas corpus, but that there is available a special local remedy, labeled mandamus, whereby the petitioner can judicially test his present sanity. In short, the Court dismisses the writ of certiorari because the decision of the court below rests on , 445] a purely State ground in that there is a State remedy available, which has not been pursued, by means of which he can secure the rights he claims under the United States Constitution. Of course I recognize the weight to be attached to the Attorney General's views regarding the law of California. But the controlling voice on California law is that of the Supreme Court of California. Whatever may be the elegancies of procedure by which the matter is to be determined, our decision declining to consider the grave constitutional issues which we thought we had before us, is contingent upon a determination by the Supreme Court of California that the law of that State is what our decision presupposes it to be, namely, that California by a remedy which California chooses to call mandamus enables the present petitioner to secure a judicial determination of his present sanity. This means, of course, not the very restricted scope of relief which is normally associated with the traditional remedy of mandamus. It presupposes that California affords petitioner the means of challenging in a substantial way the ex parte finding of the Superintendent of the State Hospital for the Insane and enables him to secure judicial determination of the claims he has made in his petition for habeas corpus which, so the Court now holds, is not the proper way to proceed. Upon thi view I concur in the decision and opinion of the Court. |
3 | Appellant is a Florida corporation whose principal offices are in Miami. It conducts most of its restaurant business through a franchise operation, under which franchisees are licensed to use appellant's trademarks and service marks in leased standardized restaurant facilities for a period of 20 years. The governing contracts provide that the franchise relationship is established in Miami and governed by Florida law, and call for payment of all required monthly fees and forwarding of all relevant notices to the Miami headquarters. The Miami headquarters sets policy and works directly with the franchisees in attempting to resolve major problems. Day-to-day monitoring of franchisees, however, is conducted through district offices that in turn report to the Miami headquarters. Appellee is a Michigan resident who, along with another Michigan resident, entered into a 20-year franchise contract with appellant to operate a restaurant in Michigan. Subsequently, when the restaurant's patronage declined, the franchisees fell behind in their monthly payments. After extended negotiations among the franchisees, the Michigan district office, and the Miami headquarters proved unsuccessful in solving the problem, headquarters terminated the franchise and ordered the franchisees to vacate the premises. They refused and continued to operate the restaurant. Appellant then brought a diversity action in Federal District Court in Florida, alleging that the franchisees had breached their franchise obligations and requesting damages and injunctive relief. The franchisees claimed that, because they were Michigan residents and because appellant's claim did not "arise" within Florida, the District Court lacked personal jurisdiction over them. But the court held that the franchisees were subject to personal jurisdiction pursuant to Florida's long-arm statute, which extends jurisdiction to any person, whether or not a citizen or resident of the State, who breaches a contract in the State by failing to perform acts that the contract requires to be performed there. Thereafter, the court entered judgment against the franchisees on the merits. The Court of Appeals reversed, holding that "[j]urisdiction under these circumstances would offend the fundamental fairness which is the touchstone of due process."Held: The District Court's exercise of jurisdiction pursuant to Florida's long-arm statute did not violate the Due Process Clause of the Fourteenth Amendment. Pp. 471-487. (a) A forum may assert specific jurisdiction over a nonresident defendant where an alleged injury arises out of or relates to actions by the defendant himself that are purposefully directed toward forum residents, and where jurisdiction would not otherwise offend "fair play and substantial justice." Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum. Pp. 471-478. (b) An individual's contract with an out-of-state party cannot alone automatically establish sufficient minimum contacts in the other party's home forum. Instead, the prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing, must be evaluated to determine whether a defendant purposefully established minimum contacts within the forum. Pp. 478-479. (c) Here, appellee established a substantial and continuing relationship with appellant's Miami headquarters, and received fair notice from the contract documents and the course of dealings that he might be subject to suit in Florida. The District Court found that appellee is an "experienced and sophisticated" businessman who did not act under economic duress or disadvantage imposed by appellant, and appellee has pointed to no other factors that would establish the unconstitutionality of Florida's assertion of jurisdiction. Pp. 479-487. 724 F.2d 1505, reversed and remanded.BRENNAN, J., delivered the opinion of the Court, in which BURGER, C. J., and MARSHALL, BLACKMUN, REHNQUIST, and O'CONNOR, JJ., joined. STEVENS, J., filed a dissenting opinion, in which WHITE, J., joined, post, p. 487. POWELL, J., took no part in the consideration or decision of the case.Joel S. Perwin argued the cause and filed briefs for appellant.Thomas H. Oehmke argued the cause and filed a brief for appellee.JUSTICE BRENNAN delivered the opinion of the Court.The State of Florida's long-arm statute extends jurisdiction to "[a]ny person, whether or not a citizen or resident of this state," who, inter alia, "[b]reach[es] a contract in this state by failing to perform acts required by the contract to be performed in this state," so long as the cause of action arises from the alleged contractual breach. Fla. Stat. 48.193 (1)(g) (Supp. 1984). The United States District Court for the Southern District of Florida, sitting in diversity, relied on this provision in exercising personal jurisdiction over a Michigan resident who allegedly had breached a franchise agreement with a Florida corporation by failing to make required payments in Florida. The question presented is whether this exercise of long-arm jurisdiction offended "traditional conception[s] of fair play and substantial justice" embodied in the Due Process Clause of the Fourteenth Amendment. International Shoe Co. v. Washington, .IABurger King Corporation is a Florida corporation whose principal offices are in Miami. It is one of the world's largest restaurant organizations, with over 3,000 outlets in the 50 States, the Commonwealth of Puerto Rico, and 8 foreign nations. Burger King conducts approximately 80% of its business through a franchise operation that the company styles the "Burger King System" - "a comprehensive restaurant format and operating system for the sale of uniform and quality food products." App. 46.1 Burger King licenses its franchisees to use its trademarks and service marks for a period of 20 years and leases standardized restaurant facilities to them for the same term. In addition, franchisees acquire a variety of proprietary information concerning the "standards, specifications, procedures and methods for operating a Burger King Restaurant." Id., at 52. They also receive market research and advertising assistance; ongoing training in restaurant management;2 and accounting, cost-control, and inventory-control guidance. By permitting franchisees to tap into Burger King's established national reputation and to benefit from proven procedures for dispensing standardized fare, this system enables them to go into the restaurant business with significantly lowered barriers to entry.3 In exchange for these benefits, franchisees pay Burger King an initial $40,000 franchise fee and commit themselves to payment of monthly royalties, advertising and sales promotion fees, and rent computed in part from monthly gross sales. Franchisees also agree to submit to the national organization's exacting regulation of virtually every conceivable aspect of their operations.4 Burger King imposes these standards and undertakes its rigid regulation out of conviction that "[u]niformity of service, appearance, and quality of product is essential to the preservation of the Burger King image and the benefits accruing therefrom to both Franchisee and Franchisor." Id., at 31.Burger King oversees its franchise system through a two-tiered administrative structure. The governing contracts provide that the franchise relationship is established in Miami and governed by Florida law, and call for payment of all required fees and forwarding of all relevant notices to the Miami headquarters.5 The Miami headquarters sets policy and works directly with its franchisees in attempting to resolve major problems. See nn. 7, 9, infra. Day-to-day monitoring of franchisees, however, is conducted through a network of 10 district offices which in turn report to the Miami headquarters.The instant litigation grows out of Burger King's termination of one of its franchisees, and is aptly described by the franchisee as "a divorce proceeding among commercial partners." 5 Record 4. The appellee John Rudzewicz, a Michigan citizen and resident, is the senior partner in a Detroit accounting firm. In 1978, he was approached by Brian MacShara, the son of a business acquaintance, who suggested that they jointly apply to Burger King for a franchise in the Detroit area. MacShara proposed to serve as the manager of the restaurant if Rudzewicz would put up the investment capital; in exchange, the two would evenly share the profits. Believing that MacShara's idea offered attractive investment and tax-deferral opportunities, Rudzewicz agreed to the venture. 6 id., at 438-439, 444, 460.Rudzewicz and MacShara jointly applied for a franchise to Burger King's Birmingham, Michigan, district office in the autumn of 1978. Their application was forwarded to Burger King's Miami headquarters, which entered into a preliminary agreement with them in February 1979. During the ensuing four months it was agreed that Rudzewicz and MacShara would assume operation of an existing facility in Drayton Plains, Michigan. MacShara attended the prescribed management courses in Miami during this period, see n. 2, supra, and the franchisees purchased $165,000 worth of restaurant equipment from Burger King's Davmor Industries division in Miami. Even before the final agreements were signed, however, the parties began to disagree over site-development fees, building design, computation of monthly rent, and whether the franchisees would be able to assign their liabilities to a corporation they had formed.6 During these disputes Rudzewicz and MacShara negotiated both with the Birmingham district office and with the Miami headquarters.7 With some misgivings, Rudzewicz and MacShara finally obtained limited concessions from the Miami headquarters,8 signed the final agreements, and commenced operations in June 1979. By signing the final agreements, Rudzewicz obligated himself personally to payments exceeding $1 million over the 20-year franchise relationship. The Drayton Plains facility apparently enjoyed steady business during the summer of 1979, but patronage declined after a recession began later that year. Rudzewicz and MacShara soon fell far behind in their monthly payments to Miami. Headquarters sent notices of default, and an extended period of negotiations began among the franchisees, the Birmingham district office, and the Miami headquarters. After several Burger King officials in Miami had engaged in prolonged but ultimately unsuccessful negotiations with the franchisees by mail and by telephone,9 headquarters terminated the franchise and ordered Rudzewicz and MacShara to vacate the premises. They refused and continued to occupy and operate the facility as a Burger King restaurant.BBurger King commenced the instant action in the United States District Court for the Southern District of Florida in May 1981, invoking that court's diversity jurisdiction pursuant to 28 U.S.C. 1332(a) and its original jurisdiction over federal trademark disputes pursuant to 1338(a).10 Burger King alleged that Rudzewicz and MacShara had breached their franchise obligations "within [the jurisdiction of] this district court" by failing to make the required payments "at plaintiff's place of business in Miami, Dade County, Florida," § 6, App. 121, and also charged that they were tortiously infringing its trademarks and service marks through their continued, unauthorized operation as a Burger King restaurant, §§ 35-53, App. 130-135. Burger King sought damages, injunctive relief, and costs and attorney's fees. Rudzewicz and MacShara entered special appearances and argued, inter alia, that because they were Michigan residents and because Burger King's claim did not "arise" within the Southern District of Florida, the District Court lacked personal jurisdiction over them. The District Court denied their motions after a hearing, holding that, pursuant to Florida's long-arm statute, "a non-resident Burger King franchisee is subject to the personal jurisdiction of this Court in actions arising out of its franchise agreements." Id., at 138. Rudzewicz and MacShara then filed an answer and a counterclaim seeking damages for alleged violations by Burger King of Michigan's Franchise Investment Law, Mich. Comp. Laws 445.1501 et seq. (1979).After a 3-day bench trial, the court again concluded that it had "jurisdiction over the subject matter and the parties to this cause." App. 159. Finding that Rudzewicz and MacShara had breached their franchise agreements with Burger King and had infringed Burger King's trademarks and service marks, the court entered judgment against them, jointly and severally, for $228,875 in contract damages. The court also ordered them "to immediately close Burger King Restaurant Number 775 from continued operation or to immediately give the keys and possession of said restaurant to Burger King Corporation," id., at 163, found that they had failed to prove any of the required elements of their counterclaim, and awarded costs and attorney's fees to Burger King.Rudzewicz appealed to the Court of Appeals for the Eleventh Circuit.11 A divided panel of that Circuit reversed the judgment, concluding that the District Court could not properly exercise personal jurisdiction over Rudzewicz pursuant to Fla. Stat. 48.193(1)(g) (Supp. 1984) because "the circumstances of the Drayton Plains franchise and the negotiations which led to it left Rudzewicz bereft of reasonable notice and financially unprepared for the prospect of franchise litigation in Florida." Burger King Corp. v. MacShara, 724 F.2d 1505, 1513 (1984). Accordingly, the panel majority concluded that "[j]urisdiction under these circumstances would offend the fundamental fairness which is the touchstone of due process." Ibid.Burger King appealed the Eleventh Circuit's judgment to this Court pursuant to 28 U.S.C. 1254(2), and we postponed probable jurisdiction. . Because it is unclear whether the Eleventh Circuit actually held that Fla. Stat. 48.193(1)(g) (Supp. 1984) itself is unconstitutional as applied to the circumstances of this case, we conclude that jurisdiction by appeal does not properly lie and therefore dismiss the appeal.12 Treating the jurisdictional statement as a petition for a writ of certiorari, see 28 U.S.C. 2103, we grant the petition and now reverse.IIAThe Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful "contacts, ties, or relations." International Shoe Co. v. Washington, 326 U.S., at 319.13 By requiring that individuals have "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign," Shaffer v. Heitner, (STEVENS, J., concurring in judgment), the Due Process Clause "gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit," World-Wide Volkswagen Corp. v. Woodson, .Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there,14 this "fair warning" requirement is satisfied if the defendant has "purposefully directed" his activities at residents of the forum, Keeton v. Hustler Magazine, Inc., , and the litigation results from alleged injuries that "arise out of or relate to" those activities, Helicopteros Nacionales de Colombia, S. A. v. Hall, (1984).15 Thus "[t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State" and those products subsequently injure forum consumers. World-Wide Volkswagen Corp. v. Woodson, supra, at 297-298. Similarly, a publisher who distributes magazines in a distant State may fairly be held accountable in that forum for damages resulting there from an allegedly defamatory story. Keeton v. Hustler Magazine, Inc., supra; see also Calder v. Jones, (suit against author and editor). And with respect to interstate contractual obligations, we have emphasized that parties who "reach out beyond one state and create continuing relationships and obligations with citizens of another state" are subject to regulation and sanctions in the other State for the consequences of their activities. Travelers Health Assn. v. Virginia, . See also McGee v. International Life Insurance Co., .We have noted several reasons why a forum legitimately may exercise personal jurisdiction over a nonresident who "purposefully directs" his activities toward forum residents. A State generally has a "manifest interest" in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors. Id., at 223; see also Keeton v. Hustler Magazine, Inc., supra, at 776. Moreover, where individuals "purposefully derive benefit" from their interstate activities, Kulko v. California Superior Court, , it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities; the Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed. And because "modern transportation and communications have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity," it usually will not be unfair to subject him to the burdens of litigating in another forum for disputes relating to such activity. McGee v. International Life Insurance Co., supra, at 223.Notwithstanding these considerations, the constitutional touchstone remains whether the defendant purposefully established "minimum contacts" in the forum State. International Shoe Co. v. Washington, supra, at 316. Although it has been argued that foreseeability of causing injury in another State should be sufficient to establish such contacts there when policy considerations so require,16 the Court has consistently held that this kind of foreseeability is not a "sufficient benchmark" for exercising personal jurisdiction. World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 295. Instead, "the foreseeability that is critical to due process analysis ... is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id., at 297. In defining when it is that a potential defendant should "reasonably anticipate" out-of-state litigation, the Court frequently has drawn from the reasoning of Hanson v. Denckla, :"The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." This "purposeful availment" requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of "random," "fortuitous," or "attenuated" contacts, Keeton v. Hustler Magazine, Inc., 465 U.S., at 774; World-Wide Volkswagen Corp. v. Woodson, supra, at 299, or of the "unilateral activity of another party or a third person," Helicopteros Nacionales de Colombia, S. A. v. Hall, supra, at 417.17 Jurisdiction is proper, however, where the contacts proximately result from actions by the defendant himself that create a "substantial connection" with the forum State. McGee v. International Life Insurance Co., supra, at 223; see also Kulko v. California Superior Court, supra, at 94, n. 7.18 Thus where the defendant "deliberately" has engaged in significant activities within a State, Keeton v. Hustler Magazine, Inc., supra, at 781, or has created "continuing obligations" between himself and residents of the forum, Travelers Health Assn. v. Virginia, 339 U.S., at 648, he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by "the benefits and protections" of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are "purposefully directed" toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there. Keeton v. Hustler Magazine, Inc., supra, at 774-775; see also Calder v. Jones, 465 U.S., at 788-790; McGee v. International Life Insurance Co., 355 U.S., at 222-223. Cf. Hoopeston Canning Co. v. Cullen, .Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with "fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S., at 320. Thus courts in "appropriate case[s]" may evaluate "the burden on the defendant," "the forum State's interest in adjudicating the dispute," "the plaintiff's interest in obtaining convenient and effective relief," "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," and the "shared interest of the several States in furthering fundamental substantive social policies." World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 292. These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required. See, e. g., Keeton v. Hustler Magazine, Inc., supra, at 780; Calder v. Jones, supra, at 788-789; McGee v. International Life Insurance Co., supra, at 223-224. On the other hand, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable. Most such considerations usually may be accommodated through means short of finding jurisdiction unconstitutional. For example, the potential clash of the forum's law with the "fundamental substantive social policies" of another State may be accommodated through application of the forum's choice-of-law rules.19 Similarly, a defendant claiming substantial inconvenience may seek a change of venue.20 Nevertheless, minimum requirements inherent in the concept of "fair play and substantial justice" may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities. World-Wide Volkswagen Corp. v. Woodson, supra, at 292; see also Restatement (Second) of Conflict of Laws 36-37 (1971). As we previously have noted, jurisdictional rules may not be employed in such a way as to make litigation "so gravely difficult and inconvenient" that a party unfairly is at a "severe disadvantage" in comparison to his opponent. The Bremen v. Zapata Off-Shore Co., (re forum-selection provisions); McGee v. International Life Insurance Co., supra, at 223-224.B(1)Applying these principles to the case at hand, we believe there is substantial record evidence supporting the District Court's conclusion that the assertion of personal jurisdiction over Rudzewicz in Florida for the alleged breach of his franchise agreement did not offend due process. At the outset, we note a continued division among lower courts respecting whether and to what extent a contract can constitute a "contact" for purposes of due process analysis.21 If the question is whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot. The Court long ago rejected the notion that personal jurisdiction might turn on "mechanical" tests, International Shoe Co. v. Washington, supra, at 319, or on "conceptualistic ... theories of the place of contracting or of performance," Hoopeston Canning Co. v. Cullen, 318 U.S., at 316. Instead, we have emphasized the need for a "highly realistic" approach that recognizes that a "contract" is "ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction." Id., at 316-317. It is these factors - prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing - that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum.In this case, no physical ties to Florida can be attributed to Rudzewicz other than MacShara's brief training course in Miami.22 Rudzewicz did not maintain offices in Florida and, for all that appears from the record, has never even visited there. Yet this franchise dispute grew directly out of "a contract which had a substantial connection with that State." McGee v. International Life Insurance Co., 355 U.S., at 223 (emphasis added). Eschewing the option of operating an independent local enterprise, Rudzewicz deliberately "reach[ed] out beyond" Michigan and negotiated with a Florida corporation for the purchase of a long-term franchise and the manifold benefits that would derive from affiliation with a nationwide organization. Travelers Health Assn. v. Virginia, 339 U.S., at 647. Upon approval, he entered into a carefully structured 20-year relationship that envisioned continuing and wide-reaching contacts with Burger King in Florida. In light of Rudzewicz' voluntary acceptance of the long-term and exacting regulation of his business from Burger King's Miami headquarters, the "quality and nature" of his relationship to the company in Florida can in no sense be viewed as "random," "fortuitous," or "attenuated." Hanson v. Denckla, 357 U.S., at 253; Keeton v. Hustler Magazine, Inc., 465 U.S., at 774; World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 299. Rudzewicz' refusal to make the contractually required payments in Miami, and his continued use of Burger King's trademarks and confidential business information after his termination, caused foreseeable injuries to the corporation in Florida. For these reasons it was, at the very least, presumptively reasonable for Rudzewicz to be called to account there for such injuries.The Court of Appeals concluded, however, that in light of the supervision emanating from Burger King's district office in Birmingham, Rudzewicz reasonably believed that "the Michigan office was for all intents and purposes the embodiment of Burger King" and that he therefore had no "reason to anticipate a Burger King suit outside of Michigan." 724 F.2d, at 1511. See also post, at 488-489 (STEVENS, J., dissenting). This reasoning overlooks substantial record evidence indicating that Rudzewicz most certainly knew that he was affiliating himself with an enterprise based primarily in Florida. The contract documents themselves emphasize that Burger King's operations are conducted and supervised from the Miami headquarters, that all relevant notices and payments must be sent there, and that the agreements were made in and enforced from Miami. See n. 5, supra. Moreover, the parties' actual course of dealing repeatedly confirmed that decisionmaking authority was vested in the Miami headquarters and that the district office served largely as an intermediate link between the headquarters and the franchisees. When problems arose over building design, site-development fees, rent computation, and the defaulted payments, Rudzewicz and MacShara learned that the Michigan office was powerless to resolve their disputes and could only channel their communications to Miami. Throughout these disputes, the Miami headquarters and the Michigan franchisees carried on a continuous course of direct communications by mail and by telephone, and it was the Miami headquarters that made the key negotiating decisions out of which the instant litigation arose. See nn. 7, 9, supra.Moreover, we believe the Court of Appeals gave insufficient weight to provisions in the various franchise documents providing that all disputes would be governed by Florida law. The franchise agreement, for example, stated:"This Agreement shall become valid when executed and accepted by BKC at Miami, Florida; it shall be deemed made and entered into in the State of Florida and shall be governed and construed under and in accordance with the laws of the State of Florida. The choice of law designation does not require that all suits concerning this Agreement be filed in Florida." App. 72. See also n. 5, supra. The Court of Appeals reasoned that choice-of-law provisions are irrelevant to the question of personal jurisdiction, relying on Hanson v. Denckla for the proposition that "the center of gravity for choice-of-law purposes does not necessarily confer the sovereign prerogative to assert jurisdiction." 724 F.2d, at 1511-1512, n. 10, citing 357 U.S., at 254. This reasoning misperceives the import of the quoted proposition. The Court in Hanson and subsequent cases has emphasized that choice-of-law analysis - which focuses on all elements of a transaction, and not simply on the defendant's conduct - is distinct from minimum-contracts jurisdictional analysis - which focuses at the threshold solely on the defendant's purposeful connection to the forum.23 Nothing in our cases, however, suggests that a choice-of-law provision should be ignored in considering whether a defendant has "purposefully invoked the benefits and protections of a State's laws" for jurisdictional purposes. Although such a provision standing alone would be insufficient to confer jurisdiction, we believe that, when combined with the 20-year interdependent relationship Rudzewicz established with Burger King's Miami headquarters, it reinforced his deliberate affiliation with the forum State and the reasonable foreseeability of possible litigation there. As Judge Johnson argued in his dissent below, Rudzewicz "purposefully availed himself of the benefits and protections of Florida's laws" by entering into contracts expressly providing that those laws would govern franchise disputes. 724 F.2d, at 1513.24 (2)Nor has Rudzewicz pointed to other factors that can be said persuasively to outweigh the considerations discussed above and to establish the unconstitutionality of Florida's assertion of jurisdiction. We cannot conclude that Florida had no "legitimate interest in holding [Rudzewicz] answerable on a claim related to" the contacts he had established in that State. Keeton v. Hustler Magazine, Inc., 465 U.S., at 776; see also McGee v. International Life Insurance Co., 355 U.S., at 223 (noting that State frequently will have a "manifest interest in providing effective means of redress for its residents").25 Moreover, although Rudzewicz has argued at some length that Michigan's Franchise Investment Law, Mich. Comp. Laws 445.1501 et seq. (1979), governs many aspects of this franchise relationship, he has not demonstrated how Michigan's acknowledged interest might possibly render jurisdiction in Florida unconstitutional.26 Finally, the Court of Appeals' assertion that the Florida litigation "severely impaired [Rudzewicz'] ability to call Michigan witnesses who might be essential to his defense and counterclaim," 724 F.2d, at 1512-1513, is wholly without support in the record.27 And even to the extent that it is inconvenient for a party who has minimum contacts with a forum to litigate there, such considerations most frequently can be accommodated through a change of venue. See n. 20, supra. Although the Court has suggested that inconvenience may at some point become so substantial as to achieve constitutional magnitude, McGee v. International Life Insurance Co., supra, at 223, this is not such a case.The Court of Appeals also concluded, however, that the parties' dealings involved "a characteristic disparity of bargaining power" and "elements of surprise," and that Rudzewicz "lacked fair notice" of the potential for litigation in Florida because the contractual provisions suggesting to the contrary were merely "boilerplate declarations in a lengthy printed contract." 724 F.2d, at 1511-1512, and n. 10. See also post, at 489-490 (STEVENS, J., dissenting). Rudzewicz presented many of these arguments to the District Court, contending that Burger King was guilty of misrepresentation, fraud, and duress; that it gave insufficient notice in its dealings with him; and that the contract was one of adhesion. See 4 Record 687-691. After a 3-day bench trial, the District Court found that Burger King had made no misrepresentations, that Rudzewicz and MacShara "were and are experienced and sophisticated businessmen," and that "at no time" did they "ac[t] under economic duress or disadvantage imposed by" Burger King. App. 157-158. See also 7 Record 648-649. Federal Rule of Civil Procedure 52(a) requires that "[f]indings of fact shall not be set aside unless clearly erroneous," and neither Rudzewicz nor the Court of Appeals has pointed to record evidence that would support a "definite and firm conviction" that the District Court's findings are mistaken. United States v. United States Gypsum Co., . See also Anderson v. Bessemer City, . To the contrary, Rudzewicz was represented by counsel throughout these complex transactions and, as Judge Johnson observed in dissent below, was himself an experienced accountant "who for five months conducted negotiations with Burger King over the terms of the franchise and lease agreements, and who obligated himself personally to contracts requiring over time payments that exceeded $1 million." 724 F.2d, at 1514. Rudzewicz was able to secure a modest reduction in rent and other concessions from Miami headquarters, see nn. 8, 9, supra; moreover, to the extent that Burger King's terms were inflexible, Rudzewicz presumably decided that the advantages of affiliating with a national organization provided sufficient commercial benefits to offset the detriments.28 IIINotwithstanding these considerations, the Court of Appeals apparently believed that it was necessary to reject jurisdiction in this case as a prophylactic measure, reasoning that an affirmance of the District Court's judgment would result in the exercise of jurisdiction over "out-of-state consumers to collect payments due on modest personal purchases" and would "sow the seeds of default judgments against franchisees owing smaller debts." 724 F.2d, at 1511. We share the Court of Appeals' broader concerns and therefore reject any talismanic jurisdictional formulas; "the facts of each case must [always] be weighed" in determining whether personal jurisdiction would comport with "fair play and substantial justice." Kulko v. California Superior Court, 436 U.S., at 92.29 The "quality and nature" of an interstate transaction may sometimes be so "random," "fortuitous," or "attenuated"30 that it cannot fairly be said that the potential defendant "should reasonably anticipate being haled into court" in another jurisdiction. World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 297; see also n. 18, supra. We also have emphasized that jurisdiction may not be grounded on a contract whose terms have been obtained through "fraud, undue influence, or overweening bargaining power" and whose application would render litigation "so gravely difficult and inconvenient that [a party] will for all practical purposes be deprived of his day in court." The Bremen v. Zapata Off-Shore Co., 407 U.S., at 12, 18. Cf. Fuentes v. Shevin, ; National Equipment Rental, Ltd. v. Szukhent, (Black, J., dissenting) (jurisdictional rules may not be employed against small consumers so as to "crippl[e] their defense"). Just as the Due Process Clause allows flexibility in ensuring that commercial actors are not effectively "judgment proof" for the consequences of obligations they voluntarily assume in other States, McGee v. International Life Insurance Co., 355 U.S., at 223, so too does it prevent rules that would unfairly enable them to obtain default judgments against unwitting customers. Cf. United States v. Rumely, (courts must not be "`blind'" to what "`[a]ll others can see and understand'"). For the reasons set forth above, however, these dangers are not present in the instant case. Because Rudzewicz established a substantial and continuing relationship with Burger King's Miami headquarters, received fair notice from the contract documents and the course of dealing that he might be subject to suit in Florida, and has failed to demonstrate how jurisdiction in that forum would otherwise be fundamentally unfair, we conclude that the District Court's exercise of jurisdiction pursuant to Fla. Stat. 48.193(1)(g) (Supp. 1984) did not offend due process. The judgment of the Court of Appeals is accordingly reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. JUSTICE POWELL took no part in the consideration or decision of this case. |
6 | OnAppeal from the District Court of the United States for the Northern District of Illinois, Eastern Division. [ Brotherhood of R. R. Trainmen v. Baltimore & O. R. Co. ], 520] Mr. Burke Williamson, of Chicago, Ill., for appellant. Mr. Ernest S. Ballard, of Chicago, Ill., for appellees. Mr. Justice MURPHY delivered the opinion of the Court. Our concern here is with the intervention rights of representatives of railroad employees in a suit brought against the railroad under 16(12) of the Interstate Commerce Act, 49 U.S.C. 16(12), 49 U.S.C.A. 16(12). The origin of this suit is to be found in an order issued by the Interstate Commerce Commission on May 16, 1922. Chicago Junction Case, 71 I.C.C. 631. See also Chicago Junction Case, . The Commission there approved the purchase by the New York Central Railroad Co. (Central) of all the capital stock of the Chicago River & Indiana Railroad Co. (River Road); it also authorized the leasing to River Road of all the properties of the Chicago Junction Railway Co. ( Junction) for 99 years and thereafter, at the lessee's option, in perpetuity. Among the properties in question were trackage and switching facilities at the Union Stock Yards, Chicago, Illinois, connecting with various trunk lines. Prior to the Commission order, the practice had been for the trunk line railroads to use their own power and crews to move their empty and loaded livestock cars over these tracks to and from the loading places in the Union Stock Yards. For the privilege of so moving their cars, the railroads were charged $1.00 per car, loaded or empty. The Commission made various conditions to its approval of the proposed transactions. The third condition provided: 'The present traffic and operating relationships , 521] existing between the Junction and River Road and all carriers operating in Chicago shall be continued, in so far as such matters are within the control of the Central.' 71 I.C.C. at 639. This condition is still in effect, the Commission's decision and order having been found to be valid and binding on all parties in a proceeding in the District Court in 1929.1 The trunk line railroads have continued to use their own power and crews in moving their livestock cars over the trackage operated by River Road and have paid River Road the amount of $1.00 per car. But on January 25, 1946, Central and River Road notified the railroads that on and after February 1, 1946, the cars would be moved over this trackage by means of the power and crews of River Road and that the handling charge would be $ 12.96 per outbound loaded car. Soon after this new practice went into effect, the trunk line railroads (appellees herein) brought this suit for preliminary and permanent injunctions under 16(12) of the Interstate Commerce Act against Central, River Road and Junction. They claimed that the new practice was in violation of the third condition of the 922 Commis sion order. They accordingly sought to enjoin the defendants and 'their respective officers, agents, representatives, servants, employees and successors,' from disobeying the order, especially the third condition thereof, and to force the defendants to permit them to move their cars with their own power and crews. The Commission was allowed to intervene as a party plaintiff; its intervening complaint also prayed for an , 522] injunction against the alleged violation of the third condition by the defendants and their employees. 2 A stipulation of facts was then filed. After describing the change in handling the cars, it pointed out that this change resulted from a settlement between the River Road and the Brotherhood of Railroad Trainmen of a labor dispute over the work involved in these livestock car movements. The Brotherhood was the bargaining agent under the Railway Labor Act, 45 U. S.C.A. 151 et seq., for the River Road trainmen. It made a demand, based upon its contract with River Road, that these trainmen be given the work of moving and switching the livestock cars over the River Road trackage. The Brotherhood threatened to call a strike unless this demand was met before 10:30 p.m., January 23, 1946, a threat that was backed by an almost unanimous strike vote of the trainmen. Under this threat, River Road made an agreement with the Brotherhood shortly before the scheduled strike hour, as a result of which the River Road trainmen were to be permitted to move and switch the cars. The notice to the trunk line railroads of this change in practice subsequently followed. The District Court thereupon issued a preliminary injunction as requested. Central, River Road and Junction, and 'their respective officers, agents, representatives, employees and successors,' were restrained from disobeying the 1922 Commission order and from violating the third condition of that order and were commanded to permit the trunk line railroads to move their cars over the River Road line with their own power and crews. The court concluded, as a matter of law, that the facts relative to , 523] the labor dispute between the Brotherhood and River Road were 'irrelevant and immaterial.'3 Three days after the preliminary injunction became effective, the Brotherhood asked leave to file its special appearance for the purpose of moving to vacate the injunction and to dismiss the proceedings for failure to join the Brotherhood and its members as indispensable parties. This motion was denied. River Road then filed its answer to the original complaint, pointing out that the changed arrangement resulted from the labor dispute with the Brotherhood and contending that this new practice did not violate the 1922 Commission order. The Brotherhood thereafter filed its motion to intervene generally as a party defendant, alleging that the primary purpose of the suit was to nullify its agreement with River Road and to deprive the Brotherhood members of the work they were performing under that agreement and that the Brotherhood members were therefore indispensable parties. The contention was made that the Brotherhood had an unconditional right to intervene by virtue of 17(11) of the Interstate Commerce Act4 and Rule 24(a)(2) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c; and 28 U.S.C. 45a, 28 U.S.C.A. 45a, was later added in support of this contention But the m otion to intervene was denied by order, without opinion. The District Court then allowed an appeal to this Court from its order denying intervention. The appellee railroads moved to dismiss the appeal on the ground that such an order was not final and hence was not appealable, the Brotherhood not being entitled to intervene as a , 524] matter of right. We postponed further consideration of the question of our jurisdiction to review the order to the hearing of the appeal upon the merits. . Ordinarily, in the absence of an abuse of discretion, no appeal lies from an order denying leave to intervene where intervention is a permissive matter within the discretion of the court. United States v. California Co-op. Canneries, , 424.5 The permissive nature of such intervention necessarily implies that, if intervention is denied, the applicant is not legally bound or prejudiced by any judgment that might be entered in the case. He is at liberty to assert and protect his interests in some more appropriate proceeding. Having no adverse effect upon the applicant, the order denying intervention accordingly falls below the level of appealability. But where a statute or the practical necessities grant the applicant an absolute right to intervene, the order denying intervention becomes appealable. Then it may fairly be said that the applicant is adversely affected by the denial, there being no other way in which he can better assert the particular interest which warrants intervention in this instance. And since he cannot appeal from any subsequent order or judgment in the proceeding unless he does intervene, the order denying intervention has the degree of definitiveness which supports an appeal therefrom. See Missouri-Kansas Pipe Line Co. v. United States, , 668. Our jurisdiction to consider an appeal from an order denying intervention thus depends upon the nature of the applicant's right to intervene. If the right is absolute, the order is appealable and we may judge it on its merits. But if the matter is one within the discretion of the trial , 525] court and if there is no abuse of discretion, the order is not appealable and we lack power to review it. In other words, our jurisdiction is identified by the necessary incidents of the right to intervene in each particular instance. We must therefore determine the question of our jurisdiction in this case by examining the character of the Brotherhood's right to intervene in the proceeding brought under 16(12) of the Interstate Commerce Act. We start with Rule 24(a) and (b) of the Federal Rules of Civil Procedure, applicable to a civil proceeding of this type. Rule 24(a) deals with intervention of right and provides in pertinent part: 'Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action; * * *.' In contrast, Rule 24(b) is concerned with permissive intervention and reads as follows: 'Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of the United States confers a condititional right to intervene; or (2) when an applicant's claim or defense and the main action have a question o law or fa ct in common. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.' The Brotherhood claims that as a consequence of either of two federal statutes-s 17(11) of the Interstate Commerce Act or 28 U.S.C. 45a, 28 U. S.C.A. 45a-it has an absolute right to intervene within the meaning of Rule 24(a)(1). It also alleges that it possesses an absolute right within the contemplation of Rule 24(a)(2), the representation of its interest by existing parties being inadequate and the possibility that it may be bound by a judgment in the action being a real one. No claim to permissive intervention , 526] under Rule 24(b) is made; nor is there a contention that the District Court abused any discretion it might have had. In our view, 17(11) of the Interstate Commerce Act does give the Brotherhood an absolute right to intervene in the instant proceeding within the meaning of Rule 24(a)(1). As set forth in 54 Stat. 916,6 this portion of the Act reads: 'Representatives of employees of a carrier, duly designated as such, may intervene and be heard in any proceeding arising under this Act affecting such employees.' The following considerations make obvious the fact that the Brotherhood meets all the requirements of this provision: First. It is unquestioned that the Brotherhood is the duly designated representative of the River Road trainmen. Second. The right of intervention granted to such a representative by 17(11) applies to a court proceeding under 16(12) of the Act, the plain language of 17(11) extending its reach to 'any proceeding arising under this Act.' , 527] On this point, however, the appellee railroads contend that 17(11) must be confined to proceedings before the Interstate Commerce Commission, to the exclusion of court proceedings. In support of this contention, they point to the fact that 17 as a whole is primarily concerned with Commission procedure and organization. That fact is emphasized by the heading of 17 as it appears in the Statutes at Large, 54 Stat. 913, and the United States Code, 49 U.S.C. 17, 49 U.S.C.A. 17, a heading that reads: 'Commission procedure; delegation of duties; rehearings.' The inference is then made that paragraph (11), with which we are concerned, must be limited by that heading and by the general context of 17 as a whole. The result of the contention is that the phrase 'any proceeding arising under this Act,' as found in paragraph (11), is rewritten by construction to refer only to 'any proceeding before the Commission arising under this section.' We cannot sanction such a construction of these words. It is true, of course, that 17 is concerned primarily with the organization of the Commission and ts subdivi sions and with the administrative disposition of matters coming within that agency's jurisdiction. At least ten of the twelve paragraphs of 17 deal with those matters. And before 17 was cast into its present form in 1940, all five of its paragraphs related exclusively to those matters. Congress rewrote the section when it enacted the Transportation Act of 1940, 54 Stat. 898, continuing and modifying previous provisions and consolidating and including matters which had formerly been scattered throughout the Act. 7 At the same time, however, it was expressly recognized that certain paragraphs were being added which were entirely new, paragraphs which went beyond purely administrative matters. Thus the pertinent com- , 528] mittee reports stated8 that 'A new paragraph (9) is included providing that orders of a division, an individual Commissioner, or a board shall be subject to judicial review as in the case of full Commission orders, after an application for rehearing has been made and acted upon.' And as to paragraph (11), it was said9 that 'A new paragraph is added at the end of section 17 providing that representatives of employees of a carrier may intervene and be heard in any proceedings arising under part I affecting such employees.' By such language in their reports, the framers of 17 recognized the obvious fact that certain provisions of that section deal with something more than might be indicated by the heading. That the heading of 17 fails to refer to all the matters which the framers of that section wrote into the text is not an unusual fact. That heading is but a short-hand reference to the general subject matter involved. While accurately referring to the subjects of Commission procedure and organization, it neglects to reveal that 17 also deals with judicial review of administrative orders and with intervention by employee representatives. But headings and titles are not meant to take the place of the detailed provisions of the text. Nor are they necessarily designed to be a reference guide or a synopsis. Where the text is complicated and prolific, headings and titles can do no more than indicate the provisions in a most genral manner; to attempt to refer to each specific provision would often be ungainly as well as useless. As a result, matters in the text which deviate from those falling within the general pattern are frequently unreflected in the headings and titles. Factors of this type have led to the wise rule that the title of a statute and , 529] the heading of a section cannot limit the plain meaning of the text. United States v. Fisher, 2 Cranch 358, 386; Cornell v. Coyne, , 385, 386; Strathearn S.S. Co. v. Dillon, , 351. For interpretative purposes, they are of use only when they shed light on some ambiguous word or phrase. They are but tools available for the resolution of a doubt. But they cannot undo or limit that which the text makes plain. Here the meaning of 17(11) is unmistakable on its face. There is a simple unambiguous reference to 'any proceeding arising under this Act' or, as the House committee paraphrased it,10 to 'any proceedings arising under part I.' There is not a word which would warrant limiting this reference so as to allow intervention only in proceedings arising under 17 or in proceedings before the Commission. The proceedings mentioned are those which arise under this Act, an Act under which both judicial and administrative proceedings may arise. 11 The instant case is a ready illustration of a judicial proceeding arising under this Act; a suit of this nature is authorized solely by 16(12) of the Act. 12 Hence it is a proceeding towhich the right of intervention may attach by virtue of 17( 11). Nor do we perceive any reason of statutory policy why the framers of 17(11) should have wished to confine the right of intervention by employee representatives to pro- , 530] ceedings before the Commission. Occasions may arise, as in this case, where the employee representatives have no interest in intervening in the original administrative proceeding, but where they have a very definite interest in intervening in a subsequent judicial proceeding arising under the Act. When the framers have used language which covers both types of proceedings, we would be unjustified in formulating some policy which they did not see fit to express to limit that language in any way. Third. This is a proceeding arising under the Act which affects the employees represented by the Brotherhood. Nothing could make this plainer than the fact that direct injunctive relief was sought and obtained against these employees. The appellee railroads sued to enjoin River Road and its employees from disobeying the third condition of the 1922 Commission order. It was alleged that this condition required River Road and its employees to permit the railroads to use their own power and crews in moving cars over the River Road line. Yet that was precisely the subject matter of the conflict between River Road and the Brotherhood, resulting in the insertion of important provisions in the contract between them. If the Commission order did require the River Road employees to forego operating the livestock cars, their contract rights with River Road were affected in a very real sense. Acts done by the employees in performance of this contract obviously prompted this suit; and any such acts performed after the issuance of an injunction might give rise to contempt action. It is thus impossible to say that this proceeding is not one 'affecting such employees' within the meaning of 17(11). Since all the conditions of 17(11) have been satisfied in this case, the only question that remains is whether the Brotherhood is thereby accorded a permissive or an absolute right to intervene. The language of 17(11) is in , 531] terms of 'may intervene and be heard,' which might be construed as giving only a discretionary right. But our view, as we have indicated, is that once the requirements of 17(11) have been met, the employees' representative acquires an absolute right of intervention. Some statutes speak of intervention 'as of right.' Thus where suit is brought by or against the United States to enforce or set aside a Commission order, the Commission or the parties in interest to the proceeding before the Commission 'may appear as parties thereto * * * as of right.' 28 U.S.C. 45a, 28 U.S.C.A. 45a. In such a case, the right to intervene is absolute and unconditional. Sprunt & Son v. United States, , 317, 318. No less absolute or unconditional is the right to intervene under 17(11), which permits intervention where the employees are affected by the proceeding. To be sufficiently affected within the meaning of this provision requires that the employees be prejudiced or bound by any judgment that might be entered in the case, as is the situation relative to the River Road employees. Once it is clear that an effect of that degree is present, however, there is no room for the operation o a court's discretion. Whether the employees' interests should be asserted or defended in a proceeding where those interests are at stake is a question to be decided by the employees' representative, not by the court. The statutory term 'may intervene' thus means 'may intervene if the employees' representative so chooses' rather than 'may intervene in the discretion of the court.' And if the representative does choose to intervene, it may do so as a matter of right within the meaning of Rule 24(a)(1) of the Federal Rules of Civil Procedure. Such is this case. We thus conclude that 17(11) gives the Brotherhood an absolute right to intervene in this proceeding, making it unnecessary to discuss whether, and to what extent, the , 532] Brotherhood would have had such a right apart from 17(11). It follows that we have jurisdiction to consider the appeal on its merits. And in the exercise of that jurisdiction, we reverse the judgment of the District Court denying leave to the Brotherhood to intervene. Reversed. |
7 | In 1913, the United States sued in Federal District Court, in what is known as the Orr Ditch litigation, to adjudicate water rights to the Truckee River for the benefit of both the Pyramid Lake Indian Reservation (Reservation) and the Newlands Reclamation Project (Project). Named as defendants were all water users on the Truckee River in Nevada. Eventually, in 1944, the District Court entered a final decree, pursuant to a settlement agreement, awarding various water rights to the Reservation and the Project, which by this time was now under the management of the Truckee-Carson Irrigation District (TCID). In 1973, the United States filed the present action in the same District Court on behalf of the Reservation, seeking additional rights to the Truckee River, and the Pyramid Lake Paiute Tribe (Tribe) was permitted to intervene in support of the United States. Named as defendants were all persons presently claiming water rights to the Truckee River and its tributaries in Nevada, including the defendants in the Orr Ditch litigation and their successors, individual farmers who owned land in the Project, and the TCID. The defendants asserted res judicata as an affirmative defense, claiming that the United States and the Tribe were precluded by the Orr Ditch decree from litigating the asserted claim. The District Court sustained the defense and dismissed the complaint. The Court of Appeals affirmed in part and reversed in part, holding that the Orr Ditch decree concluded the dispute between, on the one hand, the Orr Ditch defendants, their successors in interest, and subsequent appropriators of the Truckee River, and, on the other hand, the United States and the Tribe, but not the dispute between the tribe and the Project landowners. The court found that since neither the Tribe nor the Project landowners were parties in Orr Ditch but instead were represented by the United States, and since their interests may have conflicted in that proceeding, it could not be found that the United States had intended to bind these nonparties inter se, absent a specific statement of adversity in the pleadings. Held: Res judicata prevents the United States and the Tribe from litigating the instant claim. Pp. 121-145. (a) Where the Government represented the Project landowners in Orr Ditch, the landowners, not the Government, received the beneficial interest in the water rights confirmed to the Government. Ickes v. Fox, ; Nebraska v. Wyoming, . Therefore, the Government is not at liberty to simply reallocate the water rights decreed to the Reservation and the Project as if it owned those rights. Pp. 121-128. (b) The cause of action asserted below is the same cause of action that was asserted in the Orr Ditch case. The record in that case, including the final decree and amended complaint, clearly shows that the Government was given an opportunity to litigate the Reservation's entire water rights to the Truckee River, and that the Government intended to take advantage of that opportunity. Pp. 130-134. (c) All of the parties below are bound by the Orr Ditch decree. The United States, as a party to the Orr Ditch litigation acting as a representative for the interests of the Reservation and the Project, cannot relitigate the Reservation's water rights with those who could use the Orr Ditch decree as a defense. The Tribe, whose interests were represented in Orr Ditch by the United States, also is bound by the Orr Ditch decree as are the Orr Ditch defendants and their successors. Moreover, under circumstances where after the Orr Ditch litigation was commenced the legal relationships were no longer simply those between the United States and the tribe, but were also those between the United States, TCID, and the Project landowners, the interests of the Tribe and the Project landowners were sufficiently adverse so that both are now bound by the Orr Ditch decree. It need not be determined what the effect of the Government's representation of different interests would be under the law of private trustees and fiduciaries for that law does not apply where Congress has decreed that the Government have dual responsibilities. The Government does not "compromise" its obligation to one interest that Congress obliges it to represent when it simultaneously performs another task for another interest that Congress has obligated it by statute to do. And as to the defendants below who appropriated water from the Truckee River subsequent to the Orr Ditch decree, they too, as a necessary exception to the res judicata mutuality requirement, can use that decree against the plaintiffs below. These defendants have relied just as much on that decree in participating in the development of western Nevada as have the parties in the Orr Ditch case, and any other conclusion would make it impossible finally to quantify a reserved water right. Pp. 134-144. 649 F.2d 1286 and 666 F.2d 351, affirmed in part and reversed in part. REHNQUIST, J., delivered the opinion for a unanimous Court. BRENNAN, J., filed a concurring opinion, post, p. 145.[Footnote *] Together with No. 81-2276, Truckee-Carson Irrigation District v. United States et al.; and No. 82-38, Pyramid Lake Paiute Tribe of Indians v. Truckee-Carson Irrigation District et al., also on certiorari to the same court.E. Barrett Prettyman, Special Deputy Attorney General of Nevada, argued the cause for petitioner in No. 81-2245. With him on the briefs were Brian McKay, Attorney General, Richard H. Bryan, former Attorney General, Larry D. Struve, Chief Deputy Attorney General, and John W. Hoffman and Harold A. Swafford, Special Deputy Attorneys General. Frederick G. Girard argued the cause for petitioner in No. 81-2276. With him on the briefs were James W. Johnson, Jr., and Janet K. Goldsmith. Messrs. Bryan, Prettyman, Hoffman, Swafford, Johnson, and Girard, and Ms. Goldsmith filed a postargument memorandum for petitioners in Nos. 81-2245 and 81-2276. Robert S. Pelcyger argued the cause for petitioner in No. 82-38. With him on the briefs were Michael R. Thorp, Scott B. McElroy, and Jeanne S. Whiteing.Edwin S. Kneedler argued the cause for the United States. With him on the briefs were Solicitor General Lee, Assistant Attorney General Dinkins, Deputy Solicitor General Claiborne, Robert L. Klarquist, and Dirk D. Snel. Messrs. McKay, Prettyman, Hoffman, and Swafford filed a brief for respondent State of Nevada in No. 82-38. Louis S. Test, Steven P. Elliott, and Mills Lane filed a brief for respondents City of Reno et al. in No. 82-38. Messrs. Johnson and Girard and Ms. Goldsmith filed a brief for respondent Truckee-Carson Irrigation District in No. 82-38. Messrs. Pelcyger, Thorp, and McElroy filed a brief for respondent Pyramid Lake Paiute Tribe of Indians in Nos. 81-2245 and 81-2276. Richard W. Blakey, Gordon H. DePaoli, and John Madariaga filed a brief for respondent Sierra Pacific Power Co. in No. 82-38.Fn Fn Briefs of amici curiae urging reversal were filed for the State of New Mexico by Jeff Bingaman, Attorney General, and Peter Thomas White, Special Assistant Attorney General; and for the State of Alabama et al. by Charles A. Graddick, Attorney General of Alabama, Linley E. Pearson, Attorney General of Indiana, William J. Guste, Jr., Attorney General of Louisiana, William A. Allain, Attorney General of Mississippi, Paul L. Douglas, Attorney General of Nebraska, and Jan Eric Cartwright, Attorney General of Oklahoma.Briefs of amici curiae urging affirmance were filed for the Sierra Club et al. by John D. Leshy, Joseph L. Sax, and Ralph W. Johnson; and for the Hoopa Valley Tribe et al. by Alan C. Stay and Steven S. Anderson.Briefs of amici curiae were filed for the State of Washington et al. by Kenneth O. Eikenberry, Attorney General of Washington, Charles B. Roe, Jr., Senior Assistant Attorney General, and Robert E. Mack, Assistant Attorney General, David H. Leroy, Attorney General of Idaho, and Phillip J. Rassier and Neil L. Tillquist, Deputy Attorneys General; for the State of Arizona et al. by Mark V. Meierhenry, Attorney General of South Dakota, Mark White, Attorney General of Texas, David L. Wilkinson, Attorney General of Utah, Steven F. Freudenthal, Attorney General of Wyoming, Robert K. Corbin, Attorney General of Arizona, George Deukmejian, Attorney General of California, Michael T. Greely, Attorney General of Montana, Robert O. Wefald, Attorney General of North Dakota, and David Frohnmayer, Attorney General of Oregon; for the Salt River Project Agricultural Improvement and Power District et al. by Frederick J. Martone; and for the City of Los Angeles et al. by R. L. Knox, Jr., Maurice C. Sherrill, Justin McCarthy, Carl Boronkay, Jerome C. Muys, Roberta L. Halladay, Ira Reiner, Gilbert W. Lee, John W. Witt, Joseph Kase, Jr., and Roy H. Mann; and for Yakima Valley Canal Co. et al. by Donald H. Bond. JUSTICE REHNQUIST delivered the opinion of the Court.In 1913 the United States sued to adjudicate water rights to the Truckee River for the benefit of the Pyramid Lake Indian Reservation and the planned Newlands Reclamation Project. Thirty-one years later, in 1944, the United States District Court for the District of Nevada entered a final decree in the case pursuant to a settlement agreement. In 1973 the United States filed the present action in the same court on behalf of the Pyramid Lake Indian Reservation, seeking additional water rights to the Truckee River. The issue thus presented is whether the Government may partially undo the 1944 decree, or whether principles of res judicata prevent it, and the intervener Pyramid Lake Paiute Tribe, from litigating this claim on the merits. INevada has, on the average, less precipitation than any other State in the Union. Except for drainage in the southeastern part of the State into the Colorado river, and drainage in the northern part of the State into the Columbia River, the rivers that flow in Nevada generally disappear into "sinks." Department of Agriculture Yearbook, Climate and Man (1941). The present litigation relates to water rights in the Truckee River, one of the three principal rivers flowing through west central Nevada. It rises in the High Sierra in Placer County, Cal., flows into and out of Lake Tahoe, and thence down the eastern slope of the Sierra Nevada mountains. It flows through Reno, Nev., and after a course of some 120 miles debouches into Pyramid Lake, which has no outlet.It has been said that Pyramid Lake is "widely considered the most beautiful desert lake in North America [and that its] fishery [has] brought it worldwide fame. A species of cutthroat trout... grew to world record size in the desert lake and attracted anglers from throughout the world." S. Wheeler, The Desert Lake 90-92 (1967). The first recorded sighting of Pyramid Lake by non-Indians occurred in January 1844 when Captain John C. Fremont and his party camped nearby. In his journal Captain Fremont reported that the lake "broke upon our eyes like the ocean" and was "set like a gem in the mountains." 1 The Expeditions of John Charles Fremont 604-605 (D. Jackson & M. Spence eds. 1970). Commenting upon the fishery, as well as the Pyramid Lake Indians that his party was camping with, Captain Fremont wrote:"An Indian brought in a large fish to trade, which we had the inexpressible satisfaction to find was a salmon trout; we gathered round him eagerly. The Indians were amused with our delight, and immediately brought in numbers; so that the camp was soon stocked. Their flavor was excellent - superior, in fact, to that of any fish I have ever known. They were of extraordinary size - about as large as the Columbia river salmon - generally from two to four feet in length." Id., at 609. When first viewed by Captain Fremont in early 1844, Pyramid Lake was some 50 miles long and 12 miles wide. Since that time the surface area of the lake has been reduced by about 20,000 acres.The origins of the cases before us are found in two historical events involving the Federal Government in this part of the country. First, in 1859 the Department of the Interior set aside nearly half a million acres in what is now western Nevada as a reservation for the area's Paiute Indians. In 1874 President Ulysses S. Grant by Executive Order confirmed the withdrawal as the Pyramid Lake Indian Reservation. The Reservation includes Pyramid Lake, the land surrounding it, the lower reaches of the Truckee River, and the bottom land alongside the lower Truckee.Then, with the passage of the Reclamation Act of 1902, 32 Stat. 388, the Federal Government was designated to play a more prominent role in the development of the West. That Act directed the Secretary of the Interior to withdraw from public entry arid lands in specified Western States, reclaim the lands through irrigation projects, and then to restore the lands to entry pursuant to the homestead laws and certain conditions imposed by the Act itself. Accordingly, the Secretary withdrew from the public domain approximately 200,000 acres in western Nevada, which ultimately became the Newlands Reclamation Project. The Project was designed to irrigate a substantial area in the vicinity of Fallon, Nev., with waters from both the Truckee and the Carson Rivers.The Carson River, like the Truckee, rises on the eastern slope of the High Sierra in Alpine County, Cal., and flows north and northeast over a course of about 170 miles, finally disappearing into Carson sink. The Newlands Project accomplished the diversion of water from the Truckee River to the Carson River by constructing the Derby Diversion Dam on the Truckee River, and constructing the Truckee Canal through which the diverted waters would be transported to the Carson River. Experience in the early days of the Project indicated the necessity of a storage reservoir on the Carson River, and accordingly Lahontan Dam was constructed and Lahontan Reservoir behind that dam was created. The combined waters of the Truckee and Carson Rivers impounded in Lahontan Reservoir are distributed for irrigation and related uses on downstream lands by means of lateral canals within the Newlands Reclamation Project.Before the works contemplated by the Project went into operation, a number of private landowners had established rights to water in the Truckee River under Nevada law. The Government also asserted on behalf of the Indians of the Pyramid Lake Indian reservation a reserved right under the so-called "implied-reservation-of-water" doctrine set forth in Winters v. United States, .1 The United States therefore filed a complaint in the United States District Court for the District of Nevada in March 1913, commencing what became known as the Orr Ditch litigation. The Government, for the benefit of both the Project and the Pyramid Lake Reservation, asserted a claim to 10,000 cubic feet of water per second for the Project and a claim to 500 cubic feet per second for the Reservation. The complaint named as defendants all water users on the Truckee River in Nevada. The Government expressly sought a final decree quieting title to the rights of all parties. Following several years of hearings, a Special Master issued a report and proposed decree in July 1924. The report awarded the Reservation an 1859 priority date in the Truckee River for 58.7 second-feet and 12,412 acre-feet annually of water to irrigate 3,130 acres of Reservation lands.2 The Project was awarded a 1902 priority date for 1,500 cubic feet per second to irrigate, to the extent the amount would allow,3 232,800 acres of land within the Project. In February 1926 the District Court entered a temporary restraining order declaring the water rights as proposed by the Special Master. "One of the primary purposes" for entering a temporary order was to allow for an experimental period during which modifications of the declared rights could be made if necessary. App. to Pet. for Cert. in No. 81-2245, p. 186a (hereafter Nevada App.).Not until almost 10 years later, in the midst of a prolonged drought, was interest stimulated in concluding the Orr Ditch litigation. Settlement negotiations were commenced in 1934 by the principal organizational defendants in the case, Washoe County Water Conservation District and the Sierra Pacific Power Co., and the representatives of the Project and the Reservation. The United States still acted on behalf of the Reservation's interests, but the Project was now under the management of the Truckee-Carson Irrigation District (TCID).4 The defendants and TCID proposed an agreement along the lines of the temporary restraining order. The United States objected, demanding an increase in the Reservation's water rights to allow for the irrigation of an additional 2,745 acres of Reservation land. After some resistance, the Government's demand was accepted and a settlement agreement was signed on July 1, 1935. The District Court entered a final decree adopting the agreement on September 8, 1944.5 No appeal was taken. Thus, 31 years after its inception the Orr Ditch litigation came to a close.On December 21, 1973, the Government instituted the action below seeking additional rights to the Truckee River for the Pyramid Lake Indian Reservation; the Pyramid Lake Paiute Tribe was permitted to intervene in support of the United States. The Government named as defendants all persons presently claiming water rights to the Truckee River and its tributaries in Nevada. The defendants include the defendants in the Orr Ditch litigation and their successors, approximately 3,800 individual farmers that own land in the Newlands Reclamation Project, and TCID. The District Court certified the Project farmers as a class and directed TCID to represent their interests.6 In its complaint the Government purported not to dispute the rights decreed in the Orr Ditch case. Instead, it alleged that Orr Ditch determined only the Reservation's right to "water for irrigation," Nevada App. 157a, not the claim now being asserted for "sufficient waters of the Truckee River... [for] the maintenance and preservation of Pyramid Lake, [and for] the maintenance of the lower reaches of the Truckee River as a natural spawning ground for fish," id., at 155a-156a. The complaint further averred that in establishing the Reservation the United States had intended that the Pyramid Lake fishery be maintained. Since the additional water now being claimed is allegedly necessary for that purpose, the Government alleged that the Executive Order creating the Reservation must have impliedly reserved a right to this water.7 The defendants below asserted res judicata as an affirmative defense, saying that the United States and the Tribe were precluded by the Orr Ditch decree from litigating this claim. Following a separate trial on this issue, the District Court sustained the defense and dismissed the complaint in its entirety.In its decision, the District Court first determined that all of the parties in this action were parties, or in privity with parties, in the Orr Ditch case. The District Court then found that the Orr Ditch litigation "was intended by all concerned, lawyers, litigants and judges, as a general all inclusive water adjudication suit which sought to adjudicate all rights and claims in and to the waters of the Truckee... and required all parties to fully set up their respective water right claims." Nevada App. 185a. The court determined that in accordance with this general intention, the United States had intended in Orr Ditch "to assert as large a water right as possible for the Indian reservation." Nevada App. 185a. The District Court further explained:"[T]he cause of action sought to be asserted in this proceeding by the plaintiff and the Tribe is the same quiet title cause of action asserted by the plaintiff in Orr Ditch for and on behalf of the Tribe and its members, that is, a Winters implied and reserved water right for the benefit of the reservation, with a priority date of December 8, 1859, from a single source of water supply, i. e., the Truckee Watershed. The plaintiff and the Tribe may not litigate several different types of water use claims, all arising under the Winters doctrine and all derived from the same water source in a piece-meal fashion. There was but one cause of action in equity to quiet title in plaintiff and the Tribe based upon the Winters reserved right theory." Id., at 188a. The Court of Appeals for the Ninth Circuit affirmed in part and reversed in part. 649 F.2d 1286 (1981), modified, 666 F.2d 351 (1982). The Court of Appeals agreed that the causes of action asserted in Orr Ditch and the instant litigation are the same and that the United States and the Tribe cannot relitigate this cause of action with the Orr Ditch defendants or subsequent appropriators of the Truckee River. But the Court of Appeals found that the Orr Ditch decree did not conclude the dispute between the Tribe and the owners of Newlands Project lands. The court said that litigants are not to be bound by a prior judgment unless they were adversaries under the earlier pleadings or unless the specific issue in dispute was actually litigated in the earlier case and the court found that neither exception applied here.The Court of Appeals conceded that "[a] strict adversity requirement does not necessarily fit the realities of water adjudications." 649 F.2d, at 1309. Nevertheless, the court found that since neither the Tribe nor the Project landowners were parties in Orr Ditch but instead were both represented by the United States, and since their interests may have conflicted in that proceeding, the court would not find that the Government had intended to bind these nonparties inter se absent a specific statement of adversity in the pleadings. We granted certiorari in the cases challenging the Court of Appeals' decision, , and we now affirm in part and reverse in part.IIThe Government opens the "Summary of Argument" portion of its brief by stating: "The court of appeals has simply permitted a reallocation of the water decreed in Orr Ditch to a single party - the United States - from reclamation uses to a Reservation use with an earlier priority. The doctrine of res judicata does not bar a single party from reallocating its water in this fashion ... ." Brief for United States 21. We are bound to say that the Government's position, if accepted, would do away with half a century of decided case law relating to the Reclamation Act of 1902 and water rights in the public domain of the West.It is undisputed that the primary purpose of the Government in bringing the Orr Ditch suit in 1913 was to secure water rights for the irrigation of land that would be contained in the Newlands Project, and that the Government was acting under the aegis of the Reclamation Act of 1902 in bringing that action.8 Section 8 of that Act provides: "That nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this Act, shall proceed in conformity with such laws, and nothing herein shall in any way affect any right of any State or of the Federal Government or of any landowner, appropriator, or user of water in, to, or from any interstate stream or the waters thereof: Provided, That the right to the use of water acquired under the provisions of this Act shall be appurtenant to the land irrigated, and beneficial use shall be the basis, the measure, and the limit of the right." 32 Stat. 390. In California v. United States, , we described in greater detail the history and structure of the Reclamation Act of 1902, and stated:"The projects would be built on federal land and the actual construction and operation of the projects would be in the hands of the Secretary of the Interior. But the Act clearly provided that state water law would control in the appropriation and later distribution of the water." Id., at 664 (emphasis added). In two leading cases, Ickes v. Fox, , and Nebraska v. Wyoming, , this Court has discussed the beneficial ownership of water rights in irrigation projects built pursuant to the Reclamation Act. In Ickes v. Fox, the Court said:"Although the government diverted, stored and distributed the water, the contention of petitioner that thereby ownership of the water or water-rights became vested in the United States is not well founded. Appropriation was made not for the use of the government, but, under the Reclamation Act, for the use of the land owners; and by the terms of the law and of the contract already referred to, the water-rights became the property of the land owners, wholly distinct from the property right of the government in the irrigation works. Compare Murphy v. Kerr, 296 Fed. 536, 544, 545. The government was and remained simply a carrier and distributor of the water (ibid.), with the right to receive the sums stipulated in the contracts as reimbursement for the cost of construction and annual charges for operation and maintenance of the works. As security therefore, it was provided that the government should have a lien upon the lands and the water rights appurtenent thereto - a provision which in itself imports that the water-rights belong to another than the lienor, that is to say, to the land owner. "The federal government, as owner of the public domain, had the power to dispose of the land and water composing it together or separately; and by the Desert Land Act of 1877 (c. 107, 19 Stat. 377), if not before, Congress had severed the land and waters constituting the public domain and established the rule that for the future the lands should be patented separately. Acquisition of the government title to a parcel of land was not to carry with it a water-right; but all non-navigable waters were reserved for the use of the public under the laws of the various arid-land states. California Power Co. v. Beaver Cement Co., . And in those states, generally, including the State of Washington, it long has been established law that the right to the use of water can be acquired only by prior appropriation for a beneficial use; and that such right when thus obtained is a property right, which, when acquired for irrigation, becomes, by state law and here by express provision of the Reclamation Act as well, part and parcel of the land upon which it is applied." 300 U.S., at 94-96. In Nebraska v. Wyoming, the Court stated: "The Secretary of the Interior pursuant to 3 of the Reclamation Act withdrew from public entry certain public lands in Nebraska and Wyoming which were required for the North Platte Project and the Kendrick Project. Initiation of both projects was accompanied by filings made pursuant to 8 in the name of the Secretary of the Interior for and on behalf of the United States. Those filings were accepted by the state officials as adequate under state law. They established the priority dates for the projects. There were also applications to the States for permits to construct canals and ditches. They described the land to be served. The orders granting the applications fixed the time for completion of the canal, for application of the water to the land, and for proof of appropriation. Individual water users contracted with the United States for the use of project water. These contracts were later assumed by the irrigation districts. Irrigation districts submitted proof of beneficial use to the state authorities on behalf of the project water users. The state authorities accepted that proof and issued decrees and certificates in favor of the individual water users. The certificates named as appropriators the individual landowners. They designated the number of acres included, the use for which the appropriation was made, the amount of the appropriation, and the priority date. The contracts between the United States and the irrigation districts provided that after the stored water was released from the reservoir it was under the control of the appropriate state officials. "All of these steps make plain that those projects were designed, constructed and completed according to the pattern of state law as provided in the Reclamation Act. We can say here what was said in Ickes v. Fox, supra, pp. 94-95: `Although the government diverted, stored and distributed the water, the contention of petitioner that thereby ownership of the water or water-rights became vested in the United States is not well founded. Appropriation was made not for the use of the government, but, under the Reclamation Act, for the use of the land owners; and by the terms of the law and of the contract already referred to, the water-rights became the property of the land owners, wholly distinct from the property right of the government in the irrigation works. Compare Murphy v. Kerr, 296 Fed. 536, 544, 545. The government was and remained simply a carrier and distributor of the water (ibid.), with the right to receive the sums stipulated in the contracts as reimbursement for the cost of construction and annual charges for operation and maintenance of the works.' "The property right in the water right is separate and distinct from the property right in the reservoirs, ditches or canals. The water right is appurtenant to the land, the owner of which is the appropriator. The water right is acquired by perfecting an appropriation, i. e., by an actual diversion followed by an application within a reasonable time of the water to a beneficial use. See Murphy v. Kerr, 296 F. 536, 542, 544, 545; Commonwealth Power Co. v. State Board, 94 Neb. 613, 143 N. W. 937; Kersenbrock v. Boyes, 95 Neb. 407, 145 N. W. 837. Indeed 8 of the Reclamation Act provides as we have seen that `the right to the use of water acquired under the provisions of this Act shall be appurtenant to the land irrigated, and beneficial use shall be the basis, the measure, and the limit of the right.'" 325 U.S., at 613-614. The law of Nevada, in common with most other Western States, requires for the perfection of a water right for agricultural purposes that the water must be beneficially used by actual application on the land. Prosole v. Steamboat Canal Co., 37 Nev. 154, 159-161, 140 P. 720, 722 (1914). Such a right is appurtenant to the land on which it is used. Id., at 160-161, 140 P., at 722.In the light of these cases, we conclude that the Government is completely mistaken if it believes that the water rights confirmed to it by the Orr Ditch decree in 1944 for use in irrigating lands within the Newlands Reclamation Project were like so many bushels of wheat, to be bartered, sold, or shifted about as the Government might see fit. Once these lands were acquired by settlers in the Project, the Government's "ownership" of the water rights was at most nominal; the beneficial interest in the rights confirmed to the Government resided in the owners of the land within the Project to which these water rights became appurtenant upon the application of Project water to the land. As in Ickes v. Fox and Nebraska v. Wyoming, the law of the relevant State and the contracts entered into by the landowners and the United States make this point very clear.9 The Government's brief is replete with references to its fiduciary obligation to the Pyramid Lake Paiute Tribe of Indians, as it properly should be. But the Government seems wholly to ignore in the same brief the obligations that necessarily devolve upon it from having mere title to water rights for the Newlands Project, when the beneficial ownership of these water rights resides elsewhere.Both the briefs of the parties and the opinion of the Court of Appeals focus their analysis of res judicata on provisions relating to the relationship between private trustees and fiduciaries, especially those governing a breach of duty by the fiduciary to the beneficiary. While these undoubtedly provide useful analogies in cases such as these, they cannot be regarded as finally dispositive of the issues. This Court has long recognized "the distinctive obligation of trust incumbent upon the Government" in its dealings with Indian tribes, see, e. g., Seminole Nation v. United States, . These concerns have been traditionally focused on the Bureau of Indian Affairs within the Department of the Interior. Poafpybitty v. Skelly Oil Co., . See 25 U.S.C. 1. But Congress in its wisdom, when it enacted the Reclamation Act of 1902, required the Secretary of the Interior to assume substantial obligations with respect to the reclamation of arid lands in the western part of the United States. Additionally, in 26 of the Act of Apr. 21, 1904, 33 Stat. 225, Congress provided for the inclusion of irrigable lands of the Pyramid Lake Indian Reservation within the Newlands Project, and further authorized the Secretary, after allotting five acres of such land to each Indian belonging to the Reservation, to reclaim and dispose of the remainder of the irrigable Reservation land to settlers under the Reclamation Act.Today, particularly from our vantage point nearly half a century after the enactment of the Indian Reorganization Act of 1934, 48 Stat. 984, 25 U.S.C. 461 et seq., it may well appear that Congress was requiring the Secretary of the Interior to carry water on at least two shoulders when it delegated to him both the responsibility for the supervision of the Indian tribes and the commencement of reclamation projects in areas adjacent to reservation lands. But Congress chose to do this, and it is simply unrealistic to suggest that the Government may not perform its obligation to represent Indian tribes in litigation when Congress has obliged it to represent other interests as well. In this regard, the Government cannot follow the fastidious standards of a private fiduciary, who would breach his duties to his single beneficiary solely by representing potentially conflicting interests without the beneficiary's consent. The Government does not "compromise" its obligation to one interest that Congress obliges it to represent by the mere fact that it simultaneously performs another task for another interest that Congress has obligated it by statute to do.With these observations in mind, we turn to the principles of res judicata that we think are involved in this case.IIIRecent cases in which we have discussed principles of estoppel by judgment include Federated Department Stores, Inc. v. Moitie, ; Allen v. McCurry, ; Brown v. Felsen, ; Montana v. United States, . But what we said with respect to this doctrine more than 80 years ago is still true today; it ensures "the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for, the aid of judicial tribunals would not be invoked for the vindication of rights of person and property, if ... conclusiveness did not attend the judgments of such tribunals." Southern Pacific R. Co. v. United States, .10 Simply put, the doctrine of res judicata provides that when a final judgment has been entered on the merits of a case, "[i]t is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose." Cromwell v. County of Sac, . The final "judgment puts an end to the cause of action, which cannot again be brought into litigation between the parties upon any ground whatever." Commissioner v. Sunnen, . See Chicot County Drainage District v. Baxter State Bank, , 378 (1940).11 To determine the applicability of res judicata to the facts before us, we must decide first if the "cause of action" which the Government now seeks to assert is the "same cause of action" that was asserted in Orr Ditch; we must then decide whether the parties in the instant proceeding are identical to or in privity with the parties in Orr Ditch. We address these questions in turn.ADefinitions of what constitutes the "same cause of action" have not remained static over time. Compare Restatement of Judgments 61 (1942) with Restatement (Second) of Judgments 24 (1982).12 See generally 1B J. Moore, J. Lucas, & T. Currier, Moore's Federal Practice § 0.4101., pp. 348-363 (1983). We find it unnecessary in these cases to parse any minute differences which these differing tests might produce, because whatever standard may be applied the only conclusion allowed by the record in the Orr Ditch case is that the Government was given an opportunity to litigate the Reservation's entire water rights to the Truckee, and that the Government intended to take advantage of that opportunity.In its amended complaint in Orr Ditch, the Government averred: "Until the several rights of the various claimants, parties hereto, including the United States, to the use of the waters flowing in said river and its said tributaries in Nevada or used in Nevada have been settled, and the extent, nature, and order in time of each right to divert said waters from said river and its tributaries has been judicially determined the United States cannot properly protect its rights in and to the said waters, and to protect said rights otherwise than as herein sought if they could be protected would necessitate a multiplicity of suits." Nevada App. 10a. The final decree in Orr Ditch clearly shows that the parties to the settlement agreement and the District Court intended to accomplish this purpose. The decree provided in part: "The parties, persons, corporations, intervenors, grantees, successors in interest and substituted parties hereinbefore named, and their and each of their servants, agents, attorneys, assigns and all persons claiming by, through or under them and their successors, in or to the water rights or lands herein mentioned or described, are and each of them is hereby forever enjoined and restrained from asserting or claiming any rights in or to the waters of the Truckee River or its tributaries, or the waters of any of the creeks or streams or other waters hereinbefore mentioned except the rights, specified, determined and allowed by this decree ... ." Nevada App. 145a (emphasis added). We need not, however, stop here. For evidence more directly showing the Government's intention to assert in Orr Ditch the Reservation's full water rights, we return to the amended complaint, where it was alleged: "16. On or about or prior to the 29th day of November, 1859, the Government of the United States, having for a long time previous thereto recognized the fact that certain Pah Ute and other Indians were, and they and their ancestors had for many years been, residing upon and using certain lands in the northern part of the said Truckee River Valley and around said Pyramid Lake ... and the said Government being desirous of protecting said Indians and their descendants in their homes, fields, pastures, fishing, and their use of said lands and waters, and in affording to them an opportunity to acquire the art of husbandry and other arts of civilization, and to become civilized, did reserve said lands from any and all forms of entry or sale and for the sole use of said Indians, and for their benefit and civilization. On, to wit, the 23d day of March, 1874, the said lands, having been previously surveyed, were by order of the then President of the United States, for the purposes aforesaid, withdrawn from sale or other disposition, and set apart for the Pah Ute and other Indians aforesaid. ... . . "The United States by setting aside said lands for said purposes and creating said reservation, and by virtue of the matters and things in this paragraph set forth, did on, to wit, the 29th day of November, 1859, reserve from further appropriation, appropriate and set aside for its own use in, on, and about said Indian reservation, and the land thereof, from and of the waters of the said Truckee River, five hundred (500) cubic feet of water per second of time." Nevada App. 6a-8a. This cannot be construed as anything less than a claim for the full "implied-reservation-of-water" rights that were due the Pyramid Lake Indian Reservation.This conclusion is fortified by comparing the Orr Ditch complaint with the complaint filed in the proceedings below where, for example, the Government alleged: "Members of the Pyramid Lake Paiute Tribe of Indians have lived on the shores of Pyramid Lake from time immemorial... . They have relied upon water from the Truckee River for irrigation, for domestic uses, for maintenance of the lower segment of the Truckee River as a natural spawning ground for lake fish and for maintenance of the lake as a viable fishery. ... . . "In establishing the Pyramid Lake Reservation in 1859, there was, by implication, reserved for the benefit of the Pyramid Lake Indians sufficient water from the Truckee River for the maintenance and preservation of Pyramid Lake, for the maintenance of the lower reaches of the Truckee River as a natural spawning ground for fish and the other needs of the inhabitants of the Reservation such as irrigation and domestic use." Nevada App. 153a-154a. While the Government focuses more specifically on the Tribe's reliance on fishing in this later complaint, it seems quite clear to us that they are asserting the same reserved right for purposes of "fishing" and maintenance of "lands and waters" that was asserted in Orr Ditch.13 BHaving decided that the cause of action asserted below is the same cause of action asserted in the Orr Ditch litigation, we must next determine which of the parties before us are bound by the earlier decree. As stated earlier, the general rule is that a prior judgment will bar the "parties" to the earlier lawsuit, "and those in privity with them," from relitigating the cause of action. Cromwell v. County of Sac, 94 U.S., at 352.There is no doubt but that the United States was a party to the Orr Ditch proceeding, acting as a representative for the Reservation's interests and the interests of the Newlands Project, and cannot relitigate the Reservation's "implied-reservation-of-water" rights with those who can use the Orr Ditch decree as a defense. See United States v. Title Insurance & Trust Co., . We also hold that the Tribe, whose interests were represented in Orr Ditch by the United States, can be bound by the Orr Ditch decree.14 This Court left little room for an argument to the contrary in Heckman v. United States, , where it plainly said that "it could not, consistently with any principle, be tolerated that, after the United States on behalf of its wards had invoked the jurisdiction of its courts ... these wards should themselves be permitted to relitigate the question." Id., at 446. See also Restatement (Second) of Judgments 41(1)(d) (1982). We reaffirm that principle now.15 We then turn to the issue of which defendants in the present litigation can use the Orr Ditch decree against the Government and the Tribe. There is no dispute but that the Orr Ditch defendants were parties to the earlier decree and that they and their successors can rely on the decree. The Court of Appeals so held, and we affirm.The Court of Appeals reached a different conclusion concerning TCID and the Project farmers that it now represents. The Court of Appeals conceded that the Project's interests, like the Reservation's interests, were represented in Orr Ditch by the United States and thus that TCID, like the Tribe, stands with respect to that litigation in privity with the United States. The court further stated, however, that "[a]s a general matter, a judgment does not conclude parties who were not adversaries under the pleadings," and that in "representative litigation we should be especially careful not to infer adversity between interests represented by a single litigant." 649 F.2d, at 1309. Since the pleadings in Orr Ditch did not specifically allege adversity between the claims asserted on behalf of the Newlands Project and those asserted on behalf of the Reservation, the Court of Appeals ruled that the decree did not conclude the dispute between them.At the commencement of the Orr Ditch litigation, the United States sought water rights both for the Pyramid Lake Indian Reservation and for the irrigation of lands in the Newlands Project. It was obviously not "adverse" to itself in seeking these two separate allocations of water rights, and even if we were to treat the Paiute Tribe and the beneficial owners of water rights within the Project as being in privity with the Government, it might be that in a different kind of litigation the res judicata consequences would be different. But as the Court of Appeals noted: "A strict adversity requirement does not necessarily fit the realities of water adjudications. All parties' water rights are interdependent. See Frost v. Alturas, 11 Idaho 294, 81 P. 996, 998 (1905); Kinney, Irrigation and Water Rights at 277. Stability in water rights therefore requires that all parties be bound in all combinations. Further, in many water adjudications there is no actual controversy between the parties; the proceedings may serve primarily an administrative purpose." 649 F.2d, at 1309. We agree with these observations of the Court of Appeals. That court felt, however, that these factors did not control these cases because the "Tribe and the Project were neither parties nor co-parties, however. They were non-parties who were represented simultaneously by the same government attorneys." Ibid. We disagree with the Court of Appeals as to the consequence of this fact.It has been held that the successors in interest of parties who are not adversaries in a stream adjudication nevertheless are bound by a decree establishing priority of rights in the stream. See, e. g., Morgan v. Udy, 58 Idaho 670, 79 P.2d 295 (1938). In that case the Idaho court said:"`[I]n the settlement of cases of this character every user of water on the stream and all of its tributaries in litigation are interested in the final award to each claimant ... . Every claimant of the water of either stream, it matters not whether it be at the upper or lower end of either, or after the junction of the two, is interested in a final adjudication of all the claimants of all the waters that flow to the claimants at the lower end of the stream after its junction. In other words, ... it matters but little who are plaintiffs and who are defendants in the settlement of cases of this character; the real issue being who is first in right to the use of the waters in dispute.'" Id., at 681, 79 P.2d, at 299. This rule seems to be generally applied in stream adjudications in the Western States, where these actions play a critical role in determining the allocation of scarce water rights, and where each water rights claim by its "very nature raise[s] issues inter se as to all such parties for the determination of one claim necessarily affects the amount available for the other claims. Marlett v. Prosser, 1919, 66 Colo. 91, 179 P. 141, 142." City of Pasadena v. City of Alhambra, 180 P.2d 699, 715 (Cal. App. 1947). See Pacific Live Stock Co. v. Ellison Ranching Co., 52 Nev. 279, 296-297, 286 P. 120, 123 (1930); In re Chewaucan River, 89 Ore. 659, 666, 171 P. 402, 403-404 (1918). See also 6 Waters and Water Rights 513.2, p. 304 (R. Clark ed. 1972 and Supp. 1978).In these cases, as we have noted, the Government as a single entity brought the action seeking a determination both of the Tribe's reserved rights and of the water rights necessary for the irrigation of land within the Newlands Project. But it separately pleaded the interests of both the Project and the Reservation. During the settlement negotiations the interests of the Project, and presumably of the landowners to whom the water rights actually accrued, were represented by the newly formed TCID and the interests of the Reservation were represented by the Bureau of Indian Affairs. The settlement agreement was signed by the Government and by TCID. It would seem that at this stage of the litigation the interests of the Tribe and TCID were sufficiently adverse for the latter to oppose the Bureau's claim for additional water rights for the Reservation during the settlement negotiations.The Court of Appeals held, however, that "in representative litigation we should be especially careful not to infer adversity between interests represented by a single litigant," 649 F.2d, at 1309, analogizing the Government's position to that of a trustee under the traditional law of trusts. But as we have indicated previously, we do not believe that this analogy from the world of private law may be bodily transposed to the present situation.The Court of Appeals went on to conclude: "By representing the Tribe and the Project against the Orr Ditch defendants, the government compromised its duty of undivided loyalty to the Tribe. See Restatement (Second) of Trusts, supra, 170, & Comments p, q, r." Id., at 1310. This section of the Restatement (Second) of Trusts (1959) is entitled "Duty of Loyalty," and states that "(1) the trustee is under a duty to the beneficiary to administer the trust solely in the interest of the beneficiary." Comments p, q, and r deal respectively with "[c]ompetition with the beneficiary," "[a]ction in the interest of a third person," and "[d]uty of trustee under separate trusts."As we previously intimated, we think the Court of Appeals' reasoning here runs aground because the Government is simply not in the position of a private litigant or a private party under traditional rules of common law or statute. Our cases make this plain in numerous areas of the law. See United States v. ICC, ; Utah Power & Light Co. v. United States, . In the latter case, the Court said:"As a general rule laches or neglect of duty on the part of officers of the Government is no defense to a suit by it to enforce a public right or protect a public interest... . A suit by the United States to enforce and maintain its policy respecting lands which it holds in trust for all the people stands upon a different plane in this and some other respects from the ordinary private suit to regain the title to real property or to remove a cloud from it." Ibid. And in the very area of the law with which we deal in these cases, this Court said in Heckman v. United States, 224 U.S., at 444-445:"There can be no more complete representation than that on the part of the United States in acting on behalf of these dependents - whom Congress, with respect to the restricted lands, has not yet released from tutelage. Its efficacy does not depend on the Indian's acquiescence. It does not rest upon convention, nor is it circumscribed by rules which govern private relations. It is a representation which traces its source to the plenary control of Congress in legislating for the protection of the Indians under its care, and it recognizes no limitations that are inconsistent with the discharge of the national duty." These cases, we believe, point the way to the correct resolution of the instant cases. The United States undoubtedly owes a strong fiduciary duty to its Indian wards. See Seminole Nation v. United States, 316 U.S., at 296-297; Shoshone Tribe v. United States, . It may be that where only a relationship between the Government and the tribe is involved, the law respecting obligations between a trustee and a beneficiary in private litigation will in many, if not all, respects adequately describe the duty of the United States. But where Congress has imposed upon the United States, in addition to its duty to represent Indian tribes, a duty to obtain water rights for reclamation projects, and has even authorized the inclusion of reservation lands within a project, the analogy of a faithless private fiduciary cannot be controlling for purposes of evaluating the authority of the United States to represent different interests.At least by 1926, when TCID came into being, and very likely long before, when conveyances of the public domain to settlers within the Reclamation Project necessarily carried with them the beneficial right to appropriate water reserved to the Government for this purpose, third parties entered into the picture. The legal relationships were no longer simply those between the United States and the Paiute Tribe, but also those between the United States, TCID, and the several thousand settlers within the Project who put the Project water to beneficial use. We find it unnecessary to decide whether there would be adversity of interests between the Tribe, on the one hand, and the settlers and TCID, on the other, if the issue were to be governed by private law respecting trusts. We hold that under the circumstances described above, the interests of the Tribe and the Project landowners were sufficiently adverse so that both are now bound by the final decree entered in the Orr Ditch suit.We turn finally to those defendants below who appropriated water from the Truckee subsequent to the Orr Ditch decree. These defendants, we believe, give rise to a difficult question, but in the final analysis we agree with the Court of Appeals that they too can use the Orr Ditch decree against the plaintiffs below. While mutuality has been for the most part abandoned in cases involving collateral estoppel, see Parklane Hosiery Co. v. Shore, ; Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, , it has remained a part of the doctrine of res judicata. Nevertheless, exceptions to the res judicata mutuality requirement have been found necessary, see 18 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure 4464, pp. 586-588 (1981 and Supp. 1982), and we believe that such an exception is required in these cases.Orr Ditch was an equitable action to quiet title, an in personam action. But as the Court of Appeals determined, it "was no garden variety quiet title action." 649 F.2d, at 1308. As we have already explained, everyone involved in Orr Ditch contemplated a comprehensive adjudication of water rights intended to settle once and for all the question of how much of the Truckee River each of the litigants was entitled to. Thus, even though quiet title actions are in personam actions, water adjudications are more in the nature of in rem proceedings. Nonparties such as the subsequent appropriators in these cases have relied just as much on the Orr Ditch decree in participating in the development of western Nevada as have the parties of that case. We agree with the Court of Appeals that under "these circumstances it would be manifestly unjust ... not to permit subsequent appropriators" to hold the Reservation to the claims it made in Orr Ditch; "[a]ny other conclusion would make it impossible ever finally to quantify a reserved water right." 649 F.2d, at 1309.16 IVIn conclusion we affirm the Court of Appeals' finding that the cause of action asserted below and the cause of action asserted in Orr Ditch are one and the same. We also affirm the Court of Appeals' finding that the Orr Ditch decree concluded the controversy on this cause of action between, on the one hand, the Orr Ditch defendants, their successors in interest, and subsequent appropriators of the Truckee River, and, on the other hand, the United States and the Tribe. We reverse the Court of Appeals, however, with respect to its finding concerning TCID, and the Project farmers it represents, and hold instead that the Orr Ditch decree also ended the dispute raised between these parties and the plaintiffs below. It is so ordered. |
1 | The town of Huntington, N. Y., has a zoning classification permitting, inter alia, private construction of multifamily housing projects, but only in the town's urban renewal area, where 52% of the residents are minorities. A private developer, after acquiring an option to purchase a site in a 98% white section of town zoned for single-family residences, requested the town board to amend the code to permit multifamily rental construction by private developers townwide. The board rejected this request. Appellees filed a complaint in the District Court against appellants alleging, among other things, that appellants had violated Title VIII of the Civil Rights Act of 1968 by refusing to amend the zoning code and by refusing to rezone the proposed building site. Appellants conceded that the facial challenge to the code should be evaluated under a disparate-impact standard. The District Court rejected appellees' claims. However, the Court of Appeals reversed as to both claims, holding, with regard to the town's failure to amend the zoning code, that appellees had established a prima facie case of discriminatory impact, which appellants had failed to rebut. It ordered the town to strike the zoning limitation from the code and to rezone the project site.Held: 1. This Court expressly declines to review the judgment below insofar as it relates to the refusal to rezone the project site, because that portion of the case does not implicate this Court's mandatory jurisdiction. 2. Since appellants conceded the applicability of the disparate-impact test, this Court does not decide whether that test is the appropriate one. Assuming that test applies, the Court is satisfied on this record that appellees have shown that the zoning restriction has a disparate impact, and that the justification proffered by appellants to rebut the prima facie case is inadequate. 844 F.2d 926, affirmed. PER CURIAM.The motion of New York Planning Federation for leave to file a brief as amicus curiae is granted.The town of Huntington, N. Y., has about 200,000 residents, 95% of whom are white and less than 4% black. Almost three-fourths of the black population is clustered in six census tracts in the town's Huntington Station and South Greenlawn areas. Of the town's remaining 42 census tracts, 30 are at least 99% white.As part of Huntington's urban renewal effort in the 1960's, the town created a zoning classification (R-3M Garden Apartment District) permitting construction of multifamily housing projects, but by 198-20 of the Town Code, App. to Juris. Statement 94a, restricted private construction of such housing to the town's "urban renewal area" - the section of the town in and around Huntington Station, where 52% of the residents are minorities. Although 198-20 permits the Huntington Housing Authority (HHA) to build multifamily housing townwide, the only existing HHA project is within the urban renewal area.Housing Help, Inc. (HHI), a private developer interested in fostering residential integration, acquired an option to purchase a site in Greenlawn/East Northport, a 98% white section of town zoned for single-family residences. On February 26, 1980, HHI requested the town board to commit to amend 198-20 of the Town Code to permit multifamily rental construction by a private developer. On January 6, 1981, the board formally rejected this request. On February 23, 1981, HHI, the Huntington Branch of the National Association for the Advancement of Colored People (NAACP), and two black, low-income residents of Huntington (appellees) filed a complaint against the town and members of the town board (appellants) in the Federal District Court for the Eastern District of New York, alleging, inter alia, that they had violated Title VIII of the Civil Rights Act of 1968 by (1) refusing to amend the zoning code to allow for private construction of multifamily housing outside the urban renewal zone and (2) refusing to rezone the proposed site to R-3M. Appellees asserted that both of these claims should be adjudicated under a disparate-impact standard. Appellants agreed that the facial challenge to the ordinance should be evaluated on that basis, but maintained that the decision not to rezone the proposed project site should be analyzed under a discriminatory-intent standard.Following a bench trial, the District Court rejected appellees' Title VIII claims. 668 F. Supp. 762 (EDNY 1987). The Court of Appeals for the Second Circuit reversed as to both claims. 844 F.2d 926 (1988). The Court of Appeals held that, in order to establish a prima facie case, a Title VIII plaintiff need only demonstrate that the action or rule challenged has a discriminatory impact. As to the failure to amend the zoning ordinance (which is all that concerns us here), the court found discriminatory impact because a disproportionately high percentage of households that use and that would be eligible for subsidized rental units are minorities, and because the ordinance restricts private construction of low-income housing to the largely minority urban renewal area, which "significantly perpetuated segregation in the Town." Id., at 938. The court declared that in order to rebut this prima facie case, appellants had to put forth "bona fide and legitimate" reasons for their action and had to demonstrate that no "less discriminatory alternative can serve those ends." Id., at 939. The court found appellants' rationale for refusal to amend the ordinance - that the restriction of multifamily projects to the urban renewal area would encourage developers to invest in a deteriorated and needy section of town - clearly inadequate. In the court's view, that restriction was more likely to cause developers to invest in towns other than Huntington than to invest in Huntington's depressed urban renewal area, and tax incentives would have been a more efficacious and less discriminatory means to the desired end. After concluding that appellants had violated Title VIII, the Court of Appeals directed Huntington to strike from 198-20 the restriction of private multifamily housing projects to the urban renewal area and ordered the town to rezone the project site to R-3M.Huntington seeks review pursuant to 28 U.S.C. 1254(2) on the basis that, in striking the zoning limitation from the Town Code, the Court of Appeals invalidated "a State statute ... as repugnant to" Title VIII, a "la[w] of the United States." Viewing the case as involving two separate claims, as presented by the parties and analyzed by the courts below, we note jurisdiction, but limit our review to that portion of the case implicating our mandatory jurisdiction. Thus, we expressly decline to review the judgment of the Court of Appeals insofar as it relates to the refusal to rezone the project site.Since appellants conceded the applicability of the disparate-impact test for evaluating the zoning ordinance under Title VIII, we do not reach the question whether that test is the appropriate one. Without endorsing the precise analysis of the Court of Appeals, we are satisfied on this record that disparate impact was shown, and that the sole justification proffered to rebut the prima facie case was inadequate. The other points presented to challenge the court's holding with regard to the ordinance do not present substantial federal questions. Accordingly, the judgment of the Court of Appeals is Affirmed. JUSTICE WHITE, JUSTICE MARSHALL, and JUSTICE STEVENS would note probable jurisdiction and set the case for oral argument. |
9 | Fairlawn operates three meat markets in the vicinity of Akron, Ohio. All of its sales are intrastate. Of its purchases amounting to about $900,000 in one year, about $100,000 come from out of the State directly and as much or more indirectly. After a labor union had attempted unsuccessfully to organize Fairlawn's employees and Fairlawn had refused to recognize the union as the bargaining agent for its employees, the union picketed Fairlawn's stores and put some secondary pressure on its suppliers. Upon Fairlawn's complaint, an Ohio state court enjoined the union from picketing Fairlawn, from trespassing on its premises and from exerting secondary pressure on its suppliers. No effort was made to invoke the jurisdiction of the National Labor Relations Board; but it is assumed that the Board would have declined jurisdiction and that it had not ceded jurisdiction under 10 (a) of the National Labor Relations Act. Held: The labor dispute was within the jurisdiction of the National Labor Relations Board; the state court was without jurisdiction over the labor dispute; and the judgment is vacated. Pp. 22-25. (a) Fairlawn's interstate purchases were not so negligible that its business cannot be said to affect interstate commerce within the meaning of 2 (7) of the National Labor Relations Act. P. 22. (b) Since the proviso to 10 (a) of the National Labor Relations Act operates to exclude state labor boards from disputes within the jurisdiction of the National Labor Relations Board in the absence of a cession agreement, Guss v. Utah Labor Relations Board, ante, p. 1, it must also exclude state courts. P. 23. (c) Congress did not leave it to state labor agencies, to state courts or to this Court to decide how consistent with federal policy state law must be. The power to make that decision in the first instance was given to the National Labor Relations Board, guided by the language of the proviso to 10 (a). Pp. 23-24. (d) Since the unitary judgment of the Ohio court was based on the erroneous premise that it had power to reach the union's conduct in its entirety, it is impossible to know whether its conclusion on the mere act of trespass would have been the same outside of the context of the union's other conduct. Pp. 24-25. 164 Ohio St. 285, 130 N. E. 2d 237, judgment vacated and cause remanded.Mozart G. Ratner argued the cause for petitioners. With him on the brief were Joseph M. Jacobs and Mortimer Riemer.Stanley Denlinger argued the cause and filed a brief for respondent.Briefs of amici curiae urging affirmance were filed by Solicitor General Rankin, Theophil C. Kammholz, Stephen Leonard and Dominick L. Manoli for the National Labor Relations Board, and Thomas E. Shroyer and Milton C. Denbo for the American Retail Federation et al., and Clarence D. Laylin for the Ohio Chamber of Commerce.A brief of amici curiae was filed for the States of Florida, by Richard W. Ervin, Attorney General; Georgia, by Eugene Cook, Attorney General; Texas, by John Ben Shepperd, Attorney General; Vermont, by Robert T. Stafford, Attorney General; Virginia, by J. Lindsay Almond, Jr., Attorney General; Wyoming, by George F. Guy, Attorney General; and the Wisconsin Employment Relations Board, by Vernon W. Thomson, Attorney General, and Beatrice Lampert, Assistant Attorney General.Herbert B. Cohen, Attorney General, and Oscar Bortner, Assistant Attorney General, filed a brief for the Commonwealth of Pennsylvania, as amicus curiae.J. Albert Woll and Thomas E. Harris filed a brief for the American Federation of Labor and Congress of Industrial Organizations, as amicus curiae. MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.Respondent operates three meat markets in the vicinity of Akron, Ohio. All of its sales are intrastate, but of its purchases in one year totaling not quite $900,000, slightly more than $100,000 worth came from outside Ohio directly and as much or more indirectly. Petitioner union, after an unsuccessful attempt to organize respondent's employees, asked respondent for recognition as their bargaining agent and for a union shop contract. When respondent refused to enter into such a contract, the union picketed respondent's stores and put some secondary pressure on its suppliers. Upon respondent's complaint, the Court of Common Pleas enjoined the union from picketing respondent, from trespassing upon respondent's premises and from exerting secondary pressure on the suppliers. Petitioners objected throughout that the jurisdiction of the National Labor Relations Board was exclusive. On appeal, the Ohio Court of Appeals found that respondent's business was "purely of a local character" and interstate commerce, therefore, was not burdened or obstructed. The Court of Appeals held that the union's picketing was unlawful according to Ohio policy, and it continued in effect the injunction granted by the Court of Common Pleas.1 The Ohio Supreme Court dismissed an appeal "for the reason that no debatable constitutional question is involved."2 We granted certiorari. .We do not agree that respondent's interstate purchases were so negligible that its business cannot be said to affect interstate commerce within the meaning of 2 (7) of the National Labor Relations Act.3 Cf. Labor Board v. Denver Building & Construction Trades Council, . In this case, unlike No. 280, ante, p. 1, and No. 50, post, p. 26, no effort was made to invoke the jurisdiction of the National Labor Relations Board. Although the extent of respondent's interstate activity seems greater even than that in Building Trades Council v. Kinard Construction Co., , we will assume that this is a case where it was obvious that the Board would decline jurisdiction.4 On this view of the case, our decision in Guss v. Utah Labor Relations Board, ante, p. 1, controls. If the proviso to 10 (a) of the National Labor Relations Act operates to exclude state labor boards from disputes within the National Board's jurisdiction in the absence of a cession agreement, it must also exclude state courts. See Garner v. Teamsters Union, . The conduct here restrained - an effort by a union not representing a majority of his employees to compel an employer to agree to a union shop contract - is conduct of which the National Act has taken hold. 8 (b) (2), 61 Stat. 141, 29 U.S.C. 158 (b) (2). Garner v. Teamsters Union, supra, teaches that in such circumstances a State cannot afford a remedy parallel to that provided by the Act.It is urged in this case and its companions, however, that state action should be permitted within the area of commerce which the National Board has elected not to enter when such action is consistent with the policy of the National Act. We stated our belief in Guss v. Utah Labor Relations Board, ante, at pp. 10-11, that "Congress has expressed its judgment in favor of uniformity." We add that Congress did not leave it to state labor agencies, to state courts or to this Court to decide how consistent with federal policy state law must be. The power to make that decision in the first instance was given to the National Labor Relations Board, guided by the language of the proviso to 10 (a). This case is an excellent example of one of the reasons why, it may be, Congress was specific in its requirement of uniformity. Petitioners here contend that respondent was guilty of what would be unfair labor practices under the National Act and that the outcome of proceedings before the National Board would, for that reason, have been entirely different from the outcome of the proceedings in the state courts. Without expressing any opinion as to whether the record bears out its factual contention, we note that the opinion of the Ohio Court of Appeals takes no account of the alleged unfair labor practice activity of the employer. Thus, it cannot be said with certainty whether the state court's decree is consistent with the National Act.One final point remains to be considered. At two of respondent's stores, located in suburban shopping centers, the picketing occurred on land owned by or leased to respondent though open to the public for access to the stores. As one of the reasons for finding the picketing unlawful, the Court of Appeals recited this fact, and "trespassing upon plaintiff's property" is one of the activities specifically enjoined. Whether a State may frame and enforce an injunction aimed narrowly at a trespass of this sort is a question that is not here. Here the unitary judgment of the Ohio court was based on the erroneous premise that it had power to reach the union's conduct in its entirety. Whether its conclusion as to the mere act of trespass would have been the same outside of the context of petitioner's other conduct we cannot know. The judgment therefore is vacated and the case remanded for proceedings not inconsistent with this opinion. Vacated and remanded.MR. JUSTICE WHITTAKER took no part in the consideration or decision of this case. [For dissenting opinion of MR. JUSTICE BURTON, joined by MR. JUSTICE CLARK, see ante, p. 12.] |
7 | The Waste Import Restrictions of Michigan's Solid Waste Management Act (SWMA) provide that solid waste generated in another county, State, or country cannot be accepted for disposal unless explicitly authorized in the receiving county's plan. After St. Clair County, whose plan does not include such authorization, denied petitioner company's 1989 application for authority to accept out-of-state waste at its landfill, petitioner filed this action seeking a judgment declaring the Waste Import Restrictions invalid under the Commerce Clause and enjoining their enforcement. The District Court dismissed the complaint, and the Court of Appeals affirmed. The latter court found no facial discrimination against interstate commerce, because the statute does not treat out-of-county waste from Michigan any differently than waste from other States. The court also ruled that there was no actual discrimination, because petitioner had not alleged that all Michigan counties ban out-of-state waste.Held: The Waste Import Restrictions unambiguously discriminate against interstate commerce, and are appropriately characterized as protectionist measures that cannot withstand Commerce Clause scrutiny. Pp. 4-14. (a) Philadelphia v. New Jersey, , provides the proper analytical framework, and controls here. Under the reasoning of that case, Michigan's Waste Import Restrictions clearly discriminate against interstate commerce, since they authorize each county to isolate itself from the national economy and, indeed, afford local waste producers complete protection from competition from out-of-state producers seeking to use local disposal areas unless a county acts affirmatively to authorize such use. Pp. 4-7. (b) This case cannot be distinguished from Philadelphia v. New Jersey on the ground, asserted by respondents, that the Waste Import Restrictions treat waste from other Michigan counties no differently than waste from other States, and thus do not discriminate against interstate commerce on their face or in effect. This Court's cases teach that a State (or one of its political subdivisions) may not avoid the Commerce Clause's strictures by curtailing the movement of articles of commerce through subdivisions of the State, rather than through the State itself. See, e.g., Brimmer v. Rebman, . Nor does the fact that the Michigan statute allows individual counties to accept solid waste from out of state qualify its discriminatory character. Pp. 7-9. (c) Also rejected is respondents' argument that this case is different from Philadelphia v. New Jersey because the SWMA constitutes a comprehensive health and safety regulation, rather than "economic protectionism" of the State's limited landfill capacity. Even assuming that other provisions of the SWMA could fairly be so characterized, the same assumption cannot be made with respect to the Waste Import Restrictions themselves. Because those provisions unambiguously discriminate against interstate commerce, the State bears the burden of proving that they further health and safety concerns that cannot be adequately served by nondiscriminatory alternatives. Respondents have not met this burden, since they have provided no valid health and safety reason for limiting the amount of waste that a landfill operator may accept from outside the State, but not the amount the operator may accept from inside the State. Pp. 10-14. 931 F.2d 413, reversed.STEVENS, J., delivered the opinion of the Court, in which WHITE, O'CONNOR, SCALIA, KENNEDY, SOUTER, and THOMAS, JJ., joined. REHNQUIST, C.J., filed a dissenting opinion, in which BLACKMUN, J., joined, post, p. 368.Harold B. Finn III argued the cause for petitioner. With him on the briefs were Donna Nelson Heller and David I. Albin.Thomas L. Casey, Assistant Solicitor General of Michigan, argued the cause for respondents. With him on the brief for the state respondents were Frank J. Kelley, Attorney General, Gay Secor Hardy, Solicitor General, and Thomas J. Emery and James E. Riley, Assistant Attorneys General. Lawrence R. Ternan, Margaret Battle Kiernan, and Robert J. Nickerson filed a brief for the county respondents.* [Footnote *] Andrew J. Pincus, Evan M. Tager, and Bruce J. Parker filed a brief for the National Solid Wastes Management Association as amicus curiae urging reversal.Briefs of amici curiae urging affirmance were filed for the State of Alabama et al. by Chris Gorman, Attorney General of Kentucky, and Robert V. Bullock and Stan Cox, Assistant Attorneys General, James H. Evans, Attorney General of Alabama, Grant Woods, Attorney General of Arizona, Charles M. Oberly III, Attorney General of Delaware, Linley E. Pearson, Attorney General of Indiana, Charles S. Crookham, Attorney General of Oregon, and Mary Sue Terry, Attorney General of Virginia; and for Whatcom County, Washington, by Paul J. Kundtz.A brief of amici curiae was filed for the Commonwealth of Pennsylvania et al. by Ernest D. Preate, Jr., Attorney General of Pennsylvania, Calvin R. Koons, Senior Deputy Attorney General, John G. Knorr III, Chief Deputy Attorney General, Gail B. Phelps, and David H. Wersan, and by the Attorneys General for their respective States as follows: Michael J. Bowers of Georgia, Larry EchoHawk of Idaho, Roland W. Burris of Illinois, Marc Racicot of Montana, Don Stenberg of Nebraska, Frankie Sue Del Papa of Nevada, Nicholas Spaeth of North Dakota, Tom Udall of New Mexico, Lee Fisher of Ohio, T. Travis Medlock of South Carolina, Mark Barnett of South Dakota, Charles W. Burson of Tennessee, Mario J. Palumbo of West Virginia, and Joseph B. Meyer of Wyoming. JUSTICE STEVENS delivered the opinion of the Court.In Philadelphia v. New Jersey, , we held that a New Jersey law prohibiting the importation of most "`solid or liquid waste which originated or was collected outside the territorial limits of the State'" violated the Commerce Clause of the United States Constitution. In this case, petitioner challenges a Michigan law that prohibits private landfill operators from accepting solid waste that originates outside the county in which their facilities are located. Adhering to our holding in the New Jersey case, we conclude that this Michigan statute is also unconstitutional.IIn 1978, Michigan enacted its Solid Waste Management Act1 (SWMA). That Act required every Michigan county to estimate the amount of solid waste that would be generated in the county in the next 20 years, and to adopt a plan providing for its disposal at facilities that comply with state health standards. Mich. Comp. Laws 299.425 (Supp. 1991). After holding public hearings and obtaining the necessary approval of municipalities in the county, as well as the approval of the Director of the Michigan Department of Natural Resources, the County Board of Commissioners adopted a solid waste management plan for St. Clair County. In 1987, the Michigan Department of Natural Resources issued a permit to petitioner to operate a sanitary landfill as a solid waste2 disposal area in St. Clair County. See Bill Kettlewell Excavating, Inc. v. Michigan Dept. of Natural Resources, 931 F.2d 413, 414 (CA6 1991).On December 28, 1988, the Michigan Legislature amended the SWMA by adopting two provisions concerning the "acceptance of waste or ash generated outside the county of disposal area." See 1988 Mich. Pub.Acts, No. 475, 1, codified as amended, Mich.Comp.Laws 299.413a, 299.430(2) (Supp. 1991). Those amendments (Waste Import Restrictions), which became effective immediately, provide: "A person shall not accept for disposal solid waste ... that is not generated in the county in which the disposal area is located unless the acceptance of solid waste ... that is not generated in the county is explicitly authorized in the approved county solid waste management plan." 299.413a. "In order for a disposal area to serve the disposal needs of another county, state, or country, the service ... must be explicitly authorized in the approved solid waste management plan of the receiving county." 299.430(2). In February 1989, petitioner submitted an application to the St. Clair County Solid Waste Planning Committee for authority to accept up to 1,750 tons per day of out-of-state waste at its landfill. See Bill Kettlewell Excavating, Inc. v. Michigan Dept. of Natural Resources, 732 F.Supp. 761, 762 (ED Mich. 1990). In that application, petitioner promised to reserve sufficient capacity to dispose of all solid waste generated in the county in the next 20 years. The planning committee denied the application. Ibid. In view of the fact that the county's management plan does not authorize the acceptance of any out-of-county waste, the Waste Import Restrictions in the 1988 statute effectively prevent petitioner from receiving any solid waste that does not originate in St. Clair County.Petitioner therefore commenced this action seeking a judgment declaring the Waste Import Restrictions unconstitutional and enjoining their enforcement. Petitioner contended that requiring a private landfill operator to limit its business to the acceptance of local waste constituted impermissible discrimination against interstate commerce. The District Court denied petitioner's motion for summary judgment, however, id., at 766, and subsequently dismissed the complaint, App. 4. The court first concluded that the statute does not discriminate against interstate commerce "on its face" because the import restrictions apply "equally to Michigan counties outside of the county adopting the plan as well as to out-of-state entities." 732 F.Supp., at 764. It also concluded that there was no discrimination "in practical effect," because each county was given discretion to accept out-of-state waste. Ibid. Moreover, the incidental effect on interstate commerce was "not clearly excessive in relation to the [public health and environmental] benefits derived by Michigan from the statute." Id., at 765.The Court of Appeals for the Sixth Circuit agreed with the District Court's analysis. Although it recognized that the statute "places in-county and out-of-county waste in separate categories," the Court of Appeals found no discrimination against interstate commerce, because the statute "does not treat out-of-county waste from Michigan any differently than waste from other states." 931 F.2d, at 417. It also agreed that there was no actual discrimination, because petitioner had not alleged that all counties in Michigan ban out-of-state waste. Id., at 418. Accordingly, it affirmed the judgment of the District Court. Ibid. We granted certiorari, , because of concern that the decision below was inconsistent with Philadelphia v. New Jersey and now reverse.IIBefore discussing the rather narrow issue that is contested, it is appropriate to identify certain matters that are not in dispute. Michigan's comprehensive program of regulating the collection, transportation, and disposal of solid waste, as it was enacted in 1978 and administered prior to the 1988 Waste Import Restrictions, is not challenged. No issue relating to hazardous waste is presented, and there is no claim that petitioner's operation violated any health, safety, or sanitation requirement. Nor does the case raise any question concerning policies that municipalities or other governmental agencies may pursue in the management of publicly owned facilities. The case involves only the validity of the Waste Import Restrictions as they apply to privately owned and operated landfills.On the other hand, Philadelphia v. New Jersey provides the framework for our analysis of this case. Solid waste, even if it has no value, is an article of commerce.3 437 U.S., at 622-623. Whether the business arrangements between out-of-state generators of waste and the Michigan operator of a waste disposal site are viewed as "sales" of garbage or "purchases" of transportation and disposal services, the commercial transactions unquestionably have an interstate character. The Commerce Clause thus imposes some constraints on Michigan's ability to regulate these transactions.As we have long recognized, the "negative" or "dormant" aspect of the Commerce Clause prohibits States from "advanc[ing] their own commercial interests by curtailing the movement of articles of commerce, either into or out of the state." H.P. Hood & Sons, Inc. v. Du Mond, . A state statute that clearly discriminates against interstate commerce is therefore unconstitutional "unless the discrimination is demonstrably justified by a valid factor unrelated to economic protectionism." New Energy Co. of Ind. v. Limbach, . New Jersey's prohibition on the importation of solid waste failed this test: "[T]he evil of protectionism can reside in legislative means, as well as legislative ends. Thus, it does not matter whether the ultimate aim of ch. 363 is to reduce the waste disposal costs of New Jersey residents or to save remaining open lands from pollution, for we assume New Jersey has every right to protect its residents' pocketbooks, as well as their environment. And it may be assumed as well that New Jersey may pursue those ends by slowing the flow of all waste into the State's remaining landfills, even though interstate commerce may incidentally be affected. But whatever New Jersey's ultimate purpose, it may not be accompanied by discriminating against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently. Both on its face and in its plain effect, ch. 363 violates this principle of nondiscrimination. "The Court has consistently found parochial legislation of this kind to be constitutionally invalid, whether the ultimate aim of the legislation was to assure a steady supply of milk by erecting barriers to allegedly ruinous outside competition, Baldwin v. G. A. F. Seelig, Inc., 294 U.S., at 522-524; or to create jobs by keeping industry within the State, Foster-Fountain Packing Co. v. Haydel, ; Johnson v. Haydel, ; Toomer v. Witsell, 334 U.S., at 403-404; or to preserve the State's financial resources from depletion by fencing out indigent immigrants, Edwards v. California, . In each of these cases, a presumably legitimate goal was sought to be achieved by the illegitimate means of isolating the State from the national economy." Philadelphia v. New Jersey, 437 U.S., at 626-627. The Waste Import Restrictions enacted by Michigan authorize each of the State's 83 counties to isolate itself from the national economy. Indeed, unless a county acts affirmatively to permit other waste to enter its jurisdiction, the statute affords local waste producers complete protection from competition from out-of-state waste producers who seek to use local waste disposal areas. In view of the fact that Michigan has not identified any reason, apart from its origin, why solid waste coming from outside the county should be treated differently from solid waste within the county, the foregoing reasoning would appear to control the disposition of this case.IIIRespondents Michigan and St. Clair County argue, however, that the Waste Import Restrictions - unlike the New Jersey prohibition on the importation of solid waste - do not discriminate against interstate commerce on their face or in effect, because they treat waste from other Michigan counties no differently than waste from other States. Instead, respondents maintain, the statute regulates evenhandedly to effectuate local interests, and should be upheld because the burden on interstate commerce is not clearly excessive in relation to the local benefits. Cf. Pike v. Bruce Church, Inc., . We disagree, for our prior cases teach that a State (or one of its political subdivisions) may not avoid the strictures of the Commerce Clause by curtailing the movement of articles of commerce through subdivisions of the State, rather than through the State itself.In Brimmer v. Rebman, , we reviewed the constitutionality of a Virginia statute that imposed special inspection fees on meat from animals that had been slaughtered more than 100 miles from the place of sale. We concluded that the statute violated the Commerce Clause even though it burdened Virginia producers as well as the Illinois litigant before the Court. We explained: "[T]his statute [cannot] be brought into harmony with the Constitution by the circumstance that it purports to apply alike to the citizens of all the States, including Virginia, for `a burden imposed by a State upon interstate commerce is not to be sustained simply because the statute imposing it applies alike to the people of all the States, including the people of the State enacting such statute.' Minnesota v. Barber, ; Robbins v. Shelby Taxing District, . If the object of Virginia had been to obstruct the bringing into that State, for use as human food, of all beef, veal and mutton, however wholesome, from animals slaughtered in distant States, that object will be accomplished if the statute before us be enforced." Id., at 82-83. In Dean Milk Co. v. Madison, , another Illinois litigant challenged a city ordinance that made it unlawful to sell any milk as pasteurized unless it had been processed at a plant "within a radius of five miles from the central square of Madison," id., at 350. We held the ordinance invalid, explaining: "[T]his regulation, like the provision invalidated in Baldwin v. Seelig, Inc., , in practical effect excludes from distribution in Madison wholesome milk produced and pasteurized in Illinois. "The importer ... may keep his milk or drink it, but sell it he may not." Id., at 521. In thus erecting an economic barrier protecting a major local industry against competition from without the State, Madison plainly discriminates against interstate commerce." Id., at 354. The fact that the ordinance also discriminated against all Wisconsin producers whose facilities were more than five miles from the center of the city did not mitigate its burden on interstate commerce. As we noted, it was "immaterial that Wisconsin milk from outside the Madison area is subjected to the same proscription as that moving in interstate commerce." Id., at 354, n. 4.Nor does the fact that the Michigan statute allows individual counties to accept solid waste from out of state qualify its discriminatory character. In the New Jersey case, the statute authorized a state agency to promulgate regulations permitting certain categories of waste to enter the State. See 437 U.S., at 618-619. The limited exception covered by those regulations - like the fact that several Michigan counties accept out-of-state waste - merely reduced the scope of the discrimination; for all categories of waste not excepted by the regulations, the discriminatory ban remained in place. Similarly, in this case, St. Clair County's total ban on out-of-state waste is unaffected by the fact that some other counties have adopted a different policy.4 In short, neither the fact that the Michigan statute purports to regulate intercounty commerce in waste nor the fact that some Michigan counties accept out-of-state waste provides an adequate basis for distinguishing this case from Philadelphia v. New Jersey.IVMichigan and St. Clair County also argue that this case is different from Philadelphia v. New Jersey because the SWMA constitutes a comprehensive health and safety regulation, rather than "economic protectionism" of the State's limited landfill capacity. Relying on an excerpt from our opinion in Sporhase v. Nebraska ex rel. Douglas, , they contend that the differential treatment of out-of-state waste is reasonable because they have taken measures to conserve their landfill capacity and the SWMA is necessary to protect the health of their citizens. That reliance is misplaced. In the Sporhase case, we considered the constitutionality of a Nebraska statute that prohibited the withdrawal of ground water for use in an adjoining State without a permit that could only issue if four conditions were satisfied.5 We held that the fourth condition - a requirement that the adjoining State grant reciprocal rights to withdraw its water and allow its use in Nebraska - violated the Commerce Clause. Id., at 957-958.As a preface to that holding, we identified several reasons that, in combination, justified the conclusion that the other conditions were facially valid. Id., at 957. First, we questioned whether the statute actually discriminated against interstate commerce. Although the restrictive conditions in the statute nominally applied only to interstate transfers of ground water, they might have been "no more strict in application than [other state-law] limitations upon intrastate transfers." Id., at 956. "Obviously, a State that imposes severe withdrawal and use restrictions on its own citizens is not discriminating against interstate commerce when it seeks to prevent the uncontrolled transfer of water out of the State." Id., at 955-956.We further explained that a confluence of factors could justify a State's efforts to conserve and preserve ground water for its own citizens in times of severe shortage.6 Only the first of those reasons - our reference to the well-recognized difference between economic protectionism, on the one hand, and health and safety regulation, on the other - is even arguably relevant to this case.7 We may assume that all of the provisions of Michigan's SWMA prior to the 1988 amendments adding the Waste Import Restrictions could fairly be characterized as health and safety regulations with no protectionist purpose, but we cannot make that same assumption with respect to the Waste Import Restrictions themselves. Because those provisions unambiguously discriminate against interstate commerce, the State bears the burden of proving that they further health and safety concerns that cannot be adequately served by nondiscriminatory alternatives. Michigan and St. Clair County have not met this burden.8 Michigan and St. Clair County assert that the Waste Import Restrictions are necessary because they enable individual counties to make adequate plans for the safe disposal of future waste.9 Although accurate forecasts about the volume and composition of future waste flows may be an indispensable part of a comprehensive waste disposal plan, Michigan could attain that objective without discriminating between in- and out-of-state waste. Michigan could, for example, limit the amount of waste that landfill operators may accept each year. See Philadelphia v. New Jersey, 437 U.S., at 626. There is, however, no valid health and safety reason for limiting the amount of waste that a landfill operator may accept from outside the State, but not the amount that the operator may accept from inside the State.Of course, our conclusion would be different if the imported waste raised health or other concerns not presented by Michigan waste. In Maine v. Taylor, , for example, we upheld the State's prohibition against the importation of live baitfish because parasites and other characteristics of nonnative species posed a serious threat to native fish that could not be avoided by available inspection techniques. We concluded: "The evidence in this case amply supports the District Court's findings that Maine's ban on the importation of live baitfish serves legitimate local purposes that could not adequately be served by available nondiscriminatory alternatives. This is not a case of arbitrary discrimination against interstate commerce; the record suggests that Maine has legitimate reasons, `apart from their origin, to treat [out-of-state baitfish] differently,' Philadelphia v. New Jersey, 437 U.S., at 627." Id., at 151-152. In this case, in contrast, the lower courts did not find - and respondents have not provided - any legitimate reason for allowing petitioner to accept waste from inside the county but not waste from outside the county.For the foregoing reasons, the Waste Import Restrictions unambiguously discriminate against interstate commerce, and are appropriately characterized as protectionist measures that cannot withstand scrutiny under the Commerce Clause. The judgment of the Court of Appeals is therefore reversed.It is so ordered. |
1 | 1. After a general court-martial had convicted a soldier of the two separate crimes of premeditated murder and attempted rape and had imposed an aggregate sentence of life imprisonment for both offenses, an Army Board of Review, after setting aside the conviction on the murder charge, had authority under Article 66 (c) of the Uniform Code of Military Justice to reduce the sentence to the maximum sentence for attempted rape. Jackson v. Taylor, ante, P. 569. Pp. 583-585.2. In a habeas corpus proceeding, a civil court may not revise a sentence imposed on a soldier by military authorities after his conviction by court-martial, on the ground that the sentence is arbitrarily severe. Carter v. McClaughry, , followed. United States v. Voorhees, 4 U.S.C. M. A. 509, 16 C. M. R. 83, distinguished. Pp. 584-585.3. The action of the Board of Review in adjusting the sentence does not deprive the accused of any right of appellate review. P. 585. 234 F.2d 615, affirmed.Leon S. Epstein argued the cause for petitioner. With him on the brief was R. Monroe Schwartz.Ralph S. Spritzer argued the cause for respondent. With him on the brief were Solicitor General Rankin, Assistant Attorney General Olney, Beatrice Rosenberg and James W. Booth.MR. JUSTICE CLARK delivered the opinion of the Court.The factual background and the question presented in this case are the same as in Jackson v. Taylor, ante, p. 569, decided today. The case reaches us from the Court of Appeals for the Fifth Circuit, 234 F.2d 615, which had reversed the District Court. We granted certiorari, . There are additional reasons to those in Jackson v. Taylor advanced for reversal in this case. Fowler contends that the 20-year sentence is arbitrarily severe, even though within the statutory maximum, citing United States v. Voorhees, 4 U.S.C. M. A. 509, 16 C. M. R. 83 (1954). But as we said in Burns v. Wilson, , this Court exerts "no supervisory power over the courts which enforce [military law]; the rights of men in the armed forces must perforce be conditioned to meet certain overriding demands of discipline and duty, and the civil courts are not the agencies which must determine the precise balance to be struck in this adjustment. The Framers expressly entrusted that task to Congress." Id., at 140. If there is injustice in the sentence imposed it is for the Executive to correct, for since the board of review has authority to act, we have no jurisdiction to interfere with the exercise of its discretion. That power is placed by the Congress in the hands of those entrusted with the administration of military justice, or if clemency is in order, the Executive. It may be that the board's judgment was harsh or that the military's highest court should have intervened as it did in the Voorhees case, but we have no jurisdiction in that regard. As long ago as 1902 this Court recognized that it was a "salutary rule that the sentences of courts martial, when affirmed by the military tribunal of last resort, cannot be revised by the civil courts save only when void because of an absolute want of power, and not merely voidable because of the defective exercise of power possessed." Carter v. McClaughry, .We note that petitioner's reliance on Voorhees' case is misplaced when he cites it as apposite to the problem here presented. While the Court of Military Appeals held there that the board should have ordered a rehearing, the rehearing was to include a reconsideration of the finding of guilt as well as the sentence. Though, as Judge Latimer indicates in his opinion, the board of review had the power to approve the sentence, dismissal from the service, such approval was found by that court to be an abuse of the discretion placed in the board under the particular circumstances of the case. We, of course, do not sit to pass on the exercise of discretion by the military authorities. Judge Latimer further indicated the Court of Military Appeals' recognition of the power of the board of review to affirm such parts, or amount of a sentence, as it finds correct in fact and law. The case, then, instead of supporting petitioner's position, indicates authority for the power of the board to modify the sentence. See United States v. Bigger, 2 U.S.C. M. A. 297, 8 C. M. R. 97 (1953).The argument that the adjustment of the sentence by the board deprives the petitioner of two appeals likewise is without merit. He contends that if the resentencing were done by a court-martial he would have a review of that resentencing by the convening authority as well as the board of review. But Congress did not intend any such result. The accused has already had his day before the court-martial and the convening authority. It is not for us to say that the procedure established by Congress is unwise. There are no constitutional questions before us. We have determined that the board of review had jurisdiction to modify the sentence. Our inquiry cannot be extended beyond that question.For these reasons, and those stated in Jackson v. Taylor, ante, p. 569, the judgment is Affirmed. THE CHIEF JUSTICE, MR. JUSTICE BLACK, MR. JUSTICE DOUGLAS, and MR. JUSTICE BRENNAN dissent for the reasons stated in the dissenting opinion of MR. JUSTICE BRENNAN in No. 619, Jackson v. Taylor, ante, p. 581. |
7 | In 1910 the Texas State Land Board sold some public land by contract calling for a small down payment plus annual interest and principal payments. State law provided for the termination of the contract and forfeiture of the land for nonpayment of interest, and in such case the purchaser or his vendee could reinstate his claim on written request and payment of delinquent interest, unless rights of third parties intervened. In 1941 the law was amended limiting reinstatement rights to five years from the forfeiture date. Here the land was forfeited in 1947 and appellee, who thereafter took quitclaim deeds to the land, filed for reinstatement and tendered payment more than five years later. His application was denied. The State sold the land to the City of El Paso in 1955 and appellee filed this suit to determine title thereto. The District Court granted appellant's motion for summary judgment on the basis of the 1941 statute. The Court of Appeals reversed, ruling that the 1941 law impaired the obligation of contracts in contravention of Art. I, 10, of the Constitution, but remanded the case to the District Court for consideration of the City's defenses of laches and adverse possession. Held: 1. Although this appeal was improperly brought under 28 U.S.C. 1254 (2), the Court treats the papers whereon the appeal was filed as a petition for certiorari under 28 U.S.C. 2103, dismisses the appeal and grants certiorari. Pp. 501-503. 2. It is not every modification of a contractual promise that impairs the obligation of a contract, any more than it is every alteration of existing remedies that violates the Contract Clause. The prohibition against impairment of the obligation of contract "is not an absolute one and is not to be read with literal exactness like a mathematical formula." Home Building & Loan Assn. v. Blaisdell, . Pp. 506-508. 3. The State has reserved power to safeguard the vital interests of its people, which may modify or affect the obligation of contract but not destroy the constitutional limitation; and the reserved power and this limitation must be construed in harmony with each other. Pp. 508-509. 4. Without affecting the central undertaking of the seller or the primary consideration for the buyer's undertaking, the Texas statute of repose serves significant state objectives: clarification of land titles, elimination of massive litigation over titles and effective utilization of property. Hence, it impairs no protected right under the Contract Clause. Pp. 509-517. Appeal dismissed and certiorari granted; 320 F.2d 541, reversed.William J. Mounce argued the cause for appellant. With him on the brief was Thornton Hardie.Greenberry Simmons, appellee, argued the cause and filed a brief pro se.MR. JUSTICE WHITE delivered the opinion of the Court.Under the applicable statutes existing in Texas in 1910, the year in which the contracts in this case were made, the State Land Board was authorized to sell the public lands allocated to the Permanent Free School Fund on longterm contracts calling for a down payment of one-fortieth of the principal and annual payment of interest and principal. The time for payment of principal was extended periodically and the principal was never called due. In the event of nonpayment of interest, however, the statutes authorized the termination of the contract and the forfeiture of the lands to the State without the necessity of re-entry or judicial proceedings, the land again to become a part of the public domain and to be resold for the account of the school fund.1 The provision chiefly in issue in this case provided:"In any cases where lands have been forfeited to the State for the non-payment of interest, the purchasers or their vendees may have their claims reinstated on their written request, by paying into the treasury the full amount of interest due on such claim up to the date of reinstatement; provided, that no rights of third persons may have intervened. In all such cases the original obligations and penalties shall thereby become as binding as if no forfeiture had ever occurred." Tex. Gen. Laws 1897, ch. 129, art. 4218f. In 1941, the foregoing provisions were amended. Among other things, the offering of forfeited land for sale on a subsequent sale date was made permissive instead of mandatory and a provision was added stating that the right to reinstate lands forfeited thereafter "must be exercised within five (5) years from the date of the forfeiture." Tex Gen. & Spec. Laws 1941, ch. 191, 3, Vernon's Ann. Civ. Stat., art. 5326. In 1951, the right of reinstatement was limited to the last purchaser from the State and his vendees or heirs. Tex. Gen. & Spec. Laws 1951, ch. 59, 2, Vernon's Ann. Civ. Stat., art. 5326.2 In 1910, certain predecessors in title of Simmons, the appellee, executed their installment contracts to purchase school lands from the State of Texas. The original purchasers made a down payment of one-fortieth of the principal and made annual interest payments. The purchase contracts were assigned several times and interest payments fell into arrears during the forties. On July 21, 1947, after a notice of arrears and request for payment, the land was forfeited for nonpayment of interest. A notice of forfeiture and a copy of the 1941 Act allowing reinstatement within five years were sent to the last purchaser of record, but were returned unclaimed. Appellee Simmons, a citizen of Kentucky, thereafter took quitclaim deeds to the land in question and filed his applications for reinstatement, tendering the required payments. The applications were denied because they had not been made within five years of the forfeiture as required by the 1941 statute. In 1955, pursuant to special legislation, the land was sold by the State to the City of El Paso. Simmons then filed this suit in the Federal District Court to determine title to the land in question. In its answer the City relied upon the 1941 statute as barring Simmons' claim and also pleaded adverse possession and laches as additional defenses. The District Court granted the City's motion for summary judgment on the ground of the 1941 statute.3 The Court of Appeals reversed, 320 F.2d 541 (C. A. 5th Cir.), ruling that the right to reinstate was a vested contractual right and that the prohibition against impairment of contracts contained in Art. I, 10, of the Constitution of the United States prohibited the application of the 1941 statute to the contract here in question. We noted probable jurisdiction. . We reverse.I.Although neither party has raised the issue, we deal at the outset with a jurisdictional matter. The appeal in this case is here under 28 U.S.C. 1254 (2) (1958 ed.).4 The Court of Appeals, after holding the Texas statute unconstitutional, remanded the case to the District Court to determine the City's defenses of laches and adverse possession. Under a prior interpretation of 240 (b) of the Judicial Code, the predecessor provision of 1254 (2), a final judgment or decree of the Court of Appeals is necessary to the exercise of our jurisdiction over the case by way of appeal, Slaker v. O'Connor, , which was followed without comment in South Carolina Electric & Gas Co. v. Flemming, , and questioned but not put to rest in Chicago v. Atchison, Topeka & Santa Fe R. Co., , the judgment in that case being deemed a final one. These questions under 1254 (2) were neither briefed nor argued in this case and it is not appropriate to resolve them here.In 1962 Congress expanded the scope of 28 U.S.C. 2103 to apply to appeals from the United States courts of appeals.5 That section now provides that an appeal improvidently taken from a court of appeals as well as from a state court shall not be dismissed for that reason alone, but that the appeal papers shall be regarded and acted on as a petition for a writ of certiorari. The restriction in 28 U.S.C. 1254 (2) (1958 ed.) providing that an appeal from the court of appeals "shall preclude review by writ of certiorari at the instance of such appellant" is no bar to our treating this case as here on a petition for certiorari. For this provision means only that if an appeal is proper and has been taken, certiorari will not thereafter be available; where the appeal is not proper, this Court will still consider a timely application for certiorari.6 Bradford Electric Light Co. v. Clapper, . No timely application for certiorari has been filed in the instant case. But 28 U.S.C. 2103 (1958 ed., Supp. V) now requires that we treat the papers whereon the appeal was taken as a petition for certiorari. Accordingly we dismiss the appeal and grant the writ of certiorari.II.We turn to the merits. The City seeks to bring this case within the long line of cases recognizing a distinction between contract obligation and remedy and permitting a modification of the remedy as long as there is no substantial impairment of the value of the obligation. Sturges v. Crowninshield, 4 Wheat. 122, 200; Von Hoffman v. City of Quincy, 4 Wall. 535, 553-554; Honeyman v. Jacobs, . More specifically, it invokes three cases in this Court, two from Texas, that held it constitutionally permissible to apply state statutes allowing forfeiture of land purchase rights to land contracts between private persons and the State made when the law did not provide for forfeiture or permitted it only upon court order. Wilson v. Standefer, ; Waggoner v. Flack, ; Aikins v. Kingsbury, .7 In those cases the Court reasoned that the state statutes existing when the contracts were made were not to be considered the exclusive remedies available in the event of the purchaser's default since there was no promise, express or implied, on the part of the State not to enlarge the remedy or grant another in case of breach.The Court of Appeals rejected the City's contention. The Texas cases, according to the Court of Appeals, hold that the reinstatement provision confers a vested right which is not subject to legislative alteration.8 From this it concluded that under state law the five-year limitation on reinstatement was not a mere modification of remedy but a change in the obligation of a contract. Relying on the theory that it is state law that determines the obligations of the parties, the Court of Appeals found that the 1941 statute abrogated an obligation of the contract and thus violated the Contract Clause of the Constitution.We do not pause to consider further whether the Court of Appeals correctly ascertained the Texas law at the time these contracts were made, or to chart again the dividing line under federal law between "remedy" and "obligation," or to determine the extent to which this line is controlled by state court decisions, decisions often rendered in contexts not involving Contract Clause considerations.9 For it is not every modification of a contractual promise that impairs the obligation of contract under federal law, any more than it is every alteration of existing remedies that violates the Contract Clause. Stephenson v. Binford, ; Stone v. Mississippi, ; Manigault v. Springs, . Assuming the provision for reinstatement after default to be part of the State's obligation, we do not think its modification by a five-year statute of repose contravenes the Contract Clause.The decisions "put it beyond question that the prohibition is not an absolute one and is not to be read with literal exactness like a mathematical formula," as Chief Justice Hughes said in Home Building & Loan Assn. v. Blaisdell, . The Blaisdell opinion, which amounted to a comprehensive restatement of the principles underlying the application of the Contract Clause, makes it quite clear that "[n]to only is the constitutional provision qualified by the measure of control which the State retains over remedial processes, but the State also continues to possess authority to safeguard the vital interests of its people. It does not matter that legislation appropriate to that end `has the result of modifying or abrogating contracts already in effect.' Stephenson v. Binford, . Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order... . This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court." 290 U.S., at 434-435. Moreover, the "economic interests of the State may justify the exercise of its continuing and dominant protective power notwithstanding interference with contracts." Id., at 437. The State has the "sovereign right ... to protect the ... general welfare of the people ... . Once we are in this domain of the reserve power of a State we must respect the `wide discretion on the part of the legislature in determining what is and what is not necessary.'" East New York Savings Bank v. Hahn, . As Mr. Justice Johnson said in Ogden v. Saunders, "[i]t is the motive, the policy, the object, that must characterize the legislative act, to affect it with the imputation of violating the obligation of contracts." 12 Wheat. 213, 291.Of course, the power of a State to modify or affect the obligation of contract is not without limit. "[W]hatever is reserved of state power must be consistent with the fair intent of the constitutional limitation of that power. The reserved power cannot be construed so as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power in its essential aspects. They must be construed in harmony with each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or the destruction of contracts or the denial of means to enforce them." Blaisdell, supra, at 439. But we think the objects of the Texas statute make abundantly clear that it impairs no protected right under the Contract Clause.III.Texas, upon entering the Union, reserved its entire public domain, one-half of which was set aside under the 1876 Constitution to finance a universal system of free public education.10 These lands, over 42,000,000 acres, were to be sold as quickly as practicable in order to provide revenues for the public school system and to encourage the settlement of the vast public domain. The terms of sale were undemanding and designed to accomplish the widespread sale and development of the public domain. The State required a down payment of one-fortieth of the purchase price, an annual payment of one-fortieth of principal and an annual payment of interest.11 The terms were frequently modified in favor of purchasers. Periodically, during the course of almost a century, the time for payment of the nominal principal amount was extended.12 In 1919, the requirement that the purchaser settle on the land or adjoining land was lifted,13 provisions allowing forfeiting purchasers a first opportunity to repurchase forfeited land at a newly appraised value were thrice added,14 interest in arrears was forgiven under one of these acts,15 and reclassification of lands was held not to deprive forfeiting purchasers, upon reinstatement, of their mineral rights in the land.16 But eventually the evolution of a frontier society to a modern State, attended by the discovery of oil and gas deposits which led to speculation and exploitation of the changes in the use and value of the lands, called forth amendments to the Texas land laws modifying the conditions of sale in favor of the State. Beside increasing the required down payment from one-fortieth to one-fifth of the purchase price,17 the State restricted the right of reinstatement to the last purchaser from the State or his assigns and required that this right be exercised within five years from the date of forfeiture.The circumstances behind the 1941 amendment are well described in the Reports of the Commissioner of the General Land Office. The general purpose of the legislation enacted in 1941 was to restore confidence in the stability and integrity of land titles and to enable the State to protect and administer its property in a businesslike manner. 1938-1940 Rep. 5. "[T]he records [of the land office] show that through the years many thousands of purchase contracts, covering, in the aggregate, millions of acres of school land, have been forfeited by failure of the purchasers to meet the small annual interest payments requisite to the maintenance of the contracts." Id., at 11-12. In 1939, 15,000 sales contracts were found delinquent and subject to forfeiture and there were about 600,000 acres of unsold surveyed school lands, the major portion of which had produced no revenue for a decade. Ibid. This state of affairs was principally attributable to the opportunity for speculation to which unlimited reinstatement rights gave rise. Forfeited purchase contracts which had remained dormant for years could be reinstated if and when the land became potentially productive of gas and oil. Where forfeited lands were purchased without reservation of minerals to the State, as was the case in respect to early purchases before discovery of the extensive mineral wealth in the State, all of the mineral rights reverted to the owner of the reinstated claims, regardless of the State's later attempts in forfeited sales to share in the mineral interest. Gulf Production Co. v. State, 231 S. W. 124 (Tex. Civ. App.). Hence the Land Commissioner noted that the majority of sales and resales under the laws requiring sale to the highest bidder18 were to purchasers buying a "speculative option," "taken for possible profits on the rights of the surface owners to lease the land for oil and gas." "Under such conditions lands were bid in at highly inflated prices such as no one who expected to keep the land could afford to offer." 1940-1942 Rep. 5. The attempts to assure some stability in land sales through repurchase acts, allowing delinquent owners a preferential right to buy forfeited land at a reappraised value, and, under one act, without payment of accumulated interest in arrears, proved unsuccessful, and expensive. In regard to one of the State's attempts to quiet titles through a repurchase act, the Land Commissioner in 1925 expressed the belief that the "owners can realize such returns from [the lands] as will enable them to pay interest thereon instead of continuing the recurring annual forfeiture and resale and so on indefinitely." 1924-1926 Rep. 5. In 1939, a new Commissioner noted that 1,872,326 acres had been forfeited and 1,195,993 acres repurchased under the three repurchase acts. The net loss to the School Fund from repurchases was said to be $1,661,980 plus the loss in interest arrears of $418,000. 1938-1940 Rep. 12.No less significant was the imbroglio over land titles in Texas. The long shadow cast by perpetual reinstatement gave rise to a spate of litigation between forfeiting purchasers and the State or between one or more forfeiting purchasers and other forfeiting purchasers. See, e. g., Weaver v. Robison, 114 Tex. 272, 268 S. W. 133; Anderson v. Neighbors, 94 Tex. 236, 59 S. W. 543; Mound Oil Co. v. Terrell, 99 Tex. 625, 92 S. W. 451. Where the same land had been sold and contracts forfeited several times, as was frequently the case, the right to reinstate could be exercised by any one of the forfeiting purchasers or his vendees. Hoefer v. Robison, 104 Tex. 159, 135 S. W. 371. Cf. Faulkner v. Lear, 258 S. W. 2d 147 (Tex. Civ. App.). It was this situation to which the Texas Legislature addressed itself in 1941 and it is in light of this situation that we judge the validity of the amendment.The Contract Clause of the Constitution does not render Texas powerless to take effective and necessary measures to deal with the above. We note at the outset that the promise of reinstatement, whether deemed remedial or substantive, was not the central undertaking of the seller nor the primary consideration for the buyer's undertaking. See Wilson v. Standefer, ; Waggoner v. Flack, ; Aikins v. Kingsbury, . Under this agreement the State promised to transfer title to the buyer upon his payment of the purchase price; in turn the buyer was obliged to make a nominal down payment of one-fortieth of the purchase price and to maintain annual interest payments. Where the buyer breached what was practically his only obligation under the contract, the land reverted back to the school fund, Boykin v. Southwest Texas Oil & Gas Co., 256 S. W. 581, and a right of reinstatement arose, conditioned on the State's refusal or failure to dispose of the land by sale or lease. Hoefer v. Robison, 104 Tex. 159, 135 S. W. 371. We do not believe that it can seriously be contended that the buyer was substantially induced to enter into these contracts on the basis of a defeasible right to reinstatement in case of his failure to perform, or that he interpreted that right to be of everlasting effect. At the time the contract was entered into the State's policy was to sell the land as quickly as possible, and the State took many steps to induce sales. See Becton v. Dublin, 163 S. W. 2d 907, 910 (Tex. Civ. App.). Thus, for example, the Land Commissioner was required to reclassify forfeited lands by the next sale day and to publicize widely the forfeiture and sale. Weaver v. Robison, 114 Tex. 272, 268 S. W. 133. This policy clearly indicates that the right of reinstatement was not conceived to be an endless privilege conferred on a defaulting buyer. A contrary construction would render the buyer's obligations under the contract quite illusory while obliging the State to transfer the land whenever the purchaser decided to comply with the contract, all this for a nominal down payment. We, like the Court in Faitoute Iron & Steel Co. v. City of Asbury Park, , believe that "[t]he Constitution is `intended to preserve practical and substantial rights, not to maintain theories.' Davis v. Mills, ."The State's policy of quick resale of forfeited lands did not prove entirely successful; forfeiting purchasers who repurchased the lands again defaulted and other purchasers bought without any intention of complying with their contracts unless mineral wealth was discovered. The market for land contracted during the depression. 1938-1940 Rep. 12. These developments hardly to be expected or foreseen, operated to confer considerable advantages on the purchaser and his successors and a costly and difficult burden on the State. This Court's decisions have never given a law which imposes unforeseen advantages or burdens on a contracting party constitutional immunity against change. Honeyman v. Jacobs, ; Gelfert v. National City Bank, ; East New York Savings Bank v. Hahn, . Laws which restrict a party to those gains reasonably to be expected from the contract are not subject to attack under the Contract Clause, notwithstanding that they technically alter an obligation of a contract. The five-year limitation allows defaulting purchasers with a bona fide interest in their lands a reasonable time to reinstate. It does not and need not allow defaulting purchasers with a speculative interest in the discovery of minerals to remain in endless default while retaining a cloud on title.The clouds on title arising from reinstatement rights were not without significance to the State's vital interest in administering its school lands to produce maximum revenue and in utilizing its properties in ways best suited to the needs of a growing population. The uncertainty of land titles, the massive litigation to which this gave rise, and the pattern of sale and forfeiture were quite costly to the school fund and to the development of land use. Timeless reinstatement rights prevented the State from maintaining an orderly system of land sales and the resultant confusion impeded the effective disposition of lands and utilization of mineral wealth within them. Where sales by the State were not feasible or desirable, the State was prevented from utilizing the lands or permitting its subdivisions to utilize them by the possibility that some one of several purchasers might at some unknowable future date assert the right to reinstatement. In this very case, the legislature authorized by special act the transfer of this land to the City of El Paso, reserving the minerals to the State, in recognition of "[t]he fact that the City of El Paso is in urgent need of expanding its sources of water and of protecting water wells previously drilled," Tex. Gen. & Spec. Laws 1955, ch. 278. This transfer would have been invalid absent the 1941 Act.The program adopted at the turn of the century for the sale, settlement, forfeiture, and reinstatement of land was not wholly effectual to serve the objectives of the State's land program many decades later. Settlement was no longer the objective, but revenues for the school fund, efficient utilization of public lands, and compliance with contracts of sale remained viable and important goals, as did the policy of relieving purchasers from the hardships of temporary adversity. Given these objectives and the impediments posed to their fulfillment by timeless reinstatement rights, a statute of repose was quite clearly necessary. The measure taken to induce defaulting purchasers to comply with their contracts, requiring payment of interest in arrears within five years, was a mild one indeed, hardly burdensome to the purchaser who wanted to adhere to his contract of purchase, but nonetheless an important one to the State's interest. The Contract Clause does not forbid such a measure.The judgment is Reversed. |
7 | Petitioner sued respondent in an Illinois County Court for personal injuries he suffered while working on respondent's ship. He did not request a jury trial. In anticipation of his suit, respondent had filed a complaint for exoneration from, or limitation of, liability in Federal District Court pursuant to the Limitation of Liability Act (Limitation Act or Act). Following the procedure for limitation actions set forth in Supplemental Admiralty and Maritime Claims Rule F, the court approved a surety bond representing respondent's interest in the vessel, ordered that any claim related to the incident be filed with the court within a specified period, and enjoined the filing or prosecution of any suits related to the incident. Petitioner, inter alia, moved to dissolve the restraining order, stating that he was the only claimant, waiving any res judicata claim concerning limited liability from a state court judgment, stipulating that respondent could relitigate limited liability issues in the District Court, and stipulating that his claim's value was less than the value of the limitation fund. The District Court recognized that federal courts have exclusive jurisdiction to determine whether a vessel owner is entitled to limited liability, but also recognized that the statute conferring exclusive jurisdiction over admiralty and maritime suits to federal courts saves to suitors "all other remedies to which they are other wise entitled." 28 U. S. C. §1333(1). The court found two exceptions to exclusive federal jurisdiction under which a claimant may litigate his claim in state court — where the limitation fund's value exceeds the total value of all claims asserted against the vessel owner, and where there is a single claimant. The court dissolved the injunction because petitioner met the first and, probably, second exceptions, and retained jurisdiction over the limitation action to protect the vessel owner's right should the state proceedings necessitate further federal court proceedings. In holding that the District Court abused its discretion in dissolving the injunction, the Eighth Circuit found that respondent had a right to seek exoneration from, not mere limitation of, liability in federal court; that because petitioner did not request a jury trial, he had not sought a saved remedy in state court; and that because there was no conflict between the saving to suitors clause and the Limitation Act here, there was no basis for dissolving the injunction.Held: Because state courts may adjudicate claims like petitioner's against vessel owners so long as the owner's right to seek limitation of liability is protected, the Eighth Circuit erred in reversing the District Court's decision to dissolve the injunction. Pp. 5-17. (a) Section 1333(1)'s saving to suitors clause preserves common law remedies and concurrent state court jurisdiction over some admiralty and maritime claims. Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109, 123-124. The Limitation Act allows a vessel owner to limit liability for damage or injury, occasioned without the owner's privity or knowledge, to the value of the vessel or the owner's interest in the vessel. Potential tension exists between the saving to suitors clause and the Limitation Act because one gives suitors the right to a choice of remedies while the other gives vessel owners the right to seek limited liability in federal court. Claimants generally have been permitted to proceed with their claims in state court where there is only a single claimant, see Langnes v. Green, 282 U. S. 531, or where the total claims do not exceed the value of the limitation fund, see Lake Tankers Corp. v. Henn, 354 U. S. 147. Pp. 5-13. (b) The District Court properly exercised its discretion in dissolving the injunction here. Guided by this Court's cases, it attempted to reconcile petitioner's right to his remedy under the saving to suitors clause with respondent's right to seek limited liability under the Limitation Act. It dissolved the injunction after concluding that respondent's right would be adequately protected by petitioner's stipulations and by the court's decision to stay the Limitation Act proceedings pending state court proceedings. The Eighth Circuit misapprehended this Court's decisions in holding that the injunction should not have been dissolved. The Eighth Circuit erred in holding that the Limitation Act grants vessel owners a right to obtain exoneration of liability where limitation of liability is not at issue. By its own terms the Act protects the owners' right to limit their liability to the vessel's value. Here, the District Court concluded that petitioner's stipulations would protect the owner's right to seek limited liability in federal court, and, out of an abundance of caution, it stayed the limitation proceedings. Nothing more was required to protect respondent's Limitation Act rights. Having satisfied itself that the vessel owner's right to seek limitation would be protected, the decision to dissolve the injunction was well within the District Court's discretion. The Eighth Circuit also erred in finding that petitioner's failure to demand a jury trial in state court meant that he had no saved remedy there. The saving to suitors clause protects all remedies, of which trial by jury is an obvious, but not exclusive, example. In sum, this Court's case law makes clear that state courts, with all of their remedies, may adjudicate claims like petitioner's against vessel owners so long as the vessel owner's right to seek limitation of liability is protected. Pp. 13-17.196 F. 3d 900, reversed and remanded. O'Connor, J., delivered the opinion for a unanimous Court.JAMES F. LEWIS, PETITIONER v. LEWIS &CLARK MARINE, INC.on writ of certiorari to the united states court of appeals for the eighth circuit[February 21, 2001] Justice O'Connor delivered the opinion of the Court. This case concerns a seaman's ability to sue a vessel owner in state court for personal injuries sustained aboard a vessel. Federal courts have exclusive jurisdiction over admiralty and maritime claims, but the jurisdictional statute "sav[es] to suitors in all cases all other remedies to which they are otherwise entitled." 28 U. S. C. §1333(1). Another statute grants vessel owners the right to seek limited liability in federal court for claims of damage aboard their vessels. 46 U. S. C. App. §181 et seq. In this case, the District Court, after conducting proceedings to preserve the vessel owner's right to seek limited liability, dissolved the injunction that prevented the seaman from litigating his personal injury claims in state court. The Eighth Circuit Court of Appeals reversed, concluding that the vessel owner had a right to contest liability in federal court, and that the seaman did not have a saved remedyin state court. The question presented is whether the District Court abused its discretion in dissolving theinjunction.I Petitioner, James F. Lewis, worked as a deckhand aboard the M/V Karen Michelle, owned by respondent, Lewis & Clark Marine, Inc. Petitioner claims that on March 17, 1998, he was injured aboard the M/V Karen Michelle when he tripped over a wire and hurt his back. App. 12. In April 1998, petitioner sued respondent in the Circuit Court of Madison County, Illinois. Petitioner claimed negligence under the Jones Act, 46 U. S. C. App. §688, unseaworthiness, and maintenance and cure. A Jones Act claim is an in personam action for a seaman who suffers injury in the course of employment due to negligence of his employer, the vessel owner, or crew members. Ibid.; Plamals v. S. S. "Pinar Del Rio," 277 U. S. 151, 155-156 (1928). Unseaworthiness is a claim under general maritime law based on the vessel owner's duty to ensure that the vessel is reasonably fit to be at sea. See generally Mitchell v. Trawler Racer, Inc., 362 U. S. 539, 550 (1960). A claim for maintenance and cure concerns the vessel owner's obligation to provide food, lodging, and medical services to a seaman injured while serving the ship. See generally Calmar S. S. Corp. v. Taylor, 303 U. S. 525, 527-528 (1938). Petitioner did not demand a jury trial in state court. In anticipation of petitioner's suit, respondent had filed a complaint for exoneration from, or limitation of, liability in the United States District Court for the Eastern District of Missouri pursuant to the Limitation of Liability Act (Limitation Act or Act), 46 U. S. C. App. §181 et seq. The District Court followed the procedure for a limitation action provided in Supplemental Admiralty and Maritime Claims Rule F. The court entered an order approving a surety bond of $450,000, representing respondent's interest in the vessel. The court ordered that any person with a claim for the events of March 17, 1998, file a claim with the court within a specified period. The court then enjoined the filing or prosecution of any suits against respondent related to the incident on March 17, 1998. App. 30-33. Petitioner filed an answer to respondent's complaint, a claim for damages for injury, and a motion to dissolve the restraining order. Petitioner averred that he was the sole claimant concerning the events of March 17, 1998. He waived any claim of res judicata concerning limited liability based on a state court judgment; he stipulated that respondent could relitigate issues relating to the limitation of liability in District Court. Id., at 72. Petitioner later stipulated that the value of his claim was less than the value of the limitation fund, id., at 102, recanting his earlier allegation that his claim exceeded the vessel's value. The District Court dissolved the restraining order that prevented petitioner from proceeding with his cause of action in state court. In re Complaint of Lewis & Clark Marine, Inc., 31 F. Supp. 2d 1164 (ED Mo. 1998). The court recognized that federal courts have exclusive jurisdiction to determine whether a vessel owner is entitled to limited liability. The court also noted, however, that the statute that confers exclusive jurisdiction over admiralty and maritime claims to federal courts contains a clause that saves to suitors "all other remedies to which they are otherwise entitled." 28 U. S. C. §1333(1). The court reasoned that "a tension exists between the exclusive jurisdiction vested in the admiralty courts to determine a vessel owner's right to limited liability and the savings to suitors clause." 31 F. Supp. 2d, at 1168. The District Court found two exceptions to exclusive federal jurisdiction under which a claimant is allowed to litigate his claim in state court. The first is where the value of the limitation fund exceeds the total value of all claims asserted against the vessel owner. The second is where a single claimant brings an action against the vessel owner seeking damages in excess of the value of the vessel. The court concluded that it should dissolve the injunction in this case because petitioner met the limited fund exception and probably met the single claimant exception as well. Id., at 1169, and n. 3. The court decided to retain jurisdiction over the limitation action to protect the vessel owner's right to limitation in the event that the state proceedings necessitated further proceedings in federal court. The Eighth Circuit Court of Appeals held that the District Court abused its discretion in dissolving the injunction. 196 F. 3d 900 (1999). The Court of Appeals, like the District Court, recognized potential tension between the saving to suitors clause in the jurisdictional statute and the Limitation Act. The Court of Appeals, however, perceived no conflict between those provisions in the instant case. The Court of Appeals explained that a court must consider whether the vessel owner has the right to remain in federal court and whether the claimant is seeking a saved remedy in another forum. The court concluded that respondent had a right to seek exoneration from liability, not merely limitation of liability, in federal court. The court also concluded that because petitioner did not request a trial by jury, he had not sought a saved remedy in state court. The court determined that there was no substantive difference between the remedies afforded petitioner in state court and federal court. For these reasons, the court held that there was no basis for dissolving the injunction. We granted certiorari, 530 U. S. 1202 (2000), to resolve a conflict between the Eighth Circuit's decision and the decisions of other Courts of Appeals. Compare 196 F. 3d 900 (CA8 1999), with Kreta Shipping S. A. v. Preussag International Steel Corp., 192 F. 3d 41 (CA2 1999), Beiswenger Enterprises Corp. v. Carletta, 86 F. 3d 1032 (CA11 1996), and Linton v. Great Lakes Dredge & Dock Co., 964 F. 2d 1480 (CA5 1992).IIA Article III, §2, of the United States Constitution vests federal courts with jurisdiction over all cases of admiralty and maritime jurisdiction. Section 9 of the Judiciary Act of 1789 codified this grant of exclusive original jurisdiction, but "sav[ed] to suitors, in all cases, the right of a common law remedy, where the common law is competent to give it." Ch. 20, §9, 1 Stat. 77. In the intervening years, Congress has revised the language of the saving to suitors clause, but its substance has remained largely unchanged. See 28 U. S. C. §§41(3) and 371 Third (1940 ed.) ("saving to suitors in all cases the right of a common-law remedy where the common law is competent to give it"); 28 U. S. C. §1333(1) (1946 ed., Supp. II) ("saving to the libellant or petitioner in every case any other remedy to which he is otherwise entitled"); Act of May 24, 1949, ch. 139, §79, 63 Stat. 101 ("saving to suitors in all cases all other remedies to which they are otherwise entitled"). The jurisdictional statute now states that "[t]he district courts shall have original jurisdiction, exclusive of the courts of the States, of ... any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled." 28 U. S. C. §1333(1) (emphasis added). What the drafters of the Judiciary Act intended in creating the saving to suitors clause is not entirely clear and has been the subject of some debate. See, e.g., 1 J. Goebel, Antecedents and Beginnings to 1801, History of the Supreme Court of the United States 474 (1971). Compare Casto, The Origins of Federal Admiralty Jurisdiction in an Age of Privateers, Smugglers, and Pirates, 37 Am. J. Legal Hist. 117, 139-149 (1993), with Gutoff, Original Understandings and the Private Law Origins of the Federal Admiralty Jurisdiction, A Reply to Professor Casto, 30 J. Mar. L. & Com. 361, 387-390 (1999). This Court theorized that the saving to suitors clause was "inserted, probably, from abundant caution, lest the exclusive terms in which the power is conferred on the District Courts might be deemed to have taken away the concurrent remedy which had before existed. This leaves the concurrent power where it stood at common law." New Jersey Steam Nav. Co. v. Merchants' Bank of Boston, 6 How. 344, 390 (1848). In early cases we defined the limits of the clause. For instance, proceedings in rem were deemed outside the scope of the clause because an in rem action was not a common law remedy, but instead a proceeding under civil law. See, e.g., The Hine v. Trevor, 4 Wall. 555, 571-572 (1867); The Moses Taylor, 4 Wall. 411, 431 (1867). We later distinguished between the concept of rights and remedies. Chelentis v. Luckenbach S. S. Co., 247 U. S. 372, 383-384 (1918). In Chelentis, we held that maritime law governs a seaman's right to recovery against a vessel owner for his injuries aboard the vessel. We explained that "[t]he distinction between rights and remedies is fundamental. A right is a well founded or acknowledged claim; a remedy is the means employed to enforce a right or redress an injury." Id., at 384. In a subsequent case, the Court defined the saving to suitors clause as a grant to state courts of in personam jurisdiction, concurrent with admiralty courts. Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109, 123 (1924). We held enforceable an arbitration agreement between an owner of a steamship and a company that chartered the ship. We reasoned that agreements to arbitrate were valid under admiralty law, and that the State of New York had the power to confer on its courts the authority to compel parties to submit to arbitration. We explained that the state arbitration law merely provided a remedy in state court:"The `right of a common law remedy,' so saved to suitors, does not ... include attempted changes by the States in the substantive admiralty law, but it does include all means other than proceedings in admiralty which may be employed to enforce the right or to redress the injury involved. It includes remedies in pais, as well as proceedings in court; judicial remedies conferred by statute, as well as those existing at the common law; remedies in equity, as well as those enforceable in a court of law." Id., at 123-124.Thus, the saving to suitors clause preserves remedies and the concurrent jurisdiction of state courts over some admiralty and maritime claims. See also Madruga v. Superior Court of Cal., County of San Diego, 346 U. S. 556, 560-561 (1954); Steamboat Co. v. Chase, 16 Wall. 522, 533-534 (1873).B Admiralty and maritime law includes a host of special rights, duties, rules, and procedures. See, e.g., 46 U. S. C. App. §721 et seq. (wrecks and salvage); §741 et seq. (suits in admiralty by or against vessels or cargoes of the United States); 46 U. S. C. §10101 et seq. (merchant seamen protection and relief). Among these provisions is the Limitation Act, 46 U. S. C. App. §181 et seq. The Act allows a vessel owner to limit liability for damage or injury, occasioned without the owner's privity or knowledge, to the value of the vessel or the owner's interest in the vessel. The central provision of the Act provides: "The liability of the owner of any vessel, whether American or foreign, for any embezzlement, loss, or destruction by any person of any property, goods, or merchandise shipped or put on board of such vessel, or for any loss, damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not, except in the cases provided for in subsection (b) of this section, exceed the amount or value of the interest of such owner in such vessel, and her freight then pending." §183(a).See also §183(b) (requiring supplemental fund for some vessels for personal injury and death claimants). Congress passed the Limitation Act in 1851 "to encourage ship-building and to induce capitalists to invest money in this branch of industry." Norwich Co. v. Wright, 13 Wall. 104, 121 (1872). See also British Transport Comm'n v. United States, 354 U. S. 129, 133-135 (1957); Just v. Chambers, 312 U. S. 383, 385 (1941). The Act also had the purpose of "putting American shipping upon an equality with that of other maritime nations" that had their own limitation acts. The Main v. Williams, 152 U. S. 122, 128 (1894). See also Norwich Co., supra, at 116-119 (discussing history of limitation acts in England, France, and the States that led to the passage of the Limitation Act). The Act is not a model of clarity. See 2 T. Schoenbaum, Admiralty and Maritime Law 299 (2d ed. 1994) ("Th[e] 1851 Act, badly drafted even by the standards of the time, continues in effect today"). Having created a right to seek limited liability, Congress did not provide procedures for determining the entitlement. This Court did not have an opportunity to review the Act in detail until 20 years after its enactment. See Norwich Co., supra. Deeming the Act "incapable of execution" without further instructions to courts, id., at 123, we designed the procedures that govern a limitation action, and promulgated them the same Term, see Supplementary Rules of Practice in Admiralty, 13 Wall. xii-xiv. We later explained that the scheme "was sketched in outline" by the Act, and "the regulation of details as to the form and modes of proceeding was left to be prescribed by judicial authority." Providence & New York S. S. Co. v. Hill Mfg. Co., 109 U. S. 578, 590 (1883). The 1872 rules were "intended to facilitate the proceedings of the owners of vessels for claiming the limitation of liability secured by the statute." The "Benefactor," 103 U. S. 239, 244 (1880). Under the rules, a vessel owner seeking limitation of liability had to file a petition. The district court would obtain an appraisal of the vessel's value or the owner's interest in the vessel, and ensure that payment or some guarantee of payment was deposited with the court. The court would then order all claimants to appear. Supplemental Rule of Practice in Admiralty 54, 13 Wall. at xii-xiii. In the process of seeking limited liability, the owner was permitted to contest the fact of liability. Rule 56, 13 Wall., at xiii. The ability to contest liability relieved vessel owners of the "very onerous" English rule, which required vessel owners to confess liability in order to seek the benefit of limitation. The "Benefactor," supra, at 243 ("[T]his court, in preparing the rules of procedure for a limitation of liability, deemed it proper to allow a party seeking such limitation to contest any liability whatever"). The claimants would then contest the vessel owner's claims for exoneration and limitation of liability. Rule 56, 13 Wall., at xiii. If the owner succeeded in its effort to limit liability, but was not exonerated, the court was responsible for distributing the fund deposited in the court among the claimants. Rule 55, 13 Wall., at xiii. The procedure for a limitation action is now found in Supplemental Admiralty and Maritime Claims Rule F. Much like its predecessor provisions, Rule F sets forth the process for filing a complaint seeking exoneration from, or limitation of, liability. The district court secures the value of the vessel or owner's interest, marshals claims, and enjoins the prosecution of other actions with respect to the claims. In these proceedings, the court, sitting without a jury, adjudicates the claims. The court determines whether the vessel owner is liable and whether the owner may limit liability. The court then determines the validity of the claims, and if liability is limited, distributes the limited fund among the claimants.C Some tension exists between the saving to suitors clause and the Limitation Act. One statute gives suitors the right to a choice of remedies, and the other statute gives vessel owners the right to seek limitation of liability in federal court. We confronted this tension in Langnes v. Green, 282 U. S. 531 (1931). The respondent in Langnes was employed on the petitioner's vessel. The employee sued the vessel owner in state court for $25,000 for personal injuries suffered aboard the vessel. The vessel owner later filed a petition for limitation of liability in Federal District Court. The District Court enjoined any further proceedings in state court and issued a notice that all claimants appear. The employee filed his claim in District Court. The parties stipulated that the vessel was worth no more than $5,000. The employee sought dissolution of the injunction. He argued that the state court had jurisdiction over his claim, that he was the only possible claimant, that there was only one vessel owner, and therefore the vessel owner could claim the benefit of the Limitation Act by proper pleading in state court. The District Court denied the motion and proceeded to decide the merits, concluding that the vessel owner was not liable. The Court of Appeals reversed on the issue of limitation. On review, this Court concluded that both courts erred in failing to recognize that the state court was competent to hear the employee's personal injury claim and the vessel owner's claim for limitation. In our view, the choice before the District Court was whether it should retain the limitation action and preserve the right of the vessel owner but destroy the right of the employee in state court to a common law remedy, or allow the action in state court to proceed and preserve the rights of both parties. We concluded that the latter course was just. We decided that the District Court should have dissolved the injunction and allowed the employee to proceed with his claim in state court, and retained jurisdiction over the petition for limitation of liability in the event that the state proceedings necessitated further proceedings in federal court. We explained that the District Court's decision is "one of discretion in every case," and remanded for further proceedings. Id., at 544. After our decision, the employee was permitted to pursue his claim in state court. See Ex parte Green, 286 U. S. 437 (1932). In those proceedings, notwithstanding this Court's recognition of the vessel owner's right to seek limitation of liability in federal court, the employee sought to litigate that issue in state court. We approved of the District Court's decision to enjoin any further proceedings in state court until the employee agreed to withdraw his submission on the issue of limited liability. Id., at 440. We have also considered the conflict between the saving to suitors clause and the Limitation Act in a case where several claimants attempted to sue a vessel owner in state court. Lake Tankers Corp. v. Henn, 354 U. S. 147 (1957). A pleasure yacht, the Blackstone, capsized after a collision with a tug that was push-towing a barge, injuring several persons and killing one. Claimants sued the owner of the tug and barge in state court actions. The owner filed a petition for exoneration from, or limitation of, liability in federal court. The owner also filed a bond for the tug in the amount of approximately $119,000 and a bond for the barge in the amount of $165,000. The District Court enjoined other proceedings concerning the collision. Thereafter, the claimants made their demands for damages; the total claims were less than the amount of the two bonds. All claimants relinquished any right to damages in excess of that set forth in their claims. They further waived any claim of res judicata relating to the issue of the vessel owner's ability to limit liability. The District Court decided to dissolve the injunction because the total limitation fund exceeded the amount of the claims. The Court of Appeals affirmed. We affirmed the Court of Appeals' decision. In examining the Limitation Act and its history, we found it "crystal clear that the operation of the Act is directed at misfortunes at sea where the losses incurred exceed the value of the vessel and the pending freight." Id., at 151. Where the value of the vessel and the pending freight exceed the claims, however, there is no necessity for the maintenance of the action in federal court. Id., at 152. The stipulations, in addition to other restrictions on the state court proceedings, ensured "beyond doubt that [the owner's] right of limitation under the Act was fully protected." Ibid. We explained that to expand the scope of exclusive jurisdiction to prevent the state court actions"would transform the Act from a protective instrument to an offensive weapon by which the shipowner could deprive suitors of their common-law rights, even where the limitation fund is known to be more than adequate to satisfy all demands upon it. The shipowner's right to limit liability is not so boundless. The Act is not one of immunity from liability but of limitation of it and we read no other privilege for the shipowner into its language over and above that granting him limited liability. In fact, the Congress not only created the limitation procedure for the primary purpose of apportioning the limitation fund among the claimants where that fund was inadequate to pay the claims in full, but it reserved to such suitors their common-law remedies." Id., at 152-153.Since these decisions, the Courts of Appeals have generally permitted claimants to proceed with their claims in state court where there is only a single claimant, as in Langnes, or where the total claims do not exceed the value of the limitation fund, as in Lake Tankers. See, e.g., Beiswenger Enterprises Corp. v. Carletta, 86 F. 3d 1032 (CA11 1996); Linton v. Great Lakes Dredge & Dock Co., 964 F. 2d 1480 (CA5 1992). See also Kreta Shipping S. A. v. Preussag International Steel Corp., 192 F. 3d 41 (CA2 1999) (foreign forum).III In the instant case, we believe that the District Court properly exercised its discretion in dissolving the injunction that prevented petitioner from pursuing his claims in state court. The District Court, guided by our prior cases, attempted to reconcile petitioner's right to his remedy under the saving to suitors clause with respondent's right to seek limited liability under the Limitation Act. The court dissolved the injunction against the state court proceedings after it concluded that respondent's right to seek limitation of liability would be adequately protected. Respondent's rights were protected by petitioner's stipulation that his claim did not exceed the limitation fund, petitioner's waiver of any defense of res judicata with respect to limitation of liability, and the District Court's decision to stay the Limitation Act proceedings pending state court proceedings. The Eighth Circuit held that the District Court should not have dissolved the injunction without first "finding ... actual statutory conflict between the Limitation Act and the `saving to suitors' clause in the case at bar." 196 F. 3d, at 906. The Court of Appeals concluded that there was no conflict here because respondent had a right to seek exoneration from liability in federal court, and petitioner did not have a saved remedy under the saving to suitors clause. That reasoning misapprehends this Court's prior decisions. In this case, there was a conflict between the saving to suitors clause and the Limitation Act. Petitioner sued respondent in state court; under the saving to suitors clause, that court had jurisdiction to hear his claims. Respondent sought limited liability for petitioner's claims in federal court; the Limitation Act granted the federal court jurisdiction over that action. Both parties selected legitimate forums for their claims, and therein lies the conflict. Had petitioner sought to institute in rem proceedings against respondent in state court, that court would have lacked jurisdiction because the saving to suitors clause does not reach actions in rem. Similarly, had respondent sought limited liability for payment of wages in federal court, that court would not have had jurisdiction under the Limitation Act because claims for wages due employees are not covered. 46 U. S. C. App. §189. See also In re East River Towing Co., 266 U. S. 355, 367 (1924). Here, however, there appears to have been no obstacle to each party pursuing its claim in the forum of its choice, except the competing action. In deciding that the case should proceed in federal court, the Court of Appeals relied on two flawed premises: that the Limitation Act grants vessel owners a right to obtain exoneration from liability in federal court where limitation of liability is not at issue, and that the saving to suitors clause reserves to claimants only the right to receive a jury trial. By its own terms, the Limitation Act protects the right of vessel owners to limit their liability to the value of the vessel, provided that the events or circumstances giving rise to the damage occurred without the vessel owner's privity or knowledge. The Act was designed to encourage investment and protect vessel owners from unlimited exposure to liability. We have also made clear, however, that the scope of exclusive federal jurisdiction is proportional to the federal interest in protecting the vessel owner's right to seek limitation of liability. See Lake Tankers, 354 U. S., at 153. We have explained that "[t]he Act is not one of immunity from liability but of limitation of it." Id., at 152. We see no reason to revisit that conclusion and decline respondent's invitation to expand the scope of the Act. In construing the Limitation Act, this Court long ago determined that vessel owners may contest liability in the process of seeking limited liability, and we promulgated rules to that effect pursuant to our "power to regulate ... proceedings." The "Benefactor," 103 U. S., at 244; Supplemental Rule of Practice in Admiralty 56, 13 Wall., at xiii; Supplemental Admiralty and Maritime Claims Rule F(2). Thus, we agree with respondent that a vessel owner need not confess liability in order to seek limitation under the Act. The Act and the rules of practice, however, do not create a freestanding right to exoneration from liability in circumstances where limitation of liability is not at issue. In this case, petitioner stipulated that his claim for damages would not exceed the value of the vessel and waived any claim of res judicata from the state court action concerning issues bearing on the limitation of liability. The District Court concluded that these stipulations would protect the vessel owner's right to seek limited liability in federal court. Then, out of an "abundance of caution," the court stayed the limitation proceedings so that it could act if the state court proceedings jeopardized the vessel owner's rights under the Limitation Act. 31 F. Supp. 2d, at 1170-1171. We believe nothing more was required to protect respondent's right to seek a limitation of liability. The district courts have jurisdiction over actions arising under the Limitation Act, and they have discretion to stay or dismiss Limitation Act proceedings to allow a suitor to pursue his claims in state court. If the district court concludes that the vessel owner's right to limitation will not be adequately protected — where for example a group of claimants cannot agree on appropriate stipulations or there is uncertainty concerning the adequacy of the fund or the number of claims — the court may proceed to adjudicate the merits, deciding the issues of liability and limitation. See, e.g., Lake Tankers, supra, at 152; Port Arthur Towing Co. v. John W. Towing, Inc., 42 F. 3d 312, 314 (CA5 1995). But where, as here, the District Court satisfies itself that a vessel owner's right to seek limitation will be protected, the decision to dissolve the injunction is well within the court's discretion. The Court of Appeals reasoned that the District Court also erred in dissolving the injunction because petitioner had no saved remedy in state court. The Court of Appeals apparently treated as dispositive petitioner's failure to demand a jury trial in state court. The jurisdictional statute, however, reserves to suitors "all other remedies to which they are otherwise entitled." 28 U. S. C. §1333(1). Tracing the development of the clause since the Judiciary Act of 1789, it appears that the clause was designed to protect remedies available at common law. See, e.g, The Hine v. Trevor, 4 Wall. 555 (1867). We later explained that the clause extends to "all means other than proceedings in admiralty which may be employed to enforce the right or to redress the injury involved." Red Cross Line, 264 U. S., at 124. Trial by jury is an obvious, but not exclusive, example of the remedies available to suitors. See Lake Tankers, supra, at 153; Red Cross Line, supra, at 123-125. The Court of Appeals concluded that forum choice could not be a saved remedy under the saving to suitors clause because a claimant does not have the ability to control the forum in which his claim will be heard. 192 F. 3d, at 909. The prospect that a vessel owner may remove a state court action to federal court, however, does not limit a claimant's forum choice under the saving to suitors clause any more than other litigants' forum choices may be limited. We have previously refused to hold that admiralty claims, such as a limitation claim, fall within the scope of federal question jurisdiction out of concern that saving to suitors actions in state court would be removed to federal court and undermine the claimant's choice of forum. Romero v. International Terminal Operating Co., 358 U. S. 354, 371-372 (1959). We explained that to define admiralty jurisdiction as federal question jurisdiction would be a "destructive oversimplification of the highly intricate interplay of the States and the National Government in their regulation of maritime commerce." Id., at 373. Moreover, in this case respondent raised a Jones Act claim, which is not subject to removal to federal court even in the event of diversity of the parties. See 28 U. S. C. §1445(a) (incorporated by reference into the Jones Act, 46 U. S. C. App. §688(a)). Respondent's arguments to limit and enumerate the saved remedies under the saving to suitors clause must fail in view of the consistent recognition by Congress and this Court that both state and federal courts may be proper forums for adjudicating claims such as petitioner's. In sum, this Court's case law makes clear that state courts, with all of their remedies, may adjudicate claims like petitioner's against vessel owners so long as the vessel owner's right to seek limitation of liability is protected. Respondent seeks to invert that rule, making run of the mill personal injury actions involving vessels a matter of exclusive federal jurisdiction except where the claimant happens to seek a jury trial. We reject that proposal and hold that the Court of Appeals erred in reversing the District Court's decision to dissolve the injunction. The judgment of the United States Court of Appeals for the Eighth Circuit is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.It is so ordered. |
8 | An information filed in a Federal District Court charged appellees with having violated 19 U.S.C. 1304 by removing from ten violins imported from the Soviet Zone of Germany, after their importation but prior to their sale to ultimate purchasers, labels reading "Germany/USSR Occupied," with intent to conceal the identity of the country of origin. The District Court dismissed the information on the ground that removal of the labels did not violate 1304, because the applicable regulation appeared to require the Soviet Zone marking for tariff purposes only, rather than to apprise the ultimate purchasers of the place of origin, and also that the regulation was not sufficiently clear and unambiguous to justify a criminal prosecution. The Government appealed to the Court of Appeals, which held that the order of dismissal was appealable directly to this Court under 18 U.S.C. 3731 because (a) the District Court's interpretation of the regulation was tantamount to a construction of the statute upon which the information was founded, and (b) the effect of the dismissal was to sustain a motion in bar. Accordingly, the Court of Appeals certified the case to this Court. Held: 1. The charges in the information are founded on 1304 and the regulations thereunder; the information was dismissed solely because its allegations did not state an offense under 1304, as amplified by the regulations; the statute and regulations are so inextricably intertwined that an interpretation of the regulations necessarily is a construction of the statute; and the case was properly certified to this Court by the Court of Appeals under 18 U.S.C. 3731. Pp. 434-438. 2. The regulation here involved appears to be aimed at the collection of duties, rather than the protection of ultimate purchasers in the United States; it is not sufficiently clear and unambiguous to furnish a basis for a criminal prosecution for violation of 19 U.S.C. 1304; and the information was properly dismissed. Pp. 438-441. Affirmed. Eugene L. Grimm argued the cause for the United States. With him on the brief were Solicitor General Rankin, Assistant Attorney General Wilkey and Beatrice Rosenberg.Julius L. Schapira argued the cause and filed a brief for appellees.MR. JUSTICE CLARK delivered the opinion of the Court.The Congress has provided in the Tariff Act of 1930, 46 Stat. 590, as amended, that imported articles be marked to indicate to an ultimate purchaser in the United States the English name of the country of origin. 19 U.S.C. 1304. 1 Pursuant to the Act, the Secretary of the Treasury adopted implementing regulations. This case tests the application of these provisions to the importation of 10 violins from the Soviet Zone of Germany. Appellees were charged with removing the labels from the violins with intent to conceal from the ultimate purchasers in the United States the identity of the violins' country of origin. The District Court dismissed the information, holding that the changing of the labels did not violate the Act because the applicable regulation appeared to require the Soviet Zone marking only for tariff purposes rather than to apprise the ultimate purchasers of the place of origin. In any event, the court found, the intent of the regulation was not "manifested in a manner sufficiently clear and unambiguous to justify a criminal prosecution." On appeal by the Government, the Court of Appeals held that the District Court's opinion, interpreting the regulation, was tantamount to a construction of the statute upon which the information was founded; and hence, under the Criminal Appeals Act, 18 U.S.C. 3731, the order of dismissal was appealable directly to this Court rather than to the Court of Appeals.2 It was also of the opinion that the effect of the dismissal was to sustain a motion in bar, which, under 3731, likewise required appeal to this Court. Accordingly, it certified the appeal, 261 F.2d 40, and we postponed the question of jurisdiction to a hearing on the merits, . We have concluded to accept the certification of the Court of Appeals and, on the merits, to affirm the District Court judgment dismissing the information.Appellees, dealers in musical instruments in the United States, had purchased the violins from importers and thereafter sold them to other dealers. Upon obtaining possession of the violins from the importers, appellees replaced labels marked "Germany/USSR Occupied," then on each of the violins, with others inscribed "Made in Germany." After resale of the violins, an information was filed against appellees, charging that they removed the original labels attached to the violins with intent to conceal from the ultimate purchasers the identity of the country of origin.3 The Government's theory was that the removal of the labels violated 19 U.S.C. 1304 and its implementing regulations.I.Our first consideration is the jurisdictional issue. The Criminal Appeals Act specifies several conditions, any one of which permits a direct appeal by the Government to this Court, and makes our jurisdiction in such cases exclusive. In the event that an appeal which should have been taken here is erroneously effected to a Court of Appeals, that court is directed to certify it here. Prior to 1907, the date of the original Act, the United States had no appeal whatever in criminal cases. As passed by the House, the bill gave the Government "the same right of review by writ of error that is given to the defendant." However, in the Senate, the bill was amended so as to allow review from judgments setting aside indictments, "where the ground for such motion or demurrer is the invalidity or construction of the statute upon which the indictment is founded." 41 Cong. Rec. 2819. The final language emerged from the Conference Committee of the two Houses. See H. R. Conf. Rep. No. 8113, 59th Cong., 2d Sess. As was stated by Senator Knox, one of the proponents of the measure, a member of the Judiciary Committee and a former Attorney General of the United States, the bill "only proposed to give it [the Government] an appeal upon questions of law raised by the defendant to defeat the trial ... ." 41 Cong. Rec. 2752. The bill was intended to create "the opportunity to settle important questions of law," its "great purpose" being "to secure the ultimate decision of the court of final resort on questions of law."4 The situation sought to be remedied was outlined by Senator Patterson, also of the Judiciary Committee and a proponent of the bill, in these words:"We have a district court in one jurisdiction holding that a law is ineffective for one reason or another - it may be that it is unconstitutional, or for some other reason - and we have a district court in another jurisdiction holding the reverse; and as the cases multiply in the several sections of the country we may find one half of the courts of the country arrayed against the other half of the courts of the country upon the same identical law; one half holding that it is entirely constitutional and the other half holding that it is unconstitutional. So, Mr. President, that confusion, that ridiculous condition, exists and must continue to exist, because, as the law now stands, until a case involving the question shall go to the Supreme Court and it is brought there by the defendant, there can be no adjudication by a court whose decision and judgment is controlling... . The bill is intended to cure a defect in the administration of justice ... ."5 It therefore appears abundantly clear that the remedial purpose of the Act was to avert "the danger of frequent conflicts, real or apparent, in the decisions of the various district or circuit courts, and the unfortunate results thereof"; and to eliminate "the impossibility of the government's obtaining final and uniform rulings by recourse to a higher court." 20 Harv. L. Rev. 219. Moreover, the desirability of expedition in the determination of the validity of Acts of Congress, which is pointed to as a desideratum for direct appeal, applies equally to regulations. In practical operation, correction of a regulation by agency revision invariably awaits judicial action.The information charged violations of 19 U.S.C. 1304 "and the regulations promulgated thereunder." This section requires imported articles to be marked "to indicate to an ultimate purchaser ... the country of origin," and imposes criminal sanctions on anyone who removes such a mark with intent to conceal the information contained therein. The Secretary of the Treasury is authorized to implement it by appropriate regulations. The term "country," as used by the Congress in requiring the markings, was defined by regulation to mean "the political entity known as a nation." 19 CFR 11.8. By Treasury Decision 51527, August 28, 1946, Germany was to be considered the country of origin of articles manufactured or produced in all parts of Germany. Following a change in duty rates applicable to Soviet Zone products, T. D. 53210 was issued in 1953, providing that articles from Eastern Germany should be "marked to indicate Germany (Soviet occupied)."6 The issue posed to the District Court was whether this last regulation carried with it the sanctions of 1304. As we see it, a construction of the regulation necessarily is an interpretation of the statute.An administrative regulation, of course, is not a "statute." While in practical effect regulations may be called "little laws,"7 they are at most but offspring of statutes. Congress alone may pass a statute, and the Criminal Appeals Act calls for direct appeals if the District Court's dismissal is based upon the invalidity or construction of a statute. See United States v. Jones, . This Court has always construed the Criminal Appeals Act narrowly, limiting it strictly "to the instances specified." United States v. Borden Co., . See also United States v. Swift & Co., . Here the statute is not complete by itself, since it merely declares the range of its operation and leaves to its progeny the means to be utilized in the effectuation of its command. But it is the statute which creates the offense of the willful removal of the labels of origin and provides the punishment for violations. The regulations, on the other hand, prescribe the identifying language of the label itself, and assign the resulting tags to their respective geographical areas. Once promulgated, these regulations, called for by the statute itself, have the force of law, and violations thereof incur criminal prosecutions, just as if all the details had been incorporated into the congressional language. The result is that neither the statute nor the regulations are complete without the other, and only together do they have any force. In effect, therefore, the construction of one necessarily involves the construction of the other. The charges in the information are founded on 1304 and its accompanying regulations, and the information was dismissed solely because its allegations did not state an offense under 1304, as amplified by the regulations. When the statute and regulations are so inextricably intertwined, the dismissal must be held to involve the construction of the statute. This, we believe, gives recognition to the congressional purpose to give the Government the right of appeal upon "questions of law raised by the defendant to defeat the trial" and thus promptly to "secure the ultimate decision" of this Court, affording a desired "uniform enforcement of the law throughout the entire limits of the United States." In view of this conclusion, we need not pass upon the claim that the District Court sustained in effect a "motion in bar." Our disposition requires that the case come directly here, and accordingly we accept the certificate of the Court of Appeals and now turn to the merits.II.In 1946, the Treasury implemented the country-of-origin provisions of 1304 by issuance of T. D. 51527, which provided that, "For the purposes of the marking provisions of the Tariff Act of 1930, ... Germany shall be considered the country of origin of articles manufactured ... in all parts of the German area subject to the authority of the Allied Control Commission and the United States, British, Soviet, and French zone Commanders ... ." Thus the marking on articles produced in the Soviet Zone were required to be labeled "Made in Germany."In 1951 the Congress directed the President to suspend or withdraw any reduction in the rates of custom duties or other concessions then applicable to the importation of articles manufactured in any areas dominated by the Soviet Union. 65 Stat. 73; 19 U.S.C. 1362. In Proclamation No. 2935, 65 Stat. C25, the President suspended any reduction in rates of duty applicable to any articles manufactured in the Soviet Zone of Germany and the Soviet Sector of Berlin. Treasury Decision 52788, issued the same day, changed the rate of duty as provided in this proclamation. In 1953 the Secretary issued T. D. 53210, the regulation in controversy. This Treasury Decision is headed: "Tariff status, marking to indicate the name of the country of origin, and customs valuation of products of Germany, Poland, and Danzig." The first paragraph of T. D. 53210 refers to the presidential proclamation changing the structure of the rates of duty. The second paragraph specifies that, "For the purposes of the value provisions of section 402, Tariff Act of 1930," Western Germany shall be treated as one country, and "the Soviet Zone ... shall be treated as another `country.'" The third paragraph is the one crucial to this prosecution: it provides that products of Western Germany shall be "marked to indicate Germany as the `country of origin,' but products of the Soviet Zone ... shall be marked to indicate Germany (Soviet occupied) as the `country of origin.'" The District Court concluded that T. D. 53210 was "issued primarily to establish markings for purposes of the differences in the duties applicable"; thus the indication of Soviet Zone origin would not be required beyond entry into this country, the stage at which duty is payable. We agree with the District Court. It appears that T. D. 53210, unlike T. D. 51527, is aimed at the collection of duties rather than the protection of the ultimate purchaser in the United States. Its caption indicates that it deals with "tariff status" and "customs valuation," and the marking requirements are but aids thereof. Taking up the body of the document, we note that the first paragraph deals entirely with the fact that Soviet-dominated areas "shall not receive reduced rates of duty," while Western Germany and the Western Sectors of Berlin shall "continue to receive most-favored-nation treatment." The second paragraph is introduced by the phrase, "For the purposes of the value provisions" of the Tariff Act, and provides that "the Soviet Zone ... shall be treated as another `country.'" This language, as well as the make-up of the regulation, suggests that the third paragraph (the one involved here), requiring distinctive marking for Soviet Zone products, is but another step in the implementation of the tariff changes. It contains no reference to the requirement of 1304 that the article be marked in a "conspicuous place," "legibly, indelibly, and permanently," so that an "ultimate purchaser in the United States" would be on notice. We note that appellees placed on the violins the labels "Made in Germany" as required by T. D. 51527.In the context of criminal prosecution, we must apply the rule of strict construction when interpreting this regulation and statute. United States v. Halseth, ; United States v. Wiltberger, 5 Wheat. 76, 95-96 (1820). A reading of the regulation leaves the distinct impression that it was intended to protect and expedite the collection of customs duties. Certainly its emphasis on duties and its silence on the protection of the public from deceit support the conclusion that the old provisions were to continue insofar as markings after importation are concerned.8 If the intent were otherwise, it should not have been left to implication. There must be more to support criminal sanctions: businessmen must not be left to guess the meaning of regulations. The appellees insist that they changed the labels in good faith, believing their actions to be permissible under the law. There is nothing in the record to the contrary. A United States district judge concurred in their reading of the regulation. In the framework of criminal prosecution, unclarity alone is enough to resolve the doubts in favor of defendants.Accordingly, the judgment of the District Court is Affirmed. |
6 | Petitioner had a rule against solicitational activities in its stores and parking lots. The parking lots are appurtenant to petitioner's free-standing stores and do not serve other retail establishments. Union organizers used petitioner's parking lots to solicit petitioner's employees to join the union, and petitioner ordered the organizers off its property. The union filed unfair labor practice charges against petitioner. The National Labor Relations Board (NLRB) held that enforcement of petitioner's no-solicitation rule, which it found was overly broad, violated 8 (a) (1) of the National Labor Relations Act, which proscribes interference with employees' 7 organizational rights. The NLRB concluded that the character and use of the lots distinguished the case from NLRB v. Babcock & Wilcox Co., , which required a "yielding" of the employer's property rights in the context of an organizational campaign only "when the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels ... ." Id., at 112. Instead, the NLRB held applicable Food Employees v. Logan Valley Plaza, , where peaceful picketing by union agents on a parking lot within a shopping center was held, under the circumstances existing, to be within the protection of the First Amendment. The Court of Appeals, agreeing, ordered enforcement of the NLRB's order. Held: Logan Valley, decided on constitutional grounds, is not applicable to this 7 case, which the Court of Appeals should now reconsider in the light of Babcock. Pp. 542-548. 439 F.2d 1321, vacated and remanded.POWELL, J., delivered the opinion of the Court, in which BURGER, C. J., and STEWART, WHITE, BLACKMUN, and REHNQUIST, JJ., joined. MARSHALL, J., filed a dissenting opinion, in which DOUGLAS and BRENNAN, JJ., joined, post, p. 548.Ronald L. Aylward argued the cause for petitioner. With him on the briefs was Keith E. Mattern. Norton J. Come argued the cause for respondent National Labor Relations Board. With him on the brief were Solicitor General Griswold and Peter G. Nash. Bernard Dunau argued the cause for respondent Retail Clerks Union Local 725. With him on the brief was Carl L. Taylor.Briefs of amici curiae urging reversal were filed by Lawrence M. Cohen, Jerry Kronenberg, Gerard C. Smetana, and Alan Raywid for the American Retail Federation, and by Phil B. Hammond for Levitz Furniture Corp.J. Albert Woll, Laurence Gold, and Thomas E. Harris filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging affirmance.MR. JUSTICE POWELL delivered the opinion of the Court.Petitioner, Central Hardware Co. (Central), owns and operates two retail hardware stores in Indianapolis, Indiana. Each store is housed in a large building, containing 70,000 square feet of floor space, and housing no other retail establishments. The stores are surrounded on three sides by ample parking facilities, accommodating approximately 350 automobiles. The parking lots are owned by Central, and are maintained solely for the use of Central's customers and employees. While there are other retail establishments in the vicinity of Central's stores, these establishments are not a part of a shopping center complex, and they maintain their own separate parking lots.Approximately a week before Central opened its stores, the Retail Clerks Union, Local 725, Retail Clerks International Association, AFL-CIO (the Union), began an organization campaign at both stores. The campaign consisted primarily of solicitation by nonemployee Union organizers on Central's parking lots. The nonemployee organizers confronted Central's employees in the parking lots and sought to persuade them to sign cards authorizing the Union to represent them in an appropriate bargaining unit. As a part of the organization campaign, an "undercover agent for the Union" was infiltrated into the employ of Central, receiving fulltime salary from both the Union and the company. This agent solicited employees to join the Union, and obtained a list of the employees of the two stores which was about 80% complete.Central had a no-solicitation rule which it enforced against all solicitational activities in its stores and on its parking lots. A number of employees complained to Central's local management that they were being harassed by the organizers, and these complaints were forwarded to Central's corporate headquarters in St. Louis, Missouri. The St. Louis officials directed the Indianapolis management to enforce the nonemployee no-solicitation rule and keep all Union organizers off the company premises, including the parking lots. Although most of the nonemployee Union organizers had either left Indianapolis or ceased work on the Central organization campaign, the Indianapolis management had occasion to assert the nonemployee no-solicitation rule on several occasions.One arrest was made when a field organizer for the Union was confronted by the manager of one of the stores on its parking lot, and refused to leave after being requested to do so. The field organizer asserted that he was a "customer" and insisted upon entering the store. The police were called, and when the organizer persisted in his refusal to leave, he was arrested.Shortly after Central received complaints from its employees as to harassment by the organizers, Central filed unfair labor practice charges against the Union. The Union subsequently filed unfair labor practice charges against Central. After an investigation, the General Counsel of the National Labor Relations Board (the Board) dismissed Central's charges against the Union, and issued a complaint against Central on the Union's charges.The Board held that Central's nonemployee no-solicitation rule was overly broad, and that its enforcement violated 8 (a) (1) of the National Labor Relations Act. The Board reasoned that the character and use of Central's parking lots distinguished the case from NLRB v. Babcock & Wilcox Co., , and brought it within the principle of Amalgamated Food Employees Union v. Logan Valley Plaza, . 181 N. L. R. B. 491 (1970). A divided Court of Appeals for the Eighth Circuit agreed, and ordered enforcement of the Board's order enjoining Central from enforcing any rule prohibiting nonemployee Union organizers from using its parking lots to solicit employees on behalf of the Union. 439 F.2d 1321 (1971). We granted certiorari to consider whether the principle of Logan Valley is applicable to this case. . We conclude that it is not.ISection 7 of the National Labor Relations Act, as amended, 61 Stat. 140, 29 U.S.C. 157, guarantees to employees the right "to self-organization, to form, join, or assist labor organizations." This guarantee includes both the right of union officials to discuss organization with employees, and the right of employees to discuss organization among themselves.1 Section 8 (a) (1) of the Act, as amended, 29 U.S.C. 158 (a) (1), makes it an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed" in 7. But organization rights are not viable in a vacuum; their effectiveness depends in some measure on the ability of employees to learn the advantages and disadvantages of organization from others. Early in the history of the administration of the Act the Board recognized the importance of freedom of communication to the free exercise of organization rights. See Peyton Packing Co., 49 N. L. R. B. 828 (1943), enforced, 142 F.2d 1009 (CA5), cert. denied, .In seeking to provide information essential to the free exercise of organization rights, union organizers have often engaged in conduct inconsistent with traditional notions of private property rights. The Board and the courts have the duty to resolve conflicts between organization rights and property rights, and to seek a proper accommodation between the two. This Court addressed the conflict which often arises between organization rights and property rights in NLRB v. Babcock & Wilcox Co., . The Babcock & Wilcox Co. operated a manufacturing plant on a 100-acre tract about one mile from a community of 21,000 people. The plant buildings were enclosed within a fence, employee access being through several gates. Approximately 90% of the employees drove to work in private cars, and the company maintained a parking lot for the employees. Only employees and deliverymen normally used the parking lot. The company had a rule forbidding the distribution of literature on company property. The Board found that the company's parking lot and the walkway leading from it to the plant entrance were the only "safe and practicable" places in the vicinity of the plant for distribution of union literature, and held the company guilty of an unfair labor practice for enforcing the no-distribution rule and thereby denying union organizers limited access to company property. The Board ordered the company to rescind its no-distribution rule insofar as it related to nonemployee union representatives seeking to distribute union literature on the parking lot and walk-way area.2 The Court of Appeals for the Fifth Circuit refused enforcement of the Board's order on the ground that the Act did not authorize the Board to impose a servitude on an employer's property where no employee was involved.3 This Court affirmed on the ground that the availability of alternative channels of communication made the intrusion on the employer's property rights ordered by the Board unwarranted. The Court in Babcock stated the guiding principle for adjusting conflicts between 7 rights and property rights:"Organization rights are granted to workers by the same authority, the National Government, that preserves property rights. Accommodation between the two must be obtained with as little destruction of one as is consistent with the maintenance of the other. The employer may not affirmatively interfere with organization; the union may not always insist that the employer aid organization. But when the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels, the right to exclude from property has been required to yield to the extent needed to permit communication of information on the right to organize." 351 U.S., at 112. The principle of Babcock is limited to this accommodation between organization rights and property rights. This principle requires a "yielding" of property rights only in the context of an organization campaign. Moreover, the allowed intrusion on property rights is limited to that necessary to facilitate the exercise of employees' 7 rights. After the requisite need for access to the employer's property has been shown, the access is limited to (i) union organizers; (ii) prescribed nonworking areas of the employer's premises; and (iii) the duration of organization activity. In short, the principle of accommodation announced in Babcock is limited to labor organization campaigns, and the "yielding" of property rights it may require is both temporary and minimal.IIThe principle applied in Amalgamated Food Employees Union v. Logan Valley Plaza, , is quite different. While it is true that Logan Valley involved labor picketing, the decision rests on constitutional grounds; it is not a 7 case.Logan Valley had its genesis in Marsh v. Alabama, . Marsh involved a "company town," an economic anachronism rarely encountered today. The town was wholly owned by the Gulf Shipbuilding Corp., yet it had all of the characteristics of any other American town. Gulf Shipbuilding held title to all the land in the town, including that covered by streets and sidewalks. Gulf Shipbuilding also provided municipal services, such as sewerage service and police protection, to the residents of the town. A Jehovah's Witness undertook to distribute religious literature on a sidewalk near the post office in the "business block" of the town, and was arrested on a trespassing charge. She was subsequently convicted of the crime of trespassing, and the Alabama courts upheld the conviction on appeal. This Court reversed, holding that Alabama could not permit a corporation to assume the functions of a municipal government and at the same time deny First Amendment rights through the application of the State's criminal trespass law.In Logan Valley, over a strong dissent by Mr. Justice Black, the author of Marsh, the Court applied the reasoning of Marsh to a modern economic phenomenon, the shopping center complex. The Logan Valley Mall was a complex of retail establishments, which the Court regarded under the factual circumstances as the functional equivalent of the "community business block" of the company town in Marsh. The corporate owner of Logan Valley Mall obtained a state court injunction against peaceful picketing on the shopping center property, and the Pennsylvania Supreme Court affirmed the issuance of the injunction on the ground that the picketing constituted a trespass on private property. This Court reversed, holding that Pennsylvania could not "delegate the power, through the use of its trespass laws, wholly to exclude those members of the public wishing to exercise their First Amendment rights on the premises in a manner and for a purpose generally consonant with the use to which the property is actually put." 391 U.S., at 319-320.IIIThe Board and the Court of Appeals held that Logan Valley rather than Babcock controlled this case. The Board asserts that the distinguishing feature between these two cases is that in Logan Valley the owner had "diluted his property interest by opening his property to the general public for his own economic advantage."4 The emphasis, both in the argument on behalf of the Board and in the opinion below, is on the opening of the property "to the general public."5 This analysis misconceives the rationale of Logan Valley.6 Logan Valley involved a large commercial shopping center which the Court found had displaced, in certain relevant respects, the functions of the normal municipal "business block." First and Fourteenth Amendment free-speech rights were deemed infringed under the facts of that case when the property owner invoked the trespass laws of the State against the pickets.Before an owner of private property can be subjected to the commands of the First and Fourteenth Amendments the privately owned property must assume to some significant degree the functional attributes of public property devoted to public use. The First and Fourteenth Amendments are limitations on state action, not on action by the owner of private property used only for private purposes. The only fact relied upon for the argument that Central's parking lots have acquired the characteristics of a public municipal facility is that they are "open to the public." Such an argument could be made with respect to almost every retail and service establishment in the country, regardless of size or location. To accept it would cut Logan Valley entirely away from its roots in Marsh. It would also constitute an unwarranted infringement of long-settled rights of private property protected by the Fifth and Fourteenth Amendments. We hold that the Board and the Court of Appeals erred in applying Logan Valley to this case.The Trial Examiner concluded that no reasonable means of communication with employees were available to the nonemployee Union organizers other than solicitation in Central's parking lots. The Board adopted this conclusion. Central vigorously contends that this conclusion is not supported by substantial evidence in the record as a whole. The Court of Appeals did not consider this contention, because it viewed Logan Valley as controlling rather than Babcock. The determination whether on the record as a whole there is substantial evidence to support agency findings is a matter entrusted primarily to the courts of appeals. Universal Camera Corp. v. NLRB, . Since the Court of Appeals has not yet considered this question in light of the principles of NLRB v. Babcock & Wilcox Co., supra, the judgment is vacated, and the case will be remanded to that court for such consideration. It is so ordered. |
11 | Petitioner, a private university, was notified by the Internal Revenue Service (IRS), pursuant to a newly announced policy of denying tax-exempt status for private schools with racially discriminatory admissions policies, that it was going to revoke a ruling letter declaring that petitioner qualified for tax-exempt status under 501 (c) (3) of the Internal Revenue Code of 1954 (Code). Petitioner sued for injunctive relief to prevent revocation, alleging irreparable injury in the form of income tax liability and loss of contributions and claiming that the revocation would violate petitioner's rights to free exercise of religion, to free association, and to due process and equal protection of the laws. The District Court granted relief despite 7421 (a) of the Code, which provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court." The Court of Appeals reversed, holding that 7421 (a), as construed in Enochs v. Williams Packing & Navigation Co., , foreclosed relief. Under that decision a pre-enforcement injunction against tax assessment or collection may be granted only if (1) "it is clear that under no circumstances could the Government ultimately prevail ..." and (2) "if equity jurisdiction otherwise exists." Held: 1. The suit is one "for the purpose of restraining the assessment or collection of any tax" within the meaning of 7421 (a). Pp. 738-742. (a) Petitioner's allegation that revocation of the ruling letter would subject it to "substantial" income tax liability demonstrates that a primary purpose of the suit is to prevent the IRS from assessing and collecting income taxes; but even if no income tax liability resulted, the suit would still be one to restrain the assessment and collection of federal social security and unemployment taxes, as well as to restrain the collection of taxes from petitioner's donors. Pp. 738-739. (b) Petitioner has not shown that the contemplated revocation of its ruling letter is not based on the IRS' good-faith effort to enforce the technical requirements of the Code. Pp. 739-741. 2. Petitioner's contention that 7421 (a) is subject to judicially created exceptions other than the Williams Packing test is without merit. That decision constitutes an all-encompassing reading of 7421 (a), and it rejected the contention, relied upon by petitioner, that irreparable injury alone is sufficient to lift the statutory bar. Pp. 742-746. 3. Denying injunctive relief to petitioner under the standards of Williams Packing, supra, will not, because of alleged irreparable injury pending resort to alternative remedies, deny petitioner due process of law, since this is not a case where an aggrieved party has no access at all to judicial review. The review procedures that are available are constitutionally adequate, even though involving serious delay. Pp. 746-748. 4. Petitioner has not met the standards of Williams Packing, supra, since its contentions are sufficiently debatable to foreclose any notion that "under no circumstances could the Government ultimately prevail." Pp. 748-750. 472 F.2d 903 and 476 F.2d 259, affirmed.POWELL, J., delivered the opinion of the Court, in which BURGER, C. J., and BRENNAN, STEWART, WHITE, MARSHALL, and REHNQUIST, JJ., joined. BLACKMUN, J., filed an opinion concurring in the result, post, p. 750. DOUGLAS, J., took no part in the decision of the case.J. D. Todd, Jr., argued the cause for petitioner. With him on the briefs were Wesley M. Walker and Oscar Jackson Taylor, Jr.Assistant Attorney General Crampton argued the cause for respondents. With him on the brief were Solicitor General Bork, Stuart A. Smith, Grant W. Wiprud, and Leonard J. Henzke, Jr.MR. JUSTICE POWELL delivered the opinion of the Court.This case and Commissioner v. "Americans United" Inc., post, p. 752, involve the application of the Anti-Injunction Act, 7421 (a) of the Internal Revenue Code of 1954 (the Code), 26 U.S.C. 7421 (a), to the ruling-letter program of the Internal Revenue Service (the Service) for organizations claiming tax-exempt status under Code 501 (c) (3), 26 U.S.C. 501 (c) (3). The question presented is whether, prior to the assessment and collection of any tax, a court may enjoin the Service from revoking a ruling letter declaring that petitioner qualifies for tax-exempt status and from withdrawing advance assurance to donors that contributions to petitioner will constitute charitable deductions under Code 170 (c) (2), 26 U.S.C. 170 (c) (2). We hold that it may not.ISection 501 (a) of the Code exempts from federal income taxes organizations described in 501 (c) (3). The latter provision encompasses: "Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office." Section 501 (c) (3) organizations are also exempt from federal social security (FICA) taxes by virtue of Code 3121 (b) (8) (B), 26 U.S.C. 3121 (b) (8) (B), and from federal unemployment (FUTA) taxes by virtue of 3306 (c) (8), 26 U.S.C. 3306 (c) (8). Donations to 501 (c) (3) organizations are tax deductible under 170 (c) (2).1 As a practical matter, an organization hoping to solicit tax-deductible contributions may not rely solely on technical compliance with the language of 501 (c) (3) and 170 (c) (2). The organization must also obtain a ruling letter from the Service, pursuant to Rev. Procs. 72-3 and 72-4, 1972-1 Cum. Bull. 698, 706, declaring that it qualifies under 501 (c) (3). Receipt of such a ruling letter leads, in the ordinary case, to inclusion in the Service's periodically updated Publication No. 78, "Cumulative List of Organizations described in Section 170 (c) of the Internal Revenue Code of 1954" (the Cumulative List). In essence, the Cumulative List is the Service's official roster of tax-exempt organizations: "The listing of an organization in [the Cumulative List] signifies it has received a ruling or determination letter ... stating that contributions by donors to the organization are deductible as provided in section 170 of the Code." Rev. Proc. 72-39, 1972-2 Cum. Bull. 818. An organization's inclusion in the Cumulative List assures potential donors in advance that contributions to the organization will qualify as charitable deductions under 170 (c) (2). The Service has announced that, with narrowly limited exceptions, a donor may rely on the Cumulative List for so long as the beneficiaries of his largesse maintain their listing, regardless of their actual tax status.2 For this reason, appearance on the Cumulative List is a prerequisite to successful fund raising for most charitable organizations. Many contributors simply will not make donations to an organization that does not appear on the Cumulative List.3 Because of the importance of inclusion in the Cumulative List, revocation of a 501 (c) (3) ruling letter and consequent removal from the Cumulative List is likely to result in serious damage to a charitable organization.4 Revocation not only threatens the flow of contributions, it also subjects the affected organization to FICA and FUTA taxes and, assuming that the organization has taxable income and does not qualify as tax exempt under another subsection of 501, to federal income taxes.5 Upon the assessment and attempted collection of income taxes, the organization may litigate the legality of the Service's action by petitioning the Tax Court to review a notice of deficiency. See Code 6212 and 6213, 26 U.S.C. 6212 and 6213. Or, following the collection of any federal tax and the denial of a refund by the Service, the organization may bring a refund suit in a federal district court or in the Court of Claims. See Code 7422, 26 U.S.C. 7422; 28 U.S.C. 1346 (a) (1) and 1491. Finally, a donor to the organization may bring a refund suit to challenge the denial of a charitable deduction under 170 (c) (2). Presumably such a "friendly donor" would be able to attack the legality of the Service's revocation of an organization's 501 (c) (3) status. But these post-revocation avenues of review take substantial time, during which the organization is certain to lose contributions from those donors whose gifts are contingent on entitlement to charitable deductions under 170 (c) (2). Accordingly, any organization threatened with revocation of a 501 (c) (3) ruling letter has a powerful incentive to bring a pre-enforcement suit to prevent the Service from taking action in the first instance.The pressures operating on organizations facing revocation of 501 (c) (3) status to seek injunctive relief against the Service pending judicial review of the proposed action conflict directly with a congressional prohibition of such pre-enforcement tax suits. In force continuously since its enactment in 1867, the Anti-Injunction Act, now Code 7421 (a), provides in pertinent part that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court ... ."6 Because an injunction preventing the Service from withdrawing a 501 (c) (3) ruling letter would necessarily preclude the collection of FICA, FUTA, and possibly income taxes from the affected organization, as well as the denial of 170 (c) (2) charitable deductions to donors to the organization, a suit seeking such relief falls squarely within the literal scope of the Act.7 The clash between the language of the Anti-Injunction Act and the desire of 501 (c) (3) organizations to block the Service from withdrawing a ruling letter has been resolved against the organizations in most cases. E. g., Crenshaw County Private School Foundation v. Connally, 474 F.2d 1185 (CA5 1973), pet. for cert. pending in No. 73-170; National Council on the Facts of Over-population v. Caplin, 224 F. Supp. 313 (DC 1963); Israelite House of David v. Holden, 14 F.2d 701 (WD Mich. 1926).8 But see McGlotten v. Connally, 338 F. Supp. 448 (DC 1972) (three-judge court). Cf. Green v. Connally, 330 F. Supp. 1150 (DC), aff'd per curiam sub nom. Coit v. Green, .In the present case, the Court of Appeals for the Fourth Circuit followed the majority view. Bob Jones University v. Connally, 472 F.2d 903, petition for rehearing denied, 476 F.2d 259 (1973). In light of the contrary result reached by the Court of Appeals for the District of Columbia Circuit in "Americans United" Inc. v. WaltersApp. D.C. 284, 477 F.2d 1169 (1973), rev'd sub nom. Commissioner v. "Americans United" Inc., post, p. 752, we granted Bob Jones University's petition for certiorari. .IIPetitioner refers to itself as "the world's most unusual university." Founded in 1927 and now located in Greenville, South Carolina, the University is devoted to the teaching and propagation of its fundamentalist religious beliefs. All classes commence and close with prayer, and courses in religion are compulsory. Students and faculty are screened for adherence to certain religious precepts and may be expelled or dismissed for lack of allegiance to them. One of these beliefs is that God intended segregation of the races and that the Scriptures forbid interracial marriage. Accordingly, petitioner refuses to admit Negroes as students. On pain of expulsion students are prohibited from interracial dating, and petitioner believes that it would be impossible to enforce this prohibition absent the exclusion of Negroes.In 1942, the Service issued petitioner a ruling letter under 101 (6) of the Internal Revenue Code of 1939, the predecessor of 501 (c) (3). In 1970, however, the Service announced that it would no longer allow 501 (c) (3) status for private schools maintaining racially discriminatory admissions policies and that it would no longer treat contributions to such schools as tax deductible. See Rev. Rul. 71-447, 1971-2 Cum. Bull. 230. The Service requested proof of a nondiscriminatory admissions policy from all such schools and warned that tax-exempt ruling letters would be reviewed in light of the information provided. At the end of 1970, petitioner advised the Service that it did not admit Negroes, and in September 1971, further stated that it had no intention of altering this policy. The Commissioner of Internal Revenue therefore instructed the District Director to commence administrative procedures leading to the revocation of petitioner's 501 (c) (3) ruling letter.Petitioner brought these administrative proceedings to a halt by filing suit in the United States District Court for the District of South Carolina for preliminary and permanent injunctive relief preventing the Service from revoking or threatening to revoke petitioner's tax-exempt status. Petitioner alleged irreparable injury in the form of substantial federal income tax liability and the loss of contributions. Petitioner asserted that the Service's threatened action was outside its lawful authority and would violate petitioner's rights to the free exercise of religion, to free association, and to due process and equal protection of the laws.The District Court rejected a motion to dismiss for lack of jurisdiction, and it preliminarily enjoined the Service from revoking or threatening to revoke petitioner's tax-exempt status and from withdrawing advance assurance of the deductibility of contributions made to petitioner. Bob Jones University v. Connally, 341 F. Supp. 277 (1971). The Court of Appeals for the Fourth Circuit reversed, with one judge dissenting. 472 F.2d 903, reh. den., 476 F.2d 259 (1973). That court held that petitioner's suit was barred by the Anti-Injunction Act as interpreted by this Court in Enochs v. Williams Packing & Navigation Co., . (1962).IIIThe Anti-Injunction Act apparently has no recorded legislative history,9 but its language could scarcely be more explicit - "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court ... ." The Court has interpreted the principal purpose of this language to be the protection of the Government's need to assess and collect taxes as expeditiously as possible with a minimum of pre-enforcement judicial interference, "and to require that the legal right to the disputed sums be determined in a suit for refund." Enochs v. Williams Packing & Navigation Co., supra, at 7. See also, e. g., State Railroad Tax Cases, . Cf. Cheatham v. United States, . The Court has also identified "a collateral objective of the Act - protection of the collector from litigation pending a suit for refund." Williams Packing, supra, at 7-8.In furtherance of these goals, the Court in its most recent reading gave the Act almost literal effect. In Williams Packing, an employer sought to enjoin the collection of FICA and FUTA taxes that the employer alleged were not owed and would destroy its business. The Court held unanimously that the suit was barred by the Act. Only upon proof of the presence of two factors could the literal terms of 7421 (a) be avoided: first, irreparable injury, the essential prerequisite for injunctive relief in any case; and second, certainty of success on the merits. Id., at 6-7. An injunction could issue only "if it is clear that under no circumstances could the Government ultimately prevail ... ." Id., at 7. And this determination would be made on the basis of the information available to the Government at the time of the suit. "Only if it is then apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim, may the suit for an injunction be maintained." Ibid.Perhaps in recognition of the stringent nature of the Williams Packing standard and its implications for this case, petitioner makes little effort to argue that it can meet that test. Rather, it asserts that the Anti-Injunction Act, properly construed, is not applicable, that Williams Packing is not the controlling reading of the Act, and that rejection of both these contentions would work a denial of due process of law. We find these arguments unpersuasive. AFirst, petitioner contends that the Act is inapplicable because this is not a suit "for the purpose of restraining the assessment or collection of any tax ... ." Under petitioner's theory, its suit is intended solely to compel the Service to refrain from withdrawing petitioner's 501 (c) (3) ruling letter and from depriving petitioner's donors of advance assurance of deductibility. Petitioner describes its goal as the maintenance of the flow of contributions, not the obstruction of revenue.Petitioner's complaint and supporting documents filed in the District Court belie any notion that this is not a suit to enjoin the assessment or collection of federal taxes from petitioner. In support of its claim of irreparable injury, petitioner alleged in part that it would be subject to "substantial" federal income tax liability if the Service were allowed to carry out its threatened action. App. 6. Petitioner buttressed this contention with sworn affidavits alleging federal income tax liability of three-quarters of a million dollars for one year and in excess of half a million dollars for another and stressing the detrimental effect such tax liability would have on petitioner's capacity to operate its institution, to support its personnel, and to continue with its expansion plans. Id., at 10-11, 43-44. These allegations leave little doubt that a primary purpose of this lawsuit is to prevent the Service from assessing and collecting income taxes from petitioner.We recognize that petitioner's assertions that it will owe federal income taxes should its 501 (c) (3) status be revoked are open to debate, because they are based in part on a failure to take into account possible deductions for depreciation of plant and equipment. Even if it could be shown, however, that petitioner would owe no federal income taxes if its 501 (c) (3) status were revoked, this would still be a suit to restrain the assessment or collection of taxes because petitioner would also be liable for FICA and FUTA taxes. Section 7421 (a) speaks of "any tax"; it does not differentiate between federal income taxes or FICA or FUTA taxes. See, e. g., Williams Packing, supra. Moreover, petitioner seeks to restrain the collection of taxes from its donors - to force the Service to continue to provide advance assurance to those donors that contributions to petitioner will be recognized as tax deductible, thereby reducing their tax liability. Although in this regard petitioner seeks to lower the taxes of those other than itself, the Act is nonetheless controlling.10 Thus in any of its implications, this case falls within the literal scope and the purposes of the Act.Petitioner further contends that the Service's actions do not represent an effort to protect the revenues but an attempt to regulate the admissions policies of private universities. Under this line of argument, the Anti-Injunction Act is said to be inapplicable because the case does not truly involve taxes. We disagree.The Service bases its present position with regard to the tax status of segregative private schools on its interpretation of the Code.11 There is no evidence that that position does not represent a good-faith effort to enforce the technical requirements of the tax laws, and, without indicating a view as to whether the Service's interpretation is correct, we cannot say that its position has no legal basis or is unrelated to the protection of the revenues. The Act is therefore applicable. Petitioner's attribution of non-tax-related motives to the Service ignores the fact that petitioner has not shown that the Service's action is without an independent basis in the requirements of the Code. Moreover, petitioner's argument fails to give appropriate weight to Bailey v. George, . In that case, the Court held that the Act blocked a pre-enforcement suit to enjoin collection of the federal Child Labor Tax, although the tax was challenged as a regulatory measure beyond the taxing power of Congress. Significantly, the Court announced Bailey v. George on the same day that it issued Bailey v. Drexel Furniture Co., (1922), a tax-refund case in which the Court struck down the Child Labor Tax Law as unconstitutional on the grounds that the taxpayer attempted to raise prematurely in Bailey v. George.12 Petitioner also argues that 7421 (a) is not controlling because when the Act was passed in 1867 Congress could not possibly have foreseen something as sophisticated as the comparatively recent ruling-letter program13 and the special importance of that program for 501 (c) (3) organizations. This argument proves too much, however, since the same Congress also could not have foreseen, for example, FICA or FUTA taxes, to which the prohibitory command of 7421 (a) indisputably applies. See, e. g., Williams Packing, supra. Moreover, through the years Congress has repeatedly re-enacted the Anti-Injunction Act14 at times when it was obviously aware of the continuously increasing complexity of the federal tax system.15 BPetitioner next argues that Enochs v. Williams Packing & Navigation Co., supra, does not constitute an all-encompassing reading of the Act. Petitioner contends, on the basis of prior precedents, that 7421 (a) is subject to judicially created exceptions other than the "under no circumstances" test announced in Williams Packing. But the Court's unanimous opinion in Williams Packing indicates that the case was meant to be the capstone to judicial construction of the Act. It spells an end to a cyclical pattern of allegiance to the plain meaning of the Act, followed by periods of uncertainty caused by a judicial departure from that meaning, and followed in turn by the Court's rediscovery of the Act's purpose.During the first half century of the Act's existence, the Court gave it literal force, without regard to the character of the tax, the nature of the pre-enforcement challenge to it, or the status of the plaintiff. See State Railroad Tax Cases, 92 U.S., at 613-614; Snyder v. Marks, ; Pacific Steam Whaling Co. v. United States, ; Dodge v. Osborn, ; Bailey v. George, .16 Occasionally, however, the Court noted in dictum that unspecified extraordinary and exceptional circumstances might justify an injunction despite the Act. E. g., Dodge v. Osborn, supra, at 122; Bailey v. George, supra, at 20. In 1922, the Court seized upon these dicta and permitted pre-enforcement injunctive suits against tax statutes that were viewed as penalties or as adjuncts to the criminal law. Hill v. Wallace, ; Lipke v. Lederer, ; Regal Drug Corp. v. Wardell, . Shortly thereafter, however, the Court made clear that Hill, Lipke, and Regal Drug were of narrow scope and had no application to pre-enforcement challenges to truly revenue-raising tax statutes. Graham v. Du Pont, .17 Thus, the Court's first departure from a literal reading of the Act produced a prompt correction in course. In the 1930's the Court decided Miller v. Standard Nut Margarine Co., , and Allen v. Regents of the University System of Georgia, , the cases relied on most heavily by petitioner. Standard Nut set forth a new definition of the extraordinary and exceptional circumstances test, which was followed in Regents. In Standard Nut the Court stated that the Act is merely "declaratory of the principle" of cases prior to its passage that equity usually, but not always, disavows interference with tax collection; thus, the Act was to be construed "as near as may be in harmony with [equity doctrine] and the reasons upon which it rests." 284 U.S., at 509. Through this interpretation, the concept of extraordinary and exceptional circumstances was reduced to the traditional equitable requirements for issuance of an injunction.Standard Nut was such a significant deviation from precedent that it was referred to by a commentator at the time as "a tribute to the tenacity of the American taxpayer" and "little short of phenomenal."18 Read literally, the Court's opinion effectively repealed the Act, since the Act was viewed as requiring nothing more than equity doctrine had demanded before the Act's passage. The incongruity of this position has not escaped notice.19 It undoubtedly led directly to the Court's re-examination of the requirements of the Act in Williams Packing, the second time the Court has undertaken to rehabilitate the Act following debilitating departures from its explicit language. See Graham v. Du Pont, supra.Williams Packing switched the focus of the extraordinary and exceptional circumstances test from a showing of the degree of harm to the plaintiff absent an injunction to the requirement that it be established that the Service's action is plainly without a legal basis. The Court in essence read Standard Nut not as an instance of irreparable injury but as a case where the Service had no chance of success on the merits. 370 U.S., at 7. And the Court explicitly held that the Act may not be evaded "merely because collection would cause an irreparable injury, such as the ruination of the taxpayer's enterprise." Id., at 6. Yet petitioner's argument that we should find Williams Packing inapplicable turns, in the last analysis, on its claim that to do otherwise would subject it to great harm. The Court rejected that consideration in Williams Packing itself, and we reject it as a reason for finding that case not controlling. Under the language of the Act, the degree of harm is not a factor, and as a matter of judicial construction, it does not provide a meaningful stopping point between Standard Nut and Williams Packing. Acceptance of petitioner's irreparable injury argument would simply revive the evisceration of the Act inherent in Standard Nut.CAssuming, arguendo, the applicability of 7421 (a) and Williams Packing, petitioner contends that forcing it to meet the standards of those authorities will deny it due process of law in light of the irreparable injury it will suffer pending resort to alternative procedures for review and of the alleged inadequacies of those remedies at law. The Court dismissed out of hand similar contentions nearly 60 years ago,20 and we find such arguments no more compelling now than then.This is not a case in which an aggrieved party has no access at all to judicial review. Were that true, our conclusion might well be different. If, as alleged in its complaint, petitioner will have taxable income upon the withdrawal of its 501 (c) (3) status, it may in accordance with prescribed procedures petition the Tax Court to review the assessment of income taxes. Alternatively, petitioner may pay income taxes, or, in their absence, an installment of FICA or FUTA taxes, exhaust the Service's internal refund procedures, and then bring suit for a refund. These review procedures offer petitioner a full, albeit delayed, opportunity to litigate the legality of the Service's revocation of tax-exempt status and withdrawal of advance assurance of deductibility. See, e. g., Christian Echoes National Ministry, Inc. v. United States, 470 F.2d 849 (CA10 1972), cert. denied, ; Center on Corporate Responsibility, Inc. v. Shultz, 368 F. Supp. 863 (DC 1973).21 We do not say that these avenues of review are the best that can be devised. They present serious problems of delay, during which the flow of donations to an organization will be impaired and in some cases perhaps even terminated. But, as the Service notes, some delay may be an inevitable consequence of the fact that disputes between the Service and a party challenging the Service's actions are not susceptible of instant resolution through litigation. And although the congressional restriction to postenforcement review may place an organization claiming tax-exempt status in a precarious financial position, the problems presented do not rise to the level of constitutional infirmities, in light of the powerful governmental interests in protecting the administration of the tax system from premature judicial interference, e. g., Cheatham v. United States, 92 U.S., at 88-89; State Railroad Tax Cases, 92 U.S., at 613-614, and of the opportunities for review that are available.22 IVSince we hold that Williams Packing, supra, governs this case, the remaining issue is whether petitioner has met the standards of that case. Without deciding the merits, we think that petitioner's First Amendment, due process, and equal protection contentions are sufficiently debatable to foreclose any notion that "under no circumstances could the Government ultimately prevail ... ." 370 U.S., at 7. See, e. g., Green v. Connally, 330 F. Supp. 1150 (DC), aff'd per curiam sub nom. Coit v. Green, . Accordingly, the Court of Appeals did not err in holding that 7421 (a) deprived the District Court of jurisdiction to issue the injunctive relief petitioner sought.In holding that 7421 (a) blocks the present suit, we are not unaware that Congress has imposed an especially harsh regime on 501 (c) (3) organizations threatened with loss of tax-exempt status and with withdrawal of advance assurance of deductibility of contributions. A former Commissioner of the Internal Revenue Service has sharply criticized the system applicable to such organizations.23 The degree of bureaucratic control that, practically speaking, has been placed in the Service over those in petitioner's position is susceptible of abuse, regardless of how conscientiously the Service may attempt to carry out its responsibilities. Specific treatment of not-for-profit organizations to allow them to seek pre-enforcement review may well merit consideration. But this matter is for Congress, which is the appropriate body to weigh the relevant, policy-laden considerations, such as the harshness of the present law, the consequences of an unjustified revocation of 501 (c) (3) status, the number of organizations in any year threatened with such revocation, the comparability of those organizations to others which rely on the Service's ruling-letter program, and the litigation burden on the Service and the effect on the assessment and collection of federal taxes if the law were to be changed.The judgment is affirmed. It is so ordered.MR. JUSTICE DOUGLAS took no part in the decision of this case. |
6 | Held: Where appellants, pursuant to 28 U.S.C. 1252, could have filed a direct appeal to this Court from the District Court's decision holding the Fair Labor Standards Act unconstitutional as applied to employees of appellee's mental health facility, but instead appealed to the Court of Appeals, the Court of Appeals' judgment must be vacated as the court lacked jurisdiction, and, in addition, the appeal from its decision must be dismissed. Vacated and appeal dismissed.PER CURIAM.Appellee brought this action against officials of the United States Department of Labor seeking a declaratory judgment that the Fair Labor Standards Act does not apply to employees of the Sidney Group Home, a mental health facility operated by appellee. In the alternative, appellee sought a declaration that an application of the Act to the Home would be unconstitutional. The United States District Court for the District of Montana held that "[t]he Fair Labor Standards Act is unconstitutional as applied to the plaintiff Association in its operation of the Sidney Group Home." App. to Juris. Statement 26a. The federal officials appealed this decision to the Court of Appeals, which affirmed. Id., at 1a. The Government has now filed an appeal from that decision of the Court of Appeals.Pursuant to 28 U.S.C. 1252, appellants could have filed a direct appeal to this Court from the decision of the District Court.1 This right to pursue a direct appeal to this Court also served to deprive the Court of Appeals of jurisdiction, however, for 28 U.S.C. 1291 provides that "[t]he courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States ... except where a direct review may be had in the Supreme Court." Since the Court of Appeals lacked jurisdiction in this case, its judgment and opinion must be vacated.2 In addition, the appeal filed from the decision of the Court of Appeals must be dismissed. Appellants' proper course of conduct was to file a direct appeal from the decision of the District Court. At this time, however, such relief is foreclosed by 28 U.S.C. 2101(a).We decline appellants' request that we remand this matter to the District Court for entry of a fresh decree from which a timely appeal might be taken. Although the complexities of litigation involving three-judge district courts made it appropriate to relieve certain appellants from the consequences of a misapplication of that somewhat arcane jurisprudence, as the cases cited in JUSTICE POWELL's separate opinion demonstrate, that rationale has no application to appellants' simple failure in this case to follow the clear commands of 28 U.S.C. 1252 and 28 U.S.C. 1291.3 Judgment vacated and appeal dismissed. |
1 | 214 F. Supp. 897, affirmed.Moses M. Falk for appellants.Louis J. Lefkowitz, Attorney General of New York, Irving Galt, Assistant Solicitor General, Sheldon Raab, Assistant Attorney General, and Irving D. Goodstein for appellees.PER CURIAM.The motion to affirm is granted and the judgment is affirmed. Wright v. Rockefeller, ante, p. 52. MARTIN v. BUSH, ">U.S. Supreme Court MARTIN v. BUSH, MARTIN, SECRETARY OF STATE OF TEXAS, ET AL. v. BUSH ET AL.APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS. No. 675.Decided March 2, 1964. Judgment affirmed on authority of Wesberry v. Sanders, ante, p. 1, without prejudice to appellants' right to apply to District Court by April 1, 1964, for further equitable relief. 224 F. Supp. 499, affirmed.Waggoner Carr, Attorney General of Texas, Albert P. Jones and Hawthorne Phillips, First Assistant Attorneys General, Mary K. Wall, Assistant Attorney General, Will D. Davis and Frank C. Erwin, Jr. for appellants.William B. Cassin and Thad T. Hutcheson for appellees. PER CURIAM.The motion to affirm is granted and the judgment is affirmed on the authority of Wesberry v. Sanders, ante, p. 1, without prejudice to the right of the appellants to apply by April 1, 1964, to the District Court for further equitable relief in light of the present circumstances including the imminence of the forthcoming election and "the operation of the election machinery of Texas" noted by the District Court in its opinion.* The stay heretofore granted by MR. JUSTICE BLACK is continued in effect pending timely application for the foregoing relief and final disposition thereof by the District Court.MR. JUSTICE CLARK joins this disposition, but upon the grounds stated in his separate opinion in Wesberry v. Sanders, ante, p. 18.MR. JUSTICE HARLAN and MR. JUSTICE STEWART would reverse the judgment below for the reasons stated in their dissenting opinions in Wesberry v. Sanders, ante, pp. 20, 50.[Footnote *] 224 F. Supp. 499, 513. |
1 | Petitioner's citizenship was revoked in a proceeding under 338 (a) of the Nationality Act of 1940. The District Court found that, within ten years preceding his petition for naturalization, he had been a member of the Communist Party, that the Party was an organization which was then advocating the forcible overthrow of the Government, and that, therefore, petitioner was ineligible for citizenship under 305. Pursuant to a stipulation of petitioner's counsel, his appeal was dismissed with prejudice. Four years later petitioner moved under Rule 60 (b) of the Federal Rules of Civil Procedure to vacate the judgment, on the ground that it was voidable under this Court's subsequent decisions in Nowak v. United States, , and Maisenberg v. United States, . Held: Regardless of whether relief under Rule 60 (b) is available to petitioner in the circumstances, those decisions were not effective to alter the law controlling petitioner's case. Pp. 426-437. 272 F.2d 709, affirmed.George W. Crockett, Jr. argued the cause and filed a brief for petitioner.Charles Gordon argued the cause for the United States. With him on the brief were Solicitor General Rankin, Assistant Attorney General Wilkey, Beatrice Rosenberg and Jerome M. Feit.MR. JUSTICE STEWART delivered the opinion of the Court.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 at 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, 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 stipulation. Four years later the petitioner moved to vacate the judgment of denaturalization, relying upon Rule 60 (b), Fed. Rules Civ. Proc.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. .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 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 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 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 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, 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 petitions for certiorari filed in the other three cases. When those petitions for certiorari were denied, , 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.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, , and Maisenberg v. United States, , "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," and that, in any event, the doctrine of Ackermann v. United States, , 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.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, , 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, 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 had 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 202.What the Court said in Ackermann is of obvious relevance here:"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 198. 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.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, , and Maisenberg v. United States, .Petitioner contends that the Nowak and Maisenberg decisions reject the grounds relied upon by the District Court in revoking petitioner's citizenship in 1953. In the petitioner's denaturalization proceeding, the court held that a charge of illegal procurement of citizenship 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 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.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 666, his lack of "attachment" to constitutional principles, by the clear, unequivocal, and convincing evidence which is required. Cf. Schneiderman v. United States, . 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 671. 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 advocacy.12 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, ; Rowoldt v. Perfetto, ; Niukkanen v. McAlexander, . 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.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 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, ; United States v. Ness, ; United States v. Ginsberg, ; cf. Schneiderman v. United States, (concurring opinion).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. Affirmed. |
0 | A police officer (Biro), while taking a break in respondent's flower shop and conversing with an employee of the shop (Hennessey), noticed an envelope with money protruding therefrom lying on the cash register. Upon examination, he found it contained not only money but policy slips. Biro then placed the envelope back on the register and without telling Hennessey what he had found asked her to whom the envelope belonged. She told him it belonged to respondent. Biro's finding was reported to local detectives and to the FBI, who interviewed Hennessey some four months later without referring to the incident involving Biro. About six months after that incident respondent was summoned before a federal grand jury where he testified that he had never taken policy bets at his shop, but Hennessey testified to the contrary, and shortly thereafter respondent was indicted for perjury. Hennessey testified against respondent at his trial, but after a finding of guilt the District Court granted respondent's motion to suppress Hennessey's testimony and set aside that finding. The Court of Appeals affirmed, noting that the "road" to that testimony from the concededly unconstitutional search was "both straight and uninterrupted." Held: The Court of Appeals erred in concluding that the degree of attenuation between Biro's search of the envelope and Hennessey's testimony at the trial was not sufficient to dissipate the connection between the illegality of the search and challenged testimony. Pp. 273-280. (a) In determining whether the exclusionary rule with its deterrent purpose should be applied, its benefits should be balanced against its costs, and, in evaluating the standards for application of the rule to live-witness testimony in light of this balance, material factors to be considered are the length of the "road" between the Fourth Amendment violation and the witness' testimony; the degree of free will exercised by the witness; and the fact that exclusion of the witness' testimony would perpetually disable the witness from testifying about relevant and material facts regardless of how unrelated such testimony might be to the purpose of the originally illegal search or the evidence discovered thereby. Pp. 273-279. (b) Here, where the evidence indicates overwhelmingly that Hennesey's testimony was an act of her own free will in no way coerced or induced by official authority as a result of Biro's discovery of the policy slips, where substantial time elapsed between the illegal search and the initial contact with the witness and between the latter and her trial testimony, and where both Hennessey's identity and her relationship with respondent were well known to the investigating officers, and there is no evidence that Biro entered the shop or picked up the envelope with the intent of finding evidence of an illicit gambling operation, application of the exclusionary rule could not have the slightest deterrent effect on the behavior of an officer such as Biro, and the cost of permanently silencing Hennessey is too great for an evenhanded system of law enforcement to bear in order to secure such a speculative and very likely negligible deterrent effect. Pp. 279-280. (c) The exclusionary rule should be invoked with much greater reluctance where the claim is based on a causal relationship between a constitutional violation and the discovery of a live witness than when a similar claim is advanced to support suppression of an inanimate object. P. 280. 542 F.2d 136, reversed.REHNQUIST, J., delivered the opinion of the Court, in which STEWART, WHITE, POWELL, and STEVENS, JJ., joined. BURGER, C. J., filed an opinion concurring in the judgment, post, p. 280. MARSHALL, J., filed a dissenting opinion, in which BRENNAN, J., joined, post, p. 285. BLACKMUN, J., took no part in the consideration or decision of the case.Richard A. Allen argued the cause for the United States. With him on the brief were Solicitor General McCree, Assistant Attorney General Civiletti, Deputy Solicitor General Frey, and Sidney M. Glazer.Leon J. Greenspan argued the cause and filed a brief for respondent.MR. JUSTICE REHNQUIST delivered the opinion of the Court.In December 1974, Ronald Biro, a uniformed police officer on assignment to patrol school crossings, entered respondent's place of business, the Sleepy Hollow Flower Shop, in North Tarrytown, N. Y. He went behind the customer counter and, in the words of Ichabod Crane, one of Tarrytown's more illustrious inhabitants of days gone past, "tarried," spending his short break engaged in conversation with his friend Lois Hennessey, an employee of the shop. During the course of the conversation he noticed an envelope with money sticking out of it lying on the drawer of the cash register behind the counter. Biro picked up the envelope and, upon examining its contents, discovered that it contained not only money but policy slips. He placed the envelope back on the register and, without telling Hennessey what he had seen, asked her to whom the envelope belonged. She replied that the envelope belonged to respondent Ceccolini, and that he had instructed her to give it to someone.The next day, Officer Biro mentioned his discovery to North Tarrytown detectives who in turn told Lance Emory, an FBI agent. This very ordinary incident in the lives of Biro and Hennessey requires us, over three years later, to decide whether Hennessey's testimony against respondent Ceccolini should have been suppressed in his trial for perjury. Respondent was charged with that offense because he denied that he knew anything of, or was in any way involved with, gambling operations. Respondent was found guilty after a bench trial in the United States District Court for the Southern District of New York, but immediately after the finding of guilt the District Court granted respondent's motion to "suppress" the testimony of Hennessey because the court concluded that the testimony was a "fruit of the poisonous tree"; assuming respondent's motion for a directed verdict included a motion to set aside the verdict of guilty, the District Court granted the motion because it concluded that without Hennessey's testimony there was insufficient evidence of respondent's guilt. The Government appealed these rulings to the Court of Appeals for the Second Circuit.That court rightly concluded that the Government was entitled to appeal both the order granting the motion to suppress and the order setting aside the verdict of guilty, since further proceedings if the Government were successful on the appeal would not be barred by the Double Jeopardy Clause.1 542 F.2d 136, 139-140 (1976). The District Court had sensibly first made its finding on the factual question of guilt or innocence, and then ruled on the motion to suppress; a reversal of these rulings would require no further proceedings in the District Court, but merely a reinstatement of the finding of guilt. United States v. Morrison, ; United States v. Wilson, .The Government, however, was not successful on the merits of its appeal; the Court of Appeals by a divided vote affirmed the District Court's suppression ruling. 542 F.2d, at 140-142. We granted certiorari to consider the correctness of this ruling of the Court of Appeals. .IDuring the latter part of 1973, the Federal Bureau of Investigation was exploring suspected gambling operations in North Tarrytown. Among the establishments under surveillance was respondent's place of business, which was a frequent and regular stop of one Francis Millow, himself a suspect in the investigation. While the investigation continued on a reduced scale after December 1973,2 surveillance of the flower shop was curtailed at that time. It was thus a full year after this discontinuance of FBI surveillance that Biro spent his patrol break behind the counter with Hennessey. When Biro's discovery of the policy slips was reported the following day to Emory, Emory was not fully informed of the manner in which Biro had obtained the information. Four months later, Emory interviewed Hennessey at her home for about half an hour in the presence of her mother and two sisters. He identified himself, indicated that he had learned through the local police department that she worked for respondent, and told her that the Government would appreciate any information regarding respondent's activities that she had acquired in the shop. Emory did not specifically refer to the incident involving Officer Biro. Hennessey told Emory that she was studying police science in college and would be willing to help. She then related the events which had occurred during her visit with Officer Biro.In May 1975, respondent was summoned before a federal grand jury where he testified that he had never taken policy bets for Francis Millow at the flower shop. The next week Hennessey testified to the contrary, and shortly thereafter respondent was indicted for perjury.3 Respondent waived a jury, and with the consent of all parties the District Court considered simultaneously with the trial on the merits respondent's motion to suppress both the policy slips and the testimony of Hennessey. At the conclusion of the evidence, the District Court excluded from its consideration "the envelope and the contents of the envelope," but nonetheless found respondent guilty of the offense charged. The court then, as previously described, granted respondent's motion to suppress the testimony of Hennessey, because she "first came directly to the attention of the government as a result of an illegal search" and the Government had not "sustained its burden of showing that Lois Henness[e]y's testimony definitely would have been obtained without the illegal search." App. to Pet. for Cert. 28a-29a.The Court of Appeals affirmed this ruling on the Government's appeal, reasoning that "the road to Miss Henness[e]y's testimony from Officer Biro's concededly unconstitutional search is both straight and uninterrupted." 542 F.2d, at 142. The Court of Appeals also concluded that there was support in the record for the District Court's finding that the ongoing investigation would not have inevitably led to the evidence in question without Biro's discovery of the two policy slips. Id., at 141. Because of our traditional deference to the "two court rule," Graver Mfg. Co. v. Linde Co., , and the fact that the Government has not sought review of this latter ruling, we leave undisturbed this part of the Court of Appeals' decision. Because we decide that the Court of Appeals was wrong in concluding that there was insufficient attenuation between Officer Biro's search and Hennessey's testimony at the trial, we also do not reach the Government's contention that the exclusionary rule should not be applied when the evidence derived from the search is being used to prove a subsequent crime such as perjury.IIThe "road" to which the Court of Appeals analogized the train of events from Biro's discovery of the policy slips to Hennessey's testimony at respondent's trial for perjury is one of literally thousands of such roads traveled periodically between an original investigative discovery and the ultimate trial of the accused. The constitutional question under the Fourth Amendment was phrased in Wong Sun v. United States, , as whether "the connection between the lawless conduct of the police and the discovery of the challenged evidence has `become so attenuated as to dissipate the taint.'" Id., at 487, 491. The question was in turn derived from the Court's earlier decision in Nardone v. United States, , where Mr. Justice Frankfurter stated for the Court:"Here, as in the Silverthorne case [Silverthorne Lumber Co. v. United States], the facts improperly obtained do not `become sacred and inaccessible. If knowledge of them is gained from an independent source they may be proved like any others, but the knowledge gained by the Government's own wrong cannot be used by it' simply because it is used derivatively. . "In practice this generalized statement may conceal concrete complexities. Sophisticated argument may prove a causal connection between information obtained through illicit wire-tapping and the Government's proof. As a matter of good sense, however, such connection may have become so attenuated as to dissipate the taint." This, of course, makes it perfectly clear, if indeed ever there was any doubt about the matter, that the question of causal connection in this setting, as in so many other questions with which the law concerns itself, is not to be determined solely through the sort of analysis which would be applicable in the physical sciences. The issue cannot be decided on the basis of causation in the logical sense alone, but necessarily includes other elements as well. And our cases subsequent to Nardone, supra, have laid out the fundamental tenets of the exclusionary rule, from which the elements that are relevant to the causal inquiry can be divined.An examination of these cases leads us to reject the Government's suggestion that we adopt what would in practice amount to a per se rule that the testimony of a live witness should not be excluded at trial no matter how close and proximate the connection between it and a violation of the Fourth Amendment. We also reaffirm the holding of Wong Sun, supra, at 485, that "verbal evidence which derives so immediately from an unlawful entry and an unauthorized arrest as the officers' action in the present case is no less the `fruit' of official illegality than the more common tangible fruits of the unwarranted intrusion." We are of the view, however, that cases decided since Wong Sun significantly qualify its further observation that "the policies underlying the exclusionary rule [do not] invite any logical distinction between physical and verbal evidence." 371 U.S., at 486. Rather, at least in a case such as this, where not only was the alleged "fruit of the poisonous tree" the testimony of a live witness, but unlike Wong Sun the witness was not a putative defendant, an examination of our cases persuades us that the Court of Appeals was simply wrong in concluding that if the road were uninterrupted, its length was immaterial. Its length, we hold, is material, as are certain other factors enumerated below to which the court gave insufficient weight.In Stone v. Powell, , we observed that "despite the broad deterrent purpose of the exclusionary rule, it has never been interpreted to proscribe the introduction of illegally seized evidence in all proceedings or against all persons." Recognizing not only the benefits but the costs, which are often substantial, of the exclusionary rule, we have said that "application of the rule has been restricted to those areas where its remedial objectives are thought most efficaciously served," United States v. Calandra, . In that case, we refused to require that illegally seized evidence be excluded from presentation to a grand jury. We have likewise declined to prohibit the use of such evidence for the purpose of impeaching a defendant who testifies in his own behalf. Walder v. United States, .We have limited the standing requirement in the exclusionary rule context because the "additional benefits of extending the ... rule" to persons other than the ones subject to the illegal search are outweighed by the "further encroachment upon the public interest in prosecuting those accused of crime and having them acquitted or convicted on the basis of all the evidence which exposes the truth." Alderman v. United States, . Even in situations where the exclusionary rule is plainly applicable, we have declined to adopt a "per se or `but for' rule" that would make inadmissible any evidence, whether tangible or live-witness testimony, which somehow came to light through a chain of causation that began with an illegal arrest. Brown v. Illinois, .Evaluating the standards for application of the exclusionary rule to live-witness testimony in light of this balance, we are first impelled to conclude that the degree of free will exercised by the witness is not irrelevant in determining the extent to which the basic purpose of the exclusionary rule will be advanced by its application. This is certainly true when the challenged statements are made by a putative defendant after arrest, Wong Sun, supra, at 491; Brown v. Illinois, supra, and a fortiori is true of testimony given by nondefendants.The greater the willingness of the witness to freely testify, the greater the likelihood that he or she will be discovered by legal means and, concomitantly, the smaller the incentive to conduct an illegal search to discover the witness.4 Witnesses are not like guns or documents which remain hidden from view until one turns over a sofa or opens a filing cabinet. Witnesses can, and often do, come forward and offer evidence entirely of their own volition. And evaluated properly, the degree of free will necessary to dissipate the taint will very likely be found more often in the case of live-witness testimony than other kinds of evidence. the time, place and manner of the initial questioning of the witness may be such that any statements are truly the product of detached reflection and a desire to be cooperative on the part of the witness. And the illegality which led to the discovery of the witness very often will not play any meaningful part in the witness' willingness to testify. "The proffer of a living witness is not to be mechanically equated with the proffer of inanimate evidentiary objects illegally seized. The fact that the name of a potential witness is disclosed to police is of no evidentiary significance, per se, since the living witness is an individual human personality whose attributes of will, perception, memory and volition interact to determine what testimony he will give. The uniqueness of this human process distinguishes the evidentiary character of a witness from the relative immutability of inanimate evidence." Smith v. United StatesApp. D.C. 1, 3-4, 324 F.2d 879, 881-882 (1963) (Burger, J.) (footnotes omitted), cert. denied, . Another factor which not only is relevant in determining the usefulness of the exclusionary rule in a particular context, but also seems to us to differentiate the testimony of all live witnesses - even putative defendants - from the exclusion of the typical documentary evidence, is that such exclusion would perpetually disable a witness from testifying about relevant and material facts, regardless of how unrelated such testimony might be to the purpose of the originally illegal search or the evidence discovered thereby. Rules which disqualify knowledgeable witnesses from testifying at trial are, in the words of Professor McCormick, "serious obstructions to the ascertainment of truth"; accordingly, "[f]or a century the course of legal evolution has been in the direction of sweeping away these obstructions." C. McCormick, Law of Evidence 71 (1954). Alluding to the enormous cost engendered by such a permanent disability in an analogous context, we have specifically refused to hold that "making a confession under circumstances which preclude its use, perpetually disables the confessor from making a usable one after those conditions have been removed." United States v. Bayer, . For many of these same reasons, the Court has also held admissible at trial testimony of a witness whose identity was disclosed by the defendant's statement given after inadequate Miranda warnings. Michigan v. Tucker, ."For, when balancing the interests involved, we must weigh the strong interest under any system of justice of making available to the trier of fact all concededly relevant and trustworthy evidence which either party seeks to adduce... . Here respondent's own statement, which might have helped the prosecution show respondent's guilty conscience at trial, had already been excised from the prosecution's case pursuant to this Court's Johnson [v. New Jersey, decision. To extend the excision further under the circumstances of this case and exclude relevant testimony of a third-party witness would require far more persuasive arguments than those advanced by respondent." In short, since the cost of excluding live-witness testimony often will be greater, a closer, more direct link between the illegality and that kind of testimony is required.This is not to say, of course, that live-witness testimony is always or even usually more reliable or dependable than inanimate evidence. Indeed, just the opposite may be true. But a determination that the discovery of certain evidence is sufficiently unrelated to or independent of the constitutional violation to permit its introduction at trial is not a determination which rests on the comparative reliability of that evidence. Attenuation analysis, appropriately concerned with the differences between live-witness testimony and inanimate evidence, can consistently focus on the factors enumerated above with respect to the former, but on different factors with respect to the latter.In holding that considerations relating to the exclusionary rule and the constitutional principles which it is designed to protect must play a factor in the attenuation analysis, we do no more than reaffirm an observation made by this Court half a century ago:"A criminal prosecution is more than a game in which the Government may be checkmated and the game lost merely because its officers have not played according to rule." McGuire v. United States, . The penalties visited upon the Government, and in turn upon the public, because its officers have violated the law must bear some relation to the purposes which the law is to serve.IIIViewing this case in the light of the principles just discussed, we hold that the Court of Appeals erred in holding that the degree of attenuation was not sufficient to dissipate the connection between the illegality and the testimony. The evidence indicates overwhelmingly that the testimony given by the witness was an act of her own free will in no way coerced or even induced by official authority as a result of Biro's discovery of the policy slips. Nor were the slips themselves used in questioning Hennessey. Substantial periods of time elapsed between the time of the illegal search and the initial contact with the witness, on the one hand, and between the latter and the testimony at trial on the other. While the particular knowledge to which Hennessey testified at trial can be logically traced back to Biro's discovery of the policy slips, both the identity of Hennessey and her relationship with the respondent were well known to those investigating the case. There is, in addition, not the slightest evidence to suggest that Biro entered the shop or picked up the envelope with the intent of finding tangible evidence bearing on an illicit gambling operation, much less any suggestion that he entered the shop and searched with the intent of finding a willing and knowledgeable witness to testify against respondent. Application of the exclusionary rule in this situation could not have the slightest deterrent effect on the behavior of an officer such as Biro. The cost of permanently silencing Hennessey is too great for an evenhanded system of law enforcement to bear in order to secure such a speculative and very likely negligible deterrent effect.Obviously no mathematical weight can be assigned to any of the factors which we have discussed, but just as obviously they all point to the conclusion that the exclusionary rule should be invoked with much greater reluctance where the claim is based on a causal relationship between a constitutional violation and the discovery of a live witness than when a similar claim is advanced to support suppression of an inanimate object. The judgment of the Court of Appeals is accordingly Reversed.MR. JUSTICE BLACKMUN took no part in the consideration or decision of this case. |
7 | Mississippi imposes a 5% sales tax upon the "gross proceeds" of retail sales of tangible personal property, including gasoline, and such gross proceeds are computed without deduction for any taxes. Mississippi also imposes a gasoline excise tax on each gallon sold by a distributor, which in the case of a distributor bringing gasoline into the State otherwise than by common carrier, accrues at the time when and at the point where the gasoline is brought into the State. And a federal gasoline excise tax is imposed on each gallon sold by a "producer," 26 U.S.C. 4081 (a), defined to include any person to whom gasoline is sold tax free, 4082 (a). Contending that the denial of a deduction for the Mississippi and federal excise taxes in computing the gross proceeds of retail gasoline sales for purpose of the sales tax was unconstitutional as a taking of property without due process in violation of the Fourteenth Amendment, and that he acts as a mere collector of the excise taxes whose legal incidence is upon the purchaser-consumer, petitioner, an operator of several service stations in Mississippi who purchased his gasoline tax free in other States and transported it to Mississippi in his own trucks, paid the sales taxes under protest and sued for a refund in state court. His suit was dismissed, and the Mississippi Supreme Court affirmed, holding that the legal incidence of both excise taxes is on petitioner and not on the purchaser-consumer. Held: The denial of the deduction of the Mississippi and federal gasoline excise taxes in computing the gross proceeds of retail sales for purposes of the sales tax is not unconstitutional. Pp. 203-212. (a) As reflected by the language of 26 U.S.C. 4081 (a) and 4082 (a), and their legislative history, the legal incidence of the federal excise tax is on the statutory "producer," such as petitioner, and not on his purchaser-consumer. Pp. 204-208. (b) The Mississippi Supreme Court's holding that the legal incidence of the state excise tax falls on petitioner, being consistent with a reasonable interpretation of the statute, is conclusive. Pp. 208-210. (c) Petitioner's claim that liability for the excise taxes and sales tax arises simultaneously and results in a sales tax upon the excise tax is without merit, since the excise taxes attach prior to the point of the retail sale. Pp. 210-211. (d) Petitioner is not denied equal protection as against dealers in other States who are not required to include the federal excise tax as part of the sales tax base, since the prohibition of the Equal Protection Clause is against its denial by the State as between taxpayers subject to its laws. Pp. 211-212. 288 So.2d 868, affirmed.BRENNAN, J., delivered the opinion of the Court, in which all other Members joined except DOUGLAS, J., who took no part in the consideration or decision of the case.Charles R. Davis argued the cause for petitioner. With him on the briefs was Walter A. Armstrong, Jr.Hunter M. Gholson argued the cause for respondent. With him on the brief was William G. Burgin, Jr.MR. JUSTICE BRENNAN delivered the opinion of the Court.Mississippi imposes a 5% sales tax upon the "gross proceeds of the retail sales" of tangible personal property, including gasoline. Miss. Code Ann. 27-65-17 (Supp. 1974).1 Petitioner operates as a sole proprietorship from West Memphis, Ark. He owns and operates five gasoline service stations in Mississippi and also sells gasoline at four other stations in Mississippi on a consignment basis. He purchases his gasoline tax free from sources in Tennessee and Arkansas. He transports the gasoline to his Mississippi stations in his own trucks. He holds a Mississippi distributor's permit and is also federally licensed because he is a "producer" within the meaning of the Internal Revenue Code as one who sells gasoline bought tax free from other "producers."2 He adds to his pump prices the amount of a Mississippi gasoline excise tax, now nine cents per gallon, Miss. Code Ann. 27-55-11 (Supp. 1974), and a federal gasoline excise tax of four cents per gallon, 26 U.S.C. 4081 (a).3 The State computes his gross proceeds of retail sales "without any deduction for ... taxes of any kind ... ." Miss. Code Ann. 27-65-3 (h) (Supp. 1974).4 Petitioner contends that the denial of a deduction of the amount of the excise taxes added to his pump prices in the computation of his "gross proceeds of the retail sales" of gasoline, and the resultant application of the 5% sales tax to so much of his pump prices as reflects the amount of the taxes, are unconstitutional. He therefore paid the sales taxes to that extent under protest, and sued for a refund in Mississippi Chancery Court, Hinds County. Respondent cross-claimed for unpaid sales taxes accruing after the filing of the suit.5 After trial, the Chancery Court dismissed petitioner's suit and entered judgment for respondent on the cross-claim. The Supreme Court of Mississippi affirmed. 288 So.2d 868. We granted certiorari, . We affirm.IPetitioner's principal argument is that he acts as a mere collector of the taxes for the two governments because the legal incidence of both excise taxes is upon the purchaser-consumer. Upon that premise, he argues: "Consequently, to impose the Mississippi sales tax upon amounts so received by [petitioner] would be to tax him upon gross receipts which are not his gross receipts, but rather the gross receipts of [the two governments]. This would not only violate the fundamental conception of right and justice, but it would be taking [petitioner's] property without due process of the Fourteenth Amendment ... ." Brief for Petitioner 37. He cites in support the statement in Hoeper v. Tax Comm'n, , that "any attempt by a state to measure the tax on one person's property or income by reference to the property or income of another is contrary to due process of law as guaranteed by the Fourteenth Amendment." Also, petitioner advances an alternative argument limited to the denial of the deduction of the amount of the federal excise tax. He contends that the denial results to that extent in "a state tax on ... monies held in trust by [petitioner] as agent for the United States [and] is, in essence, a tax upon the United States ... [that] ... is clearly unconstitutional" as violating the constitutional immunity of the United States and its property from taxation by the States. M`Culloch v. Maryland, 4 Wheat. 316 (1819). Brief for Petitioner 48.Petitioner's arguments can prevail, as he apparently concedes, only if the legal incidence of the excise taxes is not upon petitioner, but upon the purchaser-consumer. Our task therefore is to determine upon whom the legal incidence of each tax rests.IIThe economic burden of taxes incident to the sale of merchandise is traditionally passed on to the purchasers of the merchandise. Therefore, the decision as to where the legal incidence of either tax falls is not determined by the fact that petitioner, by increasing his pump prices in the amounts of the taxes, shifted the economic burden of the taxes from himself to the purchaser-consumer. The Court has laid to rest doubts on that score raised by such decisions as Panhandle Oil Co. v. Mississippi ex rel. Knox, ; Indian Motorcycle Co. v. United States, ; and Kern-Limerick, Inc. v. Scurlock, , at least under taxing schemes, as here, where neither statute required petitioner to pass the tax on to the purchaser-consumer. See Alabama v. King & Boozer, ; Lash's Products Co. v. United States, ; Wheeler Lumber Co. v. United States, ; First Agricultural Nat. Bank v. Tax Comm'n, ; American Oil Co. v. Neill, .A majority of courts that have considered the question have held, in agreement with the Mississippi Supreme Court in this case, that the legal incidence of the federal excise tax is upon the statutory "producer" such as petitioner and not upon his purchaser-consumer. Martin Oil Service, Inc. v. Department of Revenue, 49 Ill. 2d 260, 273 N. E. 2d 823 (1971); People v. Werner, 364 Ill. 594, 5 N. E. 2d 238 (1936); Sun Oil Co. v. Gross Income Tax Division, 238 Ind. 111, 149 N. E. 2d 115 (1958); State v. Thoni Oil Magic Benzol Gas Stations, Inc., 121 Ga. App. 454, 174 S. E. 2d 224, aff'd, 226 Ga. 883, 178 S. E. 2d 173 (1970). Contra, see Tax Review Board v. Esso Standard Division, 424 Pa. 355, 227 A. 2d 657 (1967); cf. Standard Oil Co. v. State, 283 Mich. 85, 276 N. W. 908 (1937); Standard Oil Co. v. State Tax Comm'r, 71 N. D. 146, 299 N. W. 447 (1941). Our independent examination of the federal statute and its legislative history persuades us also that the legal incidence of the federal tax falls upon the statutory "producer" such as petitioner.The wording of the federal statute plainly places the incidence of the tax upon the "producer", that is, by definition, upon federally licensed distributors of gasoline such as petitioner. Section 4082 (a) provides that "[a]ny person to whom gasoline is sold tax-free ... shall be considered the producer of such gasoline," and 4081 (a) expressly imposes the tax "on gasoline sold by the producer ... ." (Emphasis added.) The congressional purpose to lay the tax on the "producer" and only upon the "producer" could not be more plainly revealed. Persuasive also that such was Congress' purpose is the fact that, if the producer does not pay the tax, the Government cannot collect it from his vendees; the statute has no provision making the vendee liable for its payment.6 First Agricultural Nat. Bank v. Tax Comm'n, supra, at 347.It is true that the purchaser-consumer who buys gasoline for use on his farm, 26 U.S.C. 6420 (a), or for other nonhighway purposes, 6421 (a), or for a local transit system, 6421 (b), can recover payment of all or part of the amount of the tax passed on by the "producer." But this is not proof that Congress laid the tax upon the purchaser-consumer. Rather, since the proceeds of this tax go not into the general treasury, but into a special fund used to defray the cost of the federal highway system, S. Rep. No. 367, 87th Cong., 1st Sess. (1961), the refunds authorized simply reflect a congressional determination that, because the economic burden of such taxes is traditionally passed on to the purchaser-consumer in the form of increased pump prices, farmers and other off-highway users should be relieved of the economic burden of the cost of the highway program, and that the cost should be borne entirely by motorists who use gasoline to drive on the highways. Martin Oil Service, Inc. v. Department of Revenue, supra, at 265, 273 N. E. 2d, at 827.Petitioner cites references by President Johnson to the tax as a "user tax" as proving that it is not and never was intended that the tax be imposed upon the "producer," but rather upon the purchaser-consumer. President Johnson's message to Congress of May 17, 1965, on the subject of reform of the excise tax structure stated that such "reform ... will ... leave ... excises on alcoholic beverages, tobacco, gasoline, tires, trucks, air transportation (and a few other user-charge and special excises) ... ." H. R. Doc. No. 173, 89th Cong., 1st Sess., 3 (1965). (Emphasis added.) Petitioner relies also on the report of the House Committee on Ways and Means accompanying H. R. 8371, H. R. Rep. No. 433, 89th Cong., 1st Sess., 12-13 (1965). It states: "Taxes such as those on gasoline ... are user taxes... . A tax on gasoline taxes users of the highways in rough proportion to their use of the service." (Emphasis added.) These references obviously were not made in the context of consideration of the legal incidence of the gasoline tax but merely as recognition that the reality is that users bear the economic burden of the tax. These references were rejected in Martin Oil Service, Inc., supra, by the Illinois Supreme Court as irrelevant to the question whether the tax must be considered as one whose incidence rests on the purchaser-consumer. We agree with, and adopt, that court's analysis:"We consider the references to the tax as a `user tax' were not intended to be descriptive of the legal incidence of the gasoline tax. It is not disputed that the ultimate economic burden of the tax rests upon the purchaser-consumer. A practical nontechnical description of the tax as a `user tax' is explainable, consistently with the legal incidence of the tax being on the producer. The economic burden of the tax has no relevance to the issue before us." 49 Ill. 2d, at 264, 273 N. E. 2d, at 826. We therefore hold that the Mississippi Supreme Court, which relied upon Martin Oil Service, Inc., see 288 So.2d, at 873, properly concluded that the federal excise tax is imposed solely on statutory "producers" such as petitioner and not on the purchaser.IIIThe Mississippi Supreme Court held that the legal incidence of the Mississippi excise tax also falls upon petitioner. It is true of course that this Court is the final judicial arbiter of the question where the legal incidence of the federal excise tax falls. But a State's highest court is the final judicial arbiter of the meaning of state statutes, Alabama v. King & Boozer, 314 U.S., at 9-10, and therefore our review of the holding of a state court respecting the legal incidence of a state excise tax is guided by the following: "When a state court has made its own definitive determination as to the operating incidence, our task is simplified. We give this finding great weight in determining the natural effect of a statute, and if it is consistent with the statute's reasonable interpretation it will be deemed conclusive." American Oil Co. v. Neill, 380 U.S., at 455-456.This is manifestly a case in which the holding of the Mississippi Supreme Court that the legal incidence of the state excise tax falls upon petitioner should be "deemed conclusive." Mississippi Code Ann. 27-55-11 (Supp. 1974), provides that the tax "attaches on the distributor or other person for each gallon of gasoline brought into the state ..." in the case of distribution of gasoline by distributors, such as petitioner, who bring gasoline into Mississippi "by means other than through a common carrier." The Mississippi Supreme Court relied primarily upon this provision in reaching its conclusion, and we cannot say that its conclusion is not "consistent with the statute's reasonable interpretation."Our determination is buttressed by the holding of a three-judge District Court in United States v. Sharp, 302 F. Supp. 668 (SD Miss. 1969). The United States sought a declaratory judgment that the Mississippi tax was invalid with respect to gasoline purchased by the Federal Government, its agencies, and personnel when used on Mississippi highways on Government business. The three-judge court held that the legal incidence of the state tax was upon the distributor-vendor and not upon the purchaser United States, and dismissed the action. The court stated:"We do not quarrel with the contention that a statute's practical operation and effect determines where the legal incidence of the tax falls. We simply agree that the tax burden in the Mississippi statute falls plainly and squarely on the distributor to whom the state looks for the payment of the tax, albeit the amount of the tax may ultimately be borne by the vendee, in this case the federal government." Id., at 671. Petitioner argues, however, that the decision of the Mississippi Supreme Court is foreclosed by this Court's decision in Panhandle Oil Co. v. Knox, . The argument is without merit. In that case Mississippi sued Panhandle Oil Co. to recover gasoline excise taxes imposed by Chapter 116 of the 1922 Laws of Mississippi, as amended, a predecessor to the present Miss. Code Ann. 27-55-11. The taxes claimed were on account of sales made by Panhandle to the United States for the use of its Coast Guard Fleet in service in the Gulf of Mexico, and of its Veterans' Hospital at Gulfport, Miss. The Court, over the dissents of Justices Holmes, Brandeis, Stone, and McReynolds, held that the tax as applied was invalid as a tax upon the means used by the United States for governmental purposes. The dissenters' view was that it was not a tax upon means used by the United States, but that Panhandle merely shifted the economic burden of the tax to its vendees by adding it to the price of the gasoline.The Court's Panhandle opinion did not focus upon whether the Mississippi statute laid the legal incidence of the tax upon the distributor. Rather, the rationale was that the tax was bad because, if laid upon distributors, the distributors were able to shift its burden to the purchaser. The Court has since expressly abandoned that view, and has accepted the analysis of the dissent. In Alabama v. King & Boozer, 314 U.S., at 9, the Court held: "So far as a different view has prevailed, see Panhandle Oil Co. v. Knox ..., we think it no longer tenable."IVFinally, petitioner argues that even if the legal incidence of the two taxes is on him rather than on the consumer, the provision of 27-65-17 denying the deduction of the taxes in the computation of his "gross proceeds of ... retail sales" is invalid for two reasons.First, he argues: "Since [petitioner] sells only to the ultimate consumer, the excise tax attaches simultaneously with the sale and with the sales tax; therefore, there can be no sales tax upon the excise tax." Brief for Petitioner 47. In other words, his argument is that the liability for the excise taxes, state and federal, and the liability for the sales tax arise simultaneously, and in that circumstance, one should not be included in computing the other. We read the opinion of the Mississippi Supreme Court to reject this argument and to hold that the taxes fall on the "producer at a time prior to the point of retail sale or other consumer transaction... ." 288 So.2d, at 870. That interpretation of the Mississippi statutes is, of course, binding on us as respects the state excise tax; indeed, the interpretation is not merely "reasonable," but seems obvious in light of the express provision of 27-55-11 that in cases of distributors, like petitioner, bringing gasoline into Mississippi in their own trucks the tax "attaches ... at the time when and at the point where such gasoline is brought into the state." Further, we agree with the Mississippi court that the federal tax also attaches prior to the point of the retail sale. However, even if the liability for the excise taxes did arise simultaneously with the sales tax, we cannot see any legal distinction, constitutional or otherwise, arising from that circumstance. The Illinois Supreme Court also addressed this contention when made in Martin Oil Service, Inc., supra, as to the federal excise tax, and rejected it for the following reasons, with which we agree. "The legal incidence of the Federal gasoline tax is on the producer, who is under no legal duty to pass the burden of the tax on to the consumer. If he does pass on the burden of the tax it is simply done by charging the consumer a higher price. This higher price is the result of the added cost, because of the burden of the Federal tax, to the producer in selling his gasoline. It is no different from other costs he incurs in bringing his product to market, including the costs of raw material, its processing and its delivery. All these costs are includable in his `gross receipts' or the `consideration' he receives for his gasoline. No reason has been given ... why the cost of the gasoline tax should be regarded differently from the other costs of the producer-retailer and we perceive none." 49 Ill. 2d, at 268, 273 N. E. 2d, at 828. Second, petitioner argues that "since other independent oil dealers in those states which do not include the federal excise tax as a part of the sales tax base would not be forced to pay such tax [e. g., Pennsylvania, see Tax Review Board v. Esso Standard, supra], then the arbitrary imposition of such tax upon [petitioner] and those other independent oil dealers in his class (who have to pay a sales tax on federal excise tax) would deprive [petitioner] of the Fourteenth Amendment's guarantee to equal protection of the laws." Brief for Petitioner 21. The contention is patently frivolous. The prohibition of the Equal Protection Clause is against denial by the State, here Mississippi, as between taxpayers subject to its laws. Petitioner makes no claim of unconstitutional discrimination by Mississippi in the application of its sales tax Act to taxpayers subject to that tax. Affirmed.MR. JUSTICE DOUGLAS took no part in the consideration or decision of this case. |
1 | Judgment reversed and case remanded. Reported below: 220 F. Supp. 230.Bernard Kleiman, Lester Asher, John C. Melaniphy and Charles S. Rhyne for appellants.Howard J. Trienens and Gary L. Cowan for appellees.PER CURIAM.The judgment below is reversed. Reynolds v. Sims, ; Lucas v. Forty-Fourth General Assembly of Colorado, . The case is remanded for further proceedings consistent with the views stated in our opinions in Reynolds v. Sims and in the other cases relating to state legislative apportionment decided along with Reynolds.MR. JUSTICE CLARK and MR. JUSTICE STEWART would affirm the judgment, because, as the opinions of Judge Campbell and Judge Schnackenberg demonstrate, 220 F. Supp. 230, 235, the Illinois system of legislative apportionment is entirely rational and does not frustrate effective majority rule.MR. JUSTICE HARLAN dissents for the reasons stated in his dissenting opinion in Reynolds v. Sims, .MR. JUSTICE GOLDBERG took no part in the consideration or decision of this case. |
2 | Respondent brought this action in a West Virginia circuit court alleging that three editorials in petitioner's newspaper criticizing his official conduct as court clerk had libeled him. The jury had been instructed in part that it could find for respondent if it were shown that petitioner had published the editorials "with bad or corrupt motive," or "from personal spite, ill will or a desire to injure plaintiff." Respondent contended that there was sufficient proof for the jury to find that petitioner published the statements with reckless disregard of whether they were false or not. The jury awarded respondent damages and the State Supreme Court of Appeals denied appellate review. Held: The Court's independent examination of the whole record does not reveal that any failure of petitioner to make a prior investigation constituted proof sufficient to present a jury question whether the statements were published with reckless disregard of whether they were false or not. Cf. New York Times Co. v. Sullivan, . Certiorari granted; reversed and remanded.Thurman Arnold and Jack A. Mann for petitioner.Harry G. Camper, Jr., for respondent.PER CURIAM.The petition for certiorari is granted.Respondent Hanks is the elected Clerk of the Criminal and Circuit Courts of Raleigh County, West Virginia. He brought this libel action in the West Virginia Circuit Court, Wyoming County, alleging that during his reelection campaign he was libeled by three editorials, highly critical of his official conduct, which appeared in petitioner's morning newspaper. The jury returned a verdict for respondent and awarded him $5,000 damages. The State Supreme Court of Appeals denied petitioner's application for appellate review.Although this action was tried subsequent to the decisions of this Court in New York Times Co. v. Sullivan, ; Garrison v. Louisiana, ; Henry v. Collins, ; and Rosenblatt v. Baer, , and despite the fact that it was recognized at trial that the principles of New York Times were applicable, the case went to the jury on instructions which were clearly impermissible. The jury was instructed in part that it could find for the respondent if it were shown that petitioner had published the editorials "with bad or corrupt motive," or "from personal spite, ill will or a desire to injure plaintiff." Because petitioner failed to object to this erroneous interpretation of New York Times at trial, and in fact offered instructions which were themselves inadequate, the issue of these instructions is not before us. However, since it is clear that the jury verdict was rendered upon instructions which misstated the law and since petitioner has properly challenged the sufficiency of the evidence, we have undertaken an independent examination of the record as a whole "so as to assure ourselves that the judgment does not constitute a forbidden intrusion on the field of free expression." New York Times Co. v. Sullivan, supra, at 285. See Curtis Publishing Co. v. Butts, (opinion of MR. JUSTICE HARLAN); id., at 168-170 (opinion of THE CHIEF JUSTICE).In New York Times we held that the Constitution forbids recovery of damages in a civil libel action by a public official, such as respondent, "for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with `actual malice' - that is, with knowledge that it was false or with reckless disregard of whether it was false or not." 376 U.S., at 279-280. Our examination of the whole record satisfies us that "the proof presented to show actual malice lacks the convincing clarity which the constitutional standard demands ... ." 376 U.S., at 285-286.We put aside the question whether the proofs show that the allegedly libelous statements were false. If false, respondent did not and does not contend that petitioner published the statements with knowledge of their falsity. His contention was and is that the proofs were sufficient for the jury to find that petitioner published the statements with reckless disregard of whether they were false or not. However, virtually the only evidence we find bearing on that question relates to one of the editorials critical of the opposition of respondent and another public official, Mrs. Elinor Hurt, president of the county board of health, to fluoridation of the local water supply. That editorial, captioned "The Fluoridation Situation Remains Unchanged," was directed primarily at Mrs. Hurt's opposition* but also included the following: "Here, again, [Mrs. Hurt] seems to want to follow in the footsteps of Hanks. For it was Hanks who ordered over the telephone once that he did not want his name to appear in the Beckley Post-Herald again. He backed up this order with an inexplicit threat - one merely intended to frighten those who are easily intimidated. "The only conclusion to which we can come is that either Hanks and Mrs. Hurt have been in league toward the fanatic end, believing all the wild-eyed ravings against fluoridation despite decades of experience to disprove them, or that perhaps his blustering threats were able to intimidate the lady." (Emphasis added.) Respondent's argument is that since both he and Mrs. Hurt testified and denied any threats or intimidation, the following testimony of petitioner's president and general manager on cross-examination provides "convincing proof" of the absence of prior investigation which entitled the jury to find that the "offending charges" were published with reckless disregard of whether they were false or true: "Q. But you can't tell this jury that any specific investigation was made before this man was attacked in any of these articles, can you? ... . . "A. We watch the activities of the public servant. You don't have to make an investigation. His whole life is out in front of everybody. "Q. Those editorials were not written by anybody who wanted to find out whether or not he threatened Mrs. Hurt, were they? "A. There was cause on their part to feel there was that possibility. "Q. That possibility? "A. That's right. `Perhaps,' they said. ... . . "A. It was our opinion that that was as near the facts and truth as we could get." (Tr. 121-122.) We reject respondent's contention. Neither this passage nor anything else in the record reveals "the high degree of awareness of ... probable falsity demanded by New York Times ... ." Garrison v. Louisiana, ; it cannot be said on this record that any failure of petitioner to make a prior investigation constituted proof sufficient to present a jury question whether the statements were published with reckless disregard of whether they were false or not. Cf. New York Times Co. v. Sullivan, supra, at 287-288; Time, Inc. v. Hill, . See also Curtis Publishing Co. v. Butts, supra, at 153-154 (opinion of MR. JUSTICE HARLAN).The judgment is reversed, and the case remanded to the Circuit Court of West Virginia, Wyoming County, for further proceedings not inconsistent with this opinion. It is so ordered.MR. JUSTICE BLACK, whom MR. JUSTICE DOUGLAS joins, concurs in the result for the reasons stated in his concurring opinions in New York Times Co. v. Sullivan, , and Garrison v. Louisiana, .MR. JUSTICE FORTAS took no part in the consideration or decision of this case.[Footnote *] When asked whether she had ever brought suit against petitioner for these or other statements, Mrs. Hurt replied, "No, sir, I have big broad shoulders." (Tr. 49.) |
0 | Petitioner was indicted and convicted in a Federal District Court for interfering with interstate commerce by extortion, in violation of the Hobbs Act, 18 U.S.C. 1951. The only interstate commerce mentioned in the indictment was the importation into Pennsylvania of sand to be used in building a steel plant there; but the trial judge permitted the introduction of evidence to show interference also with the exportation from Pennsylvania of steel to be manufactured in the new plant, and he instructed the jury that it could base a conviction upon interference with either the importation of sand or the exportation of steel. Held: The conviction is reversed. Pp. 213-219. (a) Since the indictment did not charge interference with the exportation of steel from the State, it was prejudicial error to submit to the jury the question whether the extortion interfered with the exportation of steel. Pp. 215-219. (b) The variance between pleading and proof here involved was not insignificant and may not be dismissed as harmless error, because it deprived petitioner of his substantial right to be tried for a felony only on charges presented in an indictment returned by a grand jury. Pp. 217-218. (c) Since the jury might have based the conviction on a finding of interference with the exportation of steel, the conviction must be reversed. P. 219. 262 F.2d 571, reversed.Michael von Moschzisker argued the cause for petitioner. With him on the brief was Vincent M. Casey.Wayne G. Barnett argued the cause for the United States. On the brief were Solicitor General Rankin, Assistant Attorney General Wilkey, Ralph S. Spritzer, Beatrice Rosenberg and Theodore George Gilinsky. MR. JUSTICE BLACK delivered the opinion of the Court.Petitioner Nicholas Stirone was indicted and convicted in a federal court for unlawfully interfering with interstate commerce in violation of the Hobbs Act.1 The crucial question here is whether he was convicted of an offense not charged in the indictment.So far as relevant to this question the indictment charged the following: From 1951 until 1953, a man by the name of William G. Rider had a contract to supply ready-mixed concrete from his plant in Pennsylvania to be used for the erection of a steel-processing plant at Allenport, Pennsylvania. For the purpose of performing this contract Rider"caused supplies and materials [sand] to move in interstate commerce between various points in the United States and the site of his plant for the manufacture or mixing of ready mixed concrete, and more particularly, from outside the State of Pennsylvania into the State of Pennsylvania." The indictment went on to charge that Stirone, using his influential union position,"did ... unlawfully obstruct, delay [and] affect interstate commerce between the several states of the United States and the movement of the aforesaid materials and supplies in such commerce, by extortion ... of $31,274.13 ... induced by fear and by the wrongful use of threats of labor disputes and threats of the loss of, and obstruction and prevention of, performance of his contract to supply ready mixed concrete." The district judge, over petitioner's objection as to its materiality and relevancy, permitted the Government to offer evidence of an effect on interstate commerce not only in sand brought into Pennsylvania from other States but also in steel shipments from the steel plant in Pennsylvania into Michigan and Kentucky. Again over petitioner's objection the trial judge charged the jury that so far as the interstate commerce aspect of the case was concerned, Stirone's guilt could be rested either on a finding that (1) sand used to make the concrete "had been shipped from another state into Pennsylvania" or (2) "Mr. Rider's concrete was used for constructing a mill which would manufacture articles of steel to be shipped in interstate commerce ..." from Pennsylvania into other States. On motion of petitioner for arrest of judgment, acquittal or new trial, the District Court held that "A sufficient foundation for introduction of both kinds of proof was laid in the indictment." 168 F. Supp. 490, 495. The Court of Appeals affirmed, all the judges agreeing that interference with the sand movements into Pennsylvania was barred by the Hobbs Act. 262 F.2d 571. Judge Hastie and Chief Judge Biggs disagreed with the court's holding that Stirone could be tried and convicted for interference with the possible future shipments of steel from Pennsylvania to Michigan and Kentucky. 262 F.2d. at 578, 580. They were of opinion that no interference with interstate steel shipments was charged in the indictment and that in any event it is an unreasonable extension of the Act to make a federal offense out of extortion from a man merely because he is supplying concrete to build a mill which after construction will produce steel, a part of which may, if processed, move in interstate commerce.We agree with the Court of Appeals that Rider's dependence on shipments of sand from outside Pennsylvania to carry on his ready-mixed concrete business entitled him to the Hobbs Act's protection against interruption or stoppage of his commerce in sand by extortion of the kind that the jury found the petitioner had committed here. That Act speaks in broad language, manifesting a purpose to use all the constitutional power Congress has to punish interference with interstate commerce by extortion, robbery or physical violence. The Act outlaws such interference "in any way or degree." 18 U.S.C. 1951 (a). Had Rider's business been hindered or destroyed, interstate movements of sand to him would have slackened or stopped. The trial jury was entitled to find that commerce was saved from such a blockage by Rider's compliance with Stirone's coercive and illegal demands. It was to free commerce from such destructive burdens that the Hobbs Act was passed. United States v. Green, .Whether prospective steel shipments from the new steel mills would be enough, alone, to bring this transaction under the Act is a more difficult question. We need not decide this, however, since we agree with the dissenting judges in the Court of Appeals that it was error to submit that question to the jury and that the error cannot be dismissed as merely an insignificant variance between allegation and proof and thus harmless error as in Berger v. United States, . The crime charged here is a felony and the Fifth Amendment requires that prosecution be begun by indictment.Ever since Ex parte Bain, . was decided in 1887 it has been the rule that after an indictment has been returned its charges may not be broadened through amendment except by the grand jury itself. In that case, the court ordered that some specific and relevant allegations the grand jury had charged be stricken from the indictment so that Bain might be convicted without proof of those particular allegations.2 In holding that this could not be done, Mr. Justice Miller, speaking for the Court, said:"If it lies within the province of a court to change the charging part of an indictment to suit its own notions of what it ought to have been, or what the grand jury would probably have made it if their attention had been called to suggested changes, the great importance which the common law attaches to an indictment by a grand jury, as a prerequisite to a prisoner's trial for a crime, and without which the Constitution says `no person shall be held to answer,' may be frittered away until its value is almost destroyed." . The Court went on to hold in Bain:"that after the indictment was changed it was no longer the indictment of the grand jury who presented it. Any other doctrine would place the rights of the citizen, which were intended to be protected by the constitutional provision, at the mercy or control of the court or prosecuting attorney ... ." . The Bain case, which has never been disapproved, stands for the rule that a court cannot permit a defendant to be tried on charges that are not made in the indictment against him. See also United States v. Norris, . Cf. Clyatt v. United States, , 220. Yet the court did permit that in this case. The indictment here cannot fairly be read as charging interference with movements of steel from Pennsylvania to other States nor does the Court of Appeals appear to have so read it. The grand jury which found this indictment was satisfied to charge that Stirone's conduct interfered with interstate importation of sand. But neither this nor any other court can know that the grand jury would have been willing to charge that Stirone's conduct would interfere with interstate exportation of steel from a mill later to be built with Rider's concrete. And it cannot be said with certainty that with a new basis for conviction added, Stirone was convicted solely on the charge made in the indictment the grand jury returned. Although the trial court did not permit a formal amendment of the indictment, the effect of what it did was the same. And the addition charging interference with steel exports here is neither trivial, useless, nor innocuous. Compare Ford v. United States, ; Goto v. Lane, . While there was a variance in the sense of a variation between pleading and proof, that variation here destroyed the defendant's substantial right to be tried only on charges presented in an indictment returned by a grand jury. Deprivation of such a basic right is far too serious to be treated as nothing more than a variance and then dismissed as harmless error. Compare Berger v. United States, . 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.3 Thus the basic protection the grand jury was designed to afford is defeated by a device or method which subjects the defendant to prosecution for interference with interstate commerce which the grand jury did not charge.Here, as the trial court charged the jury, there are two essential elements of a Hobbs Act crime: interference with commerce, and extortion. Both elements have to be charged. Neither is surplusage and neither can be treated as surplusage. The charge that interstate commerce is affected is critical since the Federal Government's jurisdiction of this crime rests only on that interference. It follows that when only one particular kind of commerce is charged to have been burdened a conviction must rest on that charge and not another, even though it be assumed that under an indictment drawn in general terms a conviction might rest upon a showing that commerce of one kind or another had been burdened. The right to have the grand jury make the charge on its own judgment is a substantial right which cannot be taken away with or without court amendment. Here, as in the Bain case, we cannot know whether the grand jury would have included in its indictment a charge that commerce in steel from a nonexistent steel mill had been interfered with. Yet because of the court's admission of evidence and under its charge this might have been the basis upon which the trial jury convicted petitioner. If so, he was convicted on a charge the grand jury never made against him. This was fatal error. Cf. Cole v. Arkansas, ; De Jonge v. Oregon, . Reversed. |
10 | Exceptions to Special Master's report overruled.Douglas G. Caroom, Assistant Attorney General of Texas, argued the cause for plaintiff. With him on the briefs were Mark White, Attorney General, John W. Fainter, Jr., First Assistant Attorney General, and Ted L. Hartley, Executive Assistant Attorney General.Richard A. Simms, special Assistant Attorney General of New Mexico, argued the cause for defendant. With him on the briefs were Jeff Bingaman, Attorney General, and G. Emlen Hall, Charles M. Tansey, and Jay F. Stein, Special Assistant Attorneys General.Solicitor General McCree filed a memorandum for the United States as intervenor.PER CURIAM.Upon consideration of the report filed October 15, 1979, by Senior Judge Jean S. Breitenstein, Special Master, and the exceptions thereto, and on consideration of briefs and oral argument thereon,IT IS ADJUDGED, ORDERED, AND DECREED that all exceptions are overruled, the report is in all respects confirmed, and the ruling of the Special Master on the "1947 condition" as that term appears in Arts. II (g) and III (a) of the Pecos River Compact is approved.MR. JUSTICE STEVENS, dissenting.Under the Pecos River Compact of 1949, ch. 184, 63 Stat. 159, the State of New Mexico has a duty "not [to] deplete by man's activities the flow of the Pecos River at the New Mexico-Texas state line below an amount which will give to Texas a quantity of water equivalent to that available to Texas under the 1947 condition."Article VI (c) of the Compact provides that the "inflow-outflow" method is to be used to determine whether New Mexico is complying with this obligation.1 Briefly stated, this method involves the development of a correlation between the inflow to a basin and the expected outflow so that, for any given inflow, engineers can estimate the amount of water that should flow through and should therefore be available for downstream (in this case Texas') use. In a river routing study made available to the Commissioners prior to the signing of the Compact, engineers attempted to develop such a correlation for the Pecos by calculating for each year from 1905 to 1946 what the outflow would have been at various points if the New Mexico water uses in place in 1947 had been in place in prior years as well. This study was then to be used as a baseline in comparing future inflow and outflow in order to determine whether New Mexico was using a larger share of the river water than it had in 1947, in violation of the Compact.For years after the Compact was signed, there were disputes between the States over the proper application of the inflow-outflow method. Both sides recognized that the routing study contained some errors, and they attempted to correct those errors through negotiation. When negotiations ultimately failed, Texas brought this suit, alleging that New Mexico had breached its obligations under the Compact by using more water than it was entitled to use under the proper definition of the "1947 condition."One of the main issues before the Special Master was the meaning of the term "1947 condition." The Master found that the term referred only to depletions due to the New Mexico water uses that were in place in 1947, along with certain projected uses.2 He therefore held that the errors in the old routing study had to be corrected before that study could be used in determining compliance. In its objections to the Master's report, Texas takes the position that the "1947 condition" refers not to actual physical conditions on the river, but rather to the baseline values developed through the 1947 routing study. It therefore argues that, in the absence of agreement, the parties must continue to use that study, despite its errors, in determining compliance.The objections filed on behalf of the State of Texas persuade me that the Master's definition is not the two States agreed upon when they entered into the Compact. Article II (g) provides that, as used in the Compact: "The term `1947 condition' means that situation in the Pecos River Basin as described and defined in the Report of the Engineering Advisory Committee. In determining any question of fact hereafter arising as to such situation, reference shall be made to, and decisions shall be based on, such report." The routing study that Texas relies upon was a part of the Report of the Engineering Advisory Committee as that term is defined in the Compact.3 It therefore, in my opinion, became a part of the Compact definition of the 1947 condition to which the parties agreed. Although this concededly makes the term "1947 condition" an "artificial" definition, rather than a description of actual conditions, the fact that the parties agreed to base their decisions on all questions of fact on that Report indicates that the parties also agreed to use the routing study as a basic frame of reference. Moreover, had the parties merely intended to describe the New Mexico water uses that existed in 1947, I believe they would have used language similar to that employed by the Master and would not have included the detailed reference to the Report of the Engineering Advisory Committee in both Arts. II (g) and II (f). Finally, the fact that the parties later recognized some errors in that study and attempted to rectify them through negotiation does not, in my judgment, change the meaning of the Compact itself. Accordingly, I would sustain the objections of the State of Texas. |
0 | Under Bruton v. United States, , a defendant is deprived of his rights under the Confrontation Clause of the Sixth Amendment when his codefendant's incriminating confession is introduced at their joint trial, even if the jury is instructed to consider that confession only against the codefendant. At petitioner's and his brother's joint trial for the felony murder of a gas station attendant, the court allowed the State, over petitioner's objection, to introduce the brother's videotaped confession that he had killed the attendant who had just shot petitioner. The brother did not himself testify, and the court warned the jury that his confession was not to be used against petitioner. The State also called a witness who testified about a conversation with petitioner which recited essentially the same facts as the brother's confession. The New York Court of Appeals affirmed petitioner's conviction, adopting the reasoning of the plurality opinion in Parker v. Randolph, , that Bruton did not require the brother's confession to be excluded because petitioner had himself confessed and his confession "interlocked" with his brother's.Held: 1. Where a nontestifying codefendant's confession facially incriminating the defendant is not directly admissible against the defendant, the Confrontation Clause bars its admission at their joint trial, even if the jury is instructed not to consider it against the defendant, and even if the defendant's own confession is admitted against him. The Parker plurality's view that Bruton is inapplicable to cases involving interlocking confessions is rejected in favor of JUSTICE BLACKMUN's view in Parker that, although introduction of the defendant's own interlocking confession cannot cure the Confrontation Clause violation caused by introduction of the nontestifying codefendant's confession, it might, in some cases, render that violation harmless. The Parker plurality's view is predicated on the erroneous theory that, when the defendant has himself confessed, introduction of the codefendant's confession will seldom, if ever, be of the "devastating" character required by Bruton to prove a Confrontation Clause violation. Although Bruton did consider "devastating" effect, it did so in the context of justification for excluding the entire category of codefendant confessions that implicate the defendant, and not as a factor whose existence must be assessed on a case-by-case basis. The assumption that an interlocking confession precludes devastation is rendered untenable by the infinite variability of inculpatory statements and their likely effect on juries. In fact, "interlocking" bears an inverse relationship to devastation, since a codefendant's confession that corroborates the defendant's alleged confession significantly harms the defendant's case, whereas one that is positively incompatible gives credence to the defendant's assertion that his own alleged confession was nonexistent or false. The "interlocking" nature of a codefendant's confession pertains not to its harmfulness but to its reliability, which, although relevant to whether the confession should be admitted as evidence against the defendant, is irrelevant to the questions whether the jury is likely to obey the instruction to disregard it or whether the jury's failure to do so is likely to be inconsequential. Pp. 189-193. 2. Although a codefendant's interlocking confession incriminating the defendant may not be admitted at trial, the defendant's own confession may be considered in assessing whether his codefendant's statements are supported by sufficient "indicia of reliability" to be directly admissible against him (assuming the codefendant's "unavailability") despite the lack of opportunity for cross-examination, and may be considered on appeal in assessing whether any Confrontation Clause violation was harmless. Pp. 193-194. 66 N. Y. 2d 61, 485 N. E. 2d 221, reversed and remanded.SCALIA, J., delivered the opinion of the Court, in which BRENNAN, MARSHALL, BLACKMUN, and STEVENS, JJ., joined. WHITE, J., filed a dissenting opinion, in which REHNQUIST, C. J., and POWELL and O'CONNOR, JJ., joined, post, p. 194.Robert S. Dean argued the cause for petitioner. With him on the briefs was Philip L. Weinstein.Peter D. Coddington argued the cause for respondent. With him on the brief was Mario Merola.Robert H. Klonoff argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Fried, Assistant Attorney General Trott, and Deputy Solicitor General Bryson.JUSTICE SCALIA delivered the opinion of the Court.In Bruton v. United States, , we held that a defendant is deprived of his rights under the Confrontation Clause when his codefendant's incriminating confession is introduced at their joint trial, even if the jury is instructed to consider that confession only against the codefendant. In Parker v. Randolph, , we considered, but were unable authoritatively to resolve, the question whether Bruton applies where the defendant's own confession, corroborating that of his codefendant, is introduced against him. We resolve that question today.IJerry Cruz was murdered on March 15, 1982. That is not the murder for which petitioner was tried and convicted, but the investigation of the one led to the solving of the other. On the day following Jerry Cruz's murder, and on several later occasions, the police talked to Jerry's brother Norberto about the killing. On April 27, Norberto for the first time informed the police of a November 29, 1981, visit by petitioner Eulogio Cruz and his brother Benjamin to the apartment Norberto shared with Jerry. (Eulogio and Benjamin Cruz were longtime friends of Norberto and Jerry Cruz, but the two sets of brothers were not related.) Norberto said that at the time of the visit Eulogio was nervous and was wearing a bloodstained bandage around his arm. According to Norberto, Eulogio confided that he and Benjamin had gone to a Bronx gas station the night before, intending to rob it; that Eulogio and the attendant had struggled; and that, after the attendant had grabbed a gun from behind a counter and shot Eulogio in the arm, Benjamin had killed him. Norberto claimed that Benjamin gave a similar account of the incident.On May 3, 1982, the police questioned Benjamin about the murder of Jerry Cruz. He strongly denied any connection with that homicide and became frustrated when the police seemed unwilling to believe him. Suddenly, to prove that he would tell the truth about killing someone if he were guilty, Benjamin spontaneously confessed to the murder of the gas station attendant. Later that evening, he gave a detailed videotaped confession to an Assistant District Attorney, in which he admitted that he, Eulogio, Jerry Cruz, and a fourth man had robbed the gas station, and that he had killed the attendant after the attendant shot Eulogio. Benjamin and Eulogio were indicated for felony murder of the station attendant.The brothers were tried jointly, over Eulogio's objection. Likewise over Eulogio's objection, the trial judge allowed the prosecutor to introduce Benjamin's videotaped confession, warning the jury that the confession was not to be used against Eulogio. The government also called Norberto, who testified about his November 29 conversation with Eulogio and Benjamin. Finally, the government introduced police testimony, forensic evidence, and photographs of the scene of the murder, all of which corroborated Benjamin's videotaped confession and the statements recounted by Norberto. At the trial's end, however, Norberto's testimony stood as the only evidence admissible against Eulogio that directly linked him to the crime. Eulogio's attorney tried to persuade the jury that Norberto had suspected Eulogio and Benjamin of killing his brother Jerry and had fabricated his testimony to gain revenge. Unconvinced, the jury convicted both defendants.The New York Court of Appeals affirmed Eulogio's conviction, 66 N. Y. 2d 61, 485 N. E. 2d 221 (1985), adopting the reasoning of the plurality opinion in Parker that Bruton did not require the codefendant's confession to be excluded because Eulogio had himself confessed and his confession "interlocked" with Benjamin's. We granted certiorari. .IIThe Confrontation Clause of the Sixth Amendment guarantees the right of a criminal defendant "to be confronted with the witnesses against him." We have held that that guarantee, extended against the States by the Fourteenth Amendment, includes the right to cross-examine witnesses. See Pointer v. Texas, . Where two or more defendants are tried jointly, therefore, the pretrial confession of one of them that implicates the others is not admissible against the others unless the confessing defendant waives his Fifth Amendment rights so as to permit cross-examination.Ordinarily, a witness is considered to be a witness "against" a defendant for purposes of the Confrontation Clause only if his testimony is part of the body of evidence that the jury may consider in assessing his guilt. Therefore, a witness whose testimony is introduced in a joint trial with the limiting instruction that it be used only to assess the guilt of one of the defendants will not be considered to be a witness "against" the other defendants. In Bruton, however, we held that this principle will not be applied to validate, under the Confrontation Clause, introduction of a nontestifying codefendant's confession implicating the defendant, with instructions that the jury should disregard the confession insofar as its consideration of the defendant's guilt is concerned. We said:"[T]here are some contexts in which the risk that the jury will not, or cannot, follow instructions is so great, and the consequences of failure so vital to the defendant, that the practical and human limitations of the jury system cannot be ignored. Such a context is presented here, where the powerfully incriminating extrajudicial statements of a codefendant, who stands accused side-by-side with the defendant, are deliberately spread before the jury in a joint trial. Not only are the incriminations devastating to the defendant but their credibility is inevitably suspect ... ." 391 U.S., at 135-136 (citations omitted). We had occasion to revisit this issue in Parker, which resembled Bruton in all major respects save one: Each of the jointly tried defendants had himself confessed, his own confession was introduced against him, and his confession recited essentially the same facts as those of his nontestifying codefendants. The plurality of four Justices found no Sixth Amendment violation. It understood Bruton to hold that the Confrontation Clause is violated only when introduction of a codefendant's confession is "devastating" to the defendant's case. When the defendant has himself confessed, the plurality reasoned, "[his] case has already been devastated," 442 U.S., at 75, n. 7, so that the codefendant's confession "will seldom, if ever, be of the `devastating' character referred to in Bruton," and impeaching that confession on cross-examination "would likely yield small advantage," id., at 73. Thus, the plurality would have held Bruton inapplicable to cases involving interlocking confessions. The four remaining Justices participating in the case disagreed, subscribing to the view expressed by JUSTICE BLACKMUN that introduction of the defendant's own interlocking confession might, in some cases, render the violation of the Confrontation Clause harmless, but could not cause introduction of the nontestifying codefendant's confession not to constitute a violation. Id., at 77-80 (BLACKMUN, J., concurring in part and concurring in judgment). (JUSTICE BLACKMUN alone went on to find that the interlocking confession did make the error harmless in the case before the Court, thereby producing a majority for affirmance of the convictions. Id., at 80-81.) We face again today the issue on which the Court was evenly divided in Parker.We adopt the approach espoused by JUSTICE BLACKMUN. While "devastating" practical effect was one of the factors that Bruton considered in assessing whether the Confrontation Clause might sometimes require departure from the general rule that jury instructions suffice to exclude improper testimony, 391 U.S., at 136, it did not suggest that the existence of such an effect should be assessed on a case-by-case basis. Rather, that factor was one of the justifications for excepting from the general rule the entire category of codefendant confessions that implicate the defendant in the crime. It is impossible to imagine why there should be excluded from that category, as generally not "devastating," codefendant confessions that "interlock" with the defendant's own confession. "[T]he infinite variability of inculpatory statements (whether made by defendants or codefendants), and of their likely effect on juries, makes [the assumption that an interlocking confession will preclude devastation] untenable." Parker, 442 U.S., at 84 (STEVENS, J., dissenting). In this case, for example, the precise content and even the existence of petitioner's own confession were open to question, since they depended upon acceptance of Norberto's testimony, whereas the incriminating confession of codefendant Benjamin was on videotape.In fact, it seems to us that "interlocking" bears a positively inverse relationship to devastation. A codefendant's confession will be relatively harmless if the incriminating story it tells is different from that which the defendant himself is alleged to have told, but enormously damaging if it confirms, in all essential respects, the defendant's alleged confession. It might be otherwise if the defendant were standing by his confession, in which case it could be said that the codefendant's confession does no more than support the defendant's very own case. But in the real world of criminal litigation, the defendant is seeking to avoid his confession - on the ground that it was not accurately reported, or that it was not really true when made. In the present case, for example, petitioner sought to establish that Norberto had a motive for falsely reporting a confession that never in fact occurred. In such circumstances a codefendant's confession that corroborates the defendant's confession significantly harms the defendant's case, whereas one that is positively incompatible gives credence to the defendant's assertion that his own alleged confession was nonexistent or false. Quite obviously, what the "interlocking" nature of the codefendant's confession pertains to is not its harmfulness but rather its reliability: If it confirms essentially the same facts as the defendant's own confession it is more likely to be true. Its reliability, however, may be relevant to whether the confession should (despite the lack of opportunity for cross-examination) be admitted as evidence against the defendant, see Lee v. Illinois, , but cannot conceivably be relevant to whether, assuming it cannot be admitted, the jury is likely to obey the instruction to disregard it, or the jury's failure to obey is likely to be inconsequential. The law cannot command respect if such an inexplicable exception to a supposed constitutional imperative is adopted. Having decided Bruton, we must face the honest consequences of what it holds.The dissent makes no effort to respond to these points, urging instead a rejection of our "remorseless logic" in favor of "common sense and judgment." See post, at 197. But those qualities, even in their most remorseless form, are not separable. It seems to us illogical, and therefore contrary to common sense and good judgment, to believe that codefendant confessions are less likely to be taken into account by the jury the more they are corroborated by the defendant's own admissions; or that they are less likely to be harmful when they confirm the validity of the defendant's alleged confession. Far from carrying Bruton "to the outer limits of its logic," ibid., our holding here does no more than reaffirm its central proposition. This case is indistinguishable from Bruton with respect to those factors the Court has deemed relevant in this area: the likelihood that the instruction will be disregarded, Bruton, 391 U.S., at 135; the probability that such disregard will have a devastating effect, id., at 136; and the determinability of these facts in advance of trial, Richardson v. Marsh, post, at 208.We hold that, where a nontestifying codefendant's confession incriminating the defendant is not directly admissible against the defendant, see Lee v. Illinois, supra, the Confrontation Clause bars its admission at their joint trial, even if the jury is instructed not to consider it against the defendant, and even if the defendant's own confession is admitted against him. Of course, the defendant's confession may be considered at trial in assessing whether his codefendant's statements are supported by sufficient "indicia of reliability" to be directly admissible against him (assuming the "unavailability" of the codefendant) despite the lack of opportunity for cross-examination, see Lee, supra, at 543-544; Bruton, supra, at 128, n. 3, and may be considered on appeal in assessing whether any Confrontation Clause violation was harmless, see Harrington v. California, .Because the Court of Appeals analyzed petitioner's Confrontation Clause claim under an approach we have now rejected, we reverse and remand for further proceedings not inconsistent with this opinion. So ordered. JUSTICE WHITE, with whom THE CHIEF JUSTICE, JUSTICE POWELL, and JUSTICE O'CONNOR join, dissenting.Bruton v. United States, , involved a joint trial and the admission of a codefendant's confession with instructions to the jury not to consider it against the defendant.1 Concededly, if the jury had followed its instructions there would have been no error, constitutional or otherwise. But the Court held that in "some contexts" - and the Bruton case fell in that category - the chance was "so great" that the jury would not follow its instructions to consider the codefendant's confession only against him, and the failure to follow such instructions would be so "devastating" to the defendant's case, that it would be constitutional error to admit the confession even against the codefendant. Id., at 135-136. The introduction of the codefendant's confession "posed a substantial threat to petitioner's right to confront the witnesses against him," a threat the Court said it could not ignore. Id., at 137.In Bruton, the defendant himself had not confessed. Here, it is otherwise: defendant Cruz had confessed and his confession was properly before the jury. Yet the Court's holding is that the codefendant's confession was inadmissible even if it completely "interlocked" with that of Cruz himself, that is, was substantially the same as and consistent with Cruz's confession with respect to all elements of the crime and did not threaten to incriminate Cruz any more than his own confession.This makes little sense to me. "[T]he defendant's own confession is probably the most probative and damaging evidence that can be admitted against him. Though itself an out-of-court statement, it is admitted as reliable evidence because it is an admission of guilt by the defendant and constitutes direct evidence of the facts to which it relates. Even the testimony of an eyewitness may be less reliable than the defendant's own confession. An observer may not correctly perceive, understand, or remember the acts of another, but the admissions of a defendant come from the actor himself, the most knowledgeable and unimpeachable source of information about his past conduct." Id., at 139-140 (WHITE, J., dissenting). Confessions of defendants have profound impact on juries, so much that we held in Jackson v. Denno, , that there is justifiable doubt that juries will disregard them even if told to do so. But a codefendant's out-of-court statements implicating the defendant are not only hearsay but also have traditionally been viewed with special suspicion. Bruton, supra, at 136; Holmgren v. United States, ; Crawford v. United States, . And the jury may be so informed. Bruton held that where the defendant has not himself confessed, there is too great a chance that the jury would rely on the codefendant's confession. But here, Cruz had admitted the crime and this fact was before the jury. I disagree with the Court's proposition that in every interlocking confession case, the jury, with the defendant's confession properly before it, would be tempted to disobey its instructions and fail to understand that presumptively unreliable evidence must not be used against the defendant. Nor is it remotely possible that in every case the admission of an interlocking confession by a codefendant will have the devastating effect referred to in Bruton.2 The Court finds it "impossible to imagine" why the defendant's interlocking confession could ever make the Bruton rule inapplicable; any such conclusion would be "illogical." Ante, at 191, 193. But many Court of Appeals Judges - as many as embrace the Court's harmless-error rule - are not so unimaginative; they see nothing illogical, in interlocking confession cases, in adhering to the traditional presumption that juries follow their instructions.3 Of course, the decision here is not a matter of imagination or logic, but one of common sense and judgment in interpreting the Constitution. Bruton disallowed the codefendant's confession into evidence, even with an instruction to disregard it as evidence against Bruton, because it posed a "substantial threat" to his Confrontation Clause rights. It does not defy logic to find that in other circumstances, such as where the defendant's own confession interlocks with his codefendant's, the threat is not of such magnitude. Even where remorseless logic may seem to justify the extension of what otherwise might be a sound constitutional rule, common sense should prevail. Otherwise, especially in applying prophylactic rules, we may trivialize the principles of prior cases by applying them to situations that in general do not really pose the dangers that the rules were intended to obviate.The Court states that "[W]e must face the honest consequences" of the Bruton decision. Ante, at 193. But Richardson v. Marsh, post, p. 200, decided today, recognizes that Bruton cannot be followed to the outer limits of its logic without serious disruption of the State's ability to conduct joint trials. In Richardson, the Court of Appeals held inadmissible a codefendant's confession even though it had been redacted to eliminate any references to the defendant, the fear being that the jury, if it disobeyed its instructions, could have drawn unfavorable inferences from the challenged confession when considered together with other evidence. Marsh v. Richardson, 781 F.2d 1201 (CA6 1986). We reversed the Court of Appeals despite this possibility, thus rejecting the Bruton claim, post, at 211, as we should do in this case.That the error the Court finds may be harmless and the conviction saved will not comfort prosecutors and judges. I doubt that the former will seek joint trials in interlocking confession cases, and if that occurs, the judge is not likely to commit error by admitting the codefendant's confession. Of course, defendants may be tried separately and Bruton problems avoided. But joint trials "conserve state funds, diminish inconvenience to witnesses and public authorities, and avoid delays in bringing those accused of crime to trial," Bruton, 391 U.S., at 134, to say nothing of the possibility of inconsistent verdicts and the effect of severance on already overburdened state and federal court systems. See also Richardson v. Marsh, post, at 209-210.I thus adhere to the views expressed by the plurality in Parker v. Randolph, . There was no constitutional error here that Bruton sought to avoid, and no occasion to inquire into harmless error. In announcing its prophylactic rule, Bruton did not address the situation where the defendant himself had confessed, and I would not extend its holding to cases where the jury has heard the defendant's own confession.Lee v. Illinois, , and Ohio v. Roberts, , suggest that a codefendant's interlocking confession will often be admissible against the defendant, in which event there would not be the Confrontation Clause issue Bruton identified.4 Here, the codefendant's confession carries numerous indicia of reliability; and I gather that the Court's disposition does not deny the state courts, on remand, the opportunity to deal with the admissibility of that confession against Cruz. |
0 | Petitioner was convicted of burglary by a Louisiana court and his conviction was affirmed by the highest state court. Thereafter, in Mapp v. Ohio, , this Court held that evidence illegally seized is inadmissible in a state criminal trial, and petitioner applied for a writ of habeas corpus. The writ was denied by the federal District Court and by the Court of Appeals, which found the searches of petitioner's person and property illegal but held that the Mapp exclusionary rule was not retrospective. Held: The exclusionary rule announced in Mapp does not apply to state court convictions which had become final before its rendition. Pp. 622-640. (a) The effect of a subsequent ruling of invalidity on prior final judgments when collaterally attacked is not automatic retroactive invalidity but depends upon a consideration of particular relations and conduct, or rights claimed to have become vested, of status, of prior determinations deemed to have finality, and of public policy in the light of the nature of the statute and its previous application. Chicot Drainage Dist. v. Baxter State Bank, . P. 627. (b) No distinction is drawn between civil and criminal litigation. P. 627. (c) The Constitution neither prohibits nor requires retroactive effect and in each case the Court determines whether retroactive or prospective application is appropriate. This approach is particularly correct with reference to the unreasonable search and seizure proscription of the Fourth Amendment. P. 629. (d) The primary purpose of Mapp v. Ohio was the enforcement of the Fourth Amendment through the inclusion of the exclusionary rule within its rights, and this purpose would not be advanced by making the rule retroactive. Pp. 636-637. (e) Other areas in which rules have been applied retrospectively concerned the fairness of the trial, which is not under attack here. P. 639. (f) The date of the seizure in Mapp (which preceded that here) is of no legal significance; the crucial date is the date of the Mapp judgment which changed the rule. P. 639. 323 F.2d 11, affirmed.Euel A. Screws, Jr., argued the cause for petitioner. With him on the brief was Truman Hobbs.Teddy W. Airhart, Jr., Assistant Attorney General of Louisiana, argued the cause for respondent. With him on the brief was Jack P. F. Gremillion, Attorney General.H. Richard Uviller argued the cause for the National District Attorneys' Association, as amicus curiae, urging affirmance. With him on the brief was Michael Juviler. Louis J. Lefkowitz, Attorney General of New York, Samuel A. Hirshowitz, First Assistant Attorney General, Barry Mahoney and Thomas F. O'Hare, Jr., Assistant Attorneys General, H. Richard Uviller and Michael Juviler filed a supplementary memorandum on behalf of the National District Attorneys' Association, as amicus curiae.MR. JUSTICE CLARK delivered the opinion of the Court.In Mapp v. Ohio, , we held that the exclusion of evidence seized in violation of the search and seizure provisions of the Fourth Amendment was required of the States by the Due Process Clause of the Fourteenth Amendment. In so doing we overruled Wolf v. Colorado, , to the extent that it failed to apply the exclusionary rule to the States.1 This case presents the question of whether this requirement operates retrospectively upon cases finally decided in the period prior to Mapp. The Court of Appeals for the Fifth Circuit held that it did not, 323 F.2d 11, and we granted certiorari in order to settle what has become a most troublesome question in the administration of justice.2 . We agree with the Court of Appeals. The petitioner was convicted in a Louisiana District Court on May 28, 1959, of "simple burglary." At the time of his arrest he had been under surveillance for two days as a suspect in connection with another burglary. He was taken to the police station, searched, and keys were taken from his person. After he was booked and placed in jail, other officers took his keys, entered and searched his home, and seized certain property and papers. Later his place of business was entered and searched and seizures were effected. These intrusions were made without a warrant. The State District Court held that the arresting officers had reasonable cause for the arrest under Louisiana law and finding probable cause to search as an incident to arrest it held the seizures valid. The Supreme Court of Louisiana affirmed in February 1960.On June 19, 1961, Mapp was announced. Immediately thereafter petitioner filed an application for habeas corpus in the state court on the basis of Mapp. The writ being denied in the Louisiana courts, he then filed a like application in the United States District Court. After denial there he appealed and the Court of Appeals affirmed. It found the searches too remote from the arrest and therefore illegal but held that the constitutional requirement of exclusion of the evidence under Mapp was not retrospective. Petitioner has two points: (1) that the Court of Appeals erred in holding that Mapp was not retrospective; and (2) that even though Mapp be held not to operate retrospectively, the search in his case was subsequent to that in Mapp, and while his final conviction was long prior to our disposition of it, his case should nevertheless be governed by Mapp.Initially we must consider the term "retrospective" for the purposes of our opinion. A ruling which is purely prospective does not apply even to the parties before the court.3 See, e. g., England v. Louisiana State Board of Medical Examiners, . See also Great Northern R. Co. v. Sunburst Oil & Refining Co., . However, we are not here concerned with pure prospectively since we applied the rule announced in Mapp to reverse Miss Mapp's conviction. That decision has also been applied to cases still pending on direct review at the time it was rendered.4 Therefore, in this case, we are concerned only with whether the exclusionary principle enunciated in Mapp applies to state court convictions which had become final5 before rendition of our opinion.I.While to some it may seem "academic" it might be helpful to others for us to briefly outline the history and theory of the problem presented.At common law there was no authority for the proposition that judicial decisions made law only for the future.6 Blackstone stated the rule that the duty of the court was not to "pronounce a new law, but to maintain and expound the old one." 1 Blackstone, Commentaries 69 (15th ed. 1809).7 This Court followed that rule in Norton v. Shelby County, ,8 holding that unconstitutional action "confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed." At 442. The judge rather than being the creator of the law was but its discoverer. Gray, Nature and Sources of the Law 222 (1st ed. 1909). In the case of the overruled decision, Wolf v. Colorado, supra, here, it was thought to be only a failure at true discovery and was consequently never the law; while the overruling one. Mapp, was not "new law but an application of what is, and therefore had been, the true law." Shulman, Retroactive Legislation, 13 Encyclopedia of the Social Sciences 355, 356 (1934).On the other hand, Austin maintained that judges do in fact do something more than discover law: they make it interstitially by filling in with judicial interpretation the vague, indefinite, or generic statutory or common-law terms that alone are but the empty crevices of the law. Implicit in such an approach is the admission when a case is overruled that the earlier decision was wrongly decided. However, rather than being erased by the later overruling decision it is considered as an existing juridical fact until overruled, and intermediate cases finally decided under it are not to be disturbed.The Blackstonian view ruled English jurisprudence and cast its shadow over our own as evidenced by Norton v. Shelby County, supra. However, some legal philosophers continued to insist that such a rule was out of tune with actuality largely because judicial repeal of time did "work hardship to those who [had] trusted to its existence." Cardozo, Address to the N. Y. Bar Assn., 55 Rep. N. Y. State Bar Assn. 263, 296-297 (1932). The Austinian view gained some acceptance over a hundred years ago when it was decided that although legislative divorces were illegal and void, those previously granted were immunized by a prospective application of the rule of the case. Bingham v. Miller, 17 Ohio 445 (1848). And as early as 1863 this Court drew on the same concept in Gelpcke v. Dubuque, 1 Wall. 175 (1863). The Supreme Court of Iowa had repeatedly held that the Iowa Legislature had the power to authorize municipalities to issue bonds to aid in the construction of railroads. After the City of Dubuque had issued such bonds, the Iowa Supreme Court reversed itself and held that the legislature lacked such power. In Gelpcke, which arose after the overruling decision, this Court held that the bonds issued under the apparent authority granted by the legislature were collectible. "However we may regard the late [overruling] case in Iowa as affecting the future, it can have no effect upon the past." At 206. The theory was, as Mr. Justice Holmes stated in Kuhn v. Fairmont Coal Co., , 371 (1910), "that a change of judicial decision after a contract has been made on the faith of an earlier one the other way is a change of the law." And in 1932 Mr. Justice Cardozo in Great Northern R. Co. v. Sunburst Oil & Refining Co., , applied the Austinian approach in denying a federal constitutional due process attack on the prospective application of a decision of the Montana Supreme Court. He said that a State "may make a choice for itself between the principle of forward operation and that of relation backward." At 364. Mr. Justice Cardozo based the rule on the avoidance of "injustice or hardship" citing a long list of state and federal cases supporting the principle that the courts had the power to say that decisions though later overruled "are law none the less for intermediate transactions." At 364. Eight years later Chief Justice Hughes in Chicot County Drainage Dist. v. Baxter State Bank, , in discussing the problem made it clear that the board statements of Norton, supra, "must be taken with qualifications." He reasoned that the actual existence of the law prior to the determination of unconstitutionality "is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration." He laid down the rule that the "effect of the subsequent ruling as to invalidity may have to be considered in various aspects." At 374.One form of limited retraction which differs somewhat from the type discussed above is that which was established in United States v. Schooner Peggy, 1 Cranch 103 (1801). There, a schooner had been seized under an order of the President which commanded that any armed French vessel found on the high seas be captured. An order of condemnation was entered on September 23, 1800. However, while the case was pending before this Court the United States signed an agreement with France providing that any property captured and not "definitively condemned" should be restored. Chief Justice Marshall said: "It is in the general true that the province of an appellate court is only to enquire whether a judgment when rendered was erroneous or not. But if subsequent to the judgment and before the decision of the appellate court, a law intervenes and positively changes the rule which governs, the law must be obeyed, or its obligation denied ... [and] where individual rights ... are sacrificed for national purposes ... the court must decide according to existing laws, and if it be necessary to set aside a judgment ... which cannot be affirmed but in violation of law, the judgment must be set aside." At 110. This same approach was subsequently applied in instances where a statutory change intervened, Carpenter v. Wabash R. Co., ; where a constitutional amendment was adopted, United States v. Chambers, ;9 and where judicial decision altered or overruled earlier case law, Vandenbark v. Owens-Illinois Glass Co., .10 Under our cases it appears (1) that a change in law will be given effect while a case is on direct review, Schooner Peggy, supra,11 and (2) that the effect of the subsequent ruling of invalidity on prior final judgments when collaterally attacked is subject to no set "principle of absolute retroactive invalidity" but depends upon a consideration of "particular relations ... and particular conduct ... of rights claimed to have become vested, of status, of prior determinations deemed to have finality"; and "of public policy in the light of the nature both of the statute and of its previous application." Chicot County Drainage Dist. v. Baxter State Bank, supra, at 374.That no distinction was drawn between civil and criminal litigation is shown by the language used not only in Schooner Peggy, supra, and Chicot County, supra, but also in such cases as State v. Jones, 44 N. M. 623, 107 P.2d 324 (1940) and James v. United States, . In the latter case, this Court laid down a prospective principle in overruling Commissioner v. Wilcox, , "in a manner that will not prejudice those who might have relied on it."12 At 221. Thus, the accepted rule today is that in appropriate cases the Court may in the interest of justice make the rule prospective. And "there is much to be said in favor of such a rule for cases arising in the future." Mosser v. Darrow, , at 276 (dissenting opinion of BLACK, J.).While the cases discussed above deal with the invalidity of statutes or the effect of a decision overturning long-established common-law rules, there seems to be no impediment - constitutional or philosophical - to the use of the same rule in the constitutional area where the exigencies of the situation require such an application. It is true that heretofore, without discussion, we have applied new constitutional rules to cases finalized before the promulgation of the rule.13 Petitioner contends that our method of resolving those prior cases demonstrates that an absolute rule of retroaction prevails in the area of constitutional adjudication. However, we believe that the Constitution neither prohibits nor requires retrospective effect. As Justice Cardozo said, "We think the federal constitution has no voice upon the subject."14 Once the premise is accepted that we are neither required to apply, nor prohibited from applying, a decision retrospectively, we must then weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation. We believe that this approach is particularly correct with reference to the Fourth Amendment's prohibitions as to unreasonable searches and seizures. Rather than "disparaging" the Amendment we but apply the wisdom of Justice Holmes that "[t]he life of the law has not been logic: it has been experience." Holmes, The Common Law 5 (Howe ed. 1963).15 II.Since Weeks v. United States, , this Court has adhered to the rule that evidence seized by federal officers in violation of the Fourth Amendment is not admissible at trial in a federal court. In 1949 in Wolf v. Colorado, supra, the Court decided that while the right to privacy - "the core of the Fourth Amendment" - was such a basic right as to be implicit in "the concept of ordered liberty" and thus enforceable against the States through the Fourteenth Amendment, "the ways of enforcing such a basic right raise questions of a different order. How such arbitrary conduct should be checked, what remedies against it should be afforded, the means by which the right should be made effective, are all questions that are not to be so dogmatically answered as to preclude the varying solutions which spring from an allowable range of judgment on issues not susceptible of quantitative solution." At 27-28.The Court went on to say that the federal exclusionary rule was not "derived from the explicit requirements of the Fourth Amendment ... . The decision was a matter of judicial implication." At 28. Since "we find that in fact most of the English-speaking world does not regard as vital to such protection the exclusion of evidence thus obtained, we must hesitate to treat this remedy as an essential ingredient of the right."16 At 29. While granting that "in practice" the exclusion of evidence might be "an effective way of deterring unreasonable searches," the Court concluded that it could not "condemn as falling below the minimal standards assured by the Due Process Clause a State's reliance upon other methods which, if consistently enforced, would be equally effective." At 31. The continuance of the federal exclusionary rule was excused on the ground that the reasons for it were more "compelling" since public opinion in the community could be exerted against oppressive conduct by local police far more effectively than it could throughout the country.The "asymmetry which Wolf imported into the law," Mapp v. Ohio, supra, at 670 (concurring opinion of DOUGLAS, J.), was indicated by a decision announced on the same day, Lustig v. United States, , holding that evidence given to federal authorities "on a silver platter" by state officers was not excludable in federal trials. At 79. Wolf's holding, in conjunction with the "silver platter" doctrine of Lustig, provided wide avenues of abuse in the Weeks' exclusionary rule in the federal courts. Evidence seized in violation of the Fourth Amendment by state officers was turned over to federal officers and admitted in evidence in prosecutions in the federal courts. In 1951 Wolf was strengthened by Stefanelli v. Minard, , in which the Court refused to permit a federal court to enjoin the use of evidence in a state criminal proceeding that had been illegally seized by state officers. In 1952, however, the Court could not tolerate the procedure involved in Rochin v. California, , where morphine capsules pumped from the accused's stomach by state officers were admitted in evidence in a state court. It struck down the conviction on due process grounds under the Fourteenth Amendment because the action was shocking to the conscience. In 1954 came Irvine v. California, , in which the State admitted evidence procured via a microphone secreted clandestinely by state police in the accused's bedroom. These "incredible" circumstances did not sufficiently shock the conscience of the Court into applying the Rochin test. Instead the case went off on the doctrine of Wolf. Mr. Justice Jackson in announcing the judgment of the Court overruled those who urged that Wolf "applies only to searches and seizures which produce on our minds a mild shock, while if the shock is more serious, the states must exclude the evidence or we will reverse the conviction." At 133-134. He strongly reaffirmed Wolf stating:"Now that the Wolf doctrine is known to them, state courts may wish further to reconsider their evidentiary rules. But to upset state convictions even before the states have had adequate opportunity to adopt or reject the rule would be an unwarranted use of federal power." At 134. The opinion in dealing with the operation of the exclusionary rule said that it "must be remembered that petitioner is not invoking the Constitution to prevent or punish a violation of his federal right recognized in Wolf ... . He is invoking it only to set aside his own conviction of crime... . Rejection of the evidence does nothing to punish the wrong-doing official, while it may, and likely will, release the wrong-doing defendant ... . [It] does nothing to protect innocent persons who are the victims of illegal but fruitless searches." At 136. Admitting the futility of other remedies available to the victims of illegal searches, Mr. Justice Jackson and the then Chief Justice suggested that the "Clerk of this Court should be directed to forward a copy of the record in this case, together with a copy of this opinion, for attention of the Attorney General of the United States" with a view to prosecution under the Civil Rights Act, 62 Stat. 696, 18 U.S.C. 242 (1958 ed.). In concurring in the judgment in Irvine the writer of this opinion indicated his displeasure with Wolf but observed that since the Court "still refuses today" to overrule it he felt bound by Wolf but had hopes that "strict adherence to the tenor of that decision may produce needed converts for its extinction." At 138-139. The Court continued to broaden the rule of exclusion when, in 1956, it held that a federal agent might be enjoined from transferring to state authorities evidence that he had seized on an illegal federal warrant, or testifying with regard to it in a state prosecution. Rea v. United States, . In 1960 the Court's dissatisfaction with the "silver platter" doctrine, Lustig v. United States, supra, led to its rejection in the leading case of Elkins v. United States, . The factual situation being the converse of Rea v. United States, supra, the Court tightened the noose of exclusion in order to strangle completely the use in the federal courts of evidence illegally seized by state agents. It was in Elkins that the Court emphasized that the exclusionary rule was "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."17 At 217.Mapp was announced in 1961. The Court in considering "the current validity of the factual grounds upon which Wolf was based" pointed out that prior to Wolf "almost two-thirds of the States were opposed to the use of the exclusionary rule, now, despite the Wolf case, more than half of those since passing upon it ... have wholly or partly adopted or adhered to the Weeks rule." At 651. We then cited California as typical of those adopting the rule since Wolf. It was "`compelled to reach that conclusion.'" we said, quoting California's highest court, "`because other remedies have completely failed to secure compliance with the constitutional provisions ... .' People v. Cahan, 44 Cal. 2d 434 ... " We went on to find that "[t]he experience of California that such other remedies have been worthless and futile is buttressed by the experience of other States. The obvious futility of relegating the Fourth Amendment to the protection of other remedies has, moreover, been recognized by this Court since Wolf. See Irvine v. California ... ." At 652-653. In discussing People v. Defore, 242 N. Y. 13, 150 N. E. 585, upon which Wolf heavily relied, we concluded that "Likewise, time has set its face against what Wolf called the `weighty testimony' of People v. Defore ... `that [t]he Federal rule as it stands is either too strict or too lax.' 242 N. Y., at 22." At 653. We concluded that "the force of that reasoning has been largely vitiated by later decisions of this Court," at 653. which had closed all of the courtroom doors "open to evidence secured by official lawlessness ..." save that of the state courts. At 655. That door was closed by Mapp.In recapitulation, we found in Mapp that Wolf rested on these grounds. First, that the "contrariety of views of the States" as to the use of the exclusionary rule was "particularly impressive." Second, "`other means of protection' [of Fourth Amendment rights] ha[d] been afforded" than the exclusionary rule. And, third, the "weighty testimony" of People v. Defore, supra. As to the first, we found the lineup of the States as to the exclusionary rule had shifted to where a majority favored it; as to the second, that the other means of protection had proven to be "worthless and futile" and had not reduced the incidence of police lawlessness during the 12 years since Wolf was announced but that Wolf had operated as a license for police illegality; and, as to the third, that our cases subsequent to Mapp had completely closed the laxity in the federal exclusionary rule complained of in People v. Defore, supra. We also affirmatively found that the exclusionary rule was "an essential part of both the Fourth and Fourteenth Amendments" and the only effective remedy for the protection of rights under the Fourth Amendment; that it would stop the needless "shopping around" that was causing conflict between federal and state courts, as was permitted in Wilson v. Schnettler, ; that it would withdraw the invitation which Wolf extended to federal officers to step across the street to the state's attorney with their illegal evidence, thus eliminating a practice which tended to destroy the entire system of constitutional restraints on which the liberties of the people rest; that it would promote state-federal cooperation in law enforcement by rejecting the double standard of admissibility of illegal evidence which tends to breed suspicion among the officers, encourages disobedience to the Constitution on the part of all the participants and violates "the imperative of judicial integrity." Mapp v. Ohio, supra, at 657-660. In short, just as other cases had found the exclusionary rule to be a deterrent safeguard necessary to the enforcement of the Amendment, Silverthorne Lumber Co. v. United States, , Mapp bottomed its rule on its necessity as a "sanction upon which [the Fourth Amendment's] protection and enjoyment had always been deemed dependent under the Boyd, Weeks and Silverthorne cases." At 655. Mapp's rationale was that since Wolf we had on an ad hoc basis been led to exclude all evidence in both state and federal courts where a federal agent had participated in the illegal search. Only a few States had made any changes in their rule of admissibility since Wolf and many of those not following the federal exclusionary rule were, in effect, using Wolf as a license to violate the Fourth Amendment's proscription of unreasonable searches and seizures as applied to the States by the Wolf case itself. As we noted in Mapp "further delay in [applying the exclusionary rule to the States] could have no effect other than to compound the difficulties"; a definitive continuance of Wolf might have increased the number of cases involving illegal searches in non-exclusionary States and also enticed those in the exclusionary column to reverse their position, as some States had done prior to Mapp. III.We believe that the existence of the Wolf doctrine prior to Mapp is "an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration." Chicot County Drainage Dist. v. Baxter State Bank, supra, at 374. The thousands of cases that were finally decided on Wolf cannot be obliterated. The "particular conduct, private and official," must be considered. Here "prior determinations deemed to have finality and acted upon accordingly" have "become vested." And finally, "public policy in the light of the nature both of the ... [Wolf doctrine] and of its previous application" must be given its proper weight. Ibid. In short, we must look to the purpose of the Mapp rule; the reliance placed upon the Wolf doctrine; and the effect on the administration of justice of a retrospective application of Mapp.It is clear that the Wolf Court, once it had found the Fourth Amendment's unreasonable Search and Seizure Clause applicable to the States through the Due Process Clause of the Fourteenth Amendment, turned its attention to whether the exclusionary rule was included within the command of the Fourth Amendment. This was decided in the negative. It is clear that based upon the factual considerations heretofore discussed the Wolf Court then concluded that it was not necessary to the enforcement of the Fourth Amendment for the exclusionary rule to be extended to the States as a requirement of due process. Mapp had as its prime purpose the enforcement of the Fourth Amendment through the inclusion of the exclusionary rule within its rights. This, it was found, was the only effective deterrent to lawless police action. Indeed, all of the cases since Wolf requiring the exclusion of illegal evidence have been based on the necessity for an effective deterrent to illegal police action. See, e. g., Rea v. United States, supra. We cannot say that this purpose would be advanced by making the rule retrospective. The misconduct of the police prior to Mapp has already occurred and will not be corrected by releasing the prisoners involved. Nor would it add harmony to the delicate state-federal relationship of which we have spoken as part and parcel of the purpose of Mapp. Finally, the ruptured privacy of the victims' homes and effects cannot be restored. Reparation comes too late.It is true that both the accused and the States relied upon Wolf. Indeed, Wolf and Irvine each pointed the way for the victims of illegal searches to seek reparation for the violation of their privacy. Some pursued the same. See Monroe v. Pape, . In addition, in Irvine, a flag in a concurring opinion warned that Wolf was in stormy weather. On the other hand, the States relied on Wolf and followed its command. Final judgments of conviction were entered prior to Mapp. Again and again this Court refused to reconsider Wolf and gave its implicit approval to hundreds of cases in their application of its rule. In rejecting the Wolf doctrine as to the exclusionary rule the purpose was to deter the lawless action of the police and to effectively enforce the Fourth Amendment. That purpose will not at this late date be served by the wholesale release of the guilty victims.Finally, there are interests in the administration of justice and the integrity of the judicial process to consider. To make the rule of Mapp retrospective would tax the administration of justice to the utmost. Hearings would have to be held on the excludability of evidence long since destroyed, misplaced or deteriorated. If it is excluded, the witnesses available at the time of the original trial will not be available or if located their memory will be dimmed. To thus legitimate such an extraordinary procedural weapon that has no bearing on guilt would seriously disrupt the administration of justice.It is urged, however, that these same considerations apply in the cases that we have applied retrospectively in other areas,18 notably that of coerced confessions, and that the Mapp exclusionary rule should, therefore, be given the same dignity and effect. Two cases are cited, Fay v. Noia, , and Reck v. Pate, , but neither is apposite. It is said that we ordered new trials 25 years after conviction in the latter and after the lapse of 21 years in the former. This time table is true but that is all. The principle that a coerced confession is not admissible in a trial predated the arrests as well as the original convictions in each of these cases. See Brown v. Mississippi, . There was no question of retrospective operation involved in either case. Moreover, coerced confessions are excluded from evidence because of "a complex of values," Blackburn v. Alabama, , including "the likelihood that the confession is untrue"; "the preservation of the individual's freedom of will"; and "`[t]he abhorrence of society to the use of involuntary confessions.'" At 207. Cited with approval in Jackson v. Denno, . But there is no likelihood of unreliability or coercion present in a search-and-seizure case. Rather than being abhorrent at the time of seizure in this case, the use in state trials of illegally seized evidence had been specifically authorized by this Court in Wolf.19 Furthermore, in Noia, the confession was admittedly coerced and the sole issue involved the availability of federal habeas corpus in a state conviction, where state post-conviction remedies had been exhausted but the accused had failed to appeal from his original conviction. Nothing of that kind is involved here and this holding has no bearing whatever on Noia or Reck, for that matter. Finally, in each of the three areas in which we have applied our rule retrospectively20 the principle that we applied went to the fairness of the trial - the very integrity of the fact-finding process. Here, as we have pointed out, the fairness of the trial is not under attack. All that petitioner attacks is the admissibility of evidence, the reliability and relevancy of which is not questioned, and which may well have had no effect on the outcome.Nor can we accept the contention of petitioner that the Mapp rule should date from the day of the seizure there, rather than that of the judgment of this Court. The date of the seizure in Mapp has no legal significance. It was the judgment of this Court that changed the rule and the date of that opinion is the crucial date. In the light of the cases of this Court this is the better cutoff time. See United States v. Schooner Peggy, supra.All that we decide today is that though the error complained of might be fundamental it is not of the nature requiring us to overturn all final convictions based upon it. After full consideration of all the factors we are not able to say that the Mapp rule requires retrospective application. Affirmed. |
1 | Appellant, assertedly the illegitimate son of Mario Lalli, who died intestate in New York, filed a petition for a compulsory accounting from appellee administratrix of the estate, claiming that he was entitled to inherit from Mario as his child. Appellee opposed the petition, arguing that even if appellant were Mario's child, he was not a lawful distributee of the estate because he had failed to comply with a New York statutory provision ( 4-1.2) that in pertinent part allows an illegitimate child to inherit from his intestate father only if a court of competent jurisdiction has, during the father's lifetime, entered an order declaring paternity. Appellant contended that his failure to obtain such an order during Mario's lifetime could not bar his inheritance because 4-1.2 discriminated against him on the basis of his illegitimate birth in violation of the Equal Protection Clause of the Fourteenth Amendment. Appellant tendered evidence that he was Mario's child. The Surrogate's Court ruled that appellant was properly excluded as a distributee under 4-1.2. The New York Court of Appeals affirmed and upheld the constitutionality of the statute. Held: The judgment is affirmed. Pp. 264-276; 276; 276-277. 43 N. Y. 2d 65, 371 N. E. 2d 481, affirmed. MR. JUSTICE POWELL, joined by THE CHIEF JUSTICE and MR. JUSTICE STEWART, concluded that 4-1.2 does not violate the Equal Protection Clause of the Fourteenth Amendment. Trimble v. Gordon, , distinguished. Pp. 264-276. (a) While classifications based on illegitimacy are not subject to "strict scrutiny," they are invalid under the Fourteenth Amendment if they are not substantially related to permissible state interests, Mathews v. Lucas, ; Trimble v. Gordon, supra, at 767. P. 265. (b) The Illinois statute invalidated in Trimble (which, in addition to requiring the father's acknowledgment of paternity, required the legitimation of the child through intermarriage of the parents as a precondition to inheritance) eliminated "the possibility of a middle ground between the extremes of complete exclusion [of illegitimates claiming under their fathers' estates] and case-by-case determination of paternity." But the single requirement at issue under 4-1.2 is an evidentiary one; the marital status of the parents is irrelevant. Pp. 266-267. (c) The primary goal underlying the challenged aspects of 4-1.2 is to provide for the just and orderly disposition of a decedent's property where paternal inheritance by illegitimate children is concerned, an area involving unique and difficult problems of proof. Pp. 268-271. (d) Section 4-1.2 represents a carefully considered legislative judgment on how best to "grant to illegitimates in so far as practicable rights of inheritance on a par with those enjoyed by legitimate children," while protecting the important state interest in the just and orderly disposition of decedents' estates. Accuracy is enhanced by placing paternity disputes in a judicial forum during the lifetime of the father, which (in addition to permitting a man to defend his reputation against unjust paternity claims) helps to forestall fraudulent assertions of paternity. Estate administration is facilitated, and delay and uncertainty minimized, where the entitlement of an illegitimate child is a matter of judicial record before administration commences. While there may be some instances where 4-1.2, as is often the case with statutory classifications, will produce inequitable results, the reach of the statute, unlike that involved in Trimble, does not exceed justifiable state objectives. Pp. 271-274. MR. JUSTICE BLACKMUN would affirm the judgment below on the basis of Labine v. Vincent, , and rather than distinguishing Trimble, supra, would overrule that decision. Pp. 276-277. MR. JUSTICE REHNQUIST concurred in the judgment for the reasons stated in his dissent in Trimble, supra, at 777. P. 276. POWELL, J., announced the judgment of the Court and delivered an opinion, in which BURGER, C. J., and STEWART, J., joined. STEWART, J., filed a concurring opinion, post, p. 276. BLACKMUN, J., filed an opinion concurring in the judgment, post, p. 276. REHNQUIST, J., filed a statement concurring in the judgment, post, p. 276. BRENNAN, J., filed a dissenting opinion, in which WHITE, MARSHALL, and STEVENS, JJ., joined, post, p. 277.Leonard M. Henkin argued the cause for appellant. With him on the brief was Morris R. Henkin.Irwin M. Strum, Assistant Attorney General of New York, argued the cause for appellee Lefkowitz. With him on the brief were Louis J. Lefkowitz, Attorney General, pro se, Samuel A. Hirshowitz, First Assistant Attorney General, and Neil S. Solon and Suzanne McGrattan, Assistant Attorneys General.* [Footnote *] John E. Kirklin, Kalman Finkel, and Jane Greengold Stevens filed a brief for the Legal Aid Society of New York City et al. as amici curiae urging reversal. MR. JUSTICE POWELL announced the judgment of the Court and delivered an opinion, in which THE CHIEF JUSTICE and MR. JUSTICE STEWART join.This case presents a challenge to the constitutionality of 4-1.2 of New York's Estates, Powers, and Trusts Law,1 which requires illegitimate children who would inherit from their fathers by intestate succession to provide a particular form of proof of paternity. Legitimate children are not subject to the same requirement.IAppellant Robert Lalli claims to be the illegitimate son of Mario Lalli who died intestate on January 7, 1973, in the State of New York. Appellant's mother, who died in 1968, never was married to Mario. After Mario's widow, Rosamond Lalli, was appointed administratrix of her husband's estate, appellant petitioned the Surrogate's Court for Westchester County for a compulsory accounting, claiming that he and his sister Maureen Lalli were entitled to inherit from Mario as his children. Rosamond Lalli opposed the petition. She argued that even if Robert and Maureen were Mario's children, they were not lawful distributees of the estate because they had failed to comply with 4-1.2,2 which provides in part: "An illegitimate child is the legitimate child of his father so that he and his issue inherit from his father if a court of competent jurisdiction has, during the lifetime of the father, made an order of filiation declaring paternity in a proceeding instituted during the pregnancy of the mother or within two years from the birth of the child." Appellant conceded that he had not obtained an order of filiation during his putative father's lifetime. He contended, however, that 4-1.2, by imposing this requirement, discriminated against him on the basis of his illegitimate birth in violation of the Equal Protection Clause of the Fourteenth Amendment.3 Appellant tendered certain evidence of his relationship with Mario Lalli, including a notarized document in which Lalli, in consenting to appellant's marriage, referred to him as "my son," and several affidavits by persons who stated that Lalli had acknowledged openly and often that Robert and Maureen were his children.The Surrogate's Court noted that 4-1.2 had previously, and unsuccessfully, been attacked under the Equal Protection Clause. After reviewing recent decisions of this Court concerning discrimination against illegitimate children, particularly Labine v. Vincent, , and three New York decisions affirming the constitutionality of the statute, In re Belton, 70 Misc. 2d 814, 335 N. Y. S. 2d 177 (Surr. Ct. 1972); In re Hendrix, 68 Misc. 2d 439, 444, 326 N. Y. S. 2d 646, 652 (Surr. Ct. 1971); In re Crawford, 64 Misc. 2d 758, 762-763, 315 N. Y. S. 2d 890, 895 (Surr. Ct. 1970), the court ruled that appellant was properly excluded as a distributee of Lalli's estate and therefore lacked status to petition for a compulsory accounting.On direct appeal the New York Court of Appeals affirmed. In re Lalli, 38 N. Y. 2d 77, 340 N. E. 2d 721 (1975). It understood Labine to require the State to show no more than that "there is a rational basis for the means chosen by the Legislature for the accomplishment of a permissible State objective." 38 N. Y. 2d, at 81, 340 N. E. 2d, at 723. After discussing the problems of proof peculiar to establishing paternity, as opposed to maternity, the court concluded that the State was constitutionally entitled to require a judicial decree during the father's lifetime as the exclusive form of proof of paternity.Appellant appealed the Court of Appeals' decision to this Court. While that case was pending here, we decided Trimble v. Gordon, . Because the issues in these two cases were similar in some respects, we vacated and remanded to permit further consideration in light of Trimble. Lalli v. Lalli, . On remand,4 the New York Court of Appeals, with two judges dissenting, adhered to its former disposition. In re Lalli, 43 N. Y. 2d 65, 371 N. E. 2d 481 (1977). It acknowledged that Trimble contemplated a standard of judicial review demanding more than "a mere finding of some remote rational relationship between the statute and a legitimate State purpose," 43 N. Y. 2d, at 67, 371 N. E. 2d, at 482, though less than strictest scrutiny. Finding 4-1.2 to be "significantly and determinatively different" from the statute overturned in Trimble, the court ruled that the New York law was sufficiently related to the State's interest in "`the orderly settlement of estates and the dependability of titles to property passing under intestacy laws,'" 43 N. Y. 2d, at 67, 69-70, 371 N. E. 2d, at 482-483, quoting Trimble, supra, at 771, to meet the requirements of equal protection.Appellant again sought review here, and we noted probable jurisdiction. . We now affirm.IIWe begin our analysis with Trimble. At issue in that case was the constitutionality of an Illinois statute providing that a child born out of wedlock could inherit from his intestate father only if the father had "acknowledged" the child and the child had been legitimated by the intermarriage of the parents. The appellant in Trimble was a child born out of wedlock whose father had neither acknowledged her nor married her mother. He had, however, been found to be her father in a judicial decree ordering him to contribute to her support. When the father died intestate, the child was excluded as a distributee because the statutory requirements for inheritance had not been met.We concluded that the Illinois statute discriminated against illegitimate children in a manner prohibited by the Equal Protection Clause. Although, as decided in Mathews v. Lucas, , and reaffirmed in Trimble, supra, at 767, classifications based on illegitimacy are not subject to "strict scrutiny," they nevertheless are invalid under the Fourteenth Amendment if they are not substantially related to permissible state interests. Upon examination, we found that the Illinois law failed that test.Two state interests were proposed which the statute was said to foster: the encouragement of legitimate family relationships and the maintenance of an accurate and efficient method of disposing of an intestate decedent's property. Granting that the State was appropriately concerned with the integrity of the family unit, we viewed the statute as bearing "only the most attenuated relationship to the asserted goal." Trimble, supra, at 768. We again rejected the argument that "persons will shun illicit relations because the offspring may not one day reap the benefits" that would accrue to them were they legitimate. Weber v. Aetna Casualty & Surety Co., . The statute therefore was not defensible as an incentive to enter legitimate family relationships.Illinois' interest in safeguarding the orderly disposition of property at death was more relevant to the statutory classification. We recognized that devising "an appropriate legal framework" in the furtherance of that interest "is a matter particularly within the competence of the individual States." Trimble, supra, at 771. An important aspect of that framework is a response to the often difficult problem of proving the paternity of illegitimate children and the related danger of spurious claims against intestate estates. See infra, at 270-271. These difficulties, we said, "might justify a more demanding standard for illegitimate children claiming under their fathers' estates than that required either for illegitimate children claiming under their mothers' estates or for legitimate children generally." Trimble, supra, at 770. The Illinois statute, however, was constitutionally flawed because, by insisting upon not only an acknowledgment by the father, but also the marriage of the parents, it excluded "at least some significant categories of illegitimate children of intestate men [whose] inheritance rights can be recognized without jeopardizing the orderly settlement of estates or the dependability of titles to property passing under intestacy laws." Id., at 771. We concluded that the Equal Protection Clause required that a statute placing exceptional burdens on illegitimate children in the furtherance of proper state objectives must be more "`carefully tuned to alternative considerations.'" id., at 772, quoting Mathews v. Lucas, supra, at 513, than was true of the broad disqualification in the Illinois law.IIIThe New York statute, enacted in 1965, was intended to soften the rigors of previous law which permitted illegitimate children to inherit only from their mothers. See infra, at 269. By lifting the absolute bar to paternal inheritance, 4-1.2 tended to achieve its desired effect. As in Trimble, however, the question before us is whether the remaining statutory obstacles to inheritance by illegitimate children can be squared with the Equal Protection Clause.AAt the outset we observe that 4-1.2 is different in important respects from the statutory provision overturned in Trimble. The Illinois statute required, in addition to the father's acknowledgment of paternity, the legitimation of the child through the intermarriage of the parents as an absolute precondition to inheritance. This combination of requirements eliminated "the possibility of a middle ground between the extremes of complete exclusion and case-by-case determination of paternity." Trimble, 430 U.S., at 770-771. As illustrated by the facts in Trimble, even a judicial declaration of paternity was insufficient to permit inheritance.Under 4-1.2, by contrast, the marital status of the parents is irrelevant. The single requirement at issue here is an evidentiary one - that the paternity of the father be declared in a judicial proceeding sometime before his death.5 The child need not have been legitimated in order to inherit from his father. Had the appellant in Trimble been governed by 4-1.2, she would have been a distributee of her father's estate. See In re Lalli, 43 N. Y. 2d, at 68 n. 2, 371 N. E. 2d, at 482 n. 2.A related difference between the two provisions pertains to the state interests said to be served by them. The Illinois law was defended, in part, as a means of encouraging legitimate family relationships. No such justification has been offered in support of 4-1.2. The Court of Appeals disclaimed that the purpose of the statute, "even in small part, was to discourage illegitimacy, to mold human conduct or to set societal norms." In re Lalli, supra, at 70, 371 N. E. 2d, at 483. The absence in 4-1.2 of any requirement that the parents intermarry or otherwise legitimate a child born out of wedlock and our review of the legislative history of the statute, infra, at 269-271, confirm this view.Our inquiry, therefore, is focused narrowly. We are asked to decide whether the discrete procedural demands that 4-1.2 places on illegitimate children bear an evident and substantial relation to the particular state interests this statute is designed to serve.BThe primary state goal underlying the challenged aspects of 4-1.2 is to provide for the just and orderly disposition of property at death.6 We long have recognized that this is an area with which the States have an interest of considerable magnitude. Trimble, supra, at 771; Weber v. Aetna Casualty & Surety Co., 406 U.S., at 170; Labine v. Vincent, 401 U.S., at 538; see also Lyeth v. Hoey, ; Mager v. Grima, 8 How. 490, 493 (1850).This interest is directly implicated in paternal inheritance by illegitimate children because of the peculiar problems of proof that are involved. Establishing maternity is seldom difficult. As one New York Surrogate's Court has observed:"[T]he birth of the child is a recorded or registered event usually taking place in the presence of others. In most cases the child remains with the mother and for a time is necessarily reared by her. That the child is the child of a particular woman is rarely difficult to prove." In re Ortiz, 60 Misc. 2d 756, 761, 303 N. Y. S. 2d 806, 812 (1969). Proof of paternity, by contrast, frequently is difficult when the father is not part of a formal family unit. "The putative father often goes his way unconscious of the birth of a child. Even if conscious, he is very often totally unconcerned because of the absence of any ties to the mother. Indeed the mother may not know who is responsible for her pregnancy." Ibid. (emphasis in original); accord, In re Flemm, 85 Misc. 2d 855, 861, 381 N. Y. S. 2d 573, 576-577 (Surr. Ct. 1975); In re Hendrix, 68 Misc. 2d, at 443, 326 N. Y. S. 2d, at 650; cf. Trimble, supra, at 770, 772. Thus, a number of problems arise that counsel against treating illegitimate children identically to all other heirs of an intestate father. These were the subject of a comprehensive study by the Temporary State Commission on the Modernization, Revision and Simplification of the Law of Estates. This group, known as the Bennett Commission,7 consisted of individuals experienced in the practical problems of estate administration. In re Flemm, supra, at 858, 381 N. Y. S. 2d, at 575. The Commission issued its report and recommendations to the legislature in 1965. See Fourth Report of the Temporary State Commission on the Modernization, Revision and Simplification of the Law of Estates, Legis. Doc. No. 19 (1965) (hereinafter Commission Report). The statute now codified as 4-1.2 was included.Although the overarching purpose of the proposed statute was "to alleviate the plight of the illegitimate child," Commission Report 37, the Bennett Commission considered it necessary to impose the strictures of 4-1.2 in order to mitigate serious difficulties in the administration of the estates of both testate and intestate decedents. The Commission's perception of some of these difficulties was described by Surrogate Sobel, a member of "the busiest [surrogate's] court in the State measured by the number of intestate estates which traffic daily through this court," In re Flemm, supra, at 857, 381 N. Y. S. 2d, at 574, and a participant in some of the Commission's deliberations:"An illegitimate, if made an unconditional distributee in intestacy, must be served with process in the estate of his parent or if he is a distributee in the estate of the kindred of a parent... . And, in probating the will of his parent (though not named a beneficiary) or in probating the will of any person who makes a class disposition to `issue' of such parent, the illegitimate must be served with process... . How does one cite and serve an illegitimate of whose existence neither family nor personal representative may be aware? And of greatest concern, how achieve finality of decree in any estate when there always exists the possibility however remote of a secret illegitimate lurking in the buried past of a parent or an ancestor of a class of beneficiaries? Finality in decree is essential in the Surrogates' Courts since title to real property passes under such decree. Our procedural statutes and the Due Process Clause mandate notice and opportunity to be heard to all necessary parties. Given the right to intestate succession, all illegitimates must be served with process. This would be no real problem with respect to those few estates where there are `known' illegitimates. But it presents an almost insuperable burden as regards `unknown' illegitimates. The point made in the [Bennett] commission discussions was that instead of affecting only a few estates, procedural problems would be created for many - some members suggested a majority - of estates." 85 Misc. 2d, at 859, 381 N. Y. S. 2d, at 575-576. Cf. In re Leventritt, 92 Misc. 2d 598, 601-602, 400 N. Y. S. 2d 298, 300-301 (Surr. Ct. 1977).Even where an individual claiming to be the illegitimate child of a deceased man makes himself known, the difficulties facing an estate are likely to persist. Because of the particular problems of proof, spurious claims may be difficult to expose. The Bennett Commission therefore sought to protect "innocent adults and those rightfully interested in their estates from fraudulent claims of heirship and harassing litigation instituted by those seeking to establish themselves as illegitimate heirs." Commission Report 265.CAs the State's interests are substantial, we now consider the means adopted by New York to further these interests. In order to avoid the problems described above, the Commission recommended a requirement designed to ensure the accurate resolution of claims of paternity and to minimize the potential for disruption of estate administration. Accuracy is enhanced by placing paternity disputes in a judicial forum during the lifetime of the father. As the New York Court of Appeals observed in its first opinion in this case, the "availability [of the putative father] should be a substantial factor contributing to the reliability of the fact-finding process." In re Lalli, 38 N. Y. 2d, at 82, 340 N. E. 2d, at 724. In addition, requiring that the order be issued during the father's lifetime permits a man to defend his reputation against "unjust accusations in paternity claims," which was a secondary purpose of 4-1.2. Commission Report 266.The administration of an estate will be facilitated, and the possibility of delay and uncertainty minimized, where the entitlement of an illegitimate child to notice and participation is a matter of judicial record before the administration commences. Fraudulent assertions of paternity will be much less likely to succeed, or even to arise, where the proof is put before a court of law at a time when the putative father is available to respond, rather than first brought to light when the distribution of the assets of an estate is in the offing.8 Appellant contends that 4-1.2, like the statute at issue in Trimble, excludes "significant categories of illegitimate children" who could be allowed to inherit "without jeopardizing the orderly settlement" of their intestate fathers' estates. Trimble, 430 U.S., at 771. He urges that those in his position - "known" illegitimate children who, despite the absence of an order of filiation obtained during their fathers' lifetimes, can present convincing proof of paternity - cannot rationally be denied inheritance as they pose none of the risks 4-1.2 was intended to minimize.9 We do not question that there will be some illegitimate children who would be able to establish their relationship to their deceased fathers without serious disruption of the administration of estates and that, as applied to such individuals, 4-1.2 appears to operate unfairly. But few statutory classifications are entirely free from the criticism that they sometimes produce inequitable results. Our inquiry under the Equal Protection Clause does not focus on the abstract "fairness" of a state law, but on whether the statute's relation to the state interests it is intended to promote is so tenuous that it lacks the rationality contemplated by the Fourteenth Amendment.The Illinois statute in Trimble was constitutionally unacceptable because it effected a total statutory disinheritance of children born out of wedlock who were not legitimated by the subsequent marriage of their parents. The reach of the statute was far in excess of its justifiable purposes. Section 4-1.2 does not share this defect. Inheritance is barred only where there has been a failure to secure evidence of paternity during the father's lifetime in the manner prescribed by the State. This is not a requirement that inevitably disqualifies an unnecessarily large number of children born out of wedlock.The New York courts have interpreted 4-1.2 liberally and in such a way as to enhance its utility to both father and child without sacrificing its strength as a procedural prophylactic. For example, a father of illegitimate children who is willing to acknowledge paternity can waive his defenses in a paternity proceeding, e. g., In re Thomas, 87 Misc. 2d 1033, 387 N. Y. S. 2d 216 (Surr. Ct. 1976), or even institute such a proceeding himself.10 N. Y. Family Court Act 522 (McKinney Supp. 1978); In re Flemm, 85 Misc. 2d, at 863, 381 N. Y. S. 2d, at 578. In addition, the courts have excused "technical" failures by illegitimate children to comply with the statute in order to prevent unnecessary injustice. E. g., In re Niles, 53 App. Div. 2d 983, 385 N. Y. S. 2d 876 (1976), appeal denied, 40 N. Y. 2d 809, 392 N. Y. S. 2d 1027 (1977) (filiation order may be signed nunc pro tunc to relate back to period prior to father's death when court's factual finding of paternity had been made); In re Kennedy, 89 Misc. 2d 551, 554, 392 N. Y. S. 2d 365, 367 (Surr. Ct. 1977) (judicial support order treated as "tantamount to an order of filiation," even though paternity was not specifically declared therein).As the history of 4-1.2 clearly illustrates, the New York Legislature desired to "grant to illegitimates in so far as practicable rights of inheritance on a par with those enjoyed by legitimate children," Commission Report 265 (emphasis added), while protecting the important state interests we have described. Section 4-1.2 represents a carefully considered legislative judgment as to how this balance best could be achieved.Even if, as MR. JUSTICE BRENNAN believes, 4-1.2 could have been written somewhat more equitably, it is not the function of a court "to hypothesize independently on the desirability or feasibility of any possible alternative[s]" to the statutory scheme formulated by New York. Mathews v. Lucas, 427 U.S., at 515. "These matters of practical judgment and empirical calculation are for [the State]... . In the end, the precise accuracy of [the State's] calculations is not a matter of specialized judicial competence; and we have no basis to question their detail beyond the evident consistency and substantiality." Id., at 515-516.11 We conclude that the requirement imposed by 4-1.2 on illegitimate children who would inherit from their fathers is substantially related to the important state interests the statute is intended to promote. We therefore find no violation of the Equal Protection Clause.The judgment of the New York Court of Appeals is Affirmed. For the reasons stated in his dissent in Trimble v. Gordon, , MR. JUSTICE REHNQUIST concurs in the judgment of affirmance. |
0 | Petitioner was indicted on three counts for "wilfully and knowingly" attempting to evade federal tax payments and on arraignment pleaded not guilty to each count. On the day set for trial petitioner's counsel, after informing the court that he had "advised ... [petitioner] of the consequences of a plea," moved to enter a plea of guilty to one count. In answer to the District Judge's inquiry, petitioner stated that he desired to plead guilty and understood that such a plea waived his right to a jury trial and subjected him to as long as five years' imprisonment and as much as a $10,000 fine. The Government consented to the plea change and agreed to dismiss the other two counts if petitioner's guilty plea to the one count was accepted. Replying to the judge's inquiry made at the Government's request and before the plea was accepted petitioner stated that his plea was not the product of threats or promises but was entered of his "own volition." At the subsequent sentencing hearing petitioner asserted that his failure to pay taxes was "not deliberate" and that they would have been paid had he not been in poor health. The judge imposed a sentence of one year and a $2,500 fine. Petitioner's counsel moved to suspend sentence, stressing that petitioner, then 65, was in poor health and that his "neglectful" and "inadvertent" bookkeeping practices occurred during a period when he had been suffering from a very serious drinking problem. The judge, declining to suspend sentence, indicated that he had examined the presentence report and concluded that petitioner's bookkeeping methods were not "inadvertent." On appeal petitioner urged the setting aside of his plea as violative of Fed. Rule Crim. Proc. 11 on the grounds (1) that the District Court had accepted his plea "without first addressing [him] ... personally and determining that the plea [was] ... made voluntarily with understanding of the nature of the charge ...," and (2) that the court had entered judgment without determining "that there [was] ... a factual basis for the plea." The Court of Appeals affirmed, implying that the Rule did not require the District Judge to address petitioner personally if petitioner understood the nature of the charge and concluding that at the sentencing hearing the judge had satisfied himself from the presentence report that the plea had a factual basis. Held: 1. Fed. Rule Crim. Proc. 11 was not complied with in this case. The Rule, which is designed (1) to assist the district judge in making the constitutionally required determination that a guilty plea is truly voluntary and (2) to produce a complete record when the plea is entered of the factors relevant to the voluntariness determination, mandates the district judge's direct inquiry of a defendant pleading guilty as to whether the defendant understands the nature of the charge against him and is aware of the consequences of his plea. Pp. 464-467. 2. Noncompliance by the District Court with Rule 11 requires that the defendant's guilty plea be set aside and his case remanded for another hearing at which he may plead anew. Pp. 468-472. 387 F.2d 838, reversed and remanded.Maurice J. McCarthy argued the cause for petitioner. With him on the briefs were Barnabas F. Sears and Wayland B. Cedarquist.James Van R. Springer argued the cause for the United States. On the brief were Solicitor General Griswold, Assistant Attorney General Rogovin, Francis X. Beytagh, Jr., Beatrice Rosenberg, and Mervyn Hamburg.MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.This case involves the procedure that must be followed under Rule 11 of the Federal Rules of Criminal Procedure before a United States District Court may accept a guilty plea and the remedy for a failure to follow that procedure.On April 1, 1966, petitioner was indicted on three counts in the United States District Court for the Northern District of Illinois for violating 7201 of the Internal Revenue Code. He was charged with "wilfully and knowingly" attempting to evade tax payments of $928.74 for 1959 (count 1), $5,143.70 for 1960 (count 2), and $1,207.12 for 1961 (count 3). At his arraignment two weeks later, petitioner, who was represented by retained counsel, pleaded not guilty to each count. The court scheduled his trial for June 30; but on June 29, it granted the Government's motion to postpone the trial because of petitioner's illness. The trial was rescheduled for July 15.On that day, after informing the court that he had "advised ... [petitioner] of the consequences of a plea," defense counsel moved to withdraw petitioner's plea of not guilty to count 2 and to enter a plea of guilty to that count. The District Judge asked petitioner if he desired to plead guilty and if he understood that such a plea waived his right to a jury trial and subjected him to imprisonment for as long as five years and to a fine as high as $10,000. Petitioner stated that he understood these consequences and wanted to plead guilty. The Government consented to this plea change and informed the court that if petitioner's plea of guilty to count 2 were accepted, the Government would move to dismiss counts 1 and 3. Before the plea was accepted, however, the prosecutor asked the judge to inquire whether it had been induced by any threats or promises. In response to the judge's inquiry, petitioner replied that his plea was not the product of either. He stated that it was entered of his "own volition." The court ordered a presentence investigation and continued the case to September 14, 1966.1 At the commencement of the sentencing hearing on September 14, petitioner asserted that his failure to pay taxes was "not deliberate" and that they would have been paid if he had not been in poor health. The prosecutor stated that the "prime consideration" for the Government's agreement to move to dismiss counts 1 and 3 was petitioner's promise to pay all taxes, penalties, and interest. The prosecutor then requested the court to refer expressly to this agreement. After noting that petitioner possessed sufficient attachable assets to meet these obligations, the court imposed a sentence of one year and a fine of $2,500. Petitioner's counsel immediately moved to suspend the sentence. He emphasized that petitioner, who was then 65 years of age, was in poor health and contended that his failure to pay his taxes had resulted from his "neglectful" and "inadvertent" method of bookkeeping during a period when he had been suffering from a very serious drinking problem. Consequently, asserted petitioner's counsel, "there was never any disposition to deprive the United States of its due." The judge, however, after indicating he had examined the presentence report, stated his opinion that "the manner in which [petitioner's] books were kept was not inadvertent." He declined, therefore, to suspend petitioner's sentence.2 On appeal to the United States Court of Appeals for the Seventh Circuit, petitioner argued that his plea should be set aside because it had been accepted in violation of Rule 11 of the Federal Rules of Criminal Procedure. Specifically, petitioner contended (1) that the District Court had accepted his plea "without first addressing [him] ... personally and determining that the plea [was] ... made voluntarily with understanding of the nature of the charge ...,"3 and (2) that the court had entered judgment without determining "that there [was] ... a factual basis for the plea."4 In affirming petitioner's conviction,5 the Court of Appeals held that the District Judge had complied with Rule 11. The court implied that the Rule did not require the District Judge to address petitioner personally to determine if he understood the nature of the charge. The court also concluded that the colloquy at the sentencing hearing demonstrated that the judge had satisfied himself by an examination of the presentence report that the plea had a factual basis.6 Because of the importance of the proper construction of Rule 11 to the administration of criminal law in the federal courts,7 and because of a conflict in the courts of appeals over the effect of a district court's failure to follow the provisions of the Rule,8 we granted certiorari. . We agree with petitioner that the District Judge did not comply with Rule 11 in this case; and in reversing the Court of Appeals, we hold that a defendant is entitled to plead anew if a United States district court accepts his guilty plea without fully adhering to the procedure provided for in Rule 11. This decision is based solely upon our construction of Rule 11 and is made pursuant to our supervisory power over the lower federal courts; we do not reach any of the constitutional arguments petitioner urges as additional grounds for reversal. I. Rule 11 expressly directs the district judge to inquire whether a defendant who pleads guilty understands the nature of the charge against him and whether he is aware of the consequences of his plea. At oral argument, however, counsel for the Government repeatedly conceded that the judge did not personally inquire whether petitioner understood the nature of the charge. At one point, counsel stated quite explicitly: "The subject on which he [the District Judge] did not directly address the defendant, which is raised here, is the question of the defendant's understanding of the charges." Nevertheless, the Government argues that since petitioner stated his desire to plead guilty, and since he was informed of the consequences of his plea, the District Court "could properly assume that petitioner was entering that plea with a complete understanding of the charge against him."9 (Emphasis added.) We cannot accept this argument, which completely ignores the two purposes of Rule 11 and the reasons for its recent amendment. First, although the procedure embodied in Rule 11 has not been held to be constitutionally mandated,10 it is designed to assist the district judge in making the constitutionally required determination that a defendant's guilty plea is truly voluntary.11 Second, the Rule is intended to produce a complete record at the time the plea is entered of the factors relevant to this voluntariness determination. Thus, the more meticulously the Rule is adhered to, the more it tends to discourage, or at least to enable more expeditious disposition of, the numerous and often frivolous post-conviction attacks on the constitutional validity of guilty pleas.12 Prior to the 1966 amendment, however, not all district judges personally interrogated defendants before accepting their guilty pleas.13 With an awareness of the confusion over the Rule's requirements in this respect, the draftsmen amended it to add a provision "expressly requir[ing] the court to address the defendant personally."14 This clarification of the judge's responsibilities quite obviously furthers both of the Rule's purposes. By personally interrogating the defendant, not only will the judge be better able to ascertain the plea's voluntariness, but he also will develop a more complete record to support his determination in a subsequent post-conviction attack.These two purposes have their genesis in the nature of a guilty plea. A defendant who enters such a plea simultaneously waives several constitutional rights, including his privilege against compulsory self-incrimination, his right to trial by jury, and his right to confront his accusers.15 For this waiver to be valid under the Due Process Clause, it must be "an intentional relinquishment or abandonment of a known right or privilege." Johnson v. Zerbst, . Consequently, if a defendant's guilty plea is not equally voluntary and knowing, it has been obtained in violation of due process and is therefore void.16 Moreover, because a guilty plea is an admission of all the elements of a formal criminal charge, it cannot be truly voluntary unless the defendant possesses an understanding of the law in relation to the facts.17 Thus, in addition to directing the judge to inquire into the defendant's understanding of the nature of the charge and the consequences of his plea, Rule 11 also requires the judge to satisfy himself that there is a factual basis for the plea. The judge must determine "that the conduct which the defendant admits constitutes the offense charged in the indictment or information or an offense included therein to which the defendant has pleaded guilty."18 Requiring this examination of the relation between the law and the acts the defendant admits having committed is designed to "protect a defendant who is in the position of pleading voluntarily with an understanding of the nature of the charge but without realizing that his conduct does not actually fall within the charge."19 To the extent that the district judge thus exposes the defendant's state of mind on the record through personal interrogation, he not only facilitates his own determination of a guilty plea's voluntariness, but he also facilitates that determination in any subsequent post-conviction proceeding based upon a claim that the plea was involuntary. Both of these goals are undermined in proportion to the degree the district judge resorts to "assumptions" not based upon recorded responses to his inquiries. For this reason, we reject the Government's contention that Rule 11 can be complied with although the district judge does not personally inquire whether the defendant understood the nature of the charge.20 II. Having decided that the Rule has not been complied with, we must also determine the effect of that non-compliance, an issue that has engendered a sharp difference of opinion among the courts of appeals. In Heiden v. United States, 353 F.2d 53 (1965), the Court of Appeals for the Ninth Circuit held that when the district court does not comply fully with Rule 11 the defendant's guilty plea must be set aside and his case remanded for another hearing at which he may plead anew.21 Other courts of appeals, however, have consistently rejected this holding, either expressly22 or tacitly.23 Instead, they have adopted the approach urged by the Government, which is to place upon the Government the burden of demonstrating from the record of the Rule 11 hearing that the guilty plea was voluntarily entered with an understanding of the charge. See, e. g., Halliday v. United States, 380 F.2d 270 (C. A. 1st Cir. 1967); Lane v. United States, 373 F.2d 570 (C. A. 5th Cir. 1967).24 In these circuits, if voluntariness cannot be determined from the record, the case is remanded for an evidentiary hearing on that issue. See, e. g., Kennedy v. United States, 397 F.2d 16 (C. A. 6th Cir. 1968); Halliday v. United States, supra.We are persuaded that the Court of Appeals for the Ninth Circuit has adopted the better rule. From the defendant's perspective, the efficacy of shifting the burden of proof to the Government at a later voluntariness hearing is questionable. In meeting its burden, the Government will undoubtedly rely upon the defendant's statement that he desired to plead guilty and frequently a statement that the plea was not induced by any threats or promises. This prima facie case for voluntariness is likely to be treated as irrebuttable in cases such as this one, where the defendant's reply is limited to his own plaintive allegations that he did not understand the nature of the charge and therefore failed to assert a valid defense or to limit his guilty plea only to a lesser included offense. No matter how true these allegations may be, rarely, if ever, can a defendant corroborate them in a post-plea voluntariness hearing.Rule 11 is designed to eliminate any need to resort to a later fact-finding proceeding "in this highly subjective area." Heiden v. United States, supra, at 55. The Rule "contemplates that disputes as to the understanding of the defendant and the voluntariness of his action are to be eliminated at the outset ... ." Ibid. As the Court of Appeals for the Sixth Circuit explained in discussing what it termed the "persuasive rationale" of Heiden: "When the ascertainment is subsequently made, greater uncertainty is bound to exist since in the resolution of disputed contentions problems of credibility and of reliability of memory cannot be avoided ... ." Waddy v. Heer, 383 F.2d 789, 794 (1967). There is no adequate substitute for demonstrating in the record at the time the plea is entered the defendant's understanding of the nature of the charge against him.The wisdom of Rule 11's requirements and the difficulty of achieving its purposes through a post-conviction voluntariness hearing are particularly apparent in this case. Petitioner, who was 65 years old and in poor health at the time he entered his plea, had been suffering from a serious drinking problem during the time he allegedly evaded his taxes. He pleaded guilty to a crime that requires a "knowing and willful" attempt to defraud the Government of its tax money;25 yet, throughout his sentencing hearing, he and his counsel insisted that his acts were merely "neglectful," "inadvertent," and committed without "any disposition to deprive the United States of its due." Remarks of this nature cast considerable doubt on the Government's assertion that petitioner pleaded guilty with full awareness of the nature of the charge. Nevertheless, confronted with petitioner's statement that he entered his plea of his "own volition," his counsel's statement that he explained the nature of the charges, and evidence that petitioner did owe the Government back taxes, both the District Court and the Court of Appeals concluded that petitioner's guilty plea was voluntary.Despite petitioner's inability to convince the courts below that he did not fully understand the charge against him, it is certainly conceivable that he may have intended to acknowledge only that he in fact owed the Government the money it claimed without necessarily admitting that he committed the crime charged; for that crime requires the very type of specific intent that he repeatedly disavowed. See Sansone v. United States, . Moreover, since the elements of the offense were not explained to petitioner, and since the specific acts of tax evasion do not appear of record, it is also possible that if petitioner had been adequately informed he would have concluded that he was actually guilty of one of two closely related lesser included offenses, which are mere misdemeanors.26 On the other hand, had the District Court scrupulously complied with Rule 11, there would be no need for such speculation. At the time the plea was entered, petitioner's own replies to the court's inquiries might well have attested to his understanding of the essential elements of the crime charged, including the requirement of specific intent, and to his knowledge of the acts which formed the basis for the charge. Otherwise, it would be apparent to the court that the plea could not be accepted. Similarly, it follows that, if the record had been developed properly, and if it demonstrated that petitioner entered his plea freely and intelligently, his subsequent references to neglect and inadvertence could have been summarily dismissed as nothing more than overzealous supplications for leniency.We thus conclude that prejudice inheres in a failure to comply with Rule 11, for noncompliance deprives the defendant of the Rule's procedural safeguards that are designed to facilitate a more accurate determination of the voluntariness of his plea. Our holding that a defendant whose plea has been accepted in violation of Rule 11 should be afforded the opportunity to plead anew not only will insure that every accused is afforded those procedural safeguards, but also will help reduce the great waste of judicial resources required to process the frivolous attacks on guilty plea convictions that are encouraged, and are more difficult to dispose of, when the original record is inadequate. It is, therefore, not too much to require that, before sentencing defendants to years of imprisonment, district judges take the few minutes necessary to inform them of their rights and to determine whether they understand the action they are taking.We therefore reverse the judgment of the Court of Appeals for the Seventh Circuit and remand the case for proceedings consistent with this opinion. It is so ordered. APPENDIX A TO OPINION OF THE COURT. The relevant portion of the colloquy at the Rule 11 hearing on July 15 is as follows: "Mr. Sokol [petitioner's counsel]: ... If the Court please, I have advised Mr. McCarthy of the consequences of a plea. At this time, in his behalf I would like to withdraw the plea of not guilty heretofore entered to Count 2, and enter a plea of guilty to Count 2. There are three Counts. "The Court: Is that satisfactory to the government? "Mr. Hughes [Government counsel]: Satisfactory to the government, your Honor. The government will move to dismiss Counts 1 and 3. "The Court: There will be a disposition in regard to the other Count? "Mr. Sokol: He has just moved to dismiss Counts 1 and 3. "The Court: Not until the plea is accepted and there is a judgment thereon. "Mr. Hughes: Correct. "The Court: This is tax evasion, five and ten? "Mr. Hughes: Yes, your Honor, a maximum penalty of five years and $10,000. "The Court: Mr. McCarthy, your lawyer tells me that you want to enter a plea of guilty to this second Count of this indictment; is that true? "Defendant McCarthy: Yes, your Honor. "The Court: You understand on your plea of guilty to the second Count of this indictment, you are waiving your right to a jury trial? "Defendant McCarthy: Yes, your Honor. "The Court: You understand on your plea of guilty you may be incarcerated for a term not to exceed five years? "Defendant McCarthy: Yes, your Honor. "The Court: You understand you may be fined in an amount not in excess of $10,000? "Defendant McCarthy: Yes, your Honor. "The Court: Knowing all that, you still persist in your plea of guilty? "Defendant McCarthy: Yes, your Honor. "The Court: The record will show that this defendant, after being advised of the consequences of his plea to Count 2 of this indictment, persists in his plea. The plea will be accepted. There will be a finding of guilty in the manner and form as charged in Count 2 of this indictment, judgment on that finding. "Now, in regard to Counts 1 and 3? "Mr. Hughes: Your Honor, the government will move to dismiss them. I would also request the Court to ask whether or not any promises or threats have been made. "Mr. Sokol: No, no promises or threats. "The Court: I am going to ask the defendant himself. Have any promises been made to you for entering a plea of guilty? "Defendant McCarthy: No, your Honor. "The Court: Has anybody threatened you that if you didn't enter a plea of guilty something would happen to you? "Defendant McCarthy: I beg your pardon? "The Court: Has anybody threatened you to enter a plea of guilty? "Defendant McCarthy: That's right, of my own volition, your Honor. "The Court: All right. Enter a pre-trial investigation order and continue the matter until the 14th day of September. Same bond may stand." APPENDIX B TO OPINION OF THE COURT. The colloquy at the September 14 sentencing hearing included the following: "Mr. Sokol [petitioner's counsel]: ... If the Court please, apart from the wrecking of his physical health that has attended a number of the problems that relate to the drinking in this case, this man has experienced a kind of punishment, self-inflicted, which almost is a categorical listing of how he flees, actually, and I use that word advisedly, flees from consequence to punishment to additional consequence. It is a sad thing when at the age of sixty-five a man who has been able to rear, with the help of his wife, a fine family, has to leave a legacy such as this. I submit to the Court that he needs no deterrent. I cannot imagine a man - apart from the conventional contrition, he has actively sought out help in order to overcome what has become a very, very serious physical and psychological problem. "When I spoke with Mr. Sanculius [the probation officer], I knew that we had given to him some reference to the fact and some attestations of the facts, supported the facts, that there had been a very, very serious psychological problem here. "With respect to the tax case itself, he never took one single step to delude the investigating officer from the very, very start, and this was before Counsel was in the matter. He extended - in other words, he was open and he answered all questions readily. "The Court: Yes, but his books were in such shape that it made it very difficult to - and that, in my opinion, was not inadvertent. ... . . "Mr. Sokol: ... When a man is neglectful and adopts a kind of a devious way of secreting himself from the government, that is one thing, and we are mindful they are kind of indicia of fraud. But where a man's pattern is neglect of not only something like this - he is sloppy with respect to that, but in gross, in gross, unaccountable, so to speak. "There was no direct relationship to the consequences of taxation. Now, I would like to point out in that connection that when the investigation commenced it zeroed in, and very, very properly, there was a disclosure made from the very, very first that in the case of the Blue Cross check, the matter of depositing that in a second account actually had absolutely nothing whatever to do with the government. At that time he had been very, very deeply involved in a protracted drinking situation and had been in the hospital for several weeks. His family, in order to avoid the matter of him really needing somebody to lead him around by the nose said, and his wife said, `You have to put yourself under the jurisdiction of your brother,' and there was some indication that he was supposed to deposit this and he would not have disposition over his own assets. They did not feel that he could look out for himself. He was oppressed, and there is no sense in going over how people become so. In this particular case with a history after sixty-five years of this kind of a situation, one can perhaps guess without going into Freudian terms he was oppressed, and in order to free himself - and this had nothing to do with the government - in order to free himself from what he felt was a trap situation where he, at the age of sixty-two or sixty-three was being treated like a little boy, he put it in a different bank account. But there was never any disposition to deprive the United States of its due. "He has never acted, actually, in what you would call normal consequence, because an interview with this man, even once, indicates that if he has - and it is like a little boy - if he has the consequence lying before him he says, `Oh, yes.' ... . . "Mr. Sokol: He did not act in contemplation of avoiding taxation. That was a natural consequence of what can best be described as gross neglect, and criminal neglect, if you please. "I could not have, in good conscience, recommended that he go into a plea if I did not feel that neglect has become criminal when it reaches a certain stage. But this was not a part of any elaborate scheme or any devious course of conduct where he was acting in contemplation of a tax return that - "The Court: It took place over a series of four years, didn't it, Counsel? "Mr. Sokol: No, your Honor, because the real problem related to the matter of his avoiding the accountability not to his government but to the matter of the spending money. "The Court: Well, I am sure that if the government had not stepped in, why, it would have lasted over a period of eight years. "Mr. Sokol: No, he had already done this, apart from the fact that he had sought help with respect to the drinking, apart from the fact that he had sought help with respect to the psychiatric problem, and apart from the fact that he had already, so to speak, contained himself, he did, in addition, seek out the help of Mr. Abraham Angram, my associate counsel in the case, who was guiding him and he was on the right path. No, he had - I want to point out to the Court that this has occurred. This is fait accompli." |
6 | Respondent Railroad, formerly under private ownership, was acquired by New York State in 1966 and is engaged in interstate commerce. Some 13 years later, petitioner Union, representing the Railroad's employees, and the Railroad failed to reach an agreement after conducting collective-bargaining negotiations pursuant to the Railway Labor Act, and mediation efforts also failed to produce agreement. This triggered a 30-day cooling-off period under that Act, at the expiration of which the Act permits a union to resort to a strike. Anticipating that New York would challenge the Railway Labor Act's applicability to the Railroad, the Union sued in Federal District Court, seeking a declaratory judgment that the labor dispute was covered by that Act and not the Taylor Law, the New York law prohibiting strikes by public employees. The Railroad then filed suit in a New York state court, seeking to enjoin an impending strike by the Union under the Taylor Law. Before the state court acted, the Federal District Court held that the Railroad was subject to the Railway Labor Act and that that Act, rather than the Taylor Law, was applicable. The District Court rejected the Railroad's argument that application of the Railway Labor Act to a state-owned railroad was inconsistent with National League of Cities v. Usery, , wherein it was held that Congress could not impose the requirements of the Fair Labor Standards Act on state and local governments. The Court of Appeals reversed, holding that the operation of the Railroad was an integral state governmental function, that the Railway Labor Act displaced "essential governmental decisions" involving that function, and that the State's interest in controlling the operation of the Railroad outweighed the federal interest in having the federal Act apply.Held: Application to a state-owned railroad of Congress' acknowledged authority to regulate labor relations in the railroad industry does not so impair a state's ability to carry out its constitutionally preserved sovereign function as to come in conflict with the Tenth Amendment. Pp. 682-690. (a) One of the requirements under National League of Cities, supra, at 852, for a successful claim that congressional commerce power is invalid is that a state's compliance with federal law would directly impair its ability to "structure integral operations in areas of traditional governmental functions." Operation of a railroad engaged in interstate commerce is clearly not an integral part of traditional state activities generally immune from federal regulation. And federal regulation of state-owned railroads, whether freight or passenger, simply does not impair a state's ability to function as a state. Pp. 683-686. (b) To allow individual states, by acquiring railroads, to circumvent the federal system of railroad collective bargaining, or any of the other elements of federal regulation of railroads, would destroy the longstanding and comprehensive uniform scheme of federal regulation of railroads and their labor relations thought essential by Congress and would endanger the efficient operation of the interstate rail system. Moreover, a state acquiring a railroad does so knowing that the railroad is subject to such scheme of federal regulation. Here, New York knew of and accepted federal regulation, and, in fact had operated under it for 13 years without claiming any impairment of its traditional sovereignty. Pp. 686-690. 634 F.2d 19, reversed and remanded.BURGER, C. J., delivered the opinion for a unanimous Court.Edward D. Friedman argued the cause for petitioner. With him on the briefs were Robert Hart and Harold A. Ross.Lewis B. Kaden argued the cause for respondents. With him on the brief were Mary P. Bass and Thomas M. Taranto.Joshua I. Schwartz argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Lee, Deputy Solicitor General Geller, T. Timothy Ryan, Jr., Lois G. Williams, Joseph Woodward, and Ronald M. Etters.* [Footnote *] J. Albert Woll, Laurence Gold, and George Kaufmann filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging reversal. Briefs of amici curiae urging affirmance were filed by William T. Coleman, Jr., Donald T. Bliss, and Zoe E. Baird for the American Public Transit Association; by Henry W. Underhill, Jr., Benjamin L. Brown, John Dekker, James B. Brennan, George Agnost, Roger F. Cutler, Lee E. Holt, George F. Knox, Jr., Walter M. Powell, Allen G. Schwartz, J. Lamar Shelley, John W. Witt, Max P. Zall, Conard B. Mattox, Jr., and Charles S. Rhyne for the National Institute of Municipal Law Officers; and by Ross D. Davis for the National League of Cities. Martin L. Barr, Jerome Thier, and Anthony Cagliostro filed a brief for the New York State Public Employment Relations Board as amicus curiae. CHIEF JUSTICE BURGER delivered the opinion of the Court.We granted certiorari to decide whether the Tenth Amendment prohibits application of the Railway Labor Act to a state-owned railroad engaged in interstate commerce.IThe Long Island Rail Road (the Railroad), incorporated in 1834, provides both freight and passenger service to Long Island.1 In 1966, after 132 years of private ownership and a period of steadily growing operating deficits, the Railroad was acquired by New York State through the Metropolitan Transportation Authority.Thereafter, the Railroad continued to conduct collective bargaining pursuant to the procedures of the Railway Labor Act. 44 Stat. (part 2) 577, as amended, 45 U.S.C. 151 et seq. The United Transportation Union, petitioner in this case, represents the Railroad's conductors, brakemen, switchmen, firemen, motormen, collectors, and related train crew employees. In 1978, the Union notified the Railroad that it desired to commence negotiations and the parties began collective bargaining as provided by the Act. They failed to reach agreement during preliminary negotiations and, in April 1979, the Railroad and the Union jointly petitioned the National Mediation Board for assistance. Seven months of mediation efforts by the Board failed to produce agreement, however, and the Board released the case from mediation. This triggered a 30-day cooling-off period under the Act; absent Presidential intervention, the Act permits the parties to resort to economic weapons, including strikes, upon the expiration of the cooling-off period.The Union anticipated the State's challenge to the applicability of the Act to the Railroad; on December 7, 1979, one day before the expiration of the 30-day cooling-off period, it sued in federal court seeking a declaratory judgment that the dispute was covered by the Railway Labor Act and not the Taylor Law, New York's law governing public employee collective bargaining and prohibiting strikes by public employees.2 The next day, the Union commenced what was to be a brief strike. Pursuant to the Act, the President of the United States intervened on December 14, thus imposing an additional 60-day cooling-off period which was to expire on February 13, 1980.3 A few days before the expiration of the 60-day period, the State converted the Railroad from a private stock corporation to a public benefit corporation, apparently believing that the change would eliminate Railway Labor Act coverage and bring the employees under the umbrella of the Taylor Law.The Railroad then filed suit in state court on February 13, 1980, seeking to enjoin the impending strike under the Taylor Law. Before the state court acted, the United States District Court for the Eastern District of New York heard and decided the Union's suit for declaratory relief, holding that the Railroad was a carrier subject to the Railway Labor Act, that the Act, rather than the Taylor Law, was applicable, and that declaratory relief was in order. 509 F. Supp. 1300 (1980).In a footnote the District Court rejected the argument now presented to this Court that application of the Act to a state-owned railroad was inconsistent with National League of Cities v. Usery, . 509 F. Supp., at 1306, n. 4. The District Court noted that in National League of Cities, the Supreme Court "specifically held that the operation of a railroad in interstate commerce is not an integral part of governmental activity" and affirmed the rulings in California v. Taylor, , and United States v. California, , which held that the Railway Labor Act and the Safety Appliance Act could be applied to state-owned railroads. 509 F. Supp., at 1306, n. 4.The Court of Appeals reversed, holding that the operation of the Railroad was an integral state governmental function and that the federal Act displaced "essential governmental decisions" involving that function. 634 F.2d 19 (CA2 1980). The court applied a balancing approach and held that the State's interest in controlling the operation of its railroad outweighed the federal interest in having the federal Act apply.We granted certiorari, , and we reverse.IIThere can be no serious question that, as both the District Court and the Court of Appeals held, the Railroad is subject to the terms of the Railway Labor Act,4 or that the Commerce Clause grants Congress the plenary authority to regulate labor relations in the railroad industry in general.5 This dispute concerns the application of this acknowledged congressional authority to a state-owned railroad; we must decide whether that application so impairs the ability of the State to carry out its constitutionally preserved sovereign function as to come into conflict with the Tenth Amendment.6 AThe Railroad claims immunity from the Railway Labor Act, relying on National League of Cities v. Usery, supra, where we held that Congress could not impose the requirements of the Fair Labor Standards Act on state and local governments.7 The Fair Labor Standards Act generally requires covered employers to pay employees no less than a minimum hourly wage and to pay them at one and one-half times their regular hourly rate for all time worked in any workweek in excess of 40 hours. Prior to 1974, the Act excluded most governmental employers. However in that year Congress amended the law to extend its provisions in somewhat modified form to "public agencies," including state governments and their political subdivisions.8 We held that the 1974 amendments were invalid "insofar as [they] operate to directly displace the States' freedom to structure integral operations in areas of traditional governmental functions ... ." 426 U.S., at 852. (Emphasis supplied.) Only recently we had occasion to apply the National League of Cities doctrine in Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., . In holding that the Surface Mining and Reclamation Act of 1977, 30 U.S.C. 1201 et seq. (1976 ed., Supp. IV), did not violate the Tenth Amendment by usurping state authority over land-use regulations, we set out a three-prong test to be applied in evaluating claims under National League of Cities:"[I]n order to succeed, a claim that congressional commerce power legislation is invalid under the reasoning of National League of Cities must satisfy each of three requirements. First, there must be a showing that the challenged regulation regulates the `States as States.' [426 U.S.], at 854. Second, the federal regulation must address matters that are indisputably `attributes of state sovereignty.' Id., at 845. And third, it must be apparent that the States' compliance with the federal law would directly impair their ability `to structure integral operations in areas of traditional governmental functions.' Id., at 852." 452 U.S., at 287-288.9 The key prong of the National League of Cities test applicable to this case is the third one, which examines whether "the States' compliance with the federal law would directly impair their ability `to structure integral operations in areas of traditional governmental functions.'"BThe determination of whether a federal law impairs a state's authority with respect to "areas of traditional [state] functions" may at times be a difficult one. In this case, however, we do not write on a clean slate. As the District Court noted, in National League of Cities we explicitly reaffirmed our holding in United States v. California, , and in two other cases involving federal regulation of railroads:10 "The holding of United States v. California ... is quite consistent with our holding today. There California's activity to which the congressional command was directed was not in an area that the States have regarded as integral parts of their governmental activities. It was, on the contrary, the operation of a railroad engaged in `common carriage by rail in interstate commerce ... .' 297 U.S., at 182." 426 U.S., at 854, n. 18. It is thus clear that operation of a railroad engaged in interstate commerce is not an integral part of traditional state activities generally immune from federal regulation under National League of Cities. See also Lafayette v. Louisiana Power & Light Co., (concurring opinion).11 The Long Island is concededly a railroad engaged in interstate commerce.The Court of Appeals undertook to distinguish the three railroad cases discussed in National League of Cities, noting that they dealt with freight carriers rather than primarily passenger railroads such as the Long Island. That distinction does not warrant a different result, however. Operation of passenger railroads, no less than operation of freight railroads, has traditionally been a function of private industry, not state or local governments.12 It is certainly true that some passenger railroads have come under state control in recent years, as have several freight lines, but that does not alter the historical reality that the operation of railroads is not among the functions traditionally performed by state and local governments. Federal regulation of state-owned railroads simply does not impair a state's ability to function as a state.IIIIn concluding that the operation of a passenger railroad is not among those governmental functions generally immune from federal regulation under National League of Cities, we are not merely following dicta of that decision or looking only to the past to determine what is "traditional." In essence, National League of Cities held that under most circumstances federal power to regulate commerce could not be exercised in such a manner as to undermine the role of the states in our federal system. This Court's emphasis on traditional governmental functions and traditional aspects of state sovereignty was not meant to impose a static historical view of state functions generally immune from federal regulation. Rather it was meant to require an inquiry into whether the federal regulation affects basic state prerogatives in such a way as would be likely to hamper the state government's ability to fulfill its role in the Union and endanger its "separate and independent existence." 426 U.S., at 851.Just as the Federal Government cannot usurp traditional state functions, there is no justification for a rule which would allow the states, by acquiring functions previously performed by the private sector, to erode federal authority in areas traditionally subject to federal statutory regulation. Railroads have been subject to comprehensive federal regulation for nearly a century.13 The Interstate Commerce Act - the first comprehensive federal regulation of the industry - was passed in 1887.14 A year earlier we had held that only the Federal Government, not the states, could regulate the interstate rates of railroads. Wabash, St. L. & P. R. Co. v. Illinois, . The first federal statute dealing with railroad labor relations was the Arbitration Act of 1888;15 the provisions of that Act were invoked by President Cleveland in reaction to the Pullman strike of 1894. Federal mediation of railroad labor disputes was first provided by the Erdman Act of 189816 and strengthened by the Newlands Act of 1913.17 In 1916, Congress mandated the 8-hour day in the railroad industry.18 After federal operation of the railroads during World War I, Congress passed the Transportation Act of 1920,19 which further enhanced federal involvement in railroad labor relations. Finally, in 1926, Congress passed the Railway Labor Act, which was jointly drafted by representatives of the railroads and the railroad unions.20 The Act has been amended a number of times since 1926, but its basic structure has remained intact. The Railway Labor Act thus has provided the framework for collective bargaining between all interstate railroads and their employees for the past 56 years. There is no comparable history of longstanding state regulation of railroad collective bargaining or of other aspects of the railroad industry.Moreover, the Federal Government has determined that a uniform regulatory scheme is necessary to the operation of the national rail system. In particular, Congress long ago concluded that federal regulation of railroad labor relations is necessary to prevent disruptions in vital rail service essential to the national economy. A disruption of service on any portion of the interstate railroad system can cause serious problems throughout the system. Congress determined that the most effective means of preventing such disruptions is by way of requiring and facilitating free collective bargaining between railroads and the labor organizations representing their employees. Rather than absolutely prohibiting strikes, Congress decided to assure equitable settlement of railroad labor disputes, and thus prevent interruption of rail service, by providing mediation and imposing cooling-off periods, thus creating "an almost interminable" collective-bargaining process. Detroit & T. S. L. R. Co. v. Transportation Union, . "[T]he procedures of the Act are purposely long and drawn out, based on the hope that reason and practical considerations will provide in time an agreement that resolves the dispute." Railway & Steamship Clerks v. Florida E. C. R. Co., .21 To allow individual states, by acquiring railroads, to circumvent the federal system of railroad bargaining, or any of the other elements of federal regulation of railroads, would destroy the uniformity thought essential by Congress and would endanger the efficient operation of the interstate rail system.In addition, a state acquiring a railroad does so knowing that the railroad is subject to this longstanding and comprehensive scheme of federal regulation of its operations and its labor relations. See California v. Taylor, 353 U.S., at 568. Here the State acquired the Railroad with full awareness that it was subject to federal regulation under the Railway Labor Act. At the time of the acquisition, a spokesman stated: "We just have a new owner and a new board of directors. We're under the Railway Labor Act, just as we've always been. The people do not become state employes, they remain railroad employes and retain all the benefits and drawbacks of that." The parties proceeded along those premises for the next 13 years, with both sides making use of the procedures available under the Railway Labor Act, and with Railroad employees covered by the Railroad Retirement Act, the Railroad Unemployment Insurance Act, and the Federal Employers' Liability Act. Conversely, Railroad employees were not eligible for any of the retirement, insurance, or job security benefits of state employees.The State knew of and accepted the federal regulation; moreover, it operated under federal regulation for 13 years without claiming any impairment of its traditional sovereignty. Indeed, the State's initial response to this suit was to acknowledge that the Railway Labor Act applied. It can thus hardly be maintained that application of the Act to the State's operation of the Railroad is likely to impair the State's ability to fulfill its role in the Union or to endanger the "separate and independent existence" referred to in National League of Cities v. Usery, 426 U.S., at 851.Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion. Reversed and remanded. |
5 | In 1986, respondent Schaefer filed a claim for Social Security disability benefits, which was denied by petitioner Secretary at the administrative level. Schaefer sought judicial review and, on April 4, 1989, the District Court reversed the administrative denial of benefits and remanded the case to the Secretary pursuant to the fourth sentence of 42 U.S.C. 405(g). Schaefer was awarded benefits on remand and, in July 1990, he returned to the District Court and filed for attorney's fees under the Equal Access to Justice Act (EAJA). In opposing the motion, the Secretary noted that the EAJA required Schaefer to file his application within 30 days of "final judgment" in the action, 28 U.S.C. 2412(d)(1)(B), and argued that the 30-day clock began running when the District Court's sentence-four remand order of April 4, 1989, became final, which would have occurred at the end of the 60 days for appeal provided under Federal Rule of Appellate Procedure 4(a). The District Court awarded fees to Schaefer, holding that a sentence-four remand order is not a final judgment where a court retains jurisdiction and plans to enter a judgment after remand proceedings are complete. The Court of Appeals affirmed on the same basis.Held: 1. The 30-day period for filing an application for EAJA fees begins immediately upon expiration of the time for appeal of a "sentence-four remand order." Pp. 295-302. (a) A district court remanding a case pursuant to sentence four of 405 must enter judgment in the case and may not retain jurisdiction over the administrative proceedings on remand. Sentence four's plain language authorizes a court to enter a judgment "with or without remanding the cause for a rehearing," not a remand order "with or without" a judgment. Pp. 295-297. (b) The Court's decision in Sullivan v. Hudson, - that fees incurred during administrative proceedings held pursuant to a district court's remand order may be recovered under the EAJA - does not apply where the remand is ordered pursuant to sentence four of 405(g). Pp. 298-300. (c) Contrary to dicta in Sullivan v. Hudson, a Social Security claimant who obtains a sentence-four judgment reversing the Secretary's denial of benefits meets the description of a "prevailing party" set out in Texas State Teachers Assn. v. Garland Independent School Dist., . Pp. 300-302. 2. Schaefer's application for EAJA fees was nonetheless timely under 2412(d)(1) because the District Court failed to comply with Federal Rule of Civil Procedure 58 in entering its sentence-four remand order of April 4, 1989. The EAJA's 30-day time limit runs from the end of the period for appeal, and that period does not begin until a judgment is entered in compliance with the formalities of Rule 58. Because the District Court never entered formal judgment, neither the time for appeal nor the EAJA's 30-day clock had run when Schaefer filed his application. Pp. 302-303. 960 F.2d 1053, affirmed.SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, KENNEDY, SOUTER, and THOMAS, JJ., joined. STEVENS, J., filed an opinion concurring in the judgment, in which BLACKMUN, J., joined, post, p. 303.William K. Kelley argued the cause pro hac vice for petitioner. On the briefs were Solicitor General Starr, Acting Solicitor General Bryson, Assistant Attorney General Gerson, Deputy Solicitor General Mahoney, Edwin S. Kneedler, and William Kanter.Randall J. Fuller argued the cause for respondent. With him on the brief were Brian Wolfman and David C. Vladeck.* [Footnote *] Briefs of amici curiae urging affirmance were filed for Legal Services of Northern California, Inc., et al. by Gary F. Smith and Gill Deford; and for the National Organization of Social Security Claimants' Representatives by Nancy G. Shor and Kirk B. Roose.JUSTICE SCALIA delivered the opinion of the Court.This case concerns the proper timing of an application for attorney's fees under the Equal Access to Justice Act (EAJA) in a Social Security case. Under 42 U.S.C. 405(g), a claimant has the right to seek judicial review of a final decision of the Secretary of Health and Human Services denying Social Security benefits. One possible outcome of such a suit is that the district court, pursuant to sentence four of 405(g), will enter "a judgment ... reversing the decision of the Secretary ... [and] remanding the cause for a rehearing." The issue here is whether the 30-day period for filing an application for EAJA fees begins immediately upon expiration of the time for appeal of such a "sentence-four remand order" or sometime after the administrative proceedings on remand are complete.IIn 1986, respondent Richard Schaefer filed an application for disability benefits under Title II of the Social Security Act, 49 Stat. 622, as amended, 42 U.S.C. 401 et seq. (1988 ed. and Supp. III). He was denied benefits at the administrative level, and sought judicial review by filing suit against the Secretary as authorized by 405(g). Schaefer and the Secretary filed cross-motions for summary judgment. On April 4, 1989, the District Court held that the Secretary had committed three errors in ruling on Schaefer's case and entered an order stating that "the Secretary's decision denying disability insurance benefits to [Schaefer] is reversed, that the parties' cross-motions for summary judgment are denied, and that the case is remanded to the Secretary for further consideration in light of this Order." App. to Pet. for Cert. 27a.In accordance with this order, Schaefer's application for benefits was reconsidered at the administrative level, and was granted. On July 18, 1990, Schaefer returned to the District Court and filed an application for attorney's fees pursuant to EAJA. In response, the Secretary noted that Schaefer was required to file any application for EAJA fees "within thirty days of final judgment in the action," 28 U.S.C. 2412(d)(1)(B), and argued that the relevant "final judgment" in the case was the administrative decision on remand, which had become final on April 2, 1990. The District Court stayed action on Schaefer's EAJA application pending this Court's imminent ruling in Melkonyan v. Sullivan, .Melkonyan was announced shortly thereafter, holding that a final administrative decision could not constitute a "final judgment" for purposes of 2412(d)(1)(B). Id., at 96. In light of Melkonyan, the Secretary changed positions to argue that EAJA's 30 day clock began running when the District Court's April 4, 1989, order (not the administrative ruling on remand) became final, which would have occurred at the end of the 60 days for appeal provided under Federal Rule of Appellate Procedure 4(a). Thus, the Secretary concluded, Schaefer's time to file his EAJA application expired on July 3, 1989, over a year before the application was filed. The District Court, however, found Schaefer's EAJA application timely under the controlling Circuit precedent of Welter v. Sullivan, 941 F.2d 674 (CA8 1991), which held that a sentence-four remand order is not a final judgment where "the district court retain[s] jurisdiction ... and plan[s] to enter dispositive sentence four judgmen[t]" after the administrative proceedings on remand are complete. Id., at 675. The District Court went on to rule that Schaefer was entitled to $1,372.50 in attorney's fees.The Secretary fared no better on appeal. The Eighth Circuit declined the Secretary's suggestion for en banc reconsideration of Welter, and affirmed the District Court in an unpublished per curiam opinion. Judgt. order reported at 960 F.2d 1053 (1992). The Secretary filed a petition for certiorari, urging us to reverse the Court of Appeals summarily. We granted certiorari, , and set the case for oral argument.IIThe first sentence of 28 U.S.C. 2412(d)(1)(B) provides: "A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed." (Emphasis added.) In Melkonyan v. Sullivan, we held that the term "final judgment" in the highlighted phrase above "refers to judgments entered by a court of law, and does not encompass decisions rendered by an administrative agency." See 501 U.S., at 96. Thus, the only order in this case that could have resulted in the starting of EAJA's 30-day clock was the District Court's April 4, 1989, order, which reversed the Secretary's decision denying disability benefits and remanded the case to the Secretary for further proceedings.In cases reviewing final agency decisions on Social Security benefits, the exclusive methods by which district courts may remand to the Secretary are set forth in sentence four and sentence six of 405(g), which are set forth in the margin.1 See Melkonyan, supra, at 99-100. Schaefer correctly concedes that the District Court's remand order in this case was entered pursuant to sentence four.2 He argues, however, that a district court proceeding under that provision need not enter a judgment at the time of remand, but may postpone it and retain jurisdiction pending completion of the administrative proceedings. That argument, however, is inconsistent with [the plain language of sentence four,] which [authorizes a district court to enter a judgment "with or without" a remand order, not a remand order "with or without a judgment.] See Sullivan v. Finkelstein, . Immediate entry of judgment (as opposed to entry of judgment after post-remand agency proceedings have been completed and their results filed with the court) is, in fact, the principal feature that distinguishes a sentence-four remand from a sentence-six remand. See Melkonyan, 501 U.S., at 101-102.Nor is it possible to argue that the judgment authorized by sentence four, if it includes a remand, does not become a "final judgment" - as required by 2412(d) - upon expiration of the time for appeal. If that were true, there would never be any final judgment in cases reversed and remanded for further agency proceedings (including those which suffer that fate after the Secretary has filed the results of a sentence-six remand). Sentence eight of 405(g) states that "[t]he judgment of the court" - which must be a reference to a sentence-four judgment, since that is the only judgment authorized by 405(g) - "shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions." Thus, when the time for seeking appellate review has run, the sentence-four judgment fits squarely within the term "final judgment" as used in 2412(d), which is defined to mean "a judgment that is final and not appealable." 28 U.S.C. 2412(d)(2)(G). We described the law with complete accuracy in Melkonyan when we said:"In sentence four cases, the filing period begins after the final judgment ("affirming, modifying, or reversing") is entered by the court and the appeal period has run, so that the judgment is no longer appealable... . In sentence six cases, the filing period does not begin until after the post-remand proceedings are completed, the Secretary returns to court, the court enters a final judgment, and the appeal period runs." 501 U.S., at 102. Schaefer raises two arguments that merit further discussion. The first is based on our decision in Sullivan v. Hudson, , which held that fees incurred during administrative proceedings held pursuant to a district court's remand order could be recovered under EAJA. In order "to effectuate Hudson," Schaefer contends, a district court entering a sentence-four remand order may properly hold its judgment in abeyance (and thereby delay the start of EAJA's 30-day clock) until post-remand administrative proceedings are complete; otherwise, as far as fees incurred during the yet-to-be-held administrative proceedings are concerned, the claimant would be unable to comply with the requirement of 2412(d)(1)(B) that the fee application include "the amount sought" and "an itemized statement ... [of] the actual time expended" by attorneys and experts. In response, the Secretary argues that Hudson applies only to cases remanded pursuant to sentence six of 405(g), where there is no final judgment and the clock does not begin to run. The difficulty with that, Schaefer contends, is that Hudson itself clearly involved a sentence-four remand. On the last point, Schaefer is right. Given the facts recited by the Court in Hudson, the remand order there could have been authorized only under sentence four. See 490 U.S., at 880-881; cf. n. 2, supra. However, the facts in Hudson also show that the District Court had not terminated the case, but had retained jurisdiction during the remand. And that was a central element in our decision, as the penultimate sentence of the opinion shows: "We conclude that, where a court orders a remand to the Secretary in a benefits litigation and retains continuing jurisdiction over the case pending a decision from the Secretary which will determine the claimant's entitlement to benefits, the proceedings on remand are an integral part of the `civil action' for judicial review, and thus attorney's fees for representation on remand are available subject to the other limitations in the EAJA. 490 U.S., at 892 (emphasis added). We have since made clear, in Finkelstein, that that retention of jurisdiction, that failure to terminate the case, was error: Under 405(g), "each final decision of the Secretary [is] reviewable by a separate piece of litigation," and a sentence-four remand order "terminate[s] the civil action" seeking judicial review of the Secretary's final decision. 496 U.S., at 624-625 (emphases added). What we adjudicated in Hudson, in other words, was a hybrid: a sentence-four remand that the District Court had improperly (but without objection) treated like a sentence-six remand.3 We specifically noted in Melkonyan that Hudson was limited to a "narrow class of qualifying administrative proceedings" where "the district court retains jurisdiction of the civil action" pending the completion of the administrative proceedings. 501 U.S., at 97. We therefore do not consider the holding of Hudson binding as to sentence-four remands that are ordered (as they should be) without retention of jurisdiction, or that are ordered with retention of jurisdiction that is challenged.4 Schaefer's second argument is that a sentence-four remand order cannot be considered a "final judgment" for purposes of 2412(d)(1)(B) because that provision requires the party seeking fees to submit an application "show[ing] that [he] is a prevailing party." That showing, Schaefer contends, cannot be made until the proceedings on remand are complete, since a Social Security claimant does not "prevail" until he is awarded Social Security benefits. The premise of this argument is wrong. No holding of this Court has ever denied prevailing-party status (under 2412(d)(1)(B)) to a plaintiff who won a remand order pursuant to sentence four of 405(g). Dicta in Hudson stated that "a Social Security claimant would not, as a general matter, be prevailing party within the meaning of the EAJA merely because a court had remanded the action to the agency for further proceedings." 490 U.S., at 887. But that statement (like the holding of the case) simply failed to recognize the distinction between a sentence-four remand, which terminates the litigation with victory for the plaintiff, and a sentence-six remand, which does not. The sharp distinction between the two types of remand had not been made in the lower court opinions in Hudson, see Hudson v. Secretary of Health and Human Services, 839 F.2d 1453 (CA11 1988); App. to Pet. for Cert. in Sullivan v. Hudson, O.T. 1988, No. 616, pp. 17a-20a (setting forth unpublished District Court opinion), was not included in the question presented for decision,5 and was mentioned for the first time in the closing pages of the Secretary's reply brief, see Reply Brief for Petitioner in Sullivan v. Hudson, O.T. 1988, No. 616, pp. 14-17. It is only decisions after Hudson - specifically Finkelstein and Melkonyan - which establish that the sentence-four, sentence-six distinction is crucial to the structure of judicial review established under 405(g). See Finkelstein, 496 U.S., at 626; Melkonyan, 501 U.S., at 97-98.Hudson's dicta that remand does not generally confer prevailing-party status relied on three cases, none of which supports that proposition as applied to sentence-four remands. Hanrahan v. Hampton, , rejected an assertion of prevailing-party status, not by virtue of having secured a remand, but by virtue of having obtained a favorable procedural ruling (the reversal on appeal of a directed verdict) during the course of the judicial proceedings. Hewitt v. Helms, , held that a plaintiff does not become a prevailing party merely by obtaining "a favorable judicial statement of law in the course of litigation that results in judgment against the plaintiff;" id., at 763 (emphasis added). (A sentence-four remand, of course, is a judgment for the plaintiff.) And the third case cited in Hudson, Texas State Teachers Assn. v. Garland Independent School Dist., , affirmatively supports the proposition that a party who wins a sentence-four remand order is a prevailing party. Garland held that status to have been obtained "[i]f the plaintiff has succeeded on any significant issue in litigation which achieve[d] some of the benefit ... sought in bringing suit." Id., at 791-792 (citation and internal quotation marks omitted). Obtaining a sentence-four judgment reversing the Secretary's denial of benefits certainly meets this description. See also Farrar v. Hobby, .IIIFinally, Schaefer argues that, even if the District Court should have entered judgment in connection with its April 4, 1989, order remanding the case to the Secretary, the fact remains that it did not. And since no judgment was entered, he contends, the 30-day time period for filing an application for EAJA fees cannot have run. We agree.An EAJA application may be filed until 30 days after a judgment becomes "not appealable" - i.e., 30 days after the time for appeal has ended. See 2412(d)(1)(B), (d)(2)(G); see also Melkonyan, 501 U.S., at 102. Rule 4(a) of the Federal Rules of Appellate Procedure establishes that, in a civil case to which a federal officer is a party, the time for appeal does not end until 60 days after "entry of judgment," and that a judgment is considered entered for purposes of the rule only if it has been "entered in compliance with Rul[e] 58 ... of the Federal Rules of Civil Procedure." Fed. Rules App. Proc. 4(a)(1), (7). Rule 58, in turn, requires a district court to set forth every judgment "on a separate document," and provides that "[a] judgment is effective only when so set forth." See United States v. Indrelunas, (per curiam).Since the District Court's April 4 remand order was a final judgment, see infra, at 7, a "separate document" of judgment should have been entered. It is clear from the record that this was not done. The Secretary does not dispute that, but argues that a formal "separate document" of judgment is not needed for an order of a district court to become appealable. That is quite true, see 28 U.S.C. 1291; Bankers Trust Co. v. Mallis, (per curiam); Finkelstein, supra, at 628, n. 7, but also quite irrelevant. EAJA's 30-day time limit runs from the end of the period for appeal, not the beginning. Absent a formal judgment, the District Court's April 4 order remained "appealable" at the time that Schaefer filed his application for EAJA fees, and thus the application was timely under 2412(d)(1).6 * * * * For the foregoing reasons, the judgment of the Court of Appeals isAffirmed. |
2 | Congress enacted 18 U. S. C. §48 to criminalize the commercial creation, sale, or possession of certain depictions of animal cruelty. The statute addresses only portrayals of harmful acts, not the underlying conduct. It applies to any visual or auditory depiction "in which a living animal is intentionally maimed, mutilated, tortured, wounded, or killed," if that conduct violates federal or state law where "the creation, sale, or possession takes place," §48(c)(1). Another clause exempts depictions with "serious religious, political, scientific, educational, journalistic, historical, or artistic value." §48(b). The legislative background of §48 focused primarily on "crush videos," which feature the torture and killing of helpless animals and are said to appeal to persons with a specific sexual fetish. Respondent Stevens was indicted under §48 for selling videos depicting dogfighting. He moved to dismiss, arguing that §48 is facially invalid under the First Amendment. The District Court denied his motion, and Stevens was convicted. The Third Circuit vacated the conviction and declared §48 facially unconstitutional as a content-based regulation of protected speech.Held: Section §48 is substantially overbroad, and therefore invalid under the First Amendment. Pp. 5-20. (a) Depictions of animal cruelty are not, as a class, categorically unprotected by the First Amendment. Because §48 explicitly regulates expression based on content, it is " 'presumptively invalid,' ... and the Government bears the burden to rebut that presumption." United States v. Playboy Entertainment Group, Inc., 529 U. S. 803, 817. Since its enactment, the First Amendment has permitted restrictions on a few historic categories of speech — including obscenity, defamation, fraud, incitement, and speech integral to criminal conduct — that "have never been thought to raise any Constitutional problem," Chaplinsky v. New Hampshire, 315 U. S. 568, 572. Depictions of animal cruelty should not be added to that list. While the prohibition of animal cruelty has a long history in American law, there is no evidence of a similar tradition prohibiting depictions of such cruelty. The Government's proposed test would broadly balance the value of the speech against its societal costs to determine whether the First Amendment even applies. But the First Amendment's free speech guarantee does not extend only to categories of speech that survive an ad hoc balancing of relative social costs and benefits. The Amendment itself reflects a judgment by the American people that the benefits of its restrictions on the Government outweigh the costs. New York v. Ferber, 458 U. S. 747, distinguished. Pp. 5-9. (b) Stevens's facial challenge succeeds under existing doctrine. Pp. 9-20. (1) In the First Amendment context, a law may be invalidated as overbroad if "a 'substantial number' of its applications are unconstitutional, ' "judged in relation to the statute's plainly legitimate sweep." ' " Washington State Grange v. Washington State Republican Party, 552 U. S. 442, 449, n. 6. Stevens claims that common depictions of ordinary and lawful activities constitute the vast majority of materials subject to §48. The Government does not defend such applications, but contends that the statute is narrowly limited to specific types of extreme material. Section 48's constitutionality thus turns on how broadly it is construed. Pp. 9-10. (2) Section 48 creates a criminal prohibition of alarming breadth. The statute's definition of a "depiction of animal cruelty" does not even require that the depicted conduct be cruel. While the words "maimed, mutilated, [and] tortured" convey cruelty, "wounded" and "killed" do not. Those words have little ambiguity and should be read according to their ordinary meaning. Section 48 does require that the depicted conduct be "illegal," but many federal and state laws concerning the proper treatment of animals are not designed to guard against animal cruelty. For example, endangered species protections restrict even the humane wounding or killing of animals. The statute draws no distinction based on the reason the conduct is made illegal. Moreover, §48 applies to any depiction of conduct that is illegal in the State in which the depiction is created, sold, or possessed, "regardless of whether the ... wounding ... or killing took place" there, §48(c)(1). Depictions of entirely lawful conduct may run afoul of the ban if those depictions later find their way into States where the same conduct is unlawful. This greatly expands §48's scope, because views about animal cruelty and regulations having no connection to cruelty vary widely from place to place. Hunting is unlawful in the District of Columbia, for example, but there is an enormous national market for hunting-related depictions, greatly exceeding the demand for crush videos or animal fighting depictions. Because the statute allows each jurisdiction to export its laws to the rest of the country, §48(a) applies to any magazine or video depicting lawful hunting that is sold in the Nation's Capital. Those seeking to comply with the law face a bewildering maze of regulations from at least 56 separate jurisdictions. Pp. 11-15. (3) Limiting §48's reach to crush videos and depictions of animal fighting or other extreme cruelty, as the Government suggests, requires an unrealistically broad reading of the statute's exceptions clause. The statute only exempts material with "serious" value, and "serious" must be taken seriously. The excepted speech must also fall within one of §48(b)'s enumerated categories. Much speech does not. For example, most hunting depictions are not obviously instructional in nature. The exceptions clause simply has no adequate reading that results in the statute's banning only the depictions the Government would like to ban. Although the language of §48(b) is drawn from the Court's decision in Miller v. California, 413 U. S. 15, the exceptions clause does not answer every First Amendment objection. Under Miller, "serious" value shields depictions of sex from regulation as obscenity. But Miller did not determine that serious value could be used as a general precondition to protecting other types of speech in the first place. Even " 'wholly neutral futilities ... come under the protection of free speech.' " Cohen v. California, 403 U. S. 15, 25. The First Amendment presumptively extends to many forms of speech that do not qualify for §48(b)'s serious-value exception, but nonetheless fall within §48(c)'s broad reach. Pp. 15-17. (4) Despite the Government's assurance that it will apply §48 to reach only "extreme" cruelty, this Court will not uphold an unconstitutional statute merely because the Government promises to use it responsibly. Nor can the Court construe this statutory language to avoid constitutional doubt. A limiting construction can be imposed only if the statute "is 'readily susceptible' to such a construction," Reno v. American Civil Liberties Union, 521 U. S. 844, 884. To read §48 as the Government desires requires rewriting, not just reinterpretation. Pp. 18-19. (5) This construction of §48 decides the constitutional question. The Government makes no effort to defend §48 as applied beyond crush videos and depictions of animal fighting. It argues that those particular depictions are intrinsically related to criminal conduct or are analogous to obscenity (if not themselves obscene), and that the ban on such speech would satisfy the proper level of scrutiny. But the Government nowhere extends these arguments to other depictions, such as hunting magazines and videos, that are presumptively protected by the First Amendment but that remain subject to §48. Nor does the Government seriously contest that these presumptively impermissible applications of §48 far outnumber any permissible ones. The Court therefore does not decide whether a statute limited to crush videos or other depictions of extreme animal cruelty would be constitutional. Section 48 is not so limited but is instead substantially overbroad, and therefore invalid under the First Amendment. Pp. 19-20. 533 F. 3d 218, affirmed. Roberts, C. J., delivered the opinion of the Court, in which Stevens, Scalia, Kennedy, Thomas, Ginsburg, Breyer, and Sotomayor, JJ., joined. Alito, J., filed a dissenting opinion.UNITED STATES, PETITIONER v. ROBERT J.STEVENSon writ of certiorari to the united states court of appeals for the third circuit[April 20, 2010] Chief Justice Roberts delivered the opinion of the Court. Congress enacted 18 U. S. C. §48 to criminalize the commercial creation, sale, or possession of certain depictions of animal cruelty. The statute does not address underlying acts harmful to animals, but only portrayals of such conduct. The question presented is whether the prohibition in the statute is consistent with the freedom of speech guaranteed by the First Amendment.I Section 48 establishes a criminal penalty of up to five years in prison for anyone who knowingly "creates, sells, or possesses a depiction of animal cruelty," if done "for commercial gain" in interstate or foreign commerce. §48(a).1 A depiction of "animal cruelty" is defined as one "in which a living animal is intentionally maimed, mutilated, tortured, wounded, or killed," if that conduct violates federal or state law where "the creation, sale, or possession takes place." §48(c)(1). In what is referred to as the "exceptions clause," the law exempts from prohibition any depiction "that has serious religious, political, scientific, educational, journalistic, historical, or artistic value." §48(b). The legislative background of §48 focused primarily on the interstate market for "crush videos." According to the House Committee Report on the bill, such videos feature the intentional torture and killing of helpless animals, including cats, dogs, monkeys, mice, and hamsters. H. R. Rep. No. 106-397, p. 2 (1999) (hereinafter H. R. Rep.). Crush videos often depict women slowly crushing animals to death "with their bare feet or while wearing high heeled shoes," sometimes while "talking to the animals in a kind of dominatrix patter" over "[t]he cries and squeals of the animals, obviously in great pain." Ibid. Apparently these depictions "appeal to persons with a very specific sexual fetish who find them sexually arousing or otherwise exciting." Id., at 2-3. The acts depicted in crush videos are typically prohibited by the animal cruelty laws enacted by all 50 States and the District of Columbia. See Brief for United States 25, n. 7 (listing statutes). But crush videos rarely disclose the participants' identities, inhibiting prosecution of the underlying conduct. See H. R. Rep., at 3; accord, Brief for State of Florida et al. as Amici Curiae 11. This case, however, involves an application of §48 to depictions of animal fighting. Dogfighting, for example, is unlawful in all 50 States and the District of Columbia, see Brief for United States 26, n. 8 (listing statutes), and has been restricted by federal law since 1976. Animal Welfare Act Amendments of 1976, §17, 90 Stat. 421, 7 U. S. C. §2156. Respondent Robert J. Stevens ran a business, "Dogs of Velvet and Steel," and an associated Web site, through which he sold videos of pit bulls engaging in dogfights and attacking other animals. Among these videos were Japan Pit Fights and Pick-A-Winna: A Pit Bull Documentary, which include contemporary footage of dogfights in Japan (where such conduct is allegedly legal) as well as footage of American dogfights from the 1960's and 1970's.2 A third video, Catch Dogs and Country Living, depicts the use of pit bulls to hunt wild boar, as well as a "gruesome" scene of a pit bull attacking a domestic farm pig. 533 F. 3d 218, 221 (CA3 2008) (en banc). On the basis of these videos, Stevens was indicted on three counts of violating §48. Stevens moved to dismiss the indictment, arguing that §48 is facially invalid under the First Amendment. The District Court denied the motion. It held that the depictions subject to §48, like obscenity or child pornography, are categorically unprotected by the First Amendment. 2:04-cr-00051-ANB (WD Pa., Nov. 10, 2004), App. to Pet. for Cert. 65a-71a. It went on to hold that §48 is not substantially overbroad, because the exceptions clause sufficiently narrows the statute to constitutional applications. Id., at 71a-75a. The jury convicted Stevens on all counts, and the District Court sentenced him to three concurrent sentences of 37 months' imprisonment, followed by three years of supervised release. App. 37. The en banc Third Circuit, over a three-judge dissent, declared §48 facially unconstitutional and vacated Stevens's conviction. 533 F. 3d 218. The Court of Appeals first held that §48 regulates speech that is protected by the First Amendment. The Court declined to recognize a new category of unprotected speech for depictions of animal cruelty, id., at 224, and n. 6, and rejected the Government's analogy between animal cruelty depictions and child pornography, id., at 224-232. The Court of Appeals then held that §48 could not survive strict scrutiny as a content-based regulation of protected speech. Id., at 232. It found that the statute lacked a compelling government interest and was neither narrowly tailored to preventing animal cruelty nor the least restrictive means of doing so. Id., at 232-235. It therefore held §48 facially invalid. In an extended footnote, the Third Circuit noted that §48 "might also be unconstitutionally overbroad," because it "potentially covers a great deal of constitutionally protected speech" and "sweeps [too] widely" to be limited only by prosecutorial discretion. Id., at 235, n. 16. But the Court of Appeals declined to rest its analysis on this ground. We granted certiorari. 556 U. S. ___ (2009).II The Government's primary submission is that §48 necessarily complies with the Constitution because the banned depictions of animal cruelty, as a class, are categorically unprotected by the First Amendment. We disagree. The First Amendment provides that "Congress shall make no law ... abridging the freedom of speech." "[A]s a general matter, the First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content." Ashcroft v. American Civil Liberties Union, 535 U. S. 564, 573 (2002) (internal quotation marks omitted). Section 48 explicitly regulates expression based on content: The statute restricts "visual [and] auditory depiction[s]," such as photographs, videos, or sound recordings, depending on whether they depict conduct in which a living animal is intentionally harmed. As such, §48 is " 'presumptively invalid,' and the Government bears the burden to rebut that presumption." United States v. Playboy Entertainment Group, Inc., 529 U. S. 803, 817 (2000) (quoting R. A. V. v. St. Paul, 505 U. S. 377, 382 (1992); citation omitted). "From 1791 to the present," however, the First Amendment has "permitted restrictions upon the content of speech in a few limited areas," and has never "include[d] a freedom to disregard these traditional limitations." Id., at 382-383. These "historic and traditional categories long familiar to the bar," Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd., 502 U. S. 105, 127 (1991) (Kennedy, J., concurring in judgment)--including obscenity, Roth v. United States, 354 U. S. 476, 483 (1957), defamation, Beauharnais v. Illinois, 343 U. S. 250, 254-255 (1952), fraud, Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U. S. 748, 771 (1976), incitement, Brandenburg v. Ohio, 395 U. S. 444, 447-449 (1969) (per curiam), and speech integral to criminal conduct, Giboney v. Empire Storage & Ice Co., 336 U. S. 490, 498 (1949)--are "well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem." Chaplinsky v. New Hampshire, 315 U. S. 568, 571-572 (1942). The Government argues that "depictions of animal cruelty" should be added to the list. It contends that depictions of "illegal acts of animal cruelty" that are "made, sold, or possessed for commercial gain" necessarily "lack expressive value," and may accordingly "be regulated as unprotected speech." Brief for United States 10 (emphasis added). The claim is not just that Congress may regulate depictions of animal cruelty subject to the First Amendment, but that these depictions are outside the reach of that Amendment altogether — that they fall into a " 'First Amendment Free Zone.' " Board of Airport Comm'rs of Los Angeles v. Jews for Jesus, Inc., 482 U. S. 569, 574 (1987). As the Government notes, the prohibition of animal cruelty itself has a long history in American law, starting with the early settlement of the Colonies. Reply Brief 12, n. 8; see, e.g., The Body of Liberties §92 (Mass. Bay Colony 1641), reprinted in American Historical Documents 1000-1904, 43 Harvard Classics 66, 79 (C. Eliot ed. 1910) ("No man shall exercise any Tirranny or Crueltie towards any bruite Creature which are usuallie kept for man's use"). But we are unaware of any similar tradition excluding depictions of animal cruelty from "the freedom of speech" codified in the First Amendment, and the Government points us to none. The Government contends that "historical evidence" about the reach of the First Amendment is not "a necessary prerequisite for regulation today," Reply Brief 12, n. 8, and that categories of speech may be exempted from the First Amendment's protection without any long-settled tradition of subjecting that speech to regulation. Instead, the Government points to Congress's " 'legislative judgment that ... depictions of animals being intentionally tortured and killed [are] of such minimal redeeming value as to render [them] unworthy of First Amendment protection,' " Brief for United States 23 (quoting 533 F. 3d, at 243 (Cowen, J., dissenting)), and asks the Court to uphold the ban on the same basis. The Government thus proposes that a claim of categorical exclusion should be considered under a simple balancing test: "Whether a given category of speech enjoys First Amendment protection depends upon a categorical balancing of the value of the speech against its societal costs." Brief for United States 8; see also id., at 12. As a free-floating test for First Amendment coverage, that sentence is startling and dangerous. The First Amendment's guarantee of free speech does not extend only to categories of speech that survive an ad hoc balancing of relative social costs and benefits. The First Amendment itself reflects a judgment by the American people that the benefits of its restrictions on the Government outweigh the costs. Our Constitution forecloses any attempt to revise that judgment simply on the basis that some speech is not worth it. The Constitution is not a document "prescribing limits, and declaring that those limits may be passed at pleasure." Marbury v. Madison, 1 Cranch 137, 178 (1803). To be fair to the Government, its view did not emerge from a vacuum. As the Government correctly notes, this Court has often described historically unprotected categories of speech as being " 'of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.' " R. A. V., supra, at 383 (quoting Chaplinsky, supra, at 572). In New York v. Ferber, 458 U. S. 747 (1982), we noted that within these categories of unprotected speech, "the evil to be restricted so overwhelmingly outweighs the expressive interests, if any, at stake, that no process of case-by-case adjudication is required," because "the balance of competing interests is clearly struck," id., at 763-764. The Government derives its proposed test from these descriptions in our precedents. See Brief for United States 12-13. But such descriptions are just that — descriptive. They do not set forth a test that may be applied as a general matter to permit the Government to imprison any speaker so long as his speech is deemed valueless or unnecessary, or so long as an ad hoc calculus of costs and benefits tilts in a statute's favor. When we have identified categories of speech as fully outside the protection of the First Amendment, it has not been on the basis of a simple cost-benefit analysis. In Ferber, for example, we classified child pornography as such a category, 458 U. S., at 763. We noted that the State of New York had a compelling interest in protecting children from abuse, and that the value of using children in these works (as opposed to simulated conduct or adult actors) was de minimis. Id., at 756-757, 762. But our decision did not rest on this "balance of competing interests" alone. Id., at 764. We made clear that Ferber presented a special case: The market for child pornography was "intrinsically related" to the underlying abuse, and was therefore "an integral part of the production of such materials, an activity illegal throughout the Nation." Id., at 759, 761. As we noted, " '[i]t rarely has been suggested that the constitutional freedom for speech and press extends its immunity to speech or writing used as an integral part of conduct in violation of a valid criminal statute.' " Id., at 761-762 (quoting Giboney, supra, at 498). Ferber thus grounded its analysis in a previously recognized, long-established category of unprotected speech, and our subsequent decisions have shared this understanding. See Osborne v. Ohio, 495 U. S. 103, 110 (1990) (describing Ferber as finding "persuasive" the argument that the advertising and sale of child pornography was "an integral part" of its unlawful production (internal quotation marks omitted)); Ashcroft v. Free Speech Coalition, 535 U. S. 234, 249-250 (2002) (noting that distribution and sale "were intrinsically related to the sexual abuse of children," giving the speech at issue "a proximate link to the crime from which it came" (internal quotation marks omitted)). Our decisions in Ferber and other cases cannot be taken as establishing a freewheeling authority to declare new categories of speech outside the scope of the First Amendment. Maybe there are some categories of speech that have been historically unprotected, but have not yet been specifically identified or discussed as such in our case law. But if so, there is no evidence that "depictions of animal cruelty" is among them. We need not foreclose the future recognition of such additional categories to reject the Government's highly manipulable balancing test as a means of identifying them.III Because we decline to carve out from the First Amendment any novel exception for §48, we review Stevens's First Amendment challenge under our existing doctrine.A Stevens challenged §48 on its face, arguing that any conviction secured under the statute would be unconstitutional. The court below decided the case on that basis, 533 F. 3d, at 231, n. 13, and we granted the Solicitor General's petition for certiorari to determine "whether 18 U. S. C. 48 is facially invalid under the Free Speech Clause of the First Amendment," Pet. for Cert. i. To succeed in a typical facial attack, Stevens would have to establish "that no set of circumstances exists under which [§48] would be valid," United States v. Salerno, 481 U. S. 739, 745 (1987), or that the statute lacks any "plainly legitimate sweep," Washington v. Glucksberg, 521 U. S. 702, 740, n. 7 (1997) (Stevens, J., concurring in judgments) (internal quotation marks omitted). Which standard applies in a typical case is a matter of dispute that we need not and do not address, and neither Salerno nor Glucksberg is a speech case. Here the Government asserts that Stevens cannot prevail because §48 is plainly legitimate as applied to crush videos and animal fighting depictions. Deciding this case through a traditional facial analysis would require us to resolve whether these applications of §48 are in fact consistent with the Constitution. In the First Amendment context, however, this Court recognizes "a second type of facial challenge," whereby a law may be invalidated as overbroad if "a substantial number of its applications are unconstitutional, judged in relation to the statute's plainly legitimate sweep." Washington State Grange v. Washington State Republican Party, 552 U. S. 442, 449, n. 6 (2008) (internal quotation marks omitted). Stevens argues that §48 applies to common depictions of ordinary and lawful activities, and that these depictions constitute the vast majority of materials subject to the statute. Brief for Respondent 22-25. The Government makes no effort to defend such a broad ban as constitutional. Instead, the Government's entire defense of §48 rests on interpreting the statute as narrowly limited to specific types of "extreme" material. Brief for United States 8. As the parties have presented the issue, therefore, the constitutionality of §48 hinges on how broadly it is construed. It is to that question that we now turn.3B As we explained two Terms ago, "[t]he first step in overbreadth analysis is to construe the challenged statute; it is impossible to determine whether a statute reaches too far without first knowing what the statute covers." United States v. Williams, 553 U. S. 285, 293 (2008). Because §48 is a federal statute, there is no need to defer to a state court's authority to interpret its own law. We read §48 to create a criminal prohibition of alarming breadth. To begin with, the text of the statute's ban on a "depiction of animal cruelty" nowhere requires that the depicted conduct be cruel. That text applies to "any ... depiction" in which "a living animal is intentionally maimed, mutilated, tortured, wounded, or killed." §48(c)(1). "[M]aimed, mutilated, [and] tortured" convey cruelty, but "wounded" or "killed" do not suggest any such limitation. The Government contends that the terms in the definition should be read to require the additional element of "accompanying acts of cruelty." Reply Brief 6; see also Tr. of Oral Arg. 17-19. (The dissent hinges on the same assumption. See post, at 6, 9.) The Government bases this argument on the definiendum, "depiction of animal cruelty," cf. Leocal v. Ashcroft, 543 U. S. 1, 11 (2004), and on " 'the commonsense canon of noscitur a sociis.' " Reply Brief 7 (quoting Williams, 553 U. S., at 294). As that canon recognizes, an ambiguous term may be "given more precise content by the neighboring words with which it is associated." Ibid. Likewise, an unclear definitional phrase may take meaning from the term to be defined, see Leocal, supra, at 11 (interpreting a " 'substantial risk' " of the "us[e]" of "physical force" as part of the definition of " 'crime of violence' "). But the phrase "wounded ... or killed" at issue here contains little ambiguity. The Government's opening brief properly applies the ordinary meaning of these words, stating for example that to " 'kill' is 'to deprive of life.' " Brief for United States 14 (quoting Webster's Third New International Dictionary 1242 (1993)). We agree that "wounded" and "killed" should be read according to their ordinary meaning. Cf. Engine Mfrs. Assn. v. South Coast Air Quality Management Dist., 541 U. S. 246, 252 (2004). Nothing about that meaning requires cruelty. While not requiring cruelty, §48 does require that the depicted conduct be "illegal." But this requirement does not limit §48 along the lines the Government suggests. There are myriad federal and state laws concerning the proper treatment of animals, but many of them are not designed to guard against animal cruelty. Protections of endangered species, for example, restrict even the humane "wound[ing] or kill[ing]" of "living animal[s]." §48(c)(1). Livestock regulations are often designed to protect the health of human beings, and hunting and fishing rules (seasons, licensure, bag limits, weight requirements) can be designed to raise revenue, preserve animal populations, or prevent accidents. The text of §48(c) draws no distinction based on the reason the intentional killing of an animal is made illegal, and includes, for example, the humane slaughter of a stolen cow.4 What is more, the application of §48 to depictions of illegal conduct extends to conduct that is illegal in only a single jurisdiction. Under subsection (c)(1), the depicted conduct need only be illegal in "the State in which the creation, sale, or possession takes place, regardless of whether the ... wounding ... or killing took place in [that] State." A depiction of entirely lawful conduct runs afoul of the ban if that depiction later finds its way into another State where the same conduct is unlawful. This provision greatly expands the scope of §48, because although there may be "a broad societal consensus" against cruelty to animals, Brief for United States 2, there is substantial disagreement on what types of conduct are properly regarded as cruel. Both views about cruelty to animals and regulations having no connection to cruelty vary widely from place to place. In the District of Columbia, for example, all hunting is unlawful. D. C. Munic. Regs., tit. 19, §1560 (2009). Other jurisdictions permit or encourage hunting, and there is an enormous national market for hunting-related depictions in which a living animal is intentionally killed. Hunting periodicals have circulations in the hundreds of thousands or millions, see Mediaweek, Sept. 29, 2008, p. 28, and hunting television programs, videos, and Web sites are equally popular, see Brief for Professional Outdoor Media Association et al. as Amici Curiae 9-10. The demand for hunting depictions exceeds the estimated demand for crush videos or animal fighting depictions by several orders of magnitude. Compare ibid. and Brief for National Rifle Association of America, Inc., as Amicus Curiae 12 (hereinafter NRA Brief) (estimating that hunting magazines alone account for $135 million in annual retail sales) with Brief for United States 43-44, 46 (suggesting $1 million in crush video sales per year, and noting that Stevens earned $57,000 from his videos). Nonetheless, because the statute allows each jurisdiction to export its laws to the rest of the country, §48(a) extends to any magazine or video depicting lawful hunting, so long as that depiction is sold within the Nation's Capital. Those seeking to comply with the law thus face a bewildering maze of regulations from at least 56 separate jurisdictions. Some States permit hunting with crossbows, Ga. Code Ann. §27-3-4(1) (2007); Va. Code Ann. §29.1-519(A)(6) (Lexis 2008 Cum. Supp.), while others forbid it, Ore. Admin. Reg. 635-065-0725 (2009), or restrict it only to the disabled, N. Y. Envir. Conserv. Law Ann. §11-0901(16) (West 2005). Missouri allows the "canned" hunting of ungulates held in captivity, Mo. Code Regs. Ann., tit. 3, 10-9.560(1), but Montana restricts such hunting to certain bird species, Mont. Admin. Rule 12.6.1202(1) (2007). The sharp-tailed grouse may be hunted in Idaho, but not in Washington. Compare Idaho Admin. Code §13.01.09.606 (2009) with Wash. Admin. Code §232-28-342 (2009). The disagreements among the States — and the "commonwealth[s], territor[ies], or possession[s] of the United States," 18 U. S. C. §48(c)(2)--extend well beyond hunting. State agricultural regulations permit different methods of livestock slaughter in different places or as applied to different animals. Compare, e.g., Fla. Stat. §828.23(5) (2007) (excluding poultry from humane slaughter requirements) with Cal. Food & Agric. Code Ann. §19501(b) (West 2001) (including some poultry). California has recently banned cutting or "docking" the tails of dairy cattle, which other States permit. 2009 Cal. Legis. Serv. Ch. 344 (S. B. 135) (West). Even cockfighting, long considered immoral in much of America, see Barnes v. Glen Theatre, Inc., 501 U. S. 560, 575 (1991) (Scalia, J., concurring in judgment), is legal in Puerto Rico, see 15 Laws P. R. Ann. §301 (Supp. 2008); Posadas de Puerto Rico Associates v. Tourism Co. of P. R., 478 U. S. 328, 342 (1986), and was legal in Louisiana until 2008, see La. Stat. Ann. §14:102.23 (West) (effective Aug. 15, 2008). An otherwise-lawful image of any of these practices, if sold or possessed for commercial gain within a State that happens to forbid the practice, falls within the prohibition of §48(a).C The only thing standing between defendants who sell such depictions and five years in federal prison — other than the mercy of a prosecutor — is the statute's exceptions clause. Subsection (b) exempts from prohibition "any depiction that has serious religious, political, scientific, educational, journalistic, historical, or artistic value." The Government argues that this clause substantially narrows the statute's reach: News reports about animal cruelty have "journalistic" value; pictures of bullfights in Spain have "historical" value; and instructional hunting videos have "educational" value. Reply Brief 6. Thus, the Government argues, §48 reaches only crush videos, depictions of animal fighting (other than Spanish bullfighting, see Brief for United States 47-48), and perhaps other depictions of "extreme acts of animal cruelty." Id., at 41. The Government's attempt to narrow the statutory ban, however, requires an unrealistically broad reading of the exceptions clause. As the Government reads the clause, any material with "redeeming societal value," id., at 9, 16, 23, " 'at least some minimal value,' " Reply Brief 6 (quoting H. R. Rep., at 4), or anything more than "scant social value," Reply Brief 11, is excluded under §48(b). But the text says "serious" value, and "serious" should be taken seriously. We decline the Government's invitation — advanced for the first time in this Court — to regard as "serious" anything that is not "scant." (Or, as the dissent puts it, " 'trifling.' " Post, at 6.) As the Government recognized below, "serious" ordinarily means a good bit more. The District Court's jury instructions required value that is "significant and of great import," App. 132, and the Government defended these instructions as properly relying on "a commonly accepted meaning of the word 'serious,' " Brief for United States in No. 05-2497 (CA3), p. 50. Quite apart from the requirement of "serious" value in §48(b), the excepted speech must also fall within one of the enumerated categories. Much speech does not. Most hunting videos, for example, are not obviously instructional in nature, except in the sense that all life is a lesson. According to Safari Club International and the Congressional Sportsmen's Foundation, many popular videos "have primarily entertainment value" and are designed to "entertai[n] the viewer, marke[t] hunting equipment, or increas[e] the hunting community." Brief for Safari Club International et al. as Amici Curiae 12. The National Rifle Association agrees that "much of the content of hunting media ... is merely recreational in nature." NRA Brief 28. The Government offers no principled explanation why these depictions of hunting or depictions of Spanish bullfights would be inherently valuable while those of Japanese dogfights are not. The dissent contends that hunting depictions must have serious value because hunting has serious value, in a way that dogfights presumably do not. Post, at 6-8. But §48(b) addresses the value of the depictions, not of the underlying activity. There is simply no adequate reading of the exceptions clause that results in the statute's banning only the depictions the Government would like to ban. The Government explains that the language of §48(b) was largely drawn from our opinion in Miller v. California, 413 U. S. 15 (1973), which excepted from its definition of obscenity any material with "serious literary, artistic, political, or scientific value," id., at 24. See Reply Brief 8, 9, and n. 5. According to the Government, this incorporation of the Miller standard into §48 is therefore surely enough to answer any First Amendment objection. Reply Brief 8-9. In Miller we held that "serious" value shields depictions of sex from regulation as obscenity. 413 U. S., at 24-25. Limiting Miller's exception to "serious" value ensured that " '[a] quotation from Voltaire in the flyleaf of a book [would] not constitutionally redeem an otherwise obscene publication.' " Id., at 25, n. 7 (quoting Kois v. Wisconsin, 408 U. S. 229, 231 (1972) (per curiam)). We did not, however, determine that serious value could be used as a general precondition to protecting other types of speech in the first place. Most of what we say to one another lacks "religious, political, scientific, educational, journalistic, historical, or artistic value" (let alone serious value), but it is still sheltered from government regulation. Even " '[w]holly neutral futilities ... come under the protection of free speech as fully as do Keats' poems or Donne's sermons.' " Cohen v. California, 403 U. S. 15, 25 (1971) (quoting Winters v. New York, 333 U. S. 507, 528 (1948) (Frankfurter, J., dissenting); alteration in original). Thus, the protection of the First Amendment presumptively extends to many forms of speech that do not qualify for the serious-value exception of §48(b), but nonetheless fall within the broad reach of §48(c).D Not to worry, the Government says: The Executive Branch construes §48 to reach only "extreme" cruelty, Brief for United States 8, and it "neither has brought nor will bring a prosecution for anything less," Reply Brief 6-7. The Government hits this theme hard, invoking its prosecutorial discretion several times. See id., at 6-7, 10, and n. 6, 19, 22. But the First Amendment protects against the Government; it does not leave us at the mercy of noblesse oblige. We would not uphold an unconstitutional statute merely because the Government promised to use it responsibly. Cf. Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 473 (2001). This prosecution is itself evidence of the danger in putting faith in government representations of prosecutorial restraint. When this legislation was enacted, the Executive Branch announced that it would interpret §48 as covering only depictions "of wanton cruelty to animals designed to appeal to a prurient interest in sex." See Statement by President William J. Clinton upon Signing H. R. 1887, 34 Weekly Comp. Pres. Doc. 2557 (Dec. 9, 1999). No one suggests that the videos in this case fit that description. The Government's assurance that it will apply §48 far more restrictively than its language provides is pertinent only as an implicit acknowledgment of the potential constitutional problems with a more natural reading. Nor can we rely upon the canon of construction that "ambiguous statutory language [should] be construed to avoid serious constitutional doubts." FCC v. Fox Television Stations, Inc., 556 U. S. ___, ___ (2009) (slip op., at 12). "[T]his Court may impose a limiting construction on a statute only if it is 'readily susceptible' to such a construction." Reno v. American Civil Liberties Union, 521 U. S. 844, 884 (1997). We " 'will not rewrite a ... law to conform it to constitutional requirements,' " id., at 884-885 (quoting Virginia v. American Booksellers Assn., Inc., 484 U. S. 383, 397 (1988); omission in original), for doing so would constitute a "serious invasion of the legislative domain," United States v. Treasury Employees, 513 U. S. 454, 479, n. 26 (1995), and sharply diminish Congress's "incentive to draft a narrowly tailored law in the first place," Osborne, 495 U. S., at 121. To read §48 as the Government desires requires rewriting, not just reinterpretation.* * * Our construction of §48 decides the constitutional question; the Government makes no effort to defend the constitutionality of §48 as applied beyond crush videos and depictions of animal fighting. It argues that those particular depictions are intrinsically related to criminal conduct or are analogous to obscenity (if not themselves obscene), and that the ban on such speech is narrowly tailored to reinforce restrictions on the underlying conduct, prevent additional crime arising from the depictions, or safeguard public mores. But the Government nowhere attempts to extend these arguments to depictions of any other activities — depictions that are presumptively protected by the First Amendment but that remain subject to the criminal sanctions of §48. Nor does the Government seriously contest that the presumptively impermissible applications of §48 (properly construed) far outnumber any permissible ones. However "growing" and "lucrative" the markets for crush videos and dogfighting depictions might be, see Brief for United States 43, 46 (internal quotation marks omitted), they are dwarfed by the market for other depictions, such as hunting magazines and videos, that we have determined to be within the scope of §48. See supra, at 13-14. We therefore need not and do not decide whether a statute limited to crush videos or other depictions of extreme animal cruelty would be constitutional. We hold only that §48 is not so limited but is instead substantially overbroad, and therefore invalid under the First Amendment. The judgment of the United States Court of Appeals for the Third Circuit is affirmed.It is so ordered.UNITED STATES, PETITIONER v. ROBERT J. STEVENSon writ of certiorari to the united states court of appeals for the third circuit[April 20, 2010] Justice Alito, dissenting. The Court strikes down in its entirety a valuable statute, 18 U. S. C. §48, that was enacted not to suppress speech, but to prevent horrific acts of animal cruelty — in particular, the creation and commercial exploitation of "crush videos," a form of depraved entertainment that has no social value. The Court's approach, which has the practical effect of legalizing the sale of such videos and is thus likely to spur a resumption of their production, is unwarranted. Respondent was convicted under §48 for selling videos depicting dogfights. On appeal, he argued, among other things, that §48 is unconstitutional as applied to the facts of this case, and he highlighted features of those videos that might distinguish them from other dogfight videos brought to our attention.1 The Court of Appeals — incorrectly, in my view — declined to decide whether §48 is unconstitutional as applied to respondent's videos and instead reached out to hold that the statute is facially invalid. Today's decision does not endorse the Court of Appeals' reasoning, but it nevertheless strikes down §48 using what has been aptly termed the "strong medicine" of the overbreadth doctrine, United States v. Williams, 553 U. S. 285, 293 (2008) (internal quotation marks omitted), a potion that generally should be administered only as "a last resort." Los Angeles Police Dept. v. United Reporting Publishing Corp. (internal quotation marks omitted). Instead of applying the doctrine of overbreadth, I would vacate the decision below and instruct the Court of Appeals on remand to decide whether the videos that respondent sold are constitutionally protected. If the question of overbreadth is to be decided, however, I do not think the present record supports the Court's conclusion that §48 bans a substantial quantity of protected speech.I A party seeking to challenge the constitutionality of a statute generally must show that the statute violates the party's own rights. New York v. Ferber, 458 U. S. 747, 767 (1982). The First Amendment overbreadth doctrine carves out a narrow exception to that general rule. See id., at 768; Broadrick v. Oklahoma, 413 U. S. 601, 611-612 (1973). Because an overly broad law may deter constitutionally protected speech, the overbreadth doctrine allows a party to whom the law may constitutionally be applied to challenge the statute on the ground that it violates the First Amendment rights of others. See, e.g., Board of Trustees of State Univ. of N. Y. v. Fox, 492 U. S. 469, 483 (1989) ("Ordinarily, the principal advantage of the overbreadth doctrine for a litigant is that it enables him to benefit from the statute's unlawful application to someone else"); see also Ohralik v. Ohio State Bar Assn., 436 U. S. 447, 462, n. 20 (1978) (describing the doctrine as one "under which a person may challenge a statute that infringes protected speech even if the statute constitutionally might be applied to him"). The "strong medicine" of overbreadth invalidation need not and generally should not be administered when the statute under attack is unconstitutional as applied to the challenger before the court. As we said in Fox, supra, at 484-485, "[i]t is not the usual judicial practice, ... nor do we consider it generally desirable, to proceed to an overbreadth issue unnecessarily — that is, before it is determined that the statute would be valid as applied." Accord, New York State Club Assn., Inc. v. City of New York, 487 U. S. 1, 11 (1988); see also Broadrick, supra, at 613; United Reporting Publishing Corp., supra, at 45 (Stevens, J., dissenting). I see no reason to depart here from the generally preferred procedure of considering the question of overbreadth only as a last resort.2 Because the Court has addressed the overbreadth question, however, I will explain why I do not think that the record supports the conclusion that §48, when properly interpreted, is overly broad.II The overbreadth doctrine "strike[s] a balance between competing social costs." Williams, 553 U. S., at 292. Specifically, the doctrine seeks to balance the "harmful effects" of "invalidating a law that in some of its applications is perfectly constitutional" against the possibility that "the threat of enforcement of an overbroad law [will] dete[r] people from engaging in constitutionally protected speech." Ibid. "In order to maintain an appropriate balance, we have vigorously enforced the requirement that a statute's overbreadth be substantial, not only in an absolute sense, but also relative to the statute's plainly legitimate sweep." Ibid. In determining whether a statute's overbreadth is substantial, we consider a statute's application to real-world conduct, not fanciful hypotheticals. See, e.g., id., at 301-302; see also Ferber, supra, at 773; Houston v. Hill, 482 U. S. 451, 466-467 (1987). Accordingly, we have repeatedly emphasized that an overbreadth claimant bears the burden of demonstrating, "from the text of [the law] and from actual fact," that substantial overbreadth exists. Virginia v. Hicks, 539 U. S. 113, 122 (2003) (quoting New York State Club Assn., supra, at 14; emphasis added; internal quotation marks omitted; alteration in original). Similarly, "there must be a realistic danger that the statute itself will significantly compromise recognized First Amendment protections of parties not before the Court for it to be facially challenged on overbreadth grounds." Members of City Council of Los Angeles v. Taxpayers for Vincent, 466 U. S. 789, 801 (1984) (emphasis added).III In holding that §48 violates the overbreadth rule, the Court declines to decide whether, as the Government maintains, §48 is constitutional as applied to two broad categories of depictions that exist in the real world: crush videos and depictions of deadly animal fights. See ante, at 10, 19. Instead, the Court tacitly assumes for the sake of argument that §48 is valid as applied to these depictions, but the Court concludes that §48 reaches too much protected speech to survive. The Court relies primarily on depictions of hunters killing or wounding game and depictions of animals being slaughtered for food. I address the Court's examples below.A I turn first to depictions of hunting. As the Court notes, photographs and videos of hunters shooting game are common. See ante, at 13-14. But hunting is legal in all 50 States, and §48 applies only to a depiction of conduct that is illegal in the jurisdiction in which the depiction is created, sold, or possessed. §§48(a), (c). Therefore, in all 50 States, the creation, sale, or possession for sale of the vast majority of hunting depictions indisputably falls outside §48's reach. Straining to find overbreadth, the Court suggests that §48 prohibits the sale or possession in the District of Columbia of any depiction of hunting because the District — undoubtedly because of its urban character — does not permit hunting within its boundaries. Ante, at 13. The Court also suggests that, because some States prohibit a particular type of hunting (e.g., hunting with a crossbow or "canned" hunting) or the hunting of a particular animal (e.g., the "sharp-tailed grouse"), §48 makes it illegal for persons in such States to sell or possess for sale a depiction of hunting that was perfectly legal in the State in which the hunting took place. See ante, at 12-14. The Court's interpretation is seriously flawed. "When a federal court is dealing with a federal statute challenged as overbroad, it should, of course, construe the statute to avoid constitutional problems, if the statute is subject to such a limiting construction." Ferber, 458 U. S., at 769, n. 24. See also Williams, supra, at 307 (Stevens, J., concurring) ("[T]o the extent the statutory text alone is unclear, our duty to avoid constitutional objections makes it especially appropriate to look beyond the text in order to ascertain the intent of its drafters"). Applying this canon, I would hold that §48 does not apply to depictions of hunting. First, because §48 targets depictions of "animal cruelty," I would interpret that term to apply only to depictions involving acts of animal cruelty as defined by applicable state or federal law, not to depictions of acts that happen to be illegal for reasons having nothing to do with the prevention of animal cruelty. See ante, at 12-13 (interpreting "[t]he text of §48(c)" to ban a depiction of "the humane slaughter of a stolen cow"). Virtually all state laws prohibiting animal cruelty either expressly define the term "animal" to exclude wildlife or else specifically exempt lawful hunting activities,3 so the statutory prohibition set forth in §48(a) may reasonably be interpreted not to reach most if not all hunting depictions. Second, even if the hunting of wild animals were otherwise covered by §48(a), I would hold that hunting depictions fall within the exception in §48(b) for depictions that have "serious" (i.e., not "trifling"4) "scientific," "educational," or "historical" value. While there are certainly those who find hunting objectionable, the predominant view in this country has long been that hunting serves many important values, and it is clear that Congress shares that view. Since 1972, when Congress called upon the President to designate a National Hunting and Fishing Day, see S. J. Res. 117, 92d Cong., 2d Sess. (1972), 86 Stat. 133, Presidents have regularly issued proclamations extolling the values served by hunting. See Presidential Proclamation No. 8421, 74 Fed. Reg. 49305 (Pres. Obama 2009) (hunting and fishing are "ageless pursuits" that promote "the conservation and restoration of numerous species and their natural habitats"); Presidential Proclamation No. 8295, 73 Fed. Reg. 57233 (Pres. Bush 2008) (hunters and anglers "add to our heritage and keep our wildlife populations healthy and strong," and "are among our foremost conservationists"); Presidential Proclamation No. 7822, 69 Fed. Reg. 59539 (Pres. Bush 2004) (hunting and fishing are "an important part of our Nation's heritage," and "America's hunters and anglers represent the great spirit of our country"); Presidential Proclamation No. 4682, 44 Fed. Reg. 53149 (Pres. Carter 1979) (hunting promotes conservation and an appreciation of "healthy recreation, peaceful solitude and closeness to nature"); Presidential Proclamation No. 4318, 39 Fed. Reg. 35315 (Pres. Ford 1974) (hunting furthers "appreciation and respect for nature" and preservation of the environment). Thus, it is widely thought that hunting has "scientific" value in that it promotes conservation, "historical" value in that it provides a link to past times when hunting played a critical role in daily life, and "educational" value in that it furthers the understanding and appreciation of nature and our country's past and instills valuable character traits. And if hunting itself is widely thought to serve these values, then it takes but a small additional step to conclude that depictions of hunting make a non-trivial contribution to the exchange of ideas. Accordingly, I would hold that hunting depictions fall comfortably within the exception set out in §48(b). I do not have the slightest doubt that Congress, in enacting §48, had no intention of restricting the creation, sale, or possession of depictions of hunting. Proponents of the law made this point clearly. See H. R. Rep. No. 106-397, p. 8 (1999) (hereinafter H. R. Rep.) ("[D]epictions of ordinary hunting and fishing activities do not fall within the scope of the statute"); 145 Cong. Rec. 25894 (Oct. 19, 1999) (Rep. McCollum) ("[T]he sale of depictions of legal activities, such as hunting and fishing, would not be illegal under this bill"); id., at 25895 (Rep. Smith) ("[L]et us be clear as to what this legislation will not do. It will in no way prohibit hunting, fishing, or wildlife videos"). Indeed, even opponents acknowledged that §48 was not intended to reach ordinary hunting depictions. See ibid. (Rep. Scott); id., at 25897 (Rep. Paul). For these reasons, I am convinced that §48 has no application to depictions of hunting. But even if §48 did impermissibly reach the sale or possession of depictions of hunting in a few unusual situations (for example, the sale in Oregon of a depiction of hunting with a crossbow in Virginia or the sale in Washington State of the hunting of a sharp-tailed grouse in Idaho, see ante, at 14), those isolated applications would hardly show that §48 bans a substantial amount of protected speech.B Although the Court's overbreadth analysis rests primarily on the proposition that §48 substantially restricts the sale and possession of hunting depictions, the Court cites a few additional examples, including depictions of methods of slaughter and the docking of the tails of dairy cows. See ante, at 14-15. Such examples do not show that the statute is substantially overbroad, for two reasons. First, as explained above, §48 can reasonably be construed to apply only to depictions involving acts of animal cruelty as defined by applicable state or federal law, and anti-cruelty laws do not ban the sorts of acts depicted in the Court's hypotheticals. See, e.g., Idaho Code §25-3514 (Lexis 2000) ("No part of this chapter [prohibiting cruelty to animals] shall be construed as interfering with or allowing interference with ... [t]he humane slaughter of any animal normally and commonly raised as food or for production of fiber ... [or] [n]ormal or accepted practices of ... animal husbandry"); Kan. Stat. Ann. § 21-4310(b) (2007) ("The provisions of this section shall not apply to ... with respect to farm animals, normal or accepted practices of animal husbandry, including the normal and accepted practices for the slaughter of such animals"); Md. Crim. Law Code Ann. §10-603 (Lexis 2002) (sections prohibiting animal cruelty "do not apply to ... customary and normal veterinary and agricultural husbandry practices, including dehorning, castration, tail docking, and limit feeding"). Second, nothing in the record suggests that any one has ever created, sold, or possessed for sale a depiction of the slaughter of food animals or of the docking of the tails of dairy cows that would not easily qualify under the exception set out in §48(b). Depictions created to show proper methods of slaughter or tail-docking would presumably have serious "educational" value, and depictions created to focus attention on methods thought to be inhumane or otherwise objectionable would presumably have either serious "educational" or "journalistic" value or both. In short, the Court's examples of depictions involving the docking of tails and humane slaughter do not show that §48 suffers from any overbreadth, much less substantial overbreadth. The Court notes, finally, that cockfighting, which is illegal in all States, is still legal in Puerto Rico, ante, at 15, and I take the Court's point to be that it would be impermissible to ban the creation, sale, or possession in Puerto Rico of a depiction of a cockfight that was legally staged in Puerto Rico.5 But assuming for the sake of argument that this is correct, this veritable sliver of unconstitutionality would not be enough to justify striking down §48 in toto. In sum, we have a duty to interpret §48 so as to avoid serious constitutional concerns, and §48 may reasonably be construed not to reach almost all, if not all, of the depictions that the Court finds constitutionally protected. Thus, §48 does not appear to have a large number of unconstitutional applications. Invalidation for overbreadth is appropriate only if the challenged statute suffers from substantial overbreadth — judged not just in absolute terms, but in relation to the statute's "plainly legitimate sweep." Williams, 553 U. S., at 292. As I explain in the following Part, §48 has a substantial core of constitutionally permissible applications.IVA1 As the Court of Appeals recognized, "the primary conduct that Congress sought to address through its passage [of §48] was the creation, sale, or possession of 'crush videos.' " 533 F. 3d 218, 222 (CA3 2008) (en banc). A sample crush video, which has been lodged with the Clerk, records the following event:"[A] kitten, secured to the ground, watches and shrieks in pain as a woman thrusts her high-heeled shoe into its body, slams her heel into the kitten's eye socket and mouth loudly fracturing its skull, and stomps repeatedly on the animal's head. The kitten hemorrhages blood, screams blindly in pain, and is ultimately left dead in a moist pile of blood-soaked hair and bone." Brief for Humane Society of United States as Amicus Curiae 2 (hereinafter Humane Society Brief). It is undisputed that the conduct depicted in crush videos may constitutionally be prohibited. All 50 States and the District of Columbia have enacted statutes prohibiting animal cruelty. See 533 F. 3d, at 223, and n. 4 (citing statutes); H. R. Rep., at 3. But before the enactment of §48, the underlying conduct depicted in crush videos was nearly impossible to prosecute. These videos, which " often appeal to persons with a very specific sexual fetish," id., at 2, were made in secret, generally without a live audience, and "the faces of the women inflicting the torture in the material often were not shown, nor could the location of the place where the cruelty was being inflicted or the date of the activity be ascertained from the depiction." Id., at 3. Thus, law enforcement authorities often were not able to identify the parties responsible for the torture. See Punishing Depictions of Animal Cruelty and the Federal Prisoner Health Care Co-Payment Act of 1999: Hearing before the Subcommittee on Crime of the House Committee on the Judiciary, 106th Cong., 1st Sess., p. 1 (1999) (hereinafter Hearing on Depictions of Animal Cruelty). In the rare instances in which it was possible to identify and find the perpetrators, they "often were able to successfully assert as a defense that the State could not prove its jurisdiction over the place where the act occurred or that the actions depicted took place within the time specified in the State statute of limitations." H. R. Rep., at 3; see also 145 Cong. Rec. 25896 (Rep. Gallegly) ("[I]t is the prosecutors from around this country, Federal prosecutors as well as State prosecutors, that have made an appeal to us for this"); Hearing on Depictions of Animal Cruelty 21 ("If the production of the video is not discovered during the actual filming, then prosecution for the offense is virtually impossible without a cooperative eyewitness to the filming or an undercover police operation"); id., at 34-35 (discussing example of case in which state prosecutor "had the defendant telling us he produced these videos," but where prosecution was not possible because the State could not prove where or when the tape was made). In light of the practical problems thwarting the prosecution of the creators of crush videos under state animal cruelty laws, Congress concluded that the only effective way of stopping the underlying criminal conduct was to prohibit the commercial exploitation of the videos of that conduct. And Congress' strategy appears to have been vindicated. We are told that "[b]y 2007, sponsors of §48 declared the crush video industry dead. Even overseas Websites shut down in the wake of §48. Now, after the Third Circuit's decision [facially invalidating the statute], crush videos are already back online." Humane Society Brief 5 (citations omitted).2 The First Amendment protects freedom of speech, but it most certainly does not protect violent criminal conduct, even if engaged in for expressive purposes. Crush videos present a highly unusual free speech issue because they are so closely linked with violent criminal conduct. The videos record the commission of violent criminal acts, and it appears that these crimes are committed for the sole purpose of creating the videos. In addition, as noted above, Congress was presented with compelling evidence that the only way of preventing these crimes was to target the sale of the videos. Under these circumstances, I cannot believe that the First Amendment commands Congress to step aside and allow the underlying crimes to continue. The most relevant of our prior decisions is Ferber, 458 U. S. 747, which concerned child pornography. The Court there held that child pornography is not protected speech, and I believe that Ferber's reasoning dictates a similar conclusion here. In Ferber, an important factor — I would say the most important factor — was that child pornography involves the commission of a crime that inflicts severe personal injury to the "children who are made to engage in sexual conduct for commercial purposes.' " Id., at 753 (internal quotation marks omitted). The Ferber Court repeatedly described the production of child pornography as child "abuse," "molestation," or "exploitation." See, e.g., id., at 749 ("In recent years, the exploitive use of children in the production of pornography has become a serious national problem"); id., at 758, n. 9 ("Sexual molestation by adults is often involved in the production of child sexual performances"). As later noted in Ashcroft v. Free Speech Coalition, 535 U. S. 234, 249 (2002), in Ferber "[t]he production of the work, not its content, was the target of the statute." See also 535 U.S., at 250 (Ferber involved "speech that itself is the record of sexual abuse"). Second, Ferber emphasized the fact that these underlying crimes could not be effectively combated without targeting the distribution of child pornography. As the Court put it, "the distribution network for child pornography must be closed if the production of material which requires the sexual exploitation of children is to be effectively controlled." 458 U. S., at 759. The Court added:"[T]here is no serious contention that the legislature was unjustified in believing that it is difficult, if not impossible, to halt the exploitation of children by pursuing only those who produce the photographs and movies... . The most expeditious if not the only practical method of law enforcement may be to dry up the market for this material by imposing severe criminal penalties on persons selling, advertising, or otherwise promoting the product." Id., at 759-760.See also id., at 761 ("The advertising and selling of child pornography provide an economic motive for and are thus an integral part of the production of such materials"). Third, the Ferber Court noted that the value of child pornography "is exceedingly modest, if not de minimis," and that any such value was "overwhelmingly outweigh[ed]" by "the evil to be restricted." Id., at 762-763. All three of these characteristics are shared by §48, as applied to crush videos. First, the conduct depicted in crush videos is criminal in every State and the District of Columbia. Thus, any crush video made in this country records the actual commission of a criminal act that inflicts severe physical injury and excruciating pain and ultimately results in death. Those who record the underlying criminal acts are likely to be criminally culpable, either as aiders and abettors or conspirators. And in the tight and secretive market for these videos, some who sell the videos or possess them with the intent to make a profit may be similarly culpable. (For example, in some cases, crush videos were commissioned by purchasers who specified the details of the acts that they wanted to see performed. See H. R. Rep., at 3; Hearing on Depictions of Animal Cruelty 27). To the extent that §48 reaches such persons, it surely does not violate the First Amendment. Second, the criminal acts shown in crush videos cannot be prevented without targeting the conduct prohibited by §48 — the creation, sale, and possession for sale of depictions of animal torture with the intention of realizing a commercial profit. The evidence presented to Congress posed a stark choice: Either ban the commercial exploitation of crush videos or tolerate a continuation of the criminal acts that they record. Faced with this evidence, Congress reasonably chose to target the lucrative crush video market. Finally, the harm caused by the underlying crimes vastly outweighs any minimal value that the depictions might conceivably be thought to possess. Section 48 reaches only the actual recording of acts of animal torture; the statute does not apply to verbal descriptions or to simulations. And, unlike the child pornography statute in Ferber or its federal counterpart, 18 U. S. C. §2252, §48(b) provides an exception for depictions having any "serious religious, political, scientific, educational, journalistic, historical, or artistic value." It must be acknowledged that §48 differs from a child pornography law in an important respect: preventing the abuse of children is certainly much more important than preventing the torture of the animals used in crush videos. It was largely for this reason that the Court of Appeals concluded that Ferber did not support the constitutionality of §48. 533 F. 3d, at 228 ("Preventing cruelty to animals, although an exceedingly worthy goal, simply does not implicate interests of the same magnitude as protecting children from physical and psychological harm"). But while protecting children is unquestionably more important than protecting animals, the Government also has a compelling interest in preventing the torture depicted in crush videos. The animals used in crush videos are living creatures that experience excruciating pain. Our society has long banned such cruelty, which is illegal throughout the country. In Ferber, the Court noted that "virtually all of the States and the United States have passed legislation proscribing the production of or otherwise combating 'child pornography,' " and the Court declined to "second-guess [that] legislative judgment."6 458 U. S., at 758. Here, likewise, the Court of Appeals erred in second-guessing the legislative judgment about the importance of preventing cruelty to animals. Section 48's ban on trafficking in crush videos also helps to enforce the criminal laws and to ensure that criminals do not profit from their crimes. See 145 Cong. Rec. 25897 (Oct. 19, 1999) (Rep. Gallegly) ("The state has an interest in enforcing its existing laws. Right now, the laws are not only being violated, but people are making huge profits from promoting the violations"); id., at 10685 (May 24, 1999) (Rep. Gallegly) (explaining that he introduced the House version of the bill because "criminals should not profit from [their] illegal acts"). We have already judged that taking the profit out of crime is a compelling interest. See Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd., 502 U. S. 105, 119 (1991). In short, Ferber is the case that sheds the most light on the constitutionality of Congress' effort to halt the production of crush videos. Applying the principles set forth in Ferber, I would hold that crush videos are not protected by the First Amendment.B Application of the Ferber framework also supports the constitutionality of §48 as applied to depictions of brutal animal fights. (For convenience, I will focus on videos of dogfights, which appear to be the most common type of animal fight videos.) First, such depictions, like crush videos, record the actual commission of a crime involving deadly violence. Dogfights are illegal in every State and the District of Columbia, Brief for United States 26-27, and n. 8 (citing statutes), and under federal law constitute a felony punishable by imprisonment for up to five years, 7 U. S. C. §2156 et seq. (2006 ed. and Supp. II), 18 U. S. C. §49 (2006 ed., Supp. II). Second, Congress had an ample basis for concluding that the crimes depicted in these videos cannot be effectively controlled without targeting the videos. Like crush videos and child pornography, dogfight videos are very often produced as part of a "low-profile, clandestine industry," and "the need to market the resulting products requires a visible apparatus of distribution." Ferber, 458 U. S., at 760. In such circumstances, Congress had reasonable grounds for concluding that it would be "difficult, if not impossible, to halt" the underlying exploitation of dogs by pursuing only those who stage the fights. Id., at 759-760; see 533 F. 3d, at 246 (Cowen, J., dissenting) (citing evidence establishing "the existence of a lucrative market for depictions of animal cruelty," including videos of dogfights, "which in turn provides a powerful incentive to individuals to create [such] videos"). The commercial trade in videos of dogfights is "an integral part of the production of such materials," Ferber, supra, at 761. As the Humane Society explains, "[v]ideotapes memorializing dogfights are integral to the success of this criminal industry" for a variety of reasons. Humane Society Brief 5. For one thing, some dogfighting videos are made "solely for the purpose of selling the video (and not for a live audience)." Id., at 9. In addition, those who stage dogfights profit not just from the sale of the videos themselves, but from the gambling revenue they take in from the fights; the videos "encourage [such] gambling activity because they allow those reluctant to attend actual fights for fear of prosecution to still bet on the outcome." Ibid.; accord, Brief for Center on the Administration of Criminal Law as Amicus Curiae 12 ("Selling videos of dogfights effectively abets the underlying crimes by providing a market for dogfighting while allowing actual dogfights to remain underground"); ibid. ("These videos are part of a 'lucrative market' where videos are produced by a 'bare-boned, clandestine staff' in order to permit the actual location of dogfights and the perpetrators of these underlying criminal activities to go undetected" (citations omitted)). Moreover, "[v]ideo documentation is vital to the criminal enterprise because it provides proof of a dog's fighting prowess — proof demanded by potential buyers and critical to the underground market." Humane Society Brief 9. Such recordings may also serve as " 'training' videos for other fight organizers." Ibid. In short, because videos depicting live dogfights are essential to the success of the criminal dogfighting subculture, the commercial sale of such videos helps to fuel the market for, and thus to perpetuate the perpetration of, the criminal conduct depicted in them. Third, depictions of dogfights that fall within §48's reach have by definition no appreciable social value. As noted, §48(b) exempts depictions having any appreciable social value, and thus the mere inclusion of a depiction of a live fight in a larger work that aims at communicating an idea or a message with a modicum of social value would not run afoul of the statute. Finally, the harm caused by the underlying criminal acts greatly outweighs any trifling value that the depictions might be thought to possess. As the Humane Society explains:"The abused dogs used in fights endure physical torture and emotional manipulation throughout their lives to predispose them to violence; common tactics include feeding the animals hot peppers and gunpowder, prodding them with sticks, and electrocution. Dogs are conditioned never to give up a fight, even if they will be gravely hurt or killed. As a result, dogfights inflict horrific injuries on the participating animals, including lacerations, ripped ears, puncture wounds and broken bones. Losing dogs are routinely refused treatment, beaten further as 'punishment' for the loss, and executed by drowning, hanging, or incineration." Id., at 5-6 (footnotes omitted). For these dogs, unlike the animals killed in crush videos, the suffering lasts for years rather than minutes. As with crush videos, moreover, the statutory ban on commerce in dogfighting videos is also supported by compelling governmental interests in effectively enforcing the Nation's criminal laws and preventing criminals from profiting from their illegal activities. See Ferber, supra, at 757-758; Simon & Schuster, 502 U. S., at 119. In sum, §48 may validly be applied to at least two broad real-world categories of expression covered by the statute: crush videos and dogfighting videos. Thus, the statute has a substantial core of constitutionally permissible applications. Moreover, for the reasons set forth above, the record does not show that §48, properly interpreted, bans a substantial amount of protected speech in absolute terms. A fortiori, respondent has not met his burden of demonstrating that any impermissible applications of the statute are "substantial" in relation to its "plainly legitimate sweep." Williams, 553 U. S., at 292. Accordingly, I would reject respondent's claim that §48 is facially unconstitutional under the overbreadth doctrine.* * * For these reasons, I respectfully dissent.APPENDIX As the following chart makes clear, virtually all state laws prohibiting animal cruelty either expressly define the term "animal" to exclude wildlife or else specifically exempt lawful hunting activities.AlaskaAlaska Stat. §11.61.140(c)(4) (2008) ("It is a defense to a prosecution under this section that the conduct of the defendant ... was necessarily incidental to lawful fishing, hunting or trapping activities")ArizonaAriz. Rev. Stat. Ann. §§13-2910(C)(1), (3) (West Supp. 2009) ("This section does not prohibit or restrict ... [t]he taking of wildlife or other activities permitted by or pursuant to title 17 ... [or] [a]ctivities regulated by the Arizona game and fish department or the Arizona department of agriculture")ArkansasArk. Code Ann. §5-62-105(a) (Supp. 2009) ("This subchapter does not prohibit any of the following activities: ... (9) Engaging in the taking of game or fish through hunting, trapping, or fishing, or engaging in any other activity authorized by Arkansas Constitution, Amendment 35, by §15-41-101 et seq., or by any Arkansas State Game and Fish Commission regulation promulgated under either Arkansas Constitution, Amendment 35, or statute")CaliforniaCal. Penal Code Ann. §599c (West 1999) ("No part of this title shall be construed as interfering with any of the laws of this state known as the 'game laws,' ... or to interfere with the right to kill all animals used for food")ColoradoColo. Rev. Stat. Ann. §18-9-201.5(2) (2009) ("In case of any conflict between this part 2 [prohibiting cruelty to animals] or section 35-43-126, [Colo. Rev. Stat.], and the wildlife statutes of the state, said wildlife statutes shall control"), §18-9-202(3) ("Nothing in this part 2 shall be construed to amend or in any manner change the authority of the wildlife commission, as established in title 33, [Colo. Rev. Stat.], or to prohibit any conduct therein authorized or permitted")ConnecticutConn. Gen. Stat. §53-247(b) (2009) ("Any person who maliciously and intentionally maims, mutilates, tortures, wounds or kills an animal shall be fined not more than five thousand dollars or imprisoned not more than five years or both. The provisions of this subsection shall not apply to ... any person ... while lawfully engaged in the taking of wildlife")DelawareDel. Code Ann., Tit. 11, §1325(f) (2007) ("This section shall not apply to the lawful hunting or trapping of animals as provided by law")FloridaFla. Stat. §828.122(9)(b) (2007) ("This section shall not apply to ... [a]ny person using animals to pursue or take wildlife or to participate in any hunting regulated or subject to being regulated by the rules and regulations of the Fish and Wildlife Conservation Commission")GeorgiaGa. Code Ann. §16-12-4(e) (2007) ("The provisions of this Code section shall not be construed as prohibiting conduct which is otherwise permitted under the laws of this state or of the United States, including, but not limited to ... hunting, trapping, fishing, [or] wildlife management")HawaiiHaw. Rev. Stat. §711-1108.5(1) (2008 Cum. Supp.) ("A person commits the offense of cruelty to animals in the first degree if the person intentionally or knowingly tortures, mutilates, or poisons or causes the torture, mutilation, or poisoning of any pet animal or equine animal resulting in serious bodily injury or death of the pet animal or equine animal")IdahoIdaho Code §25-3515 (Lexis 2000) ("No part of this chapter shall be construed as interfering with, negating or preempting any of the laws or rules of the department of fish and game of this state ... or to interfere with the right to kill, slaughter, bag or take all animals used for food")IllinoisIll. Comp. Stat., ch. 510, §70/13 (West 2006) ("In case of any alleged conflict between this Act ... and the 'Wildlife Code of Illinois' or 'An Act to define and require the use of humane methods in the handling, preparation for slaughter, and slaughter of livestock for meat or meat products to be offered for sale', ... the provisions of those Acts shall prevail"), §70/3.03(b)(1) ("For the purposes of this Section, 'animal torture' does not include any death, harm, or injury caused to any animal by ... any hunting, fishing, trapping, or other activity allowed under the Wildlife Code, the Wildlife Habitat Management Areas Act, or the Fish and Aquatic Life Code" (footnotes omitted))IndianaInd. Code §35-46-3-5(a) (West 2004) (subject to certain exceptions not relevant here, "this chapter [prohibiting "Offenses Relating to Animals"] does not apply to ... [f]ishing, hunting, trapping, or other conduct authorized under [Ind. Code §]14-22")IowaIowa Code §717B.2(5) (2009) ("This section [banning "animal abuse"] shall not apply to ... [a] person taking, hunting, trapping, or fishing for a wild animal as provided in chapter 481A"), §717B.3A(2)(e) ("This section [banning "animal torture"] shall not apply to ... [a] person taking, hunting, trapping, or fishing for a wild animal as provided in chapter 481A")KansasKan. Stat. Ann. §21-4310(b)(3) (2007) ("The provisions of this section shall not apply to ... killing, attempting to kill, trapping, catching or taking of any animal in accordance with the provisions of chapter 32 [Wildlife, Parks and Recreation] or chapter 47 [Livestock and Domestic Animals] of the Kansas Statutes Annotated")KentuckyKy. Rev. Stat. Ann. §§525.130(2)(a), (e) (Lexis 2008) ("Nothing in this section shall apply to the killing of animals ... [p]ursuant to a license to hunt, fish, or trap ... [or] [f]or purposes relating to sporting activities"), §525.130(3) ("Activities of animals engaged in hunting, field trials, dog training other than training a dog to fight for pleasure or profit, and other activities authorized either by a hunting license or by the Department of Fish and Wildlife shall not constitute a violation of this section")LouisianaLa. Rev. Stat. Ann. §14:102.1(C)(1) (West Supp. 2010) ("This Section shall not apply to ... [t]he lawful hunting or trapping of wildlife as provided by law")MaineMe. Rev. Stat. Ann., Tit. 17, §1031(1)(G) (West Supp. 2009) (providing that hunting and trapping an animal is not a form of prohibited animal cruelty if "permitted pursuant to" parts of state code regulating the shooting of large game, inland fisheries, and wildlife)MarylandMd. Crim. Law Code Ann. §10-603(3) (Lexis 2002) ("Sections 10-601 through 10-608 of this subtitle do not apply to ... an activity that may cause unavoidable physical pain to an animal, including ... hunting, if the person performing the activity uses the most humane method reasonably available")MichiganMich. Comp. Laws Ann. §§750.50(11)(a), (b) (West Supp. 2009) ("This section does not prohibit the lawful killing or other use of an animal, including ... [f]ishing ... [h]unting, [or] trapping [as regulated by state law]"), §750.50b(9)(a), (b) ("This section does not prohibit the lawful killing or other use of an animal, including ... [f]ishing ... [h]unting, [or] trapping [as regulated by state law]")MissouriMo. Rev. Stat. §578.007(3) (2000) ("The provisions of sections 578.005 to 578.023 shall not apply to ... [h]unting, fishing, or trapping as allowed by" state law)MontanaMont. Code Ann. §45-8-211(4)(d) (2009) ("This section does not prohibit ... lawful fishing, hunting, and trapping activities")NebraskaNeb. Rev. Stat. §28-1013(4) (2008) (exempting "[c]ommonly accepted practices of hunting, fishing, or trapping")NevadaNev. Rev. Stat. §§574.200(1), (3) (2007) (provisions of Nevada law banning animal cruelty "do not ... [i]nterfere with any of the fish and game laws ... [or] the right to kill all animals and fowl used for food")New HampshireN. H. Rev. Stat. Ann. §644:8(II) (West Supp. 2009) ("In this section, 'animal' means a domestic animal, a household pet or a wild animal in captivity")New JerseyN. J. Stat. Ann. §4:22-16(c) (West 1998) ("Nothing contained in this article shall be construed to prohibit or interfere with ... [t]he shooting or taking of game or game fish in such manner and at such times as is allowed or provided by the laws of this State")New MexicoN. M. Stat. Ann. §30-18-1(I)(1) (Supp. 2009) ("The provisions of this section do not apply to ... fishing, hunting, falconry, taking and trapping")New YorkN. Y. Agric. & Mkts. Law Ann. §353-a(2) (West 2004) ("Nothing contained in this section shall be construed to prohibit or interfere in any way with anyone lawfully engaged in hunting, trapping, or fishing")North CarolinaN. C. Gen. Stat. Ann. §14-360(c)(1) (Lexis 2009) ("[T]his section shall not apply to ... [t]he lawful taking of animals under the jurisdiction and regulation of the Wildlife Resources Commission ...")North DakotaN. D. Cent. Code Ann. §36-21.1-01(5)(a) (Lexis Supp. 2009) (" 'Cruelty' or 'torture' ... does not include ... [a]ny activity that requires a license or permit under chapter 20.1-03 [which governs gaming and other licenses]")OregonOre. Rev. Stat. §167.335 (2007) ("Unless gross negligence can be shown, the provisions of [certain statutes prohibiting animal cruelty] do not apply to ... (7) [l]awful fishing, hunting and trapping activities")Pennsylvania18 Pa. Cons. Stat. §5511(a)(3)(ii) (2008) ("This subsection [banning killing, maiming, or poisoning of domestic animals or zoo animals] shall not apply to ... the killing of any animal or fowl pursuant to ... The Game Law"), §5511(c)(1) ("A person commits an offense if he wantonly or cruelly illtreats, overloads, beats, otherwise abuses any animal, or neglects any animal as to which he has a duty of care")Rhode IslandR. I. Gen. Laws §4-1-3(a) (Lexis 1998) (prohibiting "[e]very owner, possessor, or person having the charge or custody of any animal" from engaging in certain acts of unnecessary cruelty), §§4-1-5(a), (b) (prohibiting only "[m]alicious" injury to or killing of animals and further providing that "[t]his section shall not apply to licensed hunters during hunting season or a licensed business killing animals for human consumption")South CarolinaS. C. Code Ann. §47-1-40(C) (Supp. 2009) ("This section does not apply to ... activity authorized by Title 50 [consisting of laws on Fish, Game, and Watercraft]")South DakotaS. D. Codified Laws §40-1-17 (2004) ("The acts and conduct of persons who are lawfully engaged in any of the activities authorized by Title 41 [Game, Fish, Parks and Forestry] ... and persons who properly kill any animal used for food and sport hunting, trapping, and fishing as authorized by the South Dakota Department of Game, Fish and Parks, are exempt from the provisions of this chapter")TennesseeTenn. Code Ann. §39-14-201(1) (2010 Supp.) (" 'Animal' means a domesticated living creature or a wild creature previously captured"), §39-14-201(4) ("[N]othing in this part shall be construed as prohibiting the shooting of birds or game for the purpose of human food or the use of animate targets by incorporated gun clubs")TexasTex. Penal Code Ann. §42.092(a)(2) (West Supp. 2009) (" 'Animal' means a domesticated living creature, including any stray or feral cat or dog, and a wild living creature previously captured. The term does not include an uncaptured wild living creature or a livestock animal"), §42.092(f)(1)(A) ("It is an exception to the application of this section that the conduct engaged in by the actor is a generally accepted and otherwise lawful ... form of conduct occurring solely for the purpose of or in support of ... fishing, hunting, or trapping")UtahUtah Code Ann. §76-9-301(1)(b)(ii)(D) (Lexis 2008) (" 'Animal' does not include ... wildlife, as defined in Section 23-13-2, including protected and unprotected wildlife, if the conduct toward the wildlife is in accordance with lawful hunting, fishing, or trapping practices or other lawful practices"), §76-9-301(9)(C) ("This section does not affect or prohibit ... the lawful hunting of, fishing for, or trapping of, wildlife")VermontVt. Stat. Ann., Tit. 13, §351b(1) (2009) ("This subchapter shall not apply to ... activities regulated by the department of fish and wildlife pursuant to Part 4 of Title 10")VirginiaVa. Code Ann. §3.2-6570D (Lexis 2008) ("This section shall not prohibit authorized wildlife management activities or hunting, fishing or trapping [as regulated by state law]")WashingtonWash. Rev. Code §16.52.180 (2008) ("No part of this chapter shall be deemed to interfere with any of the laws of this state known as the 'game laws' ... or to interfere with the right to kill animals to be used for food")West VirginiaW. Va. Code Ann. §61-8-19(f) (Lexis Supp. 2009) ("The provisions of this section do not apply to lawful acts of hunting, fishing, [or] trapping") WisconsinWis. Stat. §951.015(1) (2007-2008) ("This chapter may not be interpreted as controverting any law regulating wild animals that are subject to regulation under ch. 169 [regulating, among other things, hunting], [or] the taking of wild animals")WyomingWyo. Stat. Ann. §6-3-203(m)(iv) (2009) ("Nothing in subsection (a), (b) or (n) of this section shall be construed to prohibit ... [t]he hunting, capture or destruction of any predatory animal or other wildlife in any manner not otherwise prohibited by law")FOOTNOTESFootnote 1 The statute reads in full: "§48. Depiction of animal cruelty "(a) Creation, Sale, or Possession.--Whoever knowingly creates, sells, or possesses a depiction of animal cruelty with the intention of placing that depiction in interstate or foreign commerce for commercial gain, shall be fined under this title or imprisoned not more than 5 years, or both. "(b) Exception.--Subsection (a) does not apply to any depiction that has serious religious, political, scientific, educational, journalistic, historical, or artistic value. "(c) Definitions.--In this section-- "(1) the term 'depiction of animal cruelty' means any visual or auditory depiction, including any photograph, motion-picture film, video recording, electronic image, or sound recording of conduct in which a living animal is intentionally maimed, mutilated, tortured, wounded, or killed, if such conduct is illegal under Federal law or the law of the State in which the creation, sale, or possession takes place, regardless of whether the maiming, mutilation, torture, wounding, or killing took place in the State; and "(2) the term 'State' means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other commonwealth, territory, or possession of the United States."Footnote 2 The Government contends that these dogfights were unlawful at the time they occurred, while Stevens disputes the assertion. Reply Brief for United States 25, n. 14 (hereinafter Reply Brief); Brief for Respondent 44, n. 18.Footnote 3 The dissent contends that because there has not been a ruling on the validity of the statute as applied to Stevens, our consideration of his facial overbreadth claim is premature. Post, at 1, and n. 1, 2-3 (opinion of Alito, J.). Whether or not that conclusion follows, here no as-applied claim has been preserved. Neither court below construed Stevens's briefs as adequately developing a separate attack on a defined subset of the statute's applications (say, dogfighting videos). See 533 F. 3d 218, 231, n. 13 (CA3 2008) (en banc) ("Stevens brings a facial challenge to the statute"); App. to Pet. for Cert. 65a, 74a. Neither did the Government, see Brief for United States in No. 05-2497 (CA3), p. 28 (opposing "the appellant's facial challenge"); accord, Brief for United States 4. The sentence in Stevens's appellate brief mentioning his unrelated sufficiency-of-the-evidence challenge hardly developed a First Amendment as-applied claim. See post, at 1, n. 1. Stevens's constitutional argument is a general one. And unlike the challengers in Washington State Grange, Stevens does not "rest on factual assumptions ... that can be evaluated only in the context of an as-applied challenge." 552 U. S., at 444.Footnote 4 The citations in the dissent's appendix are beside the point. The cited statutes stand for the proposition that hunting is not covered by animal cruelty laws. But the reach of §48 is, as we have explained, not restricted to depictions of conduct that violates a law specifically directed at animal cruelty. It simply requires that the depicted conduct be "illegal." §48(c)(1). The Government implicitly admits as much, arguing that "instructional videos for hunting" are saved by the statute's exceptions clause, not that they fall outside the prohibition in the first place. Reply Brief 6.FOOTNOTESFootnote 1 Respondent argued at length that the evidence was insufficient to prove that the particular videos he sold lacked any serious scientific, educational, or historical value and thus fell outside the exception in §48(b). See Brief for Appellant in No. 05-2497 (CA3), pp. 72-79. He added that, if the evidence in this case was held to be sufficient to take his videos outside the scope of the exception, then "this case presents ... a situation" in which "a constitutional violation occurs." Id., at 71. See also id., at 47 ("The applicability of 18 U. S. C. §48 to speech which is not a crush video or an appeal to some prurient sexual interest constitutes a restriction of protected speech, and an unwarranted violation of the First Amendment's free speech guarantee"); Brief for Respondent 55 ("Stevens' speech does not fit within any existing category of unprotected, prosecutable speech"); id., at 57 ("[T]he record as a whole demonstrates that Stevens' speech cannot constitutionally be punished"). Contrary to the Court, ante, at 10-11, n. 3 (citing 533 F. 3d 218, 231, n. 13 (CA3 2008) (en banc)), I see no suggestion in the opinion of the Court of Appeals that respondent did not preserve an as-applied challenge.Footnote 2 For the reasons set forth below, this is not a case in which the challenged statute is unconstitutional in all or almost all of its applications.Footnote 3 See Appendix, infra (citing statutes); B. Wagman, S. Waisman, & P. Frasch, Animal Law: Cases and Materials 92 (4th ed. 2010) ("Most anti-cruelty laws also include one or more exemptions," which often "exclud[e] from coverage (1) whole classes of animals, such as wildlife or farm animals, or (2) specific activities, such as hunting"); Note, Economics and Ethics in the Genetic Engineering of Animals, 19 Harv. J. L. & Tech. 413, 432 (2006) ("Not surprisingly, state laws relating to the humane treatment of wildlife, including deer, elk, and waterfowl, are virtually non-existent").Footnote 4 Webster's Third New International Dictionary 2073 (1976); Random House Dictionary of the English Language 1303 (1966). While the term "serious" may also mean "weighty" or "important," ibid., we should adopt the former definition if necessary to avoid unconstitutionality.Footnote 5 Since the Court has taken pains not to decide whether §48 would be unconstitutional as applied to graphic dogfight videos, including those depicting fights occurring in countries where dogfighting is legal, I take it that the Court does not intend for its passing reference to cockfights to mean either that all depictions of cockfights, whether legal or illegal under local law, are protected by the First Amendment or that it is impermissible to ban the sale or possession in the States of a depiction of a legal cockfight in Puerto Rico.Footnote 6 In other cases, we have regarded evidence of a national consensus as proof that a particular government interest is compelling. See Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd., 502 U. S. 105, 118 (1991) (State's compelling interest "in ensuring that victims of crime are compensated by those who harm them" evidenced by fact that "[e]very State has a body of tort law serving exactly this interest"); Roberts v. United States Jaycees, 468 U. S. 609, 624-625 (1984) (citing state laws prohibiting discrimination in public accommodations as evidence of the compelling governmental interest in ensuring equal access). |
9 | As part of a comprehensive program to recoup the costs of federal aviation programs from those who use the national airsystem, Congress enacted the Airport and Airway Revenue Act of 1970, which imposes an annual "flat fee" registration tax on all civil aircraft, including those owned by the States and by the Federal Government, that fly in the navigable airspace of the United States. The Act also imposes a 7-cent-per-gallon tax on aircraft fuel, which, together with a 5-cent-per-pound aircraft tire and 10-cent-per-pound tube tax and the registration tax, was intended to reflect the cost of benefits from the programs to noncommercial general aircraft, but States were exempted from the fuel, tire, and tube taxes. After the registration tax was collected under protest from it with respect to a helicopter it used exclusively for police functions, the Commonwealth of Massachusetts instituted this refund action, contending that the United States may not constitutionally impose a tax that directly affects the essential and traditional state function of operating a police force. The District Court dismissed the complaint on the ground, inter alia, that the registration tax was a user fee which did not implicate the constitutional doctrine of implied immunity of state government from federal taxation. The Court of Appeals affirmed. Held: The registration tax does not violate the implied immunity of a state government from federal taxation. Pp. 453-470. (a) A State enjoys no constitutional immunity from a nondiscriminatory federal revenue measure which operates only to ensure that each member of a class of special beneficiaries of a federal program pays a reasonable approximation of its fair share of the cost of the program to the Federal Government. Pp. 454-463. (b) Even if it were feasible for the Federal Government to recover all costs of a program through charges for measurable amounts of use of its facilities, rather than by imposing a flat fee, so long as the federal taxes imposed do not discriminate against state functions, are based on a fair approximation of the State's use of the facilities, and are structured to produce revenues that will not exceed the total cost to the Federal Government of the benefits supplied, there can be no substantial basis for a claim that the Federal Government may be using its taxing powers to control, unduly interfere with, or destroy a State's ability to perform essential services. Pp. 463-467. (c) Here, the registration tax (1) is nondiscriminatory, since it applies not only to private users of the airways, but also to civil aircraft operated by the United States; (2) is, together with the 7-cent-per-gallon fuel tax and the 5-cent-per-pound tire and 10-cent-per-pound tube tax, a fair approximation of the cost of the benefits civil aircraft receive from the federal programs, since, even though the taxes do not give weight to every factor affecting appropriate compensation for airport and airway use, the fuel tax and tire and tube tax are geared directly to use whereas the registration tax is designed to give weight to factors affecting the level of use of the navigational facilities; and (3) is not excessive in relation to the cost of the Government benefits supplied, since not only have the user fees proved to be insufficient to cover the annual civil aviation outlays but the States, being exempt from the fuel tax, pay far less than private noncommercial users of the airways. Pp. 467-470. 548 F.2d 33, affirmed.BRENNAN, J., delivered the opinion of the Court, in which WHITE, MARSHALL, and STEVENS, JJ., joined, and in Parts I, II-C, and III of which STEWART and POWELL, JJ., joined. STEWART and POWELL, JJ., filed an opinion concurring in part and concurring in the judgment, post, p. 470. REHNQUIST, J., filed a dissenting opinion, in which BURGER, C. J., joined, post, p. 471. BLACKMUN, J., took no part in the decision or consideration of the case.Terence P. O'Malley, Assistant Attorney General of Massachusetts, argued the cause for petitioner. With him on the brief were Francis X. Bellotti, Attorney General, and S. Stephen Rosenfeld and Margot Botsford, Assistant Attorneys General.Allan A. Ryan, Jr., argued the cause for the United States. On the brief were Solicitor General McCree, Assistant Attorney General Ferguson, Stuart A. Smith, and Ann Belanger Durney.* [Footnote *] W. Bernard Richland and Samuel J. Warms filed a brief for the city of New York as amicus curiae urging reversal. MR. JUSTICE BRENNAN delivered the opinion of the Court.** As part of a comprehensive program to recoup the costs of federal aviation programs from those who use the national airsystem, Congress in 1970 imposed an annual registration tax on all civil aircraft that fly in the navigable airspace of the United States. 26 U.S.C. 4491.1 The constitutional question presented in this case is whether this tax, as applied to an aircraft owned by a State and used by it exclusively for police functions, violates the implied immunity of a state government from federal taxation. We hold that it does not.ISince the passage of the Air Commerce Act of 1926, 44 Stat. 568, the Federal Government has expended significant amounts of federal funds to develop and strengthen an integrated national airsystem and to make civil air transportation safe and practical. It has established, developed, and improved a wide array of air navigational facilities and services that benefit all aircraft flying in the Nation's navigable airspace,2 and it has also made substantial grants to state and local governments to assist in planning and developing airports.In 1970, after an extended study of the national airsystem, Congress concluded that the level of annual federal outlays on aviation, while significant, had not been sufficient to permit the national airsystem to develop the capacity to cope satisfactorily with the current and projected growth in air transportation. To remedy this situation, Congress enacted two laws, the Airport and Airway Development Act of 1970 (Development Act), 84 Stat. 219, and the Airport and Airway Revenue Act of 1970 (Revenue Act), 84 Stat. 236, which together constitute a comprehensive program substantially to expand and improve the national airport and airway system over the decade beginning July 1, 1970. In the Development Act, Congress provided for vastly increased federal expenditures both for airport planning and development and for the further expansion of federal navigational services. More importantly for present purposes, the Revenue Act adopted several measures to ensure that federal outlays that benefited the civil users of the airways would, to a substantial extent, be financed by taxing measures imposed on those civil users.3 The Revenue Act, therefore, enacted for the first time, or increased, several taxes on civil aviation. Congress conceived of each of these revenue measures as user fees and calculated that they would produce revenues that would defray a significant and increasing percentage of the civil share of the annual total federal airport and airway expenditures for the fiscal years 1970 to 1979.4 To assure that the revenues from these user taxes would be expended only for the expansion, improvement, and maintenance of the air transportation system, an Airport and Airway Trust Fund was created, and Congress provided that the amount of revenue generated by the aviation user charges would, during the 1970's, be paid into this trust fund, as would any money appropriated from general revenues for aviation purposes.5 Revenue Act, 208, 84 Stat. 250, 49 U.S.C. 1742; see H. R. Rep. No. 91-601, p. 41 (1969) (hereinafter H. R. Rep.); S. Rep. No. 91-706, pp. 23-25 (1970) (hereinafter S. Rep.).The financing measures in the Revenue Act are intended to promote two purposes. First, they are designed to serve the congressional policy of having those who especially benefit from Government activity help bear the cost. See H. R. Rep. 38; S. Rep. 5. Second, the financing provisions are intended to ensure that the capacity of the national air system would not again be found to be insufficient to meet the demands of increasing use. Congress believed that the inadequacy in past levels of investment in aviation had been due to the substantial competition from nonaviation budgetary requests. See H. R. Rep. 3. The trust fund and the user fees were, therefore, established to provide funding for aviation that would "generally match and grow with the demand" for use of the airways. Id., at 8.The tax challenged in this case is one of several adopted in the Revenue Act, the annual aircraft registration tax. Revenue Act, 206, 26 U.S.C. 4491. It imposes an annual "flat fee" tax on all civil aircraft - including those owned by State and National Governments6 - that fly in the navigable airspace of the United States.7 The amount of the annual charge depends upon the type and weight of the aircraft: those with piston-driven engines pay $25 plus 2 cents per pound of the maximum certificated takeoff weight in excess of 2,500 pounds whereas turbine-powered aircraft pay $25 plus 3 1/2 cents per pound of the maximum certificated takeoff weight. See n. 1, supra.As is apparent from both the rate of tax in 4491 and the legislative history of the Revenue Act, Congress did not contemplate that the annual registration tax would generate significant amounts of revenue, but rather that the bulk of the funds generated by the system would come from other user taxes,8 each of which is related more directly to the level of use of the navigable airspace. Thus, commercial aviation's share of the cost of the federal activities would be raised primarily through an 8% tax on the price of domestic air passenger tickets, see Revenue Act, 203, 26 U.S.C. 4261; a $3 "head tax" on international flights originating in the United States, ibid.; and a 5% tax on the cost of transporting property by air, Revenue Act, 204, 26 U.S.C. 4271. Noncommercial general aviation - the generic category that includes state police aircraft - would pay most of its share through a 7-cent-per-gallon tax on aircraft fuel. See Revenue Act, 202, 26 U.S.C. 4041.But while the registration tax was expected to produce only modest revenues and was understood to be only indirectly related to system use, Congress regarded it as an integral and essential part of the network of user charges.9 Moreover, it is the only tax imposed on those general noncommercial aircraft owned and operated by States. Although Congress was generally of the view that the States should be required to pay aviation user charges since "there would appear to be no reason why [they] should not pay for their fair share of the use of the airway facilities," H. R. Rep. 46; see S. Rep. 17-18, and in fact made the States subject to all the other user charges, it retained a statutory exemption for the States from the aircraft fuel, tire, and tube taxes. See 68A Stat. 480, as amended, 26 U.S.C. 4041 (g) (1976 ed.); 26 U.S.C. 4221.The Commonwealth of Massachusetts owns several aircraft that are subject to the tax imposed by 4491, including a helicopter which the Commonwealth uses exclusively for patrolling highways and other police functions.10 In 1973 the United States notified the Commonwealth that it had been assessed for a tax of $131.43 on this state police helicopter for the period from July 1, 1970, to June 30, 1971. The Commonwealth refused to pay and the United States thereafter levied on one of the Commonwealth's bank accounts and collected this tax, plus interest and penalties.Pursuant to 28 U.S.C. 1346 (1970 ed. and Supp. V), the Commonwealth then instituted this action for a refund of the money collected, contending that the United States may not constitutionally impose a tax that directly affects the essential and traditional state function of operating a police force. The District Court dismissed the complaint in an unreported decision. It first indicated its view that the most recent decisions of this Court had so limited a State's constitutional immunity from federal taxation that a constitutional challenge could not succeed unless the tax was discriminatory or the State showed that the tax actually impaired a State function. Because the Commonwealth had not alleged that this nondiscriminatory annual fee had in fact impaired the operations of its police force, the District Court concluded dismissal was mandatory. In the alternative, the District Court held that the tax in question is a user fee and that, whatever the present scope of the constitutional principle of implied immunity of a state government from federal taxes, a user fee does not implicate the doctrine. The Court of Appeals for the First Circuit affirmed, solely on the latter ground. 548 F.2d 33 (1977). We granted certiorari, , to resolve a conflict between this decision and Georgia Dept. of Transp. v. United States, 430 F. Supp. 823 (ND Ga. 1976), appeal docketed, No. 77-16. See also City of New York v. United States, 394 F. Supp. 641 (SDNY 1975), affirmance order, 538 F.2d 308 (CA2 1976); Texas v. United States, 72-2 USTC § 16.048 (WD Tex. 1972), aff'd, 73-1 USTC § 16,085 (CA5 1973) (holding that 8% air passenger tax may constitutionally be applied to state employees traveling on official state business). We affirm.IIA review of the development of the constitutional doctrine of state immunity from federal taxation is a necessary preface to decision of this case. For while the Commonwealth concedes that certain types of user fees may constitutionally be applied to its essential activities,11 it urges that the decisions of this Court teach that the validity of any impost levied against a State must be judged by a "bright-line" test: If the measure is labeled a tax and/or imposed or collected pursuant to the Internal Revenue Code, it is unconstitutional as applied to an essential state function even if the revenue measure operates as a user fee. See Brief for Petitioner 14-28. And the Commonwealth maintains that 4491 is invalid for the additional reason that the values furthered by this constitutional doctrine necessarily require the invalidation of a levy such as that under 4491 which, as an annual fee, is not directly related to use. See Brief for Petitioner 28-41. Neither contention has merit. The principles that have animated the development of the doctrine of state tax immunity and the decisions of this Court in analogous contexts persuade us that a State enjoys no constitutional immunity from a nondiscriminatory revenue measure, like 4491, which operates only to ensure that each member of a class of special beneficiaries of a federal program pay a reasonable approximation of its fair share of the cost of the program to the National Government.12 Like the Court of Appeals, we have no occasion to decide either the present vitality of the doctrine of state tax immunity or the conditions under which it might be invoked.AThat the existence of the States implies some restriction on the national taxing power was first decided in Collector v. Day, 11 wall. 113 (1871). There this Court held that the immunity that federal instrumentalities and employees then enjoyed from state taxation, see Dobbins v. Commissioners, 16 Pet. 435 (1842); McCulloch v. Maryland, 4 Wheat. 316 (1819), was to some extent reciprocal and that the salaries paid state judges were immune from a nondiscriminatory federal tax. This immunity of State and Federal Governments from taxation by each other was expanded in decisions over the last third of the 19th century and the first third of this century, see, e. g., Panhandle Oil Co. v. Mississippi ex rel. Knox, ; Indian Motorcycle Co. v. United States, (sales from a private person to one sovereign may not be taxed by the other), but more recent decisions of this Court have confined the scope of the doctrine.The immunity of the Federal Government from state taxation is bottomed on the Supremacy Clause, but the States' immunity from federal taxes was judicially implied from the States' role in the constitutional scheme. Collector v. Day, supra, emphasized that the States had been in existence as independent sovereigns when the Constitution was adopted, and that the Constitution presupposes and guarantees the continued existence of the States as governmental bodies performing traditional sovereign functions. 11 Wall., at 125-126. To implement this aspect of the constitutional plan, Collector v. Day concluded that it was imperative absolutely to prohibit any federal taxation that directly affected a traditional state function, quoting Mr. Chief Justice Marshall's aphorisms that "`the power of taxing ... may be exercised so far as to destroy,'" id., at 123, quoting McCulloch v. Maryland, supra, at 427, and "`a right [to tax], in its nature, acknowledges no limits.'" 11 Wall., at 123, quoting Weston v. Charleston, 2 Pet. 449, 466 (1829). The Court has more recently remarked that these maxims refer primarily to two attributes of the taxing power. First, in imposing a tax to support the services a government provides to the public at large, a legislature need not consider the value of particular benefits to a taxpayer, but may assess the tax solely on the basis of taxpayers' ability to pay. Second (of perhaps greater concern in the present context), a tax is a powerful regulatory device; a legislature can discourage or eliminate a particular activity that is within its regulatory jurisdiction simply by imposing a heavy tax on its exercise. See National Cable Television Assn. v. United States, . Collector v. Day, like the earlier McCulloch v. Maryland, reflected the view that the awesomeness of the taxing power required a flat and absolute prohibition against a tax implicating an essential state function because the ability of the federal courts to determine whether particular revenue measures would or would not destroy such an essential function was to be doubted.As the contours of the principle evolved in later decisions, "cogent reasons" were recognized for narrowly limiting the immunity of the States from federal imposts. See Helvering v. Gerhardt, . The first is that any immunity for the protection of state sovereignty is at the expense of the sovereign power of the National Government to tax. Therefore, when the scope of the States' constitutional immunity is enlarged beyond that necessary to protect the continued ability of the States to deliver traditional governmental services, the burden of the immunity is thrown upon the National Government without any corresponding promotion of the constitutionally protected values. See, id., at 416-417; Helvering v. Mountain Producers Corp., ; Willcuts v. Bunn, . The second, also recognized by Mr. Chief Justice Marshall in McCulloch v. Maryland, supra, at 435-436, is that the political process is uniquely adapted to accommodating the competing demands "for national revenue, on the one hand, and for reasonable scope for the independence of state action, on the other," Helvering v. Gerhardt, supra, at 416: The Congress, composed as it is of members chosen by state constituencies, constitutes an inherent check against the possibility of abusive taxing of the States by the National Government.13 In tacit, and at times explicit, recognition of these considerations, decisions of the Court either have declined to enlarge the scope of state immunity or have in fact restricted its reach. Typical of this trend are decisions holding that the National Government may tax revenue-generating activities of the States that are of the same nature as those traditionally engaged in by private persons. See, e. g., New York v. United States, (tax on water bottled and sold by State upheld); Allen v. Regents, (tax on admissions to state athletic events approved notwithstanding use of proceeds for essential state functions); Helvering v. Powers, (tax on operations of railroad by State); Ohio v. Helvering, (tax on state liquor operation); South Carolina v. United States, (tax on state-run liquor business). It is true that some of the opinions speak of the state activity taxed as "proprietary" and thus not an immune essential governmental activity, but the opinions of the Members of the Court in New York v. United States, supra, the most recent decision, rejected the governmental-proprietary distinction as untenable.14 Rather the majority15 reasoned that a nondiscriminatory tax may be applied to a state business activity where, as was the case there, the recognition of immunity would "accomplish a withdrawal from the taxing power of the nation a subject of taxation of a nature which has been traditionally within that power from the beginning. Its exercise ... by a nondiscriminatory tax, does not curtail the business of the state government more than it does the like business of the citizen." 326 U.S., at 588-589 (Stone, C. J., concurring).Illustrative of decisions actually restricting the scope of the immunity is the line of cases that culminated in the overruling of Collector v. Day in Graves v. New York ex rel. O'Keefe, . See, e. g., Helvering v. Gerhardt, supra; Helvering v. Mountain Producers Corp., supra; Metcalf & Eddy v. Mitchell, . Collector v. Day, of course, involved a nondiscriminatory tax that was imposed not directly on the State but rather on the salary earned by a judicial officer. Neither Collector v. Day itself nor its progeny or precursors made clear how such a taxing measure could be employed to preclude the States from performing essential functions. In any case, in the line of decisions that culminated in Graves v. New York ex rel. O'Keefe, supra, the Court demonstrated that an immunity for the salaries paid key state officials is not justifiable. Although key state officials are agents of the State, they are also citizens of the United States, so their income is a natural subject for income taxation. See Helvering v. Gerhardt, supra, at 420 and 422.More significantly, because the taxes imposed were nondiscriminatory and thus also applicable to income earned by persons in private employment, the risk was virtually nonexistent that such revenue provisions could significantly impede a State's ability to hire able persons to perform its essential functions. See Graves v. New York ex rel. O'Keefe, supra, at 484-485; Helvering v. Gerhardt, supra, at 420-421. The only advantage conceivably to be lost by denying the States such an immunity is that essential state functions might be obtained at a lesser cost because employees exempt from taxation might be willing to work for smaller salaries. See 304 U.S., at 420-421. But that was regarded as an inadequate ground for sustaining the immunity and preventing the National Government from requiring these citizens to support its activities. See Graves v. New York ex rel. O'Keefe, supra, at 483 and cases cited in n. 3. The purpose of the implied constitutional restriction on the national taxing power is not to give an advantage to the States by enabling them to engage employees at a lower charge than those paid by private entities, see Helvering v. Gerhardt, supra, at 421-422, but rather is solely to protect the States from undue interference with their traditional governmental functions. While a tax on the salary paid key state officers may increase the cost of government, it will no more preclude the States from performing traditional functions than it will prevent private entities from performing their missions. See Graves v. New York ex rel. O'Keefe, supra, at 484-485; Helvering v. Gerhardt, supra, at 420-421.These two lines of decisions illustrate the "practical construction" that the Court now gives the limitation the existence of the States constitutionally imposes on the national taxing power; "that limitation cannot be so varied or extended as seriously to impair either the taxing power of the government imposing the tax ... or the appropriate exercise of the functions of the government affected by it." New York v. United States, 326 U.S., at 589-590 (Stone, C. J., concurring) quoting Metcalf & Eddy v. Mitchell, supra, at 523-524. Where the subject of tax is a natural and traditional source of federal revenue and where it is inconceivable that such a revenue measure could ever operate to preclude traditional state activities, the tax is valid. While the Court has by no means abandoned its doubts concerning its ability to make particularized assessments of the impact of revenue measures on essential state operations, compare New York v. United States, supra, at 581 (opinion of Frankfurter, J.)16 with 326 U.S., at 590 (Stone, C. J., concurring),17 it has recognized that some generic types of revenue measures could never seriously threaten the continued functioning of the States and hence are outside the scope of the implied tax immunity.BA nondiscriminatory taxing measure that operates to defray the cost of a federal program by recovering a fair approximation of each beneficiary's share of the cost is surely no more offensive to the constitutional scheme than is either a tax on the income earned by state employees or a tax on a State's sale of bottled water.18 The National Government's interest in being compensated for its expenditures is only too apparent. More significantly perhaps, such revenue measures by their very nature cannot possess the attributes that led Mr. Chief Justice Marshall to proclaim that the power to tax is the power to destroy. There is no danger that such measures will not be based on benefits conferred or that they will function as regulatory devices unduly burdening essential state activities. It is, of course, the case that a revenue provision that forces a State to pay its own way when performing an essential function will increase the cost of the state activity. But Graves v. New York ex rel. O'Keefe, and its precursors, see 306 U.S., at 483 and the cases cited in n. 3, teach that an economic burden on traditional state functions without more is not a sufficient basis for sustaining a claim of immunity. Indeed, since the Constitution explicitly requires States to bear similar economic burdens when engaged in essential operations, see U.S. Const., Amdts. 5, 14; Pennsylvania Coal Co. v. Mahon, (State must pay just compensation when it "takes" private property for a public purpose); U.S. Const., Art. I, 10, cl. 1; United States Trust Co. v. New Jersey, (even when burdensome, a State often must comply with the obligations of its contracts), it cannot be seriously contended that federal exactions from the States of their fair share of the cost of specific benefits they receive from federal programs offend the constitutional scheme.Our decisions in analogous context support this conclusion. We have repeatedly held that the Federal Government may impose appropriate conditions on the use of federal property or privileges and may require that state instrumentalities comply with conditions that are reasonably related to the federal interest in particular national projects or programs. See, e. g., Ivanhoe Irrigation Dist. v. McCracken, ; Oklahoma v. Civil Service Comm'n, ; United States v. San Francisco, ; cf. National League of Cities v. Usery, ; Fry v. United States, . A requirement that States, like all other users, pay a portion of the costs of the benefits they enjoy from federal programs is surely permissible since it is closely related to the federal interest in recovering costs from those who benefit and since it effects no greater interference with state sovereignty than do the restrictions which this Court has approved.A clearly analogous line of decisions is that interpreting provisions in the Constitution that also place limitations on the taxing power of government. See, e. g., U.S. Const., Art. I, 8, cl. 3 (restricting power of States to tax interstate commerce); 10, cl. 3 (prohibiting any state tax that operates "to impose a charge for the privilege of entering, trading in, or lying in a port." Clyde Mallory Lines v. Alabama ex rel. State Docks Comm'n, ). These restrictions, like the implied state tax immunity, exist to protect constitutionally valued activity from the undue and perhaps destructive interference that could result from certain taxing measures. The restriction implicit in the Commerce Clause is designed to prohibit States from burdening the free flow of commerce, see generally Complete Auto Transit, Inc. v. Brady, , whereas the prohibition against duties on the privilege of entering ports is intended specifically to guard against local hindrances to trade and commerce by vessels. See Packet Co. v. Keokuk, .Our decisions implementing these constitutional provisions have consistently recognized that the interests protected by these Clauses are not offended by revenue measures that operate only to compensate a government for benefits supplied. See, e. g., Clyde Mallory Lines v. Alabama, supra (flat fee charged each vessel entering port upheld because charge operated to defray cost of harbor policing); Evansville-Vanderburgh Airport Authority v. Delta Airlines, Inc., ($1 head tax on explaining commercial air passengers upheld under the Commerce Clause because designed to recoup cost of airport facilities). A governmental body has an obvious interest in making those who specifically benefit from its services pay the cost and, provided that the charge is structured to compensate the government for the benefit conferred, there can be no danger of the kind of interference with constitutionally valued activity that the Clauses were designed to prohibit.CHaving established that taxes that operate as user fees may constitutionally be applied to the States, we turn to consider the Commonwealth's argument that 4491 should not be treated as a user fee because the amount of the tax is a flat annual fee and hence is not directly related to the degree of use of the airways.19 This argument has been confronted and rejected in analogous contexts. Capitol Greyhound Lines v. Brice, , is illustrative. There the Court rejected an attack under the Commerce Clause on an annual Maryland highway tax of "2% upon the fair market value of motor vehicles used in interstate commerce." The carrier argued that the correlation between the tax and use was not sufficiently precise to sustain the tax as a valid user charge. Noting that the tax "should be judged by its result, not its formula, and must stand unless proven to be unreasonable in amount for the privilege granted," id., at 545, the Court rejected the carrier's argument: "Complete fairness would require that a state tax formula vary with every factor affecting appropriate compensation for road use. These factors, like those relevant in considering the constitutionality of other state taxes, are so countless that we must be content with `rough approximation rather than precision.' ... Each additional factor adds to administrative burdens of enforcement, which fall alike on taxpayers and government. We have recognized that such burdens may be sufficient to justify states in ignoring even such a key factor as mileage, although the result may be a tax which on its face appears to bear with unequal weight upon different carriers... . Upon this type of reasoning rests our general rule that taxes like that of Maryland here are valid unless the amount is shown to be in excess of fair compensation for the privilege of using state roads." Id., at 546-547. (Citations and footnotes omitted.) See also Aero Mayflower Transit Co. v. Board of Railroad Comm'rs, (taxes of $10 and $15 per vehicle sustained against Commerce Clause challenges); Clyde Mallory Lines v. Alabama ex rel. State Docks Comm'n, supra (flat fee designed to defray cost of policing port upheld against claim it was constitutionally prohibited tax on privilege of entering harbor). This Court recently relied upon this reasoning to uphold a tax on commercial aviation activity. In Evansville-Vanderburgh Airport Authority v. Delta Airlines, Inc., supra, we sustained against claims based on the Commerce Clause and on the right to travel a $1 head tax on commercial airline passengers. We held that such taxes are valid so long as they (1) do not discriminate against interstate commerce, (2) are based upon some fair approximation of use, and (3) are not shown to be excessive in relation to the cost to the government of the benefits conferred. 405 U.S., at 716-720.The Commonwealth, of course, recognizes that flat fees, and even flat annual fees, have been held constitutionally permissible in these contexts. It urges, however, that such "rough approximations of cost," while appropriate compensatory measures in other settings, should not be permissible here. It maintains that the values protected by the doctrine of state tax immunity require that any user tax be closely calibrated to the amount of any taxpayer's actual use, and it suggests that we - for purposes of the state tax immunity doctrine only - define user fees as charges for measurable amounts of use of government facilities.We note first that it is doubtful that the National Government could recover the costs of its aviation activities from those direct beneficiaries without making at least some use of annual flat fees. In arguing that the Revenue Act provisions are not sufficiently user related, the Commonwealth places extensive reliance upon the DOT Study, prepared at the direction of Congress,20 of the best way to recoup the costs of the federal aviation activities from its beneficiaries. While the report recognized that it would be generally possible, albeit costly in the case of general aviation, to tie the charges to specific measurable benefits received, see DOT Study 61, it indicated that certain costs imposed by general aviation could only be recovered through flat fees. Id., at 61 n. 2.But even if it were feasible to recover all costs through charges for measurable amounts of use of Government facilities, we fail to see how such a requirement would appreciably advance the policies embodied in the doctrine of state tax immunity. Since a State has no constitutional complaint when it is required to pay the cost of benefits received, the Commonwealth's only legitimate fear is that the flat-fee requirement may result in the collection from it of more than its actual "fair share." We observe first that where the charges imposed by the Federal Government apply to large numbers of private parties as well as to state activities, it is as likely as not that the user fee will result in exacting less money from the State than it would have to pay under a perfect user-fee system. More fundamentally, even when an annual flat fee results in some overcharges, the Common-wealth's solution would often increase the fiscal burden on the States. If the National Government were required more precisely to calibrate the amount of the fee to the extent of the actual use of the airways, administrative costs would increase and so would the amount of revenue needed to operate the system. The resulting increment in a State's actual fair share might well be greater than any overcharge resulting from the present fee system. But the complete answer to the Commonwealth's concern is that even if the flat fee does cost it somewhat more than it would have to pay under a perfect user-fee system, there is still no interference with the values protected by the implied constitutional tax immunity of the States. The possibility of a slight overcharge is no more offensive to the constitutional structure than is the increase in the cost of essential operations that results either from the fact that those who deal with the State may be required to pay nondiscriminatory taxes on the money they receive or from the fact a jury may award an eminent domain claimant an amount in excess of what would be "just compensation" in an ideal system of justice.Whatever the present scope of the principle of state tax immunity, a State can have no constitutional objection to a revenue measure that satisfies the three-prong test of Evansville-Vanderburgh Airport Authority v. Delta Airlines, Inc. - substituting "state function" for "interstate commerce" in that test. So long as the charges do not discriminate against state functions, are based on a fair approximation of use of the system, and are structured to produce revenues that will not exceed the total cost to the Federal Government of the benefits to be supplied, there can be no substantial basis for a claim that the National Government will be using its taxing powers to control, unduly interfere with, or destroy a State's ability to perform essential services. The requirement that total revenues not exceed expenditures places a natural ceiling on the total amount that such charges may generate and the further requirement that the measure be reasonable and nondiscriminatory precludes the adoption of a charge that will unduly burden state activities.21 IIIApplying these principles to this case demonstrates that the Commonwealth's claim of constitutional immunity is particularly insubstantial. First, there is no question but that the tax imposed by 4491 is nondiscriminatory. It applies not only to private users of the airways but also to civil aircraft operated by the United States - facts which minimize, if not eliminate entirely, the basis for a conclusion that 4491 might be an abusive exercise of the taxing power. Indeed, the Revenue Act discriminates in favor of the States since it retains the States' exemption from the 7-cent-per-gallon fuel tax that applies to private noncommercial general aviation - a fact that illustrates the manner in which the political process is peculiarly adapted to the protection of state interests.Second, the tax satisfies the requirement that it be a fair approximation of the cost of the benefits civil aircraft receive from the federal activities. As we have indicated, the legislative background and terms of the Revenue Act indicate that Congress believed that four measures, taken together, would fairly reflect some of the cost of the benefits that redound to the noncommercial general aircraft that fly in the navigable airspace of the United States: a 7-cent-per-gallon fuel tax, a 5-cent-per-pound tax on aircraft tires, a 10-cent-per-pound tax on tubes, see 26 U.S.C. 4071, and the annual aircraft registration tax. See nn. 4 and 8, supra. The formula contained in these four measures taken together does not, of course, give weight to every factor affecting appropriate compensation for airport and airway use. A probable deficiency in the formula arises because not all aircraft make equal use of the federal navigational facilities or of the airports that have been planned or constructed with federal assistance. But the present scheme nevertheless is a fair approximation of the cost of the benefits each aircraft receives. Every aircraft that flies in the navigable airspace of the United States has available to it the navigational assistance and other special services supplied by the United States.22 And even those aircraft, if there are any, that have never received specific services from the National Government benefit from them in the sense that the services are available for their use if needed and in that the provision of the services makes the airways safer for all users.23 The four taxes, taken together, fairly reflect the benefits received, since three are geared directly to use, whereas the fourth, the aircraft registration tax, is designed to give weight to factors affecting the level of use of the navigational facilities. See n. 9, supra. A more precisely calibrated formula - which would include landing fees, charges for specific services received, and less reliance on annual flat fees, see DOT Study 62 - would, of course, be administratively more costly.It follows that a State may not complain of the application of 4491 on the ground it is not a fair approximation of use. Since the fuel tax, tire and tube tax, and annual registration fee together constitute an appropriate means of recovering the amount of the federal investment, a State, being exempt from the fuel, tire and tube taxes, can have no constitutional objection to the application of the registration fee alone.Finally, the tax is not excessive in relation to the cost of the Government benefits supplied. When Congress enacted the Revenue Act, it contemplated that the user fees imposed on civil aircraft would not be sufficient to cover the federal expenditures on civil aviation in any one year, see n. 4, supra, and the actual experience during the first years of operation was that the revenues fell far short of covering the annual civil aviation outlays.24 Since the Commonwealth pays far less than private noncommercial users of the airways, there therefore is no basis for a conclusion that the application of the registration tax to the States produces revenues in excess of the costs25 incurred by the Federal Government.26 Affirmed.MR. JUSTICE BLACKMUN took no part in the consideration or decision of this case.[Footnote **] MR. JUSTICE STEWART and MR. JUSTICE POWELL join only Parts I, II-C, and III of this opinion. MR. JUSTICE WHITE, MR. JUSTICE MARSHALL, and MR. JUSTICE STEVENS join the entire opinion. |
11 | [Footnote *] Together with United States v. Ingram et al., also on certiorari to the same court (see this Court's Rule 19.4). These cases present the issue whether 7403 of the Internal Revenue Code of 1954 - which authorizes a federal district court, in a suit instituted by the Government, to decree a sale of certain properties to satisfy the tax indebtedness of delinquent taxpayers - empowers a district court to order the sale of the family home in which a delinquent taxpayer had an interest at the time he incurred his indebtedness, but in which the taxpayer's spouse, who does not owe any of that indebtedness, also has a separate "homestead" right as defined by Texas law. Under Texas statutory and constitutional provisions, each spouse - regardless of whether one or both owns the fee interest - has a separate and undivided possessory interest in the homestead, which is only lost by death or abandonment and may not be compromised by either the other spouse or his or her heirs, and which in effect is an interest akin to an undivided life estate in the property. In the Rodgers case, the Government filed suit against respondents, the widow, children, and executor of Philip Bosco, to reduce to judgment, assessments made against Philip before his death for unpaid taxes and to enforce the Government's tax liens, including one that had attached to his interest in the homestead. The District Court granted summary judgment on respondents' claim that the tax liens could not defeat the widow's state-created right not to have her homestead (which she continued to occupy) subjected to a forced sale. The Court of Appeals affirmed. In the Ingram case, which involved tax assessments made before a divorce both against the husband alone relating to unpaid taxes withheld from employee's wages and against both spouses relating to their joint income tax liability, the residence was destroyed by fire shortly before the divorce, and the Government, as a defendant in quiet title proceedings in Federal District Court, filed a counterclaim against both spouses, seeking judicial sale of the property under 7403. Pursuant to the parties' stipulation, the property was sold and the proceeds were deposited in the court's registry, the parties agreeing that their rights would be determined as if the sale had not taken place and that the proceeds would be divided according to their respective interests. The District Court granted summary judgment on the Government's counterclaim. Affirming in part, and reversing and remanding in part, the Court of Appeals agreed that the Government could foreclose its lien on the proceeds to collect for the income tax owed by both spouses jointly, but held that the Government could not reach the proceeds to collect the husband's individual liability if the wife had maintained her homestead interest in the property. The court remanded for a factual determination of whether the wife had "abandoned" the homestead by dividing the fire insurance proceedings with the husband and by attempting, before the stipulation with the Government, to sell the property and divide the proceeds with the husband.Held: 1. Section 7403 grants power to a federal district court to order the sale of the home itself, not just the delinquent taxpayer's interest in the property. If the home is sold, the nondelinquent spouse is entitled, as part of the distribution of proceeds required under 7403, to so much of the proceeds as represents complete compensation for the loss of such spouse's separate homestead interest. Pp. 690-702. (a) While the Government's lien cannot extend beyond the property interests held by the delinquent taxpayer, the plain meaning of the statute authorizes sale of the entire property. Section 7403(a) provides that the Government may seek 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." Section 7403(b) then provides that all persons "claiming any interest in the property involved in such action" shall be made parties thereto, and 7403(c) provides that the district court should "determine the merits of all claims" to the property and if the Government's claim is established, "may decree a sale of such property ... and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States." Reading 7403 to authorize sale of the entire property is also consistent with the policy of prompt and certain collection of delinquent taxes and with the history of state in rem tax enforcement proceedings, and is further bolstered by a comparison with the statutory language which limits the Government's administrative remedy, available under 26 U.S.C. 6331, to sale of the delinquent taxpayer's interest in property. Moreover, 7403's requirements for distribution of the proceeds of the sale provide compensation for the taking of the property interest (such as the homestead estate in Texas) of an innocent third party, thus precluding any difficulties under the Due Process Clause of the Fifth Amendment. Pp. 690-700. (b) Nor do the special protections accorded by the exemption aspect of Texas homestead law immunize property held as a homestead by a nondelinquent third party from the reach of 7403. No such exception appears on the face of 7403, and the Supremacy Clause - which provides the underpinning for the Federal Government's right to sweep aside state-created exemptions in the first place - is as potent in its application to innocent bystanders as in its application to delinquent debtors. Pp. 700-702. 2. Section 7403, which provides that a district court "may" decree the sale of property, does not require the court to authorize a forced sale under absolutely all circumstances. Some limited room is left in the statute for the exercise of reasoned discretion. Pp. 703-712. (a) The principle of statutory construction that the word "may" usually implies some degree of discretion can be defeated by indications of contrary legislative intent or by obvious inferences from the statute's structure and purpose. Such indications or inferences are not present here. Pp. 706-709. (b) In determining whether to authorize a sale under 7403 when the interests of nondelinquent third parties are involved, a district court should consider such factors as the following: (1) the extent to which the Government's financial interests would be prejudiced if it were relegated to a forced sale of the partial interest actually liable for the delinquent taxes; (2) whether the third party with a nonliable separate interest in the property would, in the normal course of events, have a legally recognized expectation that such separate property would not be subject to forced sale by the delinquent taxpayer or his or her creditors; (3) the likely prejudice to the third party, both in personal dislocation costs and in practical undercompensation; and (4) the relative character and value of the nonliable and liable interests held in the property. Pp. 709-711. (c) In the Rodgers case, no individualized equitable balance of such factors has yet been attempted, this being a matter for the District Court in the first instance. In the Ingram case, a question remains under Texas law as to whether the divorced wife had abandoned the homestead. Assuming no abandonment, and if the wife discharges her personal income tax liability before the Government can proceed with its "sale," the District Court will be obliged to strike an equitable balance under the relevant factors. P. 712. 649 F.2d 1117, reversed and remanded; 649 F.2d 1128, vacated and remanded.BRENNAN, J., delivered the opinion of the Court, in which BURGER, C. J., and WHITE, MARSHALL, and POWELL, JJ., joined. BLACKMUN, J., filed an opinion concurring in the result in part and dissenting in part, in which REHNQUIST, STEVENS, and O'CONNOR, JJ., joined, post, p. 713.George W. Jones argued the cause pro hac vice for the United States. On the briefs were Solicitor General Lee, Assistant Attorney General Archer, Stuart A. Smith, William S. Estabrook, and Wynette J. Hewett. Wm. D. Elliott argued the cause for respondents Rodgers et al. With him on the brief was J. Michael Wylie. L. Lynn Elliott argued the cause and filed a brief for respondents Ingram et al.JUSTICE BRENNAN delivered the opinion of the Court.These consolidated cases involve the relationship between the imperatives of federal tax collection and rights accorded by state property laws. Section 7403 of the Internal Revenue Code of 1954, 26 U.S.C. 7403 (1976 ed. and Supp. V), authorizes the judicial sale of certain properties to satisfy the tax indebtedness of delinquent taxpayers. The issue in both cases is whether 7403 empowers a federal district court to order the sale of a family home in which a delinquent taxpayer had an interest at the time he incurred his indebtedness, but in which the taxpayer's spouse, who does not owe any of that indebtedness, also has a separate "homestead" right as defined by Texas law. We hold that the statute does grant power to order the sale, but that its exercise is limited to some degree by equitable discretion. We also hold that, if the home is sold, the nondelinquent spouse is entitled, as part of the distribution of proceeds required under 7403, to so much of the proceeds as represents complete compensation for the loss of the homestead estate.IASection 7403 provides in full as follows: "(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 [of the Treasury], 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. For purposes of the preceding sentence, any acceleration of payment under section 6166(g) shall be treated as a neglect to pay tax. "(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 sale according to the findings of the court in respect to the interests of the parties and of the United States. If the 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 such lien with expenses of sale, as the Secretary directs. "(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 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." As a general matter,1 the "lien of the United States" referred to in 7403(a) is that created by 26 U.S.C. 6321, which provides:"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 7403, whose basic elements go back to revenue legislation passed in 1868 ( 106 of the Act of July 20, 1868, ch. 186, 15 Stat. 167) is one of a number of distinct enforcement tools available to the United States for the collection of delinquent taxes.3 The Government may, for example, simply sue for the unpaid amount, and, on getting a judgment, exercise the usual rights of a judgment creditor. See 26 U.S.C. 6502(a), 7401, 7402(a). Yet a third route is administrative levy under 26 U.S.C. 6331(a), which provides:"If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary [or his delegate] to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax ... ." Administrative levy, unlike an ordinary lawsuit, and unlike the procedure described in 7403, does not require any judicial intervention, and it is up to the taxpayer, if he so chooses, to go to court if he claims that the assessed amount was not legally owing. See generally Bull v. United States, .4 The common purpose of this formidable arsenal of collection tools is to ensure the prompt and certain enforcement of the tax laws in a system relying primarily on self-reporting. See G. M. Leasing Corp. v. United States, ; United States v. Security Trust & Savings Bank, ; Bull v. United States, supra, at 259-260.5 Moreover, it has long been an axiom of our tax collection scheme that, although the definition of underlying property interests is left to state law, the consequences that attach to those interests is a matter left to federal law. See United States v. Mitchell, (state law determines income attributable to wife as community property, but state law allowing wife to renounce community rights and obligations not effective as to liability for federal tax); United States v. Union Central Life Insurance Co., (federal tax lien not subject, even as against good-faith purchaser, to state filing requirements); Aquilino v. United States, , and cases cited (attachment of federal lien depends on whether "property" or "rights to property" exist under state law; priority of federal lien depends on federal law); United States v. Bess, (once it has been determined that state law has created property interests sufficient for federal tax lien to attach, state law "is inoperative to prevent the attachment" of such liens); Springer v. United States, (federal tax sale not subject to state requirement that independent lots be sold separately). BThe substance of Texas law related to the homestead right may usefully be divided into two categories. Cf. Woods v. Alvarado State Bank, 118 Tex. 586, 590, 19 S. W. 2d 35, 35 (1929). First, in common with a large number of States, Texas establishes the family home or place of business6 as an enclave exempted from the reach of most creditors. Thus, under Tex. Const., Art. 16, 50:"The homestead of a family, or of a single adult person, shall be, and is hereby protected from forced sale, for the payment of all debts except for [certain exceptions not relevant here] ... . No mortgage, trust deed, or other lien on the homestead shall ever be valid, except for [certain exceptions not relevant here]."7 Second, in common with a somewhat smaller number of States, Texas gives members of the family unit additional rights in the homestead property itself. Thus, in a clause not included in the above quotation, Tex. Const., Art 16, 50, also provides that "the owner or claimant of the property claimed as homestead [may not], if married, sell or abandon the homestead without the consent of the other spouse, given in such manner as may be prescribed by law."8 Equally important, Art. 16, 52, provides:"On the death of the husband or wife, or both, the homestead shall descend and vest in like manner as other real property of the deceased, and shall be governed by the same laws of descent and distribution, but it shall not be partitioned among the heirs of the deceased during the lifetime of the surviving husband or wife, or so long as the survivor may elect to use or occupy the same as a homestead, or so long as the guardian of the minor children of the deceased may be permitted, under the order of the proper court having the jurisdiction, to use and occupy the same."9 The effect of these provisions in the Texas Constitution is to give each spouse in a marriage a separate and undivided possessory interest in the homestead, which is only lost by death or abandonment, and which may not be compromised either by the other spouse or by his or her heirs.10 It bears emphasis that the rights accorded by the homestead laws vest independently in each spouse regardless of whether one spouse, or both, actually owns the fee interest in the homestead. Thus, although analogy is somewhat hazardous in this area, it may be said that the homestead laws have the effect of reducing the underlying ownership rights in a homestead property to something akin to remainder interests and vesting in each spouse an interest akin to an undivided life estate in the property. See Williams v. Williams, 569 S. W. 2d 867, 869 (Tex. 1978), and cases cited; Paddock v. Siemoneit, 147 Tex. 571, 585, 218 S. W. 2d 428, 436 (1949), and cases cited; Hill v. Hill, 623 S. W. 2d 779, 780 (Tex. App. 1981), and cases cited. This analogy, although it does some injustice to the nuances present in the Texas homestead statute,11 also serves to bring to the fore something that has been repeatedly emphasized by the Texas courts, and that was reaffirmed by the Court of Appeals in these cases: that the Texas homestead right is not a mere statutory entitlement, but a vested property right. As the Supreme Court of Texas has put it, a spouse "has a vested estate in the land of which she cannot be divested during her life except by abandonment or a voluntary conveyance in the manner prescribed by law." Paddock v. Siemoneit, supra, at 585, 218 S. W. 2d, at 436; see United States v. Rogers, 649 F.2d 1117, 1127 (CA5 1981), and cases cited.12 IIThe two cases before us were consolidated for oral argument before the United States Court of Appeals for the Fifth Circuit, and resulted in opinions issued on the same day. United States v. Rogers, supra;13 Ingram v. Dallas Dept. of Housing & Urban Rehabilitation, 649 F.2d 1128 (1981). They arise out of legally comparable, but quite distinct, sets of facts.ALucille Mitzi Bosco Rodgers is the widow of Philip S. Bosco, whom she married in 1937. She and Mr. Bosco acquired, as community property, a residence in Dallas, Texas, and occupied it as their homestead. Subsequently, in 1971 and 1972, the Internal Revenue Service issued assessments totaling more than $900,000 for federal wagering taxes, penalties, and interest, against Philip for the taxable years 1966 through 1971. These taxes remained unpaid at the time of Philip's death in 1974. Since Philip's death, Lucille has continued to occupy the property as her homestead, and now lives there with her present husband.On September 23, 1977, the Government filed suit under 26 U.S.C. 7402 and 7403 in the United States District Court for the Northern District of Texas against Mrs. Rodgers and Philip's son, daughter, and executor. The suit sought to reduce to judgment the assessments against Philip, to enforce the Government's tax liens, including the one that had attached to Philip's interest in the residence, and to obtain a deficiency judgment in the amount of any unsatisfied part of the liability. On cross-motions for summary judgment, the District Court granted partial summary judgment on, among other things, the defendants' claim that the federal tax liens could not defeat Mrs. Rodgers' state-created right not to have her homestead subjected to a forced sale. Fed. Rule Civ. Proc. 54(b).The Court of Appeals affirmed on the homestead issue,14 holding that if "a homestead interest is, under state law, a property right, possessed by the nontaxpayer spouse at the time the lien attaches to the taxpayer spouse's interest, then the federal tax lien may not be foreclosed against the homestead property for as long as the nontaxpayer spouse maintains his or her homestead interest under state law." 649 F.2d, at 1125 (footnotes omitted). The court implied that the Government had the choice of either waiting until Mrs. Rodgers' homestead interest lapsed, or satisfying itself with a forced sale of only Philip Bosco's interest in the property.BJoerene Ingram is the divorced wife of Donald Ingram. During their marriage, Joerene and Donald acquired, as community property, a residence in Dallas, Texas, and occupied it as their homestead. Subsequently, in 1972 and 1973, the Internal Revenue Service issued assessments against Donald Ingram relating to unpaid taxes withheld from wages of employees of a company of which he was president. Deducting payments made on account of these liabilities, there remains unpaid approximately $9,000, plus interest. In addition, in 1973, the Service made an assessment against both Donald and Joerene in the amount of $283.33, plus interest, relating to their joint income tax liability for 1971. These amounts also remain unpaid.In March 1975, at about the time the Ingrams were seeking a divorce, their residence was destroyed by fire. In September 1975, the Ingrams obtained a divorce. In connection with the divorce, they entered into a property settlement agreement, one provision of which was that Donald would convey to Joerene his interest in the real property involved in this case in exchange for $1,500, to be paid from the proceeds of the sale of the property. Joerene tried to sell the property, through a trustee, but was unsuccessful in those efforts, apparently because of the federal tax liens encumbering the property. To make matters worse, she then received notice from the City of Dallas Department of Housing and Urban Rehabilitation (Department) that unless she complied with local ordinances, the remains of the fire-damaged residence would be demolished. Following a hearing, the Department issued a final notice and a work order to demolish. Joerene Ingram and the trustee then filed suit in Texas state court to quiet title to the property, to remove the federal tax liens, and to enjoin demolition. The defendants were the United States, the Department, and several creditors claiming an interest in the property.The United States removed the suit to the District Court for the Northern District of Texas. It then filed a counterclaim against Joerene Ingram and Donald Ingram (who was added as a defendant on the counterclaim) for both the unpaid withholding taxes and the joint liability for unpaid income taxes. In its prayer for relief, the Government sought, among other things, judicial sale of the property under 7403. Pursuant to a stipulation of the parties, the property was sold unencumbered and the proceeds (approximately $16,250) were deposited into the registry of the District Court pending the outcome of the suit. The parties agreed that their rights, claims, and priorities would be determined as if the sale had not taken place, and that the proceeds would be divided according to their respective interests. On cross-motions for summary judgment, the District Court granted summary judgment on the Government's counterclaims.The Court of Appeals affirmed in part, and reversed and remanded in part. It agreed that the Government could foreclose its lien on the proceeds from the sale of the property to collect the $283.33, plus interest, for the unpaid income tax owed by Joerene and Donald Ingram jointly. Applying its decision in Rodgers, however, it also held that the Government could not reach the proceeds of the sale of the property to collect the individual liability of Donald Ingram, assuming Joerene Ingram had maintained her homestead interest in the property. The court remanded, however, for a factual determination of whether Joerene had "abandoned" the homestead by dividing the insurance proceeds with Donald and by attempting - even before the stipulation entered into with the Government - to sell the property and divide the proceeds of that sale with Donald.15 CThe Government filed a single petition for certiorari in both these cases. See this Court's Rule 19.4. We granted certiorari, , in order to resolve a conflict among the Courts of Appeals as to the proper interpretation of 7403.IIIAThe basic holding underlying the Court of Appeals' view that the Government was not authorized to seek a sale of the homes in which respondents held a homestead interest is that "when a delinquent taxpayer shares his ownership interest in property jointly with other persons rather than being the sole owner, his `property' and `rights to property' to which the federal tax lien attaches under 26 U.S.C. 6321, and on which federal levy may be had under 26 U.S.C. 7403(a), involve only his interest in the property, and not the entire property." 649 F.2d, at 1125 (emphasis in original). According to the Court of Appeals, this principle applies, not only in the homestead context, but in any cotenancy in which unindebted third parties share an ownership interest with a delinquent taxpayer. See Folsom v. United States, 306 F.2d 361 (CA5 1962).We agree with the Court of Appeals that the Government's lien under 6321 cannot extend beyond the property interests held by the delinquent taxpayer.16 We also agree that the Government may not ultimately collect, as satisfaction for the indebtedness owed to it, more than the value of the property interests that are actually liable for that debt. But, in this context at least, the right to collect and the right to seek a forced sale are two quite different things.The Court of Appeals for the Fifth Circuit recognized that it was the only Court of Appeals that had adopted the view that the Government could seek the sale, under 7403, of only the delinquent taxpayer's "interest in the property, and not the entire property." 649 F.2d, at 1125, and n. 12. We agree with the prevailing view that such a restrictive reading of 7403 flies in the face of the plain meaning of the statute. See, e. g., United States v. Trilling, 328 F.2d 699, 702-703 (CA7 1964); Washington v. United States, 402 F.2d 3, 6-7 (CA4 1968); United States v. Overman, 424 F.2d 1142, 1146 (CA9 1970); United States v. Kocher, 468 F.2d 503, 506-507 (CA2 1972); see also Mansfield v. Excelsior Refining Co., .17 Section 7403(a) provides, not only that the Government may "enforce [its] lien," but also that it may seek 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" (emphasis added). This clause in and of itself defeats the reading proposed by the Court of Appeals.18 Section 7403(b) then provides that "[a]ll persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto" (emphasis added). Obviously, no joinder of persons claiming independent interests in the property would be necessary if the Government were only authorized to seek the sale of the delinquent taxpayer's own interests. Finally, 7403(c) provides that the district court should "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 ... and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States" (emphasis added). Again, we must read the statute to contemplate, not merely the sale of the delinquent taxpayer's own interest, but the sale of the entire property (as long as the United States has any "claim or interest" in it), and the recognition of third-party interests through the mechanism of judicial valuation and distribution.Our reading of 7403 is consistent with the policy inherent in the tax statutes in favor of the prompt and certain collection of delinquent taxes. See supra, at 683. It requires no citation to point out that interests in property, when sold separately, may be worth either significantly more or significantly less than the sum of their parts. When the latter is the case, it makes considerable sense to allow the Government to seek the sale of the whole, and obtain its fair share of the proceeds, rather than satisfy itself with a mere sale of the part.Our reading is also supported by an examination of the historical background against which the predecessor statute to 7403 was enacted. In 1868, as today, state taxation consisted in large part of ad valorem taxation on real property. In enforcing such taxes against delinquent taxpayers, one usual remedy was a sale by the State of the assessed property. The prevailing - although admittedly not universal - view was that such sales were in rem proceedings, and that the title that was created in the sale extinguished not only the interests of the person liable to pay the tax, but also any other interests that had attached to the property, even if the owners of such interests could not otherwise be held liable for the tax. See generally H. Black, Law of Tax Titles 231-236 (1888); W. Burroughs, Law of Taxation 122 (1877). Where in rem proceedings were the rule, they were generally held to cut off as well dower or homestead rights possessed by the delinquent taxpayer's spouse. See Lucas v. Purdy, 142 Iowa 359, 120 N. W. 1063 (1909); Robbins v. Barron, 32 Mich. 36 (1875); Jones v. Devore, 8 Ohio St. 430 (1858); Black 299; Burroughs 348. But cf. R. Blackwell, Power to Sell Land for the Non-Payment of Taxes 550 (3d ed. 1869). One evident purpose of the federal judicial sale provision enacted in 1868 was to obtain for the federal tax collector some of the advantages that many States enjoyed through in rem tax enforcement. As one commentator has put it, echoing almost exactly the usual description of state in rem proceedings, the 7403 proceeding"from its very nature, is a proceeding in rem. The purchaser receives a complete new title and not just somebody's interest. The court finds the state of the title to the real estate in question, orders it sold if the United States has a lien on it, and divides the proceeds accordingly. All prior interests are cut off and the title starts over again in the new purchaser." Rogge, The Tax Lien of the United States, 13 A. B. A. J. 576, 577 (1927). See also G. Holmes, Federal Income Tax 546-547 (1920).Even as it gave the Government the right to seek an undivided sale in an in rem proceeding, however, the predecessor to 7403 departed quite sharply from the model provided by the States by guaranteeing that third parties with an interest in the property receive a share of the proceeds commensurate with the value of their interests. This apparently unique provision was prompted, we can assume, by the sense that, precisely because the federal taxes involved were not taxes on the real property being sold, simple justice required significantly greater solicitude for third parties than was generally available in state in rem proceedings.19 Finally, our reading of the statute is significantly bolstered by a comparison with the statutory language setting out the administrative levy remedy also available to the Government.20 Under 26 U.S.C. 6331(a), the Government may sell for the collection of unpaid taxes all nonexempt "property and rights to property ... belonging to such person [i. e., the delinquent taxpayer] or on which there is a lien provided in this chapter for the payment of such tax" (emphasis added). This language clearly embodies the limitation that the Court of Appeals thought was present in 7403, and it has been so interpreted by the courts.21 Section 6331, unlike 7403, does not require notice and hearing for third parties, because no rights of third parties are intended to be implicated by 6331. Indeed, third parties whose property or interests in property have been seized inadvertently are entitled to claim that the property has been "wrongfully levied upon," and may apply for its return either through administrative channels, 26 U.S.C. 6343(b), or through a civil action filed in a federal district court, 7426(a)(1); see 7426(b)(1), 7426(b)(2)(A).22 In the absence of such "wrongful levy," the entire proceeds of a sale conducted pursuant to administrative levy may be applied, without any prior distribution of the sort required by 7403, to the expenses of the levy and sale, the specific tax liability on the seized property, and the general tax liability of the delinquent taxpayer. 26 U.S.C. 6342.We are not entirely unmoved by the force of the basic intuition underlying the Court of Appeals' view of 7403 - that the Government, though it has the "right to pursue the property of the [delinquent] taxpayer with all the force and fury at its command," should not have any right, superior to that of other creditors, to disturb the settled expectations of innocent third parties. Folsom v. United States, 306 F.2d, at 367-368. In fact, however, the Government's right to seek a forced sale of the entire property in which a delinquent taxpayer had an interest does not arise out of its privileges as an ordinary creditor, but out of the express terms of 7403. Moreover, the use of the power granted by 7403 is not the act of an ordinary creditor, but the exercise of a sovereign prerogative, incident to the power to enforce the obligations of the delinquent taxpayer himself, and ultimately grounded in the constitutional mandate to "lay and collect taxes."23 Cf. Bull v. United States, 295 U.S., at 259-260; Phillips v. Commissioner, ; United States v. Snyder, .Admittedly, if 7403 allowed for the gratuitous confiscation of one person's property interests in order to satisfy another person's tax indebtedness, such a provision might pose significant difficulties under the Due Process Clause of the Fifth Amendment.24 But, as we have already indicated, 7403 makes no further use of third-party property interests than to facilitate the extraction of value from those concurrent property interests that are properly liable for the taxpayer's debt. To the extent that third-party property interests are "taken" in the process, 7403 provides compensation for that "taking" by requiring that the court distribute the proceeds of the sale "according to the findings of the court in respect to the interests of the parties and of the United States." Cf. United States v. Overman, 424 F.2d, at 1146. Moreover, we hold, on the basis of what we are informed about the nature of the homestead estate in Texas, that it is the sort of property interest for whose loss an innocent third party must be compensated under 7403. Cf. United States v. General Motors Corp., .25 We therefore see no contradiction, at least at the level of basic principle, between the enforcement powers granted to the Government under 7403 and the recognition of vested property interests granted to innocent third parties under state law.The exact method for the distribution required by 7403 is not before us at this time. But we can get a rough idea of the practical consequences of the principles we have just set out. For example, if we assume, only for the sake of illustration, that a homestead estate is the exact economic equivalent of a life estate, and that the use of a standard statutory or commercial table and an 8% discount rate is appropriate in calculating the value of that estate, then three nondelinquent surviving or remaining spouses, aged 30, 50, and 70 years, each holding a homestead estate, would be entitled to approximately 97%, 89%, and 64%, respectively, of the proceeds of the sale of their homes as compensation for that estate.26 In addition, if we assume that each of these hypothetical nondelinquent spouses also has a protected half-interest in the underlying ownership rights to the property being sold,27 then their total compensation would be approximately 99%, 95%, and 82%, respectively, of the proceeds from such sale.In sum, the Internal Revenue Code, seen as a whole, contains a number of cumulative collection devices, each with its own advantages and disadvantages for the tax collector. Among the advantages of administrative levy is that it is quick and relatively inexpensive. Among the advantages of a 7403 proceeding is that it gives the Federal Government the opportunity to seek the highest return possible on the forced sale of property interests liable for the payment of federal taxes. The provisions of 7403 are broad and profound. Nevertheless, 7403 is punctilious in protecting the vested rights of third parties caught in the Government's collection effort, and in ensuring that the Government not receive out of the proceeds of the sale any more than that to which it is properly entitled. Of course, the exercise in any particular case of the power granted under 7403 to seek the forced sale of property interests other than those of the delinquent taxpayer is left in the first instance to the good sense and common decency of the collecting authorities. 26 U.S.C. 7403(a). We also explore in Part IV of this opinion the nature of the limited discretion left to the courts in proceedings brought under 7403. But that the power exists, and that it is necessary to the prompt and certain enforcement of the tax laws, we have no doubt.BThere is another, intermeshed but analytically distinguishable, ground advanced by the Court of Appeals and the respondents - and reiterated by the dissent - for denying the Government the right to seek the forced sale of property held as a homestead by a nondelinquent third party. Taken in itself, this view would hold that, even if 7403 normally allows for the forced sale of property interests other than those directly liable for the indebtedness of the delinquent taxpayer, the special protections accorded by the exemption aspect of Texas homestead law, see supra, at 685-686, should immunize it from the reach of 7403.The Court of Appeals conceded that "the homestead interest of a taxpayer spouse, i. e., that of one who himself has tax liability, clearly cannot by itself defeat [the enforcement under 7403 of] a federal tax lien." 649 F.2d, at 1121 (emphasis in original); see also 649 F.2d, at 1132 (authorizing levy on proceeds in Ingram case to the extent of the $283.33 liability jointly owed by Mr. and Mrs. Ingram). This proposition, although not explicit in the Code, is clearly implicit in 26 U.S.C. 6334(c) (relating to exemptions from levy),28 and in our decisions in United States v. Mitchell, 403 U.S., at 204-205; Aquilino v. United States, 363 U.S., at 513-514; and United States v. Bess, 357 U.S., at 56-57, discussed supra, at 683. The Court of Appeals also held that, if the homestead interest under Texas law were "merely an exemption" without accompanying vested property rights, it would not be effective against the Federal Government in a 7403 proceeding, even in the case of a nondelinquent spouse. 649 F.2d, at 1125. Nevertheless, the court concluded that, if the homestead estate both was claimed by a nondelinquent spouse and constituted a property right under state law, then it would bar the Federal Government from pursuing a forced sale of the entire property.We disagree. If 7403 is intended, as we believe it is, to reach the entire property in which a delinquent taxpayer has or had any "right, title, or interest," then state-created exemptions against forced sale should be no more effective with regard to the entire property than with regard to the "right, title, or interest" itself. Accord, United States v. Overman, 424 F.2d, at 1145-1147; Herndon v. United States, 501 F.2d 1219, 1223-1224 (CA8 1974) (Ross, J., concurring).29 No exception of the sort carved out by the Court of Appeals appears on the face of the statute, and we decline to frustrate the policy of the statute by reading such an exception into it. Cf. Hisquierdo v. Hisquierdo, ; United States v. Mitchell, supra, at 205-206. Moreover, the Supremacy Clause30 - which provides the underpinning for the Federal Government's right to sweep aside state-created exemptions in the first place - is as potent in its application to innocent bystanders as in its application to delinquent debtors. See United States v. Union Central Life Insurance Co., 368 U.S., at 293-295 (federal tax lien good against bona fide purchaser, even though lien not filed in accordance with provisions of state law); cf. Hisquierdo v. Hisquierdo, supra, at 585-586; United States v. Carmack, (1946). Whatever property rights attach to a homestead under Texas law are adequately discharged by the payment of compensation, and no further deference to state law is required, either by 7403 or by the Constitution.The dissent urges us to carve out an exception from the plain language of 7403 in that "small number of joint-ownership situations ... [in which] the delinquent taxpayer has no right to force partition or otherwise to alienate the entire property without the consent of the co-owner." Post, at 715. Its primary argument in favor of such an exception is that it would be consistent with traditional limitations on the rights of a lienholder. Post, at 713-715, 723-724. If 7403 truly embodied traditional limitations on the rights of lienholders, however, then we would have to conclude that Folsom v. United States, 306 F.2d 361 (CA5 1962), discussed supra, at 690, 696-697, was correctly decided, a proposition that even the dissent is not willing to advance. See post, at 713, 714, n. 2, 726. More importantly, we believe that the better analogy in this case is not to the traditional rights of lienholders, but to the traditional powers of a taxing authority in an in rem enforcement proceeding. See supra, at 694-695.31 IVAAlthough we have held that the Supremacy Clause allows the federal tax collector to convert a nondelinquent spouse's homestead estate into its fair cash value, and that such a conversion satisfies the requirements of due process, we are not blind to the fact that in practical terms financial compensation may not always be a completely adequate substitute for a roof over one's head. Cf. United States v. 564.54 Acres of Land, . This problem seems particularly acute in the case of a homestead interest. First, the nature of the market for life estates or the market for rental property may be such that the value of a homestead interest, calculated as some fraction of the total value of a home, would be less than the price demanded by the market for a lifetime's interest in an equivalent home. Second, any calculation of the cash value of a homestead interest must of necessity be based on actuarial statistics, and will unavoidably undercompensate persons who end up living longer than the average.32 Indeed, it is precisely because of problems such as these that a number of courts, in eminent domain cases involving property divided between a homestead interest and underlying ownership rights or between a life estate and a remainder interest, have refused to distribute the proceeds according to an actuarial formula, and have instead placed the entire award in trust (or reinvested it in a new parcel of property) with the income (or use) going to the life-estate holder during his or her lifetime, and the corpus vesting in the holder of the remainder interest upon the death of the life-estate holder.33 If the sale and distribution provided for in 7403 were mandatory, the practical problems we have just described would be of little legal consequence. The statute provides, however, that the court in a 7403 proceeding "shall ... 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 ..." (emphasis added), and respondents argue that this language allows a district court hearing a 7403 proceeding to exercise a degree of equitable discretion and refuse to authorize a forced sale in a particular case. See Tillery v. Parks, 630 F.2d 775 (CA10 1980); United States v. Eaves, 499 F.2d 869, 870-871 (CA10 1974); United States v. Hershberger, 475 F.2d, at 679-680; United States v. Overman, 424 F.2d, at 1146; United States v. Morrison, 247 F.2d 285, 289-291 (CA5 1957). The Court of Appeals agreed with this interpretation of the statute, although it does not appear to have relied on it, 649 F.2d, at 1125, and in any event neither it nor the District Court undertook any particularized equitable assessment of the cases now before us. We find the question to be close, but on balance, we too conclude that 7403 does not require a district court to authorize a forced sale under absolutely all circumstances, and that some limited room is left in the statute for the exercise of reasoned discretion.BThe word "may," when used in a statute, usually implies some degree of discretion.34 This common-sense principle of statutory construction is by no means invariable, however, see Mason v. Fearson, 9 How. 248, 258-260 (1850); see generally United States ex rel. Siegel v. Thoman, , and cases cited, and can be defeated by indications of legislative intent to the contrary or by obvious inferences from the structure and purpose of the statute, see ibid.In these cases, we have little to go on in discerning Congress' intent except for one crucial fact: before 1936, the predecessor statute to 7403 used the word "shall" rather than the word "may" in describing the court's role in ordering a forced sale of property in which a claim or interest of the United States had been shown. Revenue Act of 1926, Pub. L. 20, 1127, 44 Stat. (part 2) 9, 123-124. In 1936, as one of a number of amendments in the text of the provision, Congress changed "shall" to "may." Revenue Act of 1936, Pub. L. 740, 802, 49 Stat. 1648, 1743-1744. The other changes - specifically, expanding the scope of 7403 to include personal as well as real property, and adding the receivership option now embodied in 7403(d), see supra, at 681 - are explained in the legislative history.35 There is no direct explanation for the change from "shall" to "may."36 The Government argues that the only significance of the change from "shall" to "may" was that "Congress recognized it had specifically authorized sale of interests in property, sale of the entire property, and receivership. Employing the term `shall' with respect to each may have been perceived as confusing insofar as it could be read as directing contradictory requirements." Reply Brief for United States 8, n. 5. We find this explanation plausible, but not compelling. If Congress had really meant no more than to adjust the forced sale language to take into account the receivership option, it could have easily expressed that intention more clearly by language to the effect of "the court shall either decree the sale of such property ... or, upon the instance of the United States, appoint a receiver to enforce the lien, etc." Moreover, the authors of an earlier, unpassed, otherwise virtually identical proposal introduced in the House, did not think it necessary to change "shall" to "may" in their version of the legislation. See nn. 35, 36, supra.Faced as we are with such an ambiguous legislative record, we come to rest with the natural meaning of the language enacted into law. In light of the fact that Congress did see fit to explain the other changes in the 1936 Act, we do not assert that Congress, without comment or explanation, intended to create equitable discretion where none existed before. On the other hand, there is support in our prior cases for the proposition that an unexplained change in statutory wording from "shall" to "may" is best construed as indicating a congressional belief that equitable discretion existed all along. Moore v. Illinois Central R. Co., ; cf. Haig v. Agee, , n. 26 (1981).In addition, reading "may" as either conferring or confirming a degree of equitable discretion conforms to the even more important principle of statutory construction that Congress should not lightly be assumed to have enacted a statutory scheme foreclosing a court of equity from the exercise of its traditional discretion. Weinberger v. Romero-Barcelo, ; Porter v. Warner Holding Co., ; Hecht Co. v. Bowles, . A 7403 proceeding is by its nature a proceeding in equity,37 and judicial sales in general have traditionally been accompanied by at least a limited degree of judicial discretion.38 Finally, we are convinced that recognizing that district courts may exercise a degree of equitable discretion in 7403 proceedings is consistent with the policies of the statute: unlike an absolute exception, which we rejected above, the exercise of limited equitable discretion in individual cases can take into account both the Government's interest in prompt and certain collection of delinquent taxes and the possibility that innocent third parties will be unduly harmed by that effort.CTo say that district courts need not always go ahead with a forced sale authorized by 7403 is not to say that they have unbridled discretion. We can think of virtually no circumstances, for example, in which it would be permissible to refuse to authorize a sale simply to protect the interests of the delinquent taxpayer himself or herself.39 And even when the interests of third parties are involved, we think that a certain fairly limited set of considerations will almost always be paramount.First, a court should consider the extent to which the Government's financial interests would be prejudiced if it were relegated to a forced sale of the partial interest actually liable for the delinquent taxes. Even the Government seems to concede that, if such a partial sale would not prejudice it at all (because the separate market value of the partial interest is likely to be equal to or greater than its value as a fraction of the total value of the entire property) then there would be no reason at all to authorize a sale of the entire property. Tr. of Oral Arg. 7, 13; Reply Brief for United States 8, n. 5.40 We think that a natural extension of this principle, however, is that, even when the partial interest would be worth less sold separately than sold as part of the entire property, the possibility of prejudice to the Government can still be measured as a matter of degree. Simply put, the higher the expected market price, the less the prejudice, and the less weighty the Government's interest in going ahead with a sale of the entire property.41 Second, a court should consider whether the third party with a nonliable separate interest in the property would, in the normal course of events (leaving aside 7403 and eminent domain proceedings, of course), have a legally recognized expectation that that separate property would not be subject to forced sale by the delinquent taxpayer or his or her creditors. If there is no such expectation, then there would seem to be little reason not to authorize the sale. Again, however, this factor is amenable to considerations of degree. The Texas homestead laws are almost absolute in their protections against forced sale.42 The usual cotenancy arrangement, which allows any cotenant to seek a judicial sale of the property and distribution of the proceeds, but which also allows the other cotenants to resist the sale and apply instead for a partition in kind, is further along the continuum. And a host of other types of property interests are arrayed between and beyond.Third, a court should consider the likely prejudice to the third party, both in personal dislocation costs and in the sort of practical undercompensation described supra, at 704-705.Fourth, a court should consider the relative character and value of the nonliable and liable interests held in the property: if, for example, in the case of real property, the third party has no present possessory interest or fee interest in the property, there may be little reason not to allow the sale; if, on the other hand, the third party not only has a possessory interest or fee interest, but that interest is worth 99% of the value of the property, then there might well be virtually no reason to allow the sale to proceed.We do not pretend that the factors we have just outlined constitute an exhaustive list; we certainly do not contemplate that they be used as a "mechanical checklist" to the exclusion of common sense and consideration of special circumstances. Cf. Moses H. Cone Hospital v. Mercury Construction Corp., . We do emphasize, however, that the limited discretion accorded by 7403 should be exercised rigorously and sparingly, keeping in mind the Government's paramount interest in prompt and certain collection of delinquent taxes. VIn these cases, no individualized equitable balance of the sort we have just outlined has yet been attempted. In the Rodgers case, the record before us, although it is quite clear as to the legal issues relevant to the second consideration noted above, affords us little guidance otherwise. In any event, we think that the task of exercising equitable discretion should be left to the District Court in the first instance.The Ingram case is a bit more complicated, even leaving aside the fact of the stipulated sale by which we are constrained to treat the escrow fund now sitting in the registry of the District Court as if it were a house. First, as the Court of Appeals pointed out, there remains a question under Texas law as to whether Joerene Ingram abandoned the homestead by the time of the stipulated sale. Second, the Government, in addition to its lien for the individual debt of Donald Ingram, has a further lien for $283.33, plus interest, on the house, representing the joint liability of Donald and Joerene Ingram. Because Joerene Ingram is not a "third party" as to that joint liability, we can see no reason, as long as that amount remains unpaid, not to allow a "sale" of the "house" (i. e., a levy on the proceeds of the stipulated sale) for satisfaction of the debt. Moreover, once the dam is broken, there is no reason, under our interpretation of 7403, not to allow the Government also to collect on the individual debt of Donald Ingram out of that portion of the proceeds of the sale representing property interests properly liable for the debt. On the other hand, it would certainly be to Mrs. Ingram's advantage to discharge her personal liability before the Government can proceed with its "sale," in which event, assuming that she has not abandoned the homestead, the District Court will be obliged to strike an equitable balance on the same general principles as those that govern the Rodgers case.The judgment of the Court of Appeals in Rodgers is reversed, its judgment in Ingram is vacated, and both cases are remanded with directions that they be remanded to the District Court for further proceedings consistent with this opinion. So ordered. |
0 | Under Witherspoon v. Illinois, , and its progeny, the right to an impartial jury under the Sixth and Fourteenth Amendments prohibits the exclusion of venire members for cause in capital cases unless their stated opposition to the death penalty would prevent or substantially impair the performance of their duties as jurors. Davis v. Georgia, , in effect established a per se rule requiring the vacation of a death sentence imposed by a jury from which a potential juror, who has conscientious scruples against the death penalty but who nevertheless under Witherspoon is eligible to serve, has been erroneously excluded for cause. At voir dire during petitioner's capital murder trial, the trial judge in eight instances denied the prosecutor's motions to dismiss for cause venire members who expressed some degree of doubt about the death penalty. The prosecutor used peremptory challenges to remove those eight panel members. When venire member Bounds, although initially somewhat confused in her response, stated that she could reach a guilty verdict and vote to impose the death penalty, the trial judge nevertheless excused her for cause on the motion of the prosecutor, who by then had exercised all of his peremptory challenges. The judge acknowledged that he had made the prosecutor use peremptory challenges against venire members whose opposition to the death penalty was unequivocal. Ultimately, the Mississippi Supreme Court affirmed petitioner's conviction and death sentence. Although acknowledging that Bounds was clearly qualified to be a juror, the court concluded that her erroneous exclusion did not prejudice petitioner since that error simply corrected other errors the trial judge committed in refusing to dismiss venire members for cause after they unequivocally stated that they could not vote to impose the death penalty.Held: The judgment is reversed in part and the case is remanded. 472 So.2d 409, reversed in part and remanded. JUSTICE BLACKMUN delivered the opinion of the Court as to Parts I, II, III-A, III-B-1, and IV, concluding that: 1. Venire member Bounds was clearly qualified to be seated as a juror under Witherspoon and its progeny. Thus, the trial court was not authorized to exclude her for cause. Pp. 657-659. 2. Davis is reaffirmed. Witherspoon violations constitute reversible constitutional error, and cannot be subjected to harmless-error review. Pp. 659-667. (a) The State Supreme Court's analysis is rejected if and to the extent it is based on the reasoning that the trial judge restored one of the State's peremptory challenges by determining that he had erred in denying one of the Witherspoon motions, and that Bounds' erroneous removal for cause was therefore harmless since the State would have used its restored challenge to remove her in any case. This "unexercised peremptory" argument wrongly assumes that the crucial question is whether a particular prospective juror is excluded due to the court's erroneous ruling. Rather, the relevant inquiry is whether the composition of the jury panel as a whole could possibly have been affected by the error. However, the jury selection process requires a series of on-the-spot decisions weighing the relative objectionableness of a particular venire member against the number of peremptory challenges available at that time. Thus, the nature of the selection process defies any attempt to establish that an erroneous Witherspoon exclusion is harmless. Pp. 661-666. (b) The State's argument that Bounds' exclusion was a single technical error that should be considered harmless because it did not have any prejudicial effect is unavailing under Davis. Pp. 666-667. 3. The State Supreme Court's judgment cannot stand insofar as it imposes the death sentence. P. 668. JUSTICE BLACKMUN, joined by JUSTICE BRENNAN, JUSTICE MARSHALL, and JUSTICE STEVENS, concluded in Part III-B-2 that, since it appears that prosecutors often use peremptory challenges to remove venire members who have expressed any degree of hesitation against imposing the death penalty, and because courts generally do not review the prosecution's reasons for exercising peremptory challenges, it cannot be said that an erroneous exclusion for cause of a scrupled, yet eligible, venire member is an isolated incident having no prejudicial effect in any particular case. The constitutional right to an impartial jury is so basic to a fair trial that its infraction can never be treated as harmless error. Pp. 667-668. JUSTICE POWELL, agreed that the trial court erred in removing Bounds for cause and that Davis therefore requires petitioner's resentencing. But the proper exclusion by means of peremptory challenges of other jurors who might have shared Bounds' views did not exacerbate the prejudice created by her removal, and has no significance to the decision of this case. Witherspoon and its progeny do not restrict the traditional rights of prosecutors to remove peremptorily jurors believed to be unwilling to impose lawful punishment. Pp. 669-672. BLACKMUN, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, III-A, III-B-1, and IV, in which BRENNAN, MARSHALL, POWELL, and STEVENS, JJ., joined, and an opinion with respect to Part III-B-2, in which BRENNAN, MARSHALL, and STEVENS, JJ., joined. POWELL, J., filed an opinion concurring in part and concurring in the judgment, post, 669. SCALIA, J., filed a dissenting opinion, in which REHNQUIST, C. J., and WHITE and O'CONNOR, JJ., joined, post, 672.Andru H. Volinsky argued the cause and filed briefs for petitioner.Marvin L. White, Jr., Assistant Attorney General of Mississippi, argued the cause for respondent. With him on the brief were Edwin Lloyd Pittman, Attorney General, and Amy D. Whitten, Special Assistant Attorney General.* [Footnote *] A brief of amici curiae urging affirmance was filed for the State of North Carolina et al. by Lacy H. Thornburg, Attorney General, Joan H. Byers, Special Deputy Attorney General, David Roy Blackwell, Assistant Attorney General, Charles A. Graddick, Attorney General of Alabama, John Van de Kamp, Attorney General of California, John I. Kelly, Chief State's Attorney of Connecticut, Charles M. Oberly III, Attorney General of Delaware, Jim Smith, Attorney General of Florida, Neil F. Hartigan, Attorney General of Illinois, Linley E. Pearson, Attorney General of Indiana, William J. Guste, Jr., Attorney General of Louisiana, T. Travis Medlock, Attorney General of South Carolina, Mark V. Meierhenry, Attorney General of South Dakota, Mary Sue Terry, Attorney General of Virginia, and A. G. McClintock, Attorney General of Wyoming.JUSTICE BLACKMUN announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, III-A, III-B-1, and IV, and an opinion with respect to Part III-B-2, in which JUSTICE BRENNAN, JUSTICE MARSHALL, and JUSTICE STEVENS join.More than 10 years ago, in Davis v. Georgia, (per curiam), this Court on certiorari summarily reversed a judgment of a state court and ruled that when a trial court misapplies Witherspoon v. Illinois, , and excludes from a capital jury a prospective juror who in fact is qualified to serve, a death sentence imposed by the jury cannot stand.1 This case presents the question whether the Court now should abandon that ruling and, instead, subject an impermissible exclusion to harmless-error review.IIn June 1982, petitioner David Randolph Gray was indicted in Harrison County, Miss., on a capital charge for the stabbing death of Ronald Wojcik while engaged in the commission of the felony of kidnapping.2 The trial judge began the jury selection process by assembling the entire venire in the courtroom. He then formed an initial panel for voir dire by calling 12 persons to the jury box. Tr. 193-194. After preliminary questioning by the court regarding prior knowledge of the case and of the parties involved, the prosecutor commenced his examination of the panel. After a member was removed for cause or by the prosecutor's use of a peremptory challenge, another venire member was called to the box for questioning by the prosecutor. When the prosecutor reached the point where he acknowledged that he would accept the full panel as it stood, the voir dire shifted to the defense and petitioner's attorney followed the same procedure. The questioning continued in this alternating fashion, with each side examining those venire members who had been called to the box since its last opportunity to inquire, until the final panel was selected.The panel members were questioned individually for the most part, but this took place in the presence of the others in the box as well as in the presence of all prospective jurors in the courtroom waiting to be called. As a result, venire members were able to learn the consequences of different responses. In particular, they learned what response would likely result in their being excluded from the jury. This knowledge caused difficulty during the prosecutor's questioning. He asked each panel member whether he or she had any conscientious scruples against capital punishment and whether he or she could vote to impose a death sentence. Whenever a prospective juror revealed any such scruples or expressed any degree of uncertainty in the ability to cast such a vote, the prosecutor moved to have the panel member excused for cause. In one instance the court granted that motion. Id., at 368. In eight instances, however, the court denied the motion. The prosecutor then used peremptory challenges to remove those eight panel members. App. 3, 5, 6, 9, 12, 13, 15, 16.3 After his denials of these for-cause motions, the judge observed that venire members perhaps were not being forthright in their responses to the prosecutor. He criticized them for expressing insincere hesitation about the death penalty in order to be excluded from the jury. He admonished them: "Now I don't want nobody telling me that, just to get off the jury. Now, that's not being fair with me." Id., at 16.4 By the time venire member Mrs. H. C. Bounds was called to the jury box, the prosecutor had exercised all 12 of the State's peremptory challenges, see Miss. Code Ann. 99-17-3 (1972), 4 of which apparently were exercised for reasons unrelated to the panel members' responses to Witherspoon questions. See Tr. 301-302, 381, 390-391. Although the voir dire of member Bounds was somewhat confused, she ultimately stated that she could consider the death penalty in an appropriate case and the judge concluded that Bounds was capable of voting to impose it.5 Evidently deciding that he did not want Bounds on the jury and realizing that he had no peremptory challenge left, the prosecutor asked the court to allow the State another such challenge.6 App. 22. He argued that the court had erred in denying five or six of the State's for-cause challenges and thereby had compelled the State to use its peremptory challenges against those venire members. The prosecutor asserted that, if he had another challenge, he would use it to remove Bounds. Ibid.The judge initially observed, "Well, I think that's right, I made you use about five of them that didn't equivocate. Uh, I never had no idea that we'd run into this many." Id., at 23. After defense counsel objected to granting the State a 13th peremptory challenge, ibid., the prosecutor urged the court to reverse one of its earlier denials of his for-cause motions, which would restore a peremptory challenge to the State. The trial court responded:"Well, I didn't examine them myself. Of course, I admit that they were unequivocal, about five of them, that answered you that way. "Go ask her [Bounds] if she'd vote guilty or not guilty, ... and let's see what she says to that. "If she says, if she gets to equivocating on that, I'm going to let her off as a person who can't make up her mind." Ibid. In response to the prosecutor's questioning, Bounds stated that she could reach either a guilty or not guilty verdict and that she could vote to impose the death penalty if the verdict were guilty. Id., at 24. Despite these answers, the prosecutor renewed his motion that she be removed for cause. Defense counsel pointed out that Bounds' answers to the questions did not render her excludable. He further contended that the prosecutor had not properly questioned the earlier jurors, who had not been excused for cause, to determine whether they were excludable under Witherspoon. The judge agreed that the prosecutor had not used the appropriate language and noted, "I should have questioned them on this, I guess... ." Id., at 25.After still further discussion, the judge excused Bounds for cause, but expressly declined to reconsider his earlier refusals to strike venire members for cause.7 The voir dire continued until both sides accepted 12 venire members in the box and two alternates. The trial began that afternoon and concluded three days later when the jury convicted petitioner of capital murder and sentenced him to death.In an otherwise unanimous opinion, the Supreme Court of Mississippi divided on petitioner's claim that his death sentence was invalid because the exclusion of Bounds violated his right to a fair and impartial jury and was inconsistent with Witherspoon's dictates. 472 So.2d 409 (1985). The majority stated at the outset that the jury selection problem in the case was created in part by the trial court's failure to follow the voir dire guidelines for capital cases set forth in Armstrong v. State, 214 So.2d 589, 593 (Miss. 1968), cert. denied, , which were aimed at ensuring compliance with Witherspoon. 472 So.2d, at 421. Despite this violation of state procedure, the court affirmed petitioner's sentence as well as the judgment of conviction.The majority explained that reluctance on the part of some venire members to serve complicated the jury selection. Ibid. The majority did not discuss in any detail the voir dire of the venire members whom the State removed by peremptory challenges. It noted, however, that the trial court had refused to excuse several jurors who had expressed conscientious scruples against the death penalty and who had stated they could not vote to inflict it. The majority offered the following explanation for the trial judge's action:"It is abundantly clear from the record that his reason for doing so was because he believed that the jurors were simply claiming to have conscientious scruples against the death penalty so that they could be released from jury service. Confronted by what he believed to be insincere attestations of personal moral convictions, the trial court was unwilling to dismiss those jurors for cause even though their responses clearly indicated that they could properly be so dismissed both under Witherspoon and Adams [v. Texas, ." Id., at 421-422 (footnote omitted). After reviewing Bounds' voir dire, the majority agreed with petitioner that Bounds "was clearly qualified to be seated as a juror under the Adams and [Wainwright v.] Witt, [ criteria." Id., at 422. It concluded, however, that petitioner was not prejudiced by the trial court's erroneous exclusion of this juror:"The force and effect of the trial court's ruling was to correct an error he had committed in refusing to dismiss other jurors for cause after they had unequivocally stated that they could not vote to impose the death penalty in any circumstance... . That being the case the trial court was correct when it recognized the error in its prior rulings and took affirmative action to correct that error." Id., at 422-423. Writing in dissent and joined by two other members of the court, Justice Sullivan emphasized that, according to the record, the trial judge excused Bounds for cause ("the majority ... contradicts the trial judge's very words"), not on the basis of a peremptory challenge. Id., at 424. In the dissent's view, the majority's reasoning was invalid because, under Davis v. Georgia, courts could not treat erroneous Witherspoon dismissals as harmless error. 472 So.2d, at 425.We granted certiorari, , to consider whether to abandon the Davis ruling and whether the improper excusal of a juror for cause can be harmless.IIIn Witherspoon, this Court held that a capital defendant's right, under the Sixth and Fourteenth Amendments, to an impartial jury prohibited the exclusion of venire members "simply because they voiced general objections to the death penalty or expressed conscientious or religious scruples against its infliction." 391 U.S., at 522. It reasoned that the exclusion of venire members must be limited to those who were "irrevocably committed ... to vote against the penalty of death regardless of the facts and circumstances that might emerge in the course of the proceedings," and to those whose views would prevent them from making an impartial decision on the question of guilt. Id., at 522, n. 21. We have reexamined the Witherspoon rule on several occasions, one of them being Wainwright v. Witt, , where we clarified the standard for determining whether prospective jurors may be excluded for cause based on their views on capital punishment. We there held that the relevant inquiry is "whether the juror's views would `prevent or substantially impair the performance of his duties as a juror in accordance with his instructions and his oath.'" Id., at 424, quoting Adams v. Texas, .There is no need to delve again into the intricacies of that standard. It is necessary, however, to keep in mind the significance of a capital defendant's right to a fair and impartial jury under the Sixth and Fourteenth Amendments.JUSTICE REHNQUIST, in writing for the Court, recently explained:"It is important to remember that not all who oppose the death penalty are subject to removal for cause in capital cases; those who firmly believe that the death penalty is unjust may nevertheless serve as jurors in capital cases so long as they state clearly that they are willing to temporarily set aside their own beliefs in deference to the rule of law." Lockhart v. McCree, . The State's power to exclude for cause jurors from capital juries does not extend beyond its interest in removing those jurors who would "frustrate the State's legitimate interest in administering constitutional capital sentencing schemes by not following their oaths." Wainwright v. Witt, 469 U.S., at 423. To permit the exclusion for cause of other prospective jurors based on their views of the death penalty unnecessarily narrows the cross section of venire members. It "stack[s] the deck against the petitioner. To execute [such a] death sentence would deprive him of his life without due process of law." Witherspoon v. Illinois, 391 U.S., at 523.Every Justice of the Mississippi Supreme Court expressly stated that panel member Bounds "was clearly qualified to be seated as a juror under the Adams and Witt criteria." 472 So.2d, at 422 and 424. We agree. Gray's death sentence therefore cannot stand unless this Court chooses to abandon Davis.IIIAlthough Davis was not cited in the Mississippi Supreme Court's majority opinion in the present case, this Court in Davis surely established a per se rule requiring the vacation of a death sentence imposed by a jury from which a potential juror, who has conscientious scruples against the death penalty but who nevertheless under Witherspoon is eligible to serve, has been erroneously excluded for cause. See Davis, 429 U.S., at 123-124 (dissenting opinion). The Davis per curiam opinion served to identify the Court's course after Witherspoon.8 Soon after Witherspoon was decided, the Court was presented with several situations in which state courts had exhibited their confusion as to how to apply the standard enunciated in that case.9 In 1971, it had summarily reversed the judgments in 23 cases imposing death sentences and had remanded the cases for further proceedings in light of Witherspoon and its progeny. See . Several of the state courts in those cases had relied on harmless-error analyses similar to those Mississippi seeks to resurrect here. See nn. 14 and 16, infra.We did not have occasion to revisit the Witherspoon issue during the period between the decision in Furman v. Georgia, , and Branch v. Texas, decided with Furman, where Georgia and Texas death sentences were invalidated, and the decisions in Gregg v. Georgia, , and its companion cases, where we upheld post-Furman death penalty statutes against constitutional challenge. But after Gregg, the Witherspoon issue again appeared. In fact, our first post-Gregg opinion in a capital case was Davis, which served to inform lower courts that we would continue to treat Witherspoon violations as reversible constitutional error in the post-Gregg era. 429 U.S., at 123. The instant case presents yet another opportunity for this Court to adopt a harmless-error analysis and once again we decline to do so.The efforts to apply a harmless-error determination to Witherspoon violations have suggested two analyses. See Krauss, The Witherspoon Doctrine at Witt's End: Death-Qualification Reexamined, 24 Am. Crim. L. Rev. 1, 32, n. 111 (1987). The first is to consider the state's retention of unexercised peremptory challenges at the end of jury selection as an indication that the erroneous for-cause exclusion was harmless. This approach relies on a representation by the state that it would have removed the venire member by peremptory challenge if the court had denied its for-cause motion. The second is to treat the erroneous exclusion as an isolated incident without prejudicial effect if it cannot be said that the ultimate panel did not fairly represent the community anyway. The Mississippi Supreme Court appears to have relied on a variation of the first analysis; respondent urges the Court to adopt the second.10 We find each unpersuasive.AThe seeming ambiguity of the Mississippi Supreme Court's opinion complicates somewhat our examination of its harmless-error analysis. The opinion is susceptible to three possible interpretations. The first is that, in the court's view, the trial judge recognized that he had erred earlier in failing to dismiss one of the jurors for cause and therefore restored to the State a peremptory challenge that the prosecutor then exercised to remove Bounds. The second is that the court could be seen as concluding that the trial court itself offset its earlier error in denying a valid for-cause Witherspoon motion by granting an invalid for-cause Witherspoon motion as to Bounds. The third is that the court could be seen to have decided that the trial judge restored a peremptory challenge to the State, by determining that he had erred previously in denying one of the prosecutor's Witherspoon motions, but still removed Bounds for cause. Under this interpretation, the court would have reasoned that, although the trial judge erred in removing Bounds for cause, the error was harmless because the State had an unexercised peremptory challenge that the prosecutor would have used to remove Bounds if the trial judge had refused to remove her for cause.We disagree with the judgment if and to the extent it rests on the first interpretation because that reasoning is wholly unsupported by the record. The trial judge was explicit in his explanation that Bounds was removed for cause. See n. 7, supra. It is by no means clear that, in his view, he erred in denying the prosecutor's Witherspoon motions. Whether he actually erred in his earlier denials simply cannot be discerned from the record. Although the trial judge acknowledged that some of the venire members had responded to the prosecutor's questioning in language at least suggesting that they would be excludable under Witherspoon, the judge agreed with defense counsel that the prosecutor had not properly questioned the earlier venire members. App. 25. In order to avoid errors based on this type of failure to establish an adequate foundation for juror exclusion, Mississippi law, contrary to the implications in the dissent, requires the trial judge himself to question the venire members.11 The trial judge in this case, however, did not comply with the Mississippi procedure. Had he done so, despite their initial responses, the venire members might have clarified their positions upon further questioning and revealed that their concerns about the death penalty were weaker than they originally stated. It might have become clear that they could set aside their scruples and serve as jurors. The inadequate questioning regarding the venire members' views in effect precludes an appellate court from determining whether the trial judge erred in refusing to remove them for cause.12 We also disagree with the judgment of the Mississippi Supreme Court if and to the extent that it might be seen to approve a trial court's remedying an erroneous denial of a Witherspoon motion by granting an invalid Witherspoon motion. Our reasons are embraced by that well-worn adage that "two wrongs do not make a right." Although we prefer that a trial court remedy its own mistakes if possible, we cannot condone the "correction" of one error by the commitment of another.Moreover, the fact that the State may have been deprived improperly of peremptory challenges does not render the Witherspoon error any less a violation of petitioner's constitutional rights guaranteed by the Sixth and Fourteenth Amendments. Peremptory challenges are not of constitutional origin. See Batson v. Kentucky, ; Swain v. Alabama, ; Stilson v. United States, . In a situation such as this where a constitutional right comes into conflict with a statutory right, the former prevails.13 Finally, we disagree with the Mississippi Supreme Court's judgment if and to the extent it holds that a Witherspoon violation constitutes harmless error when the prosecutor has an unexercised peremptory challenge that he states he would have used to excuse the juror. At least two of this Court's 1971 summary reversals stand as prior rejections of this "unexercised peremptories" argument.14 A fresh examination of this argument also leads us to conclude that it must be rejected.15 The unexercised peremptory argument assumes that the crucial question in the harmless-error analysis is whether a particular prospective juror is excluded from the jury due to the trial court's erroneous ruling. Rather, the relevant inquiry is "whether the composition of the jury panel as a whole could possibly have been affected by the trial court's error" (emphasis in original). Moore v. Estelle, 670 F.2d 56, 58 (CA5) (specially concurring opinion), cert. denied, . Due to the nature of trial counsel's on-the-spot decisionmaking during jury selection, the number of peremptory challenges remaining for counsel's use clearly affects his exercise of those challenges. A prosecutor with fewer peremptory challenges in hand may be willing to accept certain jurors whom he would not accept given a larger reserve of peremptories. Even if one is to believe the prosecutor's statement that if his motion to remove Bounds for cause had been denied and he had had a peremptory remaining, he would have used it to remove her, we cannot know whether in fact he would have had this peremptory challenge left to use. That is, if the court had granted one or more of his earlier motions to remove for cause, the prosecutor may have used his peremptory challenges on other jurors whom he did not strike when he had fewer peremptory challenges to exercise. The nature of the jury selection process defies any attempt to establish that an erroneous Witherspoon-Witt exclusion of a juror is harmless.The practical result of adoption of this unexercised peremptory argument would be to insulate jury selection error from meaningful appellate review. By simply stating during voir dire that the State is prepared to exercise a peremptory challenge if the court denies its motion for cause, a prosecutor could ensure that a reviewing court would consider any erroneous exclusion harmless. A prosecutor, as a routine matter, would likely append a statement to this effect to his motion for cause.B1The State's argument that the erroneous exclusion of Bounds was a single technical error that should be considered harmless because it did not have any prejudicial effect is equally unavailing. The judgment of the Supreme Court of Georgia that was reversed in Davis rested on a similar analysis. See Davis v. State, 236 Ga. 804, 225 S. E. 2d 241 (1976). In this Court's Davis opinion, it cited three of its 1971 summary reversals which can be read as having rejected this argument.16 429 U.S., at 123. The State nevertheless urges us to apply the constitutional harmless-error analysis formulated in Chapman v. California, , and affirm petitioner's death sentence.In Davis v. State, the Georgia Supreme Court concluded that, despite the erroneous exclusion of a venire member whose scruples about the death penalty did not justify Witherspoon exclusion, Davis' death sentence could stand. The Georgia court correctly read Witherspoon to prohibit the State from "`entrust[ing] the determination of whether a man should live or die to a tribunal organized to return a verdict of death,'" and from "`stack[ing] the deck against the petitioner.'" 236 Ga., at 809, 225 S. E. 2d, at 244, quoting Witherspoon v. Illinois, 391 U.S., at 521, 523. It focused on Witherspoon's statement that "`the decision whether a man deserves to live or die must be made on scales that are not deliberately tipped toward death.'" 236 Ga., at 809, 225 S. E. 2d, at 244, further quoting Witherspoon, 391 U.S., at 521-522, n. 20. The Georgia court, however, then concluded: "The rationale of Witherspoon and its progeny is not violated where merely one of a qualified class or group is excluded where it is shown, as here, that others of such group were qualified to serve." 236 Ga., at 809, 225 S. E. 2d, at 244-245. The court observed that "other veniremen who initially expressed opposition to capital punishment ... were not excused when upon further examination it was determined they were not unalterably opposed to the death penalty under all circumstances." Id., at 810, 225 S. E. 2d, at 245. Nevertheless, this Court reversed the judgment and held that the subsequently imposed death sentence could not stand.2We reaffirm that ruling today in a case that brings into focus one of the real-world factors that render inappropriate the application of the harmless-error analysis to such erroneous exclusions for cause. Unlike Davis in which the state court found that the erroneous exclusion of the scrupled, yet eligible, venire member was an isolated incident because the record revealed that similar jurors were not excused, the record in the instant case does not support such a finding. In fact, it suggests the opposite - that the State exercised its peremptory challenges to remove all venire members who expressed any degree of hesitation against the death penalty.17 Because courts do not generally review the prosecution's reasons for exercising peremptory challenges,18 and because it appears that prosecutors often use peremptory challenges in this manner,19 a court cannot say with confidence that an erroneous exclusion for cause of a scrupled, yet eligible, venire member is an isolated incident in that particular case. Therefore, we cannot say that courts may treat such an error as an isolated incident having no prejudicial effect.Because the Witherspoon-Witt standard is rooted in the constitutional right to an impartial jury, Wainwright v. Witt, 469 U.S., at 416, and because the impartiality of the adjudicator goes to the very integrity of the legal system, the Chapman harmless-error analysis cannot apply. We have recognized that "some constitutional rights [are] so basic to a fair trial that their infraction can never be treated as harmless error." Chapman v. California, 386 U.S., at 23. The right to an impartial adjudicator, be it judge or jury, is such a right. Id., at 23, n. 8, citing, among other cases, Tumey v. Ohio, (impartial judge). As was stated in Witherspoon, a capital defendant's constitutional right not to be sentenced by a "tribunal organized to return a verdict of death" surely equates with a criminal defendant's right not to have his culpability determined by a "tribunal `organized to convict.'" 391 U.S., at 521, quoting Fay v. New York, .IVThe judgment of the Supreme Court of Mississippi, insofar as it imposes the death sentence, is reversed, and the case is remanded to that court for further proceedings not inconsistent with this opinion. It is so ordered. |
1 | An alien "convicted of an aggravated felony any time after admission is deportable." 8 U. S. C. §1227(a)(2)(A)(iii). An "aggravated felony" includes "an offense that ... involves fraud or deceit in which the loss to the ... victims exceeds $10,000." §1101(a)(43)(M)(i). Petitioner, an alien, was convicted of conspiring to commit mail fraud and related crimes. Because the relevant statutes did not require a finding of loss, the jury made no such finding. However, at sentencing, petitioner stipulated that the loss exceeded $100 million. He was sentenced to prison and required to make $683 million in restitution. The Government subsequently sought to remove him from the United States, claiming that he had been convicted of an "aggravated felony." The Immigration Judge found that petitioner's conviction fell within the "aggravated felony" definition. The Board of Immigration Appeals agreed, as did the Third Circuit, which held that the Immigration Judge could inquire into the underlying facts of a prior fraud conviction for purposes of determining whether the loss to the victims exceeded $10,000. Held: Subparagraph (M)(i)'s $10,000 threshold refers to the particular circumstances in which an offender committed a fraud or deceit crime on a particular occasion rather than to an element of the fraud or deceit crime. Pp. 3-13. (a) Words such as "crime," "felony, and "offense" sometimes refer to a generic crime (a "categorical" interpretation), and sometimes refer to the specific acts in which an offender engaged ("circumstance-specific" interpretation). The basic argument favoring the "categorical" interpretation rests upon Taylor v. United States, 495 U. S. 575, Chambers v. United States, 555 U. S. ___, and James v. United States, 550 U. S. 192. These cases concerned the Armed Career Criminal Act (ACCA), which enhances the sentence for firearm-law offenders who have prior "violent felony" convictions, 18 U. S. C. §924(e). The Court held that the word "felony" refers to a generic crime as generally committed. Thus, for example, in James, the Court applied the "categorical method" to determine whether an "attempted burglary" was a "violent felony." That method required the Court to examine "not the unsuccessful burglary ... attempted on a particular occasion, but the generic crime of attempted burglary." 550 U. S., at 204-206. Pp. 3-5. (b) Contrary to petitioner's arguments, the "$10,000 loss" provision at issue calls for a "circumstance-specific" interpretation, not a "categorical" one. The "aggravated felony" statute of which it is a part differs from ACCA in general, and the "$10,000 loss" provision differs specifically from ACCA's provisions. Pp. 6-10. (1) The "aggravated felony" statute at issue resembles ACCA when it lists several "offenses" in language that must refer to generic crimes. But other "offenses" are listed using language that almost certainly refers to specific circumstances. Title 8 U. S. C. §1101(a)(43)(P), for example, after referring to "an offense" that amounts to "falsely making, forging, counterfeiting, mutilating, or altering a passport," adds, "except in the case of a first offense for which ... the alien committed the offense for the purpose of assisting ... the alien's spouse, child, or parent ... to violate a provision of this chapter." The language about "forging ... passport[s]" may well refer to a generic crime, but the exception cannot possibly refer to a generic crime, because there is no criminal statute that contains any such exception. Subparagraph (M)(ii), which refers to an offense "described in [26 U. S. C. §7201] (relating to tax evasion) in which the revenue loss to the government exceeds $10,000," provides another example. Because no §7201 offense has a specific loss amount as an element, the tax-evasion provision would be pointless, unless the "revenue loss" language calls for circumstance-specific application. Here, the question is to which category subparagraph (M)(i) belongs. Pp. 6-8. (2) Subparagraph (M)(i)'s language is consistent with a circumstance-specific approach. The words "in which" (modifying "offense") can refer to the conduct involved "in" the commission of the offense of conviction, rather than to the elements of the offense. Moreover, subparagraph (M)(i) appears just prior to subparagraph (M)(ii), the tax-evasion provision, and their structures are identical. Where, as here, Congress uses similar statutory language and similar statutory structure in two adjoining provisions, it normally intends similar interpretations. IBP, Inc. v. Alvarez, 546 U. S. 21, 34. Additionally, applying a categorical approach would leave subparagraph (M)(i) with little, if any, meaningful application. Only three federal fraud statutes appear to contain a relevant monetary loss threshold. And at the time the $10,000 threshold was added, only eight States had fraud and deceit statutes in respect to which that threshold, as categorically interpreted, would have full effect. Congress is unlikely to have intended subparagraph (M)(i) to apply in such a limited and haphazard manner. Pp. 8-10. (c) This Court rejects petitioner's alternative position that fairness calls for a "modified categorical approach" requiring a jury verdict or a judge-approved equivalent to embody a loss-amount determination, and permitting the subsequent immigration court applying subparagraph (M)(i) to examine only charging documents, jury instructions, and any special jury finding, or their equivalents. The Court's cases developed the evidentiary list to which petitioner points for a very different purpose, namely, to determine which statutory phrase (contained within a statutory provision covering several different generic crimes) covered a prior conviction. Additionally, petitioner's proposal can prove impractical insofar as it requires obtaining from a jury a special verdict on a fact that is not an element of the offense. Further, evidence of loss offered by the Government must meet a "clear and convincing" standard and the loss must be tied to the specific counts covered by the conviction. These considerations mean that petitioner and others in similar circumstances have at least one and possibly two opportunities to contest the loss amount, the first at the earlier sentencing and the second at the deportation hearing. There was nothing unfair about the Immigration Judge's reliance on earlier sentencing-related material here. The defendant's sentencing stipulation and the court's restitution order show that the conviction involved losses considerably greater than $10,000. Absent any conflicting evidence, this evidence is clear and convincing. Pp. 10-12.523 F. 3d 387, affirmed. Breyer, J., delivered the opinion for a unanimous Court.MANOJ NIJHAWAN, PETITIONER v. ERIC H. HOLDER, Jr., ATTORNEY GENERALon writ of certiorari to the united states court of appeals for the third circuit[June 15, 2009] Justice Breyer delivered the opinion of the Court. Federal immigration law provides that any "alien who is convicted of an aggravated felony at any time after admission is deportable." 8 U. S. C. §1227(a)(2)(A)(iii) (emphasis added). A related statute defines "aggravated felony" in terms of a set of listed offenses that includes "an offense that ... involves fraud or deceit in which the loss to the victim or victims exceeds $10,000." §1101(a)(43)(M)(i) (emphasis added). See Appendix A. The question before us is whether the italicized language refers to an element of the fraud or deceit "offense" as set forth in the particular fraud or deceit statute defining the offense of which the alien was previously convicted. If so, then in order to determine whether a prior conviction is for the kind of offense described, the immigration judge must look to the criminal fraud or deceit statute to see whether it contains a monetary threshold of $10,000 or more. See Taylor v. United States, 495 U. S. 575 (1990) (so interpreting the Armed Career Criminal Act). We conclude, however, that the italicized language does not refer to an element of the fraud or deceit crime. Rather it refers to the particular circumstances in which an offender committed a (more broadly defined) fraud or deceit crime on a particular occasion.I Petitioner, an alien, immigrated to the United States in 1985. In 2002 he was indicted for conspiring to commit mail fraud, wire fraud, bank fraud, and money laundering. 18 U. S. C. §§371, 1341, 1343, 1344, 1956(h). A jury found him guilty. But because none of these statutes requires a finding of any particular amount of victim loss, the jury made no finding about the amount of the loss. At sentencing petitioner stipulated that the loss exceeded $100 million. The court then imposed a sentence of 41 months in prison and required restitution of $683 million. In 2005 the Government, claiming that petitioner had been convicted of an "aggravated felony," sought to remove him from the United States. The Immigration Judge found that petitioner's conviction was for crimes of fraud and deceit; that the sentencing stipulation and restitution order showed that the victims' loss exceeded $10,000; and that petitioner's conviction consequently fell within the immigration statute's "aggravated felony" definition. See 8 U. S. C. §§1101(a)(43)(M)(i), (U) (including within the definition of "aggravated felony" any "attempt or conspiracy to commit" a listed "offense"). The Board of Immigration Appeals agreed. App. to Pet. for Cert. 44a-51a. So did the Third Circuit. 523 F. 3d 387 (2008). The Third Circuit noted that the statutes of conviction were silent as to amounts, but, in its view, the determination of loss amounts for "aggravated felony" purposes "requires an inquiry into the underlying facts of the case." Id., at 396 (internal quotation marks omitted). The Courts of Appeals have come to different conclusions as to whether the $10,000 threshold in subparagraph (M)(i) refers to an element of a fraud statute or to the factual circumstances surrounding commission of the crime on a specific occasion. Compare Conteh v. Gonzales, 461 F. 3d 45, 55 (CA1 2006) (fact-based approach); 523 F. 3d 387 (same) (case below); Arguelles-Olivares v. Mukasey, 526 F. 3d 171, 178 (CA5 2008) (same), with Dulal-Whiteway v. United States Dept. of Homeland Security, 501 F. 3d 116, 131 (CA2 2007) (definitional approach); Kawashima v. Mukasey, 530 F. 3d 1111, 1117 (CA9 2008) (same); Obasohan v. United States Atty. Gen., 479 F. 3d 785, 791 (CA11 2007) (same). We granted certiorari to decide the question.II The interpretive difficulty before us reflects the linguistic fact that in ordinary speech words such as "crime," "felony, "offense," and the like sometimes refer to a generic crime, say, the crime of fraud or theft in general, and sometimes refer to the specific acts in which an offender engaged on a specific occasion, say, the fraud that the defendant planned and executed last month. See Chambers v. United States, 555 U. S. ___, ___ (2009) (slip op., at 3). The question here, as we have said, is whether the italicized statutory words "offense that involves fraud or deceit in which the loss to the ... victims exceeds $10,000" should be interpreted in the first sense (which we shall call "categorical"), i.e., as referring to a generic crime, or in the second sense (which we shall call "circumstance-specific"), as referring to the specific way in which an offender committed the crime on a specific occasion. If the first, we must look to the statute defining the offense to determine whether it has an appropriate monetary threshold; if the second, we must look to the facts and circumstances underlying an offender's conviction.A The basic argument favoring the first — i.e., the "generic" or "categorical"--interpretation rests upon Taylor, Chambers, and James v. United States, 550 U. S. 192 (2007). Those cases concerned the Armed Career Criminal Act (ACCA), a statute that enhances the sentence imposed upon certain firearm-law offenders who also have three prior convictions for "a violent felony." 18 U. S. C. §924(e). See Appendix B, infra. ACCA defines "violent felony" to include, first, felonies with elements that involve the use of physical force against another; second, felonies that amount to "burglary, arson, or extortion" or that involve the use of explosives; and third, felonies that "otherwise involv[e] conduct that presents a serious potential risk of physical injury to another." §924(e)(2)(B). In Taylor and James we held that ACCA's language read naturally uses the word "felony" to refer to a generic crime as generally committed. Chambers, supra, at ___ (slip op., at 3) (discussing Taylor, 495 U. S., at 602); James, supra, at 201-202. The Court noted that such an interpretation of the statute avoids "the practical difficulty of trying to ascertain" in a later proceeding, "perhaps from a paper record" containing only a citation (say, by number) to a statute and a guilty plea, "whether the [offender's] prior crime ... did or did not involve," say, violence. Chambers, supra, at ___ (slip op., at 3). Thus in James, referring to Taylor, we made clear that courts must use the "categorical method" to determine whether a conviction for "attempted burglary" was a conviction for a crime that, in ACCA's language, "involved conduct that presents a serious potential risk of physical injury to another." §924(e)(2)(B)(ii). That method required the court to "examine, not the unsuccessful burglary the defendant attempted on a particular occasion, but the generic crime of attempted burglary." Chambers, supra, at (slip op., at 3) (discussing James, supra, at 204-206). We also noted that the categorical method is not always easy to apply. That is because sometimes a separately numbered subsection of a criminal statute will refer to several different crimes, each described separately. And it can happen that some of these crimes involve violence while others do not. A single Massachusetts statute section entitled "Breaking and Entering at Night," for example, criminalizes breaking into a "building, ship, vessel or vehicle." Mass. Gen. Laws, ch. 266, §16 (West 2006). In such an instance, we have said, a court must determine whether an offender's prior conviction was for the violent, rather than the nonviolent, break-ins that this single five-word phrase describes (e.g., breaking into a building rather than into a vessel), by examining "the indictment or information and jury instructions," Taylor, supra, at 602, or, if a guilty plea is at issue, by examining the plea agreement, plea colloquy or "some comparable judicial record" of the factual basis for the plea. Shepard v. United States, 544 U. S. 13, 26 (2005). Petitioner argues that we should interpret the subsection of the "aggravated felony" statute before us as requiring use of this same "categorical" approach. He says that the statute's language, read naturally as in Taylor, refers to a generic kind of crime, not a crime as committed on a particular occasion. He adds that here, as in Taylor, such a reading avoids the practical difficulty of determining the nature of prior conduct from what may be a brief paper record, perhaps noting only a statutory section number and a guilty plea; or, if there is a more extensive record, combing through that record for evidence of underlying conduct. Also, the categorical approach, since it covers only criminal statutes with a relevant monetary threshold, not only provides assurance of a finding on the point, but also assures that the defendant had an opportunity to present evidence about the amount of loss.B Despite petitioner's arguments, we conclude that the "fraud and deceit" provision before us calls for a "circumstance-specific," not a "categorical," interpretation. The "aggravated felony" statute of which it is a part differs in general from ACCA, the statute at issue in Taylor. And the "fraud and deceit" provision differs specifically from ACCA's provisions.1 Consider, first, ACCA in general. That statute defines the "violent" felonies it covers to include "burglary, arson, or extortion" and "crime[s]" that have "as an element" the use or threatened use of force. 18 U. S. C. §§924(e)(2) (B)(i)-(ii). This language refers directly to generic crimes. The statute, however, contains other, more ambiguous language, covering "crime[s]" that "involv[e] conduct that presents a serious potential risk of physical injury to another." Ibid. (emphasis added). While this language poses greater interpretive difficulty, the Court held that it too refers to crimes as generically defined. James, supra, at 202. Now compare the "aggravated felony" statute before us. 8 U. S. C. §1101(a)(43). We concede that it resembles ACCA in certain respects. The "aggravated felony" statute lists several of its "offenses" in language that must refer to generic crimes. Subparagraph (A), for example, lists "murder, rape, or sexual abuse of a minor." See, e.g., Estrada-Espinoza v. Mukasey, 546 F. 3d 1147, 1152 (CA9 2008) (en banc) (applying the categorical approach to "sexual abuse"); Singh v. Ashcroft, 383 F. 3d 144, 164 (CA3 2004) (same); Santos v. Gonzales, 436 F. 3d 323, 324 (CA2 2005) (per curiam) (same). Subparagraph (B) lists "illicit trafficking in a controlled substance." See Gousse v. Ashcroft, 339 F. 3d 91, 95-96 (CA2 2003) (applying categorical approach); Fernandez v. Mukasey, 544 F. 3d 862, 871-872 (CA7 2008) (same); Steele v. Blackman, 236 F. 3d 130, 136 (CA3 2001) (same). And subparagraph (C) lists "illicit trafficking in firearms or destructive devices." Other sections refer specifically to an "offense described in" a particular section of the Federal Criminal Code. See, e.g., subparagraphs (E), (H), (I), (J), (L). More importantly, however, the "aggravated felony" statute differs from ACCA in that it lists certain other "offenses" using language that almost certainly does not refer to generic crimes but refers to specific circumstances. For example, subparagraph (P), after referring to "an offense" that amounts to "falsely making, forging, counterfeiting, mutilating, or altering a passport," adds, "except in the case of a first offense for which the alien ... committed the offense for the purpose of assisting ... the alien's spouse, child, or parent ... to violate a provision of this chapter" (emphasis added). The language about (for example) "forging ... passport[s]" may well refer to a generic crime, but the italicized exception cannot possibly refer to a generic crime. That is because there is no such generic crime; there is no criminal statute that contains any such exception. Thus if the provision is to have any meaning at all, the exception must refer to the particular circumstances in which an offender committed the crime on a particular occasion. See also subparagraph (N) (similar exception). The statute has other provisions that contain qualifying language that certainly seems to call for circumstance-specific application. Subparagraph (K)(ii), for example, lists "offense[s] ... described in section 2421, 2422, or 2423 of title 18 (relating to transportation for the purpose of prostitution) if committed for commercial advantage" (emphasis added). Of the three specifically listed criminal statutory sections only one subsection (namely, §2423(d)) says anything about commercial advantage. Thus, unless the "commercial advantage" language calls for circumstance-specific application, the statute's explicit references to §§2421 and 2422 would be pointless. But see Gertsenshteyn v. United States Dept. of Justice, 544 F. 3d 137, 144-145 (CA2 2008). Subparagraph (M)(ii) provides yet another example. It refers to an offense "described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000" (emphasis added). There is no offense "described in section 7201 of title 26" that has a specific loss amount as an element. Again, unless the "revenue loss" language calls for circumstance-specific application, the tax-evasion provision would be pointless. The upshot is that the "aggravated felony" statute, unlike ACCA, contains some language that refers to generic crimes and some language that almost certainly refers to the specific circumstances in which a crime was committed. The question before us then is to which category subparagraph (M)(i) belongs.2 Subparagraph (M)(i) refers to "an offense that ... involves fraud or deceit in which the loss to the victim or victims exceeds $10,000" (emphasis added). The language of the provision is consistent with a circumstance-specific approach. The words "in which" (which modify "offense") can refer to the conduct involved "in" the commission of the offense of conviction, rather than to the elements of the offense. Moreover, subparagraph (M)(i) appears just prior to subparagraph (M)(ii), the internal revenue provision we have just discussed, and it is identical in structure to that provision. Where, as here, Congress uses similar statutory language and similar statutory structure in two adjoining provisions, it normally intends similar interpretations. IBP, Inc. v. Alvarez, 546 U. S. 21, 34 (2005). Moreover, to apply a categorical approach here would leave subparagraph (M)(i) with little, if any, meaningful application. We have found no widely applicable federal fraud statute that contains a relevant monetary loss threshold. See, e.g., 18 U. S. C. §§1341 (mail fraud), 1343 (wire fraud), 1344 (bank fraud), 371 (conspiracy to defraud the United States), 666 (theft in federally funded programs), 1028 (fraud in connection with identification documents), 1029 (fraud in connection with access devices), 1030 (fraud in connection with computers), 1347 (health care fraud), and 1348 (securities fraud). Petitioner has found only three federal fraud statutes that do so, and those three contain thresholds not of $10,000, but of $100,000 or $1 million, §§668 (theft by fraud of an artwork worth $100,000 or more), 1031(a) (contract fraud against the United States where the contract is worth at least $1 million), and 1039(d) (providing enhanced penalties for fraud in obtaining telephone records, where the scheme involves more than $100,000). Why would Congress intend subparagraph (M)(i) to apply to only these three federal statutes, and then choose a monetary threshold that, on its face, would apply to other, nonexistent statutes as well? We recognize, as petitioner argues, that Congress might have intended subparagraph (M)(i) to apply almost exclusively to those who violate certain state fraud and deceit statutes. So we have examined state law. See Appendix C, infra. We have found, however, that in 1996, when Congress added the $10,000 threshold in subparagraph (M)(i), see Illegal Immigration Reform and Immigrant Responsibility Act §321(a)(7), 110 Stat. 3009-628, 29 States had no major fraud or deceit statute with any relevant monetary threshold. In 13 of the remaining 21 States, fraud and deceit statutes contain relevant monetary thresholds but with amounts significantly higher than $10,000, leaving only 8 States with statutes in respect to which subparagraph (M)(i)'s $10,000 threshold, as categorically interpreted, would have full effect. We do not believe Congress would have intended (M)(i) to apply in so limited and so haphazard a manner. Cf. United States v. Hayes, 555 U. S. ___, ___ (2009) (slip op., at 10-11) (reaching similar conclusion for similar reason in respect to a statute referring to crimes involving "domestic violence"). Petitioner next points to 8 U. S. C. §1326, which criminalizes illegal entry after removal and imposes a higher maximum sentence when an alien's removal was "subsequent to a conviction for commission of an aggravated felony." §1326(b)(2). Petitioner says that a circumstance-specific approach to subparagraph (M)(i) could create potential constitutional problems in a subsequent criminal prosecution under that statute, because loss amount would not have been found beyond a reasonable doubt in the prior criminal proceeding. The Government, however, stated in its brief and at oral argument that the later jury, during the illegal reentry trial, would have to find loss amount beyond a reasonable doubt, Brief for Respondent 49-50; Tr. of Oral Arg. 39-40, eliminating any constitutional concern. Cf. Hayes, supra, at ___ (slip op., at 10). We conclude that Congress did not intend subparagraph (M)(i)'s monetary threshold to be applied categorically, i.e., to only those fraud and deceit crimes generically defined to include that threshold. Rather, the monetary threshold applies to the specific circumstances surrounding an offender's commission of a fraud and deceit crime on a specific occasion.III Petitioner, as an alternative argument, says that we should nonetheless borrow from Taylor what that case called a "modified categorical approach." He says that, for reasons of fairness, we should insist that a jury verdict, or a judge-approved equivalent, embody a determination that the loss involved in a prior fraud or deceit conviction amounted to at least $10,000. To determine whether that is so, petitioner says, the subsequent immigration court applying subparagraph (M)(i) should examine only charging documents, jury instructions, and any special jury finding (if one has been requested). If there was a trial but no jury, the subsequent court should examine the equivalent judge-made findings. If there was a guilty plea (and no trial), the subsequent court should examine the written plea documents or the plea colloquy. To authorize any broader examination of the prior proceedings, petitioner says, would impose an unreasonable administrative burden on immigration judges and would unfairly permit him to be deported on the basis of circumstances that were not before judicially determined to have been present and which he may not have had an opportunity, prior to conviction, to dispute. We agree with petitioner that the statute foresees the use of fundamentally fair procedures, including procedures that give an alien a fair opportunity to dispute a Government claim that a prior conviction involved a fraud with the relevant loss to victims. But we do not agree that fairness requires the evidentiary limitations he proposes. For one thing, we have found nothing in prior law that so limits the immigration court. Taylor, James, and Shepard, the cases that developed the evidentiary list to which petitioner points, developed that list for a very different purpose, namely that of determining which statutory phrase (contained within a statutory provision that covers several different generic crimes) covered a prior conviction. See supra, at 5; Taylor, 495 U. S., at 602; Shepard, 544 U. S., at 26. For another, petitioner's proposal itself can prove impractical insofar as it requires obtaining from a jury a special verdict on a fact that (given our Part II determination) is not an element of the offense. Further, a deportation proceeding is a civil proceeding in which the Government does not have to prove its claim "beyond a reasonable doubt." At the same time the evidence that the Government offers must meet a "clear and convincing" standard. 8 U. S. C. §1229a(c)(3)(A). And, as the Government points out, the "loss" must "be tied to the specific counts covered by the conviction." Brief for Respondent 44; see, e.g., Alaka v. Attorney General of United States, 456 F. 3d 88, 107 (CA3 2006) (loss amount must be tethered to offense of conviction; amount cannot be based on acquitted or dismissed counts or general conduct); Knutsen v. Gonzales, 429 F. 3d 733, 739-740 (CA7 2005) (same). And the Government adds that the "sole purpose" of the "aggravated felony" inquiry "is to ascertain the nature of a prior conviction; it is not an invitation to relitigate the conviction itself." Brief for Respondent 44 (internal quotation marks omitted). Finally, the Board of Immigration Appeals, too, has recognized that immigration judges must assess findings made at sentencing "with an eye to what losses are covered and to the burden of proof employed." In re Babaisakov, 24 I. & N. Dec. 306, 319 (2007). These considerations, taken together, mean that petitioner and those in similar circumstances have at least one and possibly two opportunities to contest the amount of loss, the first at the earlier sentencing and the second at the deportation hearing itself. They also mean that, since the Government must show the amount of loss by clear and convincing evidence, uncertainties caused by the passage of time are likely to count in the alien's favor. We can find nothing unfair about the immigration judge's having here relied upon earlier sentencing-related material. The defendant's own stipulation, produced for sentencing purposes, shows that the conviction involved losses considerably greater than $10,000. The court's restitution order shows the same. In the absence of any conflicting evidence (and petitioner mentions none), this evidence is clear and convincing. The Court of Appeals concluded that petitioner's prior federal conviction consequently falls within the scope of subparagraph (M)(i). And we affirm its judgment.It is so ordered.APPENDIXESA Section 101(a)(43) of the Immigration and Nationality Act, as set forth in 8 U. S. C. 1101(a)(43), provides:"The term 'aggravated felony' means-- "(A) murder, rape, or sexual abuse of a minor; "(B) illicit trafficking in a controlled substance (as defined in section 802 of title 21), including a drug trafficking crime (as defined in section 924(c) of title 18); "(C) illicit trafficking in firearms or destructive devices (as defined in section 921 of title 18) or in explosive materials (as defined in section 841(c) of that title); "(D) an offense described in section 1956 of title 18 (relating to laundering of monetary instruments) or section 1957 of that title (relating to engaging in monetary transactions in property derived from specific unlawful activity) if the amount of the funds exceeded $10,000; "(E) an offense described in-- "(i) section 842(h) or (i) of title 18, or section 844(d), (e), (f), (g), (h), or (i) of that title (relating to explosive materials offenses); "(ii) section 922(g)(1), (2), (3), (4), or (5), (j), (n), (o), (p), or (r) or 924(b) or (h) of title 18 (relating to firearms offenses); or "(iii) section 5861 of title 26 (relating to firearms offenses); "(F) a crime of violence (as defined in section 16 of title 18, but not including a purely political offense) for which the term of imprisonment at least one year; "(G) a theft offense (including receipt of stolen property) or burglary offense for which the term of imprisonment at least one year; "(H) an offense described in section 875, 876, 877, or 1202 of title 18 (relating to the demand for or receipt of ransom); "(I) an offense described in section 2251, 2251A, or 2252 of title 18 (relating to child pornography); "(J) an offense described in section 1962 of title 18 (relating to racketeer influenced corrupt organizations), or an offense described in section 1084 (if it is a second or subsequent offense) or 1955 of that title (relating to gambling offenses), for which a sentence of one year imprisonment or more may be imposed; "(K) an offense that-- "(i) relates to the owning, controlling, managing, or supervising of a prostitution business; "(ii) is described in section 2421, 2422, or 2423 of title 18 (relating to transportation for the purpose of prostitution) if committed for commercial advantage; or "(iii) is described in any of sections 1581-1585 or 1588-1591 of title 18 (relating to peonage, slavery, involuntary servitude, and trafficking in persons); "(L) an offense described in-- "(i) section 793 (relating to gathering or transmitting national defense information), 798 (relating to disclosure of classified information), 2153 (relating to sabotage) or 2381 or 2382 (relating to treason) of title 18; "(ii) section 421 of title 50 (relating to protecting the identity of undercover intelligence agents); or "(iii) section 421 of title 50 (relating to protecting the identity of undercover agents); "(M) an offense that-- "(i) involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or "(ii) is described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000; "(N) an offense described in paragraph (1)(A) or (2) of section 1324(a) of this title (relating to alien smuggling), except in the case of a first offense for which the alien has affirmatively shown that the alien committed the offense for the purpose of assisting, abetting, or aiding only the alien's spouse, child, or parent (and no other individual) to violate a provision of this chapter "(O) an offense described in section 1325(a) or 1326 of this title committed by an alien who was previously deported on the basis of a conviction for an offense described in another subparagraph of this paragraph; "(P) an offense (i) which either is falsely making, forging, counterfeiting, mutilating, or altering a passport or instrument in violation of section 1543 of title 18 or is described in section 1546(a) of such title (relating to document fraud) and (ii) for which the term of imprisonment is at least 12 months, except in the case of a first offense for which the alien has affirmatively shown that the alien committed the offense for the purpose of assisting, abetting, or aiding only the alien's spouse, child, or parent (and no other individual) to violate a provision of this chapter; "(Q) an offense relating to a failure to appear by a defendant for service of sentence if the underlying offense is punishable by imprisonment for a term of 5 years or more; "(R) an offense relating to commercial bribery, counterfeiting, forgery, or trafficking in vehicles the identification numbers of which have been altered for which the term of imprisonment is at least one year; "(S) an offense relating to obstruction of justice, perjury or subornation of perjury, or bribery of a witness, for which the term of imprisonment is at least one year; "(T) an offense relating to a failure to appear before a court pursuant to a court order to answer to or dispose of a charge of a felony for which a sentence of 2 years' imprisonment or more may be imposed; and "(U) an attempt or conspiracy to commit an offense described in this paragraph."The term applies to an offense described in this paragraph whether in violation of Federal or State law and applies to such an offense in violation of the law of a foreign country for which the term of imprisonment was completed within the previous 15 years. Notwithstanding any other provision of law (including any effective date), the term applies regardless of whether the conviction was entered before, on, or after September 30, 1996." ( |
8 | Certiorari granted; judgment vacated; and case remanded. Reported below: ___ So.2d ___.Petitioner pro se.Richard W. Ervin, Attorney General of Florida, and Reeves Bowen, Assistant Attorney General, for respondent.PER CURIAM.The motion for leave to proceed in forma pauperis is granted. The motion for leave to file a petition for writ of habeas corpus is denied. Treating the papers submitted as a petition for writ of certiorari, certiorari is granted. In view of the representations of the Attorney General of Florida that the cause has become moot, the judgment of the Supreme Court of Florida is vacated and the cause is remanded for such further proceedings as that Court may deem appropriate. See N. A. A. C. P. v. Committee on Offenses Against the Administration of Justice, . |
1 | The Social Security Act authorizes payment of Title II disability insurance benefits and Title XVI Supplemental Security Income to individuals who have an "inability to engage in any substantial gainful activity by reason of any medically determinable ... impairment ... which has lasted or can be expected to last for a continuous period of not less than 12 months." 42 U. S. C. §423(d)(1)(A) (emphasis added); accord, §1382c(a)(3)(A). The Social Security Administration (Agency) denied benefits to respondent Walton, finding that his "inability" to engage in substantial gainful activity lasted only 11 months. The District Court affirmed, but the Fourth Circuit reversed, holding that the 12-month duration requirement modifies "impairment" not "inability," that the statute leaves no doubt that no similar duration requirement relates to an "inability," and that therefore Walton was entitled to benefits despite Agency regulations restricting them to those unable to work for 12 months. The court decided further that Walton qualified for benefits because, prior to his return to work, his "inability" would have been "expected" to last 12 months. It conceded that the Agency had made Walton's actual return to work within 12 months of his onset date and before the Agency's decision date determinative on this point, 20 CFR §§404.1520(b), 1592(d)(2), but found that the regulations conflicted with the statute. It noted that Walton's work simply counted as part of a 9-month trial work period during which persons "entitled" to Title II benefits may work without loss of benefits, 42 U. S. C. §422(c).Held: The Agency's interpretations of the statute fall within its lawful interpretative authority. Pp. 4-13. (a) The Agency's reading of the term "inability" is reasonable. The statute requires both an "inability" to engage in any substantial gainful activity and an "impairment" providing "reason" for the "inability," adding that the "impairment" must last or be expected to last not less than 12 months. The Agency has determined in both its formal regulations and its interpretation of those regulations that the "inability" must last the same amount of time. Courts grant considerable leeway to an agency's interpretation of its own regulations, and the Agency has properly interpreted its regulation here. Thus, this Court must decide (1) whether the statute unambiguously forbids that interpretation, and if not, (2) whether the interpretation exceeds permissible bounds. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843. First, the Act does not unambiguously forbid the regulation. That the statute's 12-month phrase modifies only "impairment" shows only that the provision says nothing explicitly about the "inability's" duration. Such silence normally creates, but does not resolve, ambiguity. Second, the Agency's construction is permissible. It supplies a duration requirement, which the statute demands, in a way that consistently reconciles the statutory "impairment" and "inability" language. The Agency's regulations also reflect the Agency's own longstanding interpretation, which should be accorded particular deference, North Haven Bd. of Ed. v. Bell, 456 U. S. 512, 522, n. 12. Finally, Congress has frequently amended or reenacted the relevant provisions without change. Walton's claim that Title II's 5-month waiting period for entitlement protects against a claimant with a chronic, but only briefly disabling, disease shows, at most, that the Agency could have chosen other reasonable time periods. Moreover, Title XVI has no such period, yet Walton offers no explanation why its identical definitional language should be interpreted differently in a closely related context. Walton's argument that the Agency's interpretation should be disregarded because its formal regulations were only recently enacted is also rejected. E.g., Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 741. And the Agency's longstanding interpretation is not automatically deprived of the judicial deference otherwise its due because it was previously reached through means less formal than notice and comment rulemaking. Chevron, supra, at 843. Pp. 4-10. (b) Also consistent with the statute is the Agency's regulation providing that "[y]ou are not entitled to a trial work period" if "you perform work ... within 12 months of the onset of the impairment ... and before the date of any ... decision finding ... you ...disabled," 20 CFR §404.1592(d)(2) (emphasis added). The statute is ambiguous, and the regulation treats a pre-Agency-decision actual return to work as if it were determinative of the "can be expected to last" question. The statute's complexity, the vast number of claims it engenders, and the consequent need for agency expertise and administrative experience lead the Court to read the statute as delegating to the Agency considerable authority to fill in matters of detail related to its administration. See Schweiker v. Gray Panthers, 453 U. S. 34, 43-44. The interpretation at issue is such a matter. Pp. 10-12.235 F. 3d 184, reversed. Breyer, J., delivered the opinion of the Court, Parts I and III of which were unanimous, and Part II of which was joined by Rehnquist, C. J., and Stevens, O'Connor, Kennedy, Souter, Thomas, and Ginsburg, JJ. Scalia, J., filed an opinion concurring in part and concurring in the judgment.JO ANNE B. BARNHART, COMMISSIONER OF SOCIAL SECURITY, PETITIONER v. CLEVELAND B. WALTONon writ of certiorari to the united states court of appeals for the fourth circuit[March 27, 2002] Justice Breyer delivered the opinion of the Court. The Social Security Act authorizes payment of disability insurance benefits and Supplemental Security Income to individuals with disabilities. See 49 Stat. 622, as amended, 42 U. S. C. §401 et seq. (1994 ed. and V) (Title II disability insurance benefits); §1381 et seq. (Title XVI supplemental security income). For both types of benefits the Act defines the key term "disability" as an"[i]nability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months." §423(d)(1)(A) (1994 ed.) (Title II) (emphasis added); accord §1382c(a)(3)(A) (1994 ed., Supp. V) (Title XVI).This case presents two questions about the Social Security Administration's interpretation of this definition. First, the Social Security Administration (which we shall call the Agency) reads the term "inability" as including a "12 month" requirement. In its view, the "inability" (to engage in any substantial gainful activity) must last, or must be expected to last, for at least 12 months. Second, the Agency reads the term "expected to last" as applicable only when the "inability" has not yet lasted 12 months. In the case of a later Agency determination — where the "inability" did not last 12 months — the Agency will automatically assume that the claimant failed to meet the duration requirement. It will not look back to decide hypothetically whether, despite the claimant's actual return to work before 12 months expired, the "inability" nonetheless might have been expected to last that long. The Court of Appeals for the Fourth Circuit held both these interpretations of the statute unlawful. We hold, to the contrary, that both fall within the Agency's lawful interpretive authority. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). Consequently, we reverse.I In 1996 Cleveland Walton, the respondent, applied for both Title II disability insurance benefits and Title XVI Supplemental Security Income. The Agency found that (1) by October 31, 1994, Walton had developed a serious mental illness involving both schizophrenia and associated depression; (2) the illness caused him then to lose his job as a full-time teacher; (3) by mid-1995 he began to work again part time as a cashier; and (4) by December 1995 he was working as a cashier full time. The Agency concluded that Walton's mental illness had prevented him from engaging in any significant work, i.e., from "engag[ing] in any substantial gainful activity," for 11 months — from October 31, 1994 (when he lost his teaching job) until the end of September 1995 (when he earned income sufficient to rise to the level of "substantial gainful activity"). See 20 CFR §§404.1574, 416.974 (2001). And because the statute demanded an "inability to engage in any substantial gainful activity" lasting 12, not 11, months, Walton was not entitled to benefits. Walton sought court review. The District Court affirmed the Agency's decision, but the Court of Appeals for the Fourth Circuit reversed. Walton v. Apfel, 235 F. 3d 184, 186-187 (2000). The court said that the statute's 12-month duration requirement modifies the word "impairment," not the word "inability." Id., at 189. It added that the statute's "language ... leaves no doubt" that there is no similar "duration requirement" related to an "inability" (to engage in substantial gainful activity). Ibid. It concluded that, because the statute's language "speaks clearly" and is "unambiguous," Walton was entitled to receive benefits despite agency regulations restricting benefits to those unable to work for a 12-month period. Ibid. The court went on to decide that, in any event, Walton qualified because, prior to Walton's return to work, one would have "expected" his "inability" to last 12 months. Id., at 189-190. It conceded that the Agency had made Walton's actual return to work determinative on this point. See 20 CFR §§404.1520(b), 1592(d)(2) (2001). But it found unlawful the Agency regulations that gave the Agency the benefit of hindsight — on the ground that they conflicted with the statute's clear command. 235 F. 3d, at 190. For either reason, the Circuit concluded, Walton became "entitled" to Title II benefits no later than April 1995, five months after the onset of his illness. See 42 U. S. C. §§423(a)(1)(D)(i), 423(a)(1)(D)(ii) (providing for a 5-month "waiting period" before a claimant is "entitled" to benefits), 423(c)(2)(A) (1994 ed.). It added that Walton's later work as a cashier was legally beside the point. That work simply counted as part of a 9-month "trial work period," which the statute grants to those "entitled" to Title II benefits, and which it permits them to perform without loss of benefits. §422(c). The Government sought certiorari. It pointed out that the Fourth Circuit's first holding conflicts with those of other circuits, compare 235 F. 3d, at 189-190, with Titus v. Sullivan, 4 F. 3d 590, 594-595 (CA8 1993), and Alexander v. Richardson, 451 F. 2d 1185 (CA10 1971). It added that the Circuit's views were contrary to well-settled law and would create additional Social Security costs of $80 billion over ten years. We granted the writ. We now reverse.II The statutory definition of "disability" has two parts. First, it requires a certain kind of "inability," namely an "inability to engage in any substantial gainful activity." Second it requires an "impairment," namely a "physical or mental impairment," which provides "reason" for the "inability." The statute adds that the "impairment" must be one that "has lasted or can be expected to last ... not less than 12 months." But what about the "inability"? Must it also last (or be expected to last) for the same amount of time? The Agency has answered this question in the affirmative. Acting pursuant to statutory rulemaking authority, 42 U. S. C. §§405(a) (Title II), 1383(d)(1) (Title XVI), it has promulgated formal regulations that state that a claimant is not disabled "regardless of [his] medical condition," ifhe is doing "substantial gainful activity." 20 CFR §404.1520(b) (2001). And the Agency has interpreted this regulation to mean that the claimant is not disabled if "within 12 months after the onset of an impairment ... the impairment no longer prevents substantial gainful activity." 65 Fed. Reg. 42774 (2000). Courts grant an agency's interpretation of its own regulations considerable legal leeway. Auer v. Robbins, 519 U. S. 452, 461 (1997); Udall v. Tallman, 380 U. S. 1, 16-17 (1965). And no one here denies that the Agency has properly interpreted its own regulation. Consequently, the legal question before us is whether the Agency's interpretation of the statute is lawful. This Court has previously said that, if the statute speaks clearly "to the Ibid.precise question at issue," we "must give effect to the unambiguously expressed intent of Congress." Chevron, 533 U. S. 218, 227 (2001). First, the statute does not unambiguously forbid the regulation. The Fourth Circuit believed the contrary primarily for a linguistic reason. It pointed out that, linguistically speaking, the statute's "12-month" phrase modifies only the word "impairment," not the word "inability." And to that extent we agree. After all, the statute, in parallel phrasing, uses the words "which can be expected to result in death." And that structurally parallel phrase makes sense in reference to an "impairment," but makes no sense in reference to the "inability." Nonetheless, this linguistic point is insufficient. It shows that the particular statutory provision says nothing explicitly about the "inability's" duration. But such silence, after all, normally creates ambiguity. It does not resolve it. Moreover, a nearby provision of the statute says that an"individual shall be determined to be under a disability only if his ... impairment ... [is] of such severity that he is not only unable to do his previous work but cannot ... engage in any other kind of substan-tial gainful work which exists in the national econ-omy." 42 U. S. C. §423(d)(2)(A) (Title II); accord §1382c(a)(3)(B) (Title XVI).In other words, the statute, in the two provisions, specifies that the "impairment," both must last 12 months and also must be severe enough to prevent the claimant from engaging in virtually any "substantial gainful work." The statute, we concede, nowhere explicitly says that the "impairment" must be that severe (i.e., severe enough to prevent "substantial gainful work") for 12 months. But that is a fair inference from the language. See Brief for AARP et al. as Amici Curiae 13 (conceding that an impairment must remain of "disabling severity" for 12 months). At the very least the statute is ambiguous in that respect. And, if so, then it is an equally fair inference that the "inability" must last 12 months. That is because the latter statement (i.e., that the claimant must be unable to "engage in any substantial gainful activity" for a year) is the virtual equivalent of the former statement (i.e., that the "impairment" must remain severe enough to prevent the claimant from engaging in "substantial gainful work" for a year). It simply rephrases the same point in a slightly different way. Second, the Agency's construction is "permissible." The interpretation makes considerable sense in terms of the statute's basic objectives. The statute demands some duration requirement. No one claims that the statute would permit an individual with a chronic illness — say high blood pressure — to qualify for benefits if that illness, while itself lasting for a year, were to permit a claimant to return to work after only a week, or perhaps even a day, away from the job. The Agency's interpretation supplies a duration requirement, which the statute demands, while doing so in a way that consistently reconciles the statutory "impairment" and "inability" language. In addition, the Agency's regulations reflect the Agency's own longstanding interpretation. See Social Security Ruling 82-52, p. 106 (cum. ed. 1982) ("In considering `duration,' it is the inability to engage in [substantial gainful activity] that must last the required 12-month period"); Disability Insurance State Manual §316 (Sept. 9, 1965), Government Lodging, Tab C, ("Duration of impairment refers to that period of time during which an individual is continuously unable to engage in substantial gainful activity because of" an impairment); OASI Disability Insurance Letter No. 39 (Jan. 22, 1957), id., Tab A, p. 1 (duration requirement refers to the "expected duration of the medical impairment" at a "level of severity sufficient to preclude" substantial gainful activity"). And this Court will normally accord particular deference to an agency interpretation of "longstanding" duration. North Haven Bd. of Ed. v. Bell, 456 U. S. 512, 522, n. 12 (1982). Finally, Congress has frequently amended or reenacted the relevant provisions without change. E.g., Social Security Amendments of 1965, §303(a)(1), 79 Stat. 366; see also S. Rep. No. 404, 89th Cong., 1st Sess., pt. I, pp. 98-99 (1965) ("[T]he committee's bill ... provide[s] for the payment of disability benefits for an insured worker who has been or can be expected to be totally disabled throughout a continuous period of 12 calendar months" (emphasis added)); id., at 98 (rejecting effort to provide benefits to those with "short-term, temporary disabilit[ies]," defined as inability to work for six months); H. R. Rep. No. 92-231, p. 56 (1971) ("No benefit is payable, however, unless the disability is expected to last (or has lasted) at least 12 consecutive months" (emphasis added)); S. Rep. No. 744, 90th Cong., 1st Sess., 49 (1967) ("The committee also believes ... that an individual who does substantial gainful work despite an impairment or impairments that otherwise might be considered disabling is not disabled for purposes of establishing a period of disability"). These circumstances provide further evidence — if more is needed — that Congress intended the Agency's interpretation, or at least understood the interpretation as statutorily permissible. Commodity Futures Trading Comm'n v. Schor. Walton points in reply to Title II language stating that a claimant who is "under a disability ... shall be entitled to a ... benefit ... beginning with the first month after" a "waiting period" of "five consecutive calendar months ... throughout which" he "has been under a disability." 42 U. S. C. §§423(a)(1)(D)(i), 423(c)(2)(A). He adds that this 5-month "waiting period" assures a lengthy period of time during which the applicant (who must be "under a disability" throughout) has been unable to work. And it thereby provides ironclad protection against the claimant who suffers a chronic, but only briefly disabling disease, such as the claimant who suffers high blood pressure in our earlier example. See supra, at 7. This claim does not help Walton, however, for it shows, at most, that the Agency might have chosen other reasonable time periods — a matter not disputed. Regardless, Walton's "waiting period" argument could work only in respect to Title II, not Title XVI. Title XVI has no waiting period, though it uses identical definitional language. And Walton does not explain why we should interpret the same statutory words differently in closely related contexts. See Department of Revenue of Ore. v. ACF Industries, Inc., 510 U. S. 332, 342 (1994) (" `[I]dentical words used in different parts of the same act are intended to have the same meaning' " (quoting Sorenson v. Secretary of Treasury, 475 U. S. 851, 860 (1986) (some internal quotation marks omitted)). Walton also asks us to disregard the Agency's interpretation of its formal regulations on the ground that the Agency only recently enacted those regulations, perhaps in response to this litigation. We have previously rejected similar arguments. Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 741 (1996); United States v. Morton, 467 U. S. 822, 835-836, n. 21 (1984). Regardless, the Agency's interpretation is one of long standing. See supra, at 8. And the fact that the Agency previously reached its interpretation through means less formal than "notice and comment" rulemaking, see 5 U. S. C. §553, does not automatically deprive that interpretation of the judicial deference otherwise its due. Cf. Chevron, 415 U. S. 199, 231 (1974))). If this Court's opinion in Christensen v. Harris County, 529 U. S. 576 (2000), suggested an absolute rule to the contrary, our later opinion in United States v. Mead Corp., 533 U. S. 218 (2001), denied the suggestion. Id., at 230-231 ("[T]he want of" notice and comment "does not decide the case"). Indeed, Mead pointed to instances in which the Court has applied Chevron deference to agency interpretations that did not emerge out of notice-and-comment rulemaking. 533 U. S., at 230-231 (citing NationsBank of N. C., N. A. v. Variable Annuity Life Ins. Co., 513 U. S. 251, 256-257 (1995)). It indicated that whether a court should give such deference depends in significant part upon the interpretive method used and the nature of the question at issue. 533 U. S., 229-231. And it discussed at length why Chevron did not require deference in the circumstances there present — a discussion that would have been superfluous had the presence or absence of notice-and-comment rulemaking been dispositive. 533 U. S., at 231-234. In this case, the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the Agency has given the question over a long period of time all indicate that Chevron provides the appropriate legal lens through which to view the legality of the Agency interpretation here at issue. See United States v. Mead Corp., supra; cf. also I K. Davis & R. Pierce, Administrative Law Treatise §§1.7, 3.3 (3d ed. 1994). For these reasons, we find the Agency's interpretation lawful.III Walton's second claim is more complex. For purposes of making that claim, Walton assumes what we have just decided, namely that the statute's "12 month" duration requirements apply to both the "impairment" and the "inability" to work requirements. Walton also concedes that he returned to work after 11 months. But Walton claims that his work from month 11 to month 12 does not count against him because it is part of a "trial work" period that the statute grants to those "entitled" to Title II benefits. See 42 U. S. C. §422(c). And Walton adds, he was "entitle[d]" to benefits because — even though he returned to work after 11 months — his "impairment" and his "inability" to work were nonetheless "expected to last" for at least "12 months" before he returned to work. To illustrate Walton's argument, we simplify the actual circumstances. We imagine that: (1) On January 1, Year One, Walton developed (a) a severe impairment, which (b) made him unable to work; (2) Eleven (not twelve) months later, on December 1, Year One, Walton returned to work; (3) On July 1, Year Two, the Agency adjudicated, and denied, Walton's claim for benefits. Walton argues that, even though he returned to work after 11 months, had the Agency looked at the matter, not ex post, but as if it were looking prior to his return to work, the Agency would have had to conclude that both his "impairment" and his "inability" to work "can be expected to last for a continuous period of not less than 12 months." §423(d)(1)(A). He consequently satisfied the 12-month duration requirement and became "entitled" to benefits before he returned to work; he was in turn entitled to a "trial work" period; and his subsequent work as a cashier, being "trial work," should not count against him. The Agency's regulations plainly reject this view of the statute. They say, "You are not entitled to a trial work period" if "you perform work ... within 12 months of the onset of the impairment(s) ... and before the date of any notice of determination or decision finding ... you ... disabled." 20 CFR §404.1592(d)(2) (2001). This regulation means that the Agency, deciding before the end of Year One, might have found that Walton's impairment (or inability to work) "can be expected to last" for twelve months. But the Agency, deciding after a Year One in which Walton in fact returned to work, would not ask whether his impairment (or inability to work) could have been expected to last 12 months. The legal question is whether this Agency regulation is consistent with the statute. The Court of Appeals, accepting Walton's view, concluded that it is not. It said that the Agency's rules — permitting the use of hindsight when reviewing claims — are inconsistent with the statute's plain language, 235 F. 3d, at 191. And, here, other courts have agreed. See Salamalekis v. Commissioner of Soc. Sec., 221 F. 3d 828 (CA6 2000); Newton v. Chater, 92 F. 3d 688 (CA8 1996); Walker v. Secretary of Health & Human Servs., 943 F. 2d 1257 (CA10 1991); McDonald v. Bowen, 818 F. 2d 559 (CA7 1986). Nonetheless, we believe that Agency regulation is lawful. See Chevron, supra, at 843. The statute is ambiguous. It says nothing about how the Agency, when it adjudicates a matter after Year One, is to treat an earlier return to work. Its language "can be expected to last" 12 months, 42 U. S. C. §423(d)(1)(A), simply does not say as of what time the law measures the "expectation." Indeed, from a linguistic perspective, the phrase "can be expected," foresees a decisionmaker who is looking into the future, not a decisionmaker who is in the future, looking back into the past in order to see what then "was," "could be," or "could have been" expected. And read in context, the purpose of the phrase "can be expected to last" might be one of permitting the Agency to award benefits before 12 months have expired, not one of denying the Agency the benefit of hindsight. See 65 Fed. Reg., at 42780; cf. also S. Rep. No. 404, at 99. At the same time, the Agency's regulation seems a reasonable, hence permissible, interpretation of the statute. In effect it treats a pre-Agency-decision actual return to work, e.g., Walton's return in December Year One, as if it were determinative of the expectation question. With Year Two's hindsight, Walton's "inability" to work "can" not "be expected to last 12 months." And use of that hindsight avoids the need for the Year Two decisionmaker in effect to answer a highly unwieldy question in what grammarians might call the pluperfect future tense. Of course, administrators and judges are capable of answering hypothetical questions of this kind. But here the question concerns what must be a contrary-to-fact speculation about the future. It is a speculation that, however often raised, would rarely prove easy to resolve. And the statute's purpose does not demand its resolution. Indeed, one might ask why, other things being equal, a claimant who returns to work too early ordinarily to qualify for benefits nonetheless should qualify if, but only if, that return was a kind of medical surprise. Of course, as Walton says, such a rule would help encourage (or at least not discourage) a claimant's early return to work. See generally S. Rep. No. 1856, 86th Cong., 2d Sess., 15-16 (1960). But the statute does not demand that the Agency make of this desirable end an overriding interpretive principle. And the Agency has recognized and addressed the problem of work disincentives in other ways. See, e.g., 20 CFR §§404.1574(c), 404.1575(d) (2001). The statute's complexity, the vast number of claims that it engenders, and the consequent need for agency expertise and administrative experience lead us to read the statute as delegating to the Agency considerable authority to fill in, through interpretation, matters of detail related to its administration. See Schweiker v. Gray Panthers, 453 U. S. 34, 43-44 (1981). The interpretation at issue here is such a matter. The statute's language is ambiguous. And the Agency's interpretation is reasonable. We conclude that the Agency's regulation is lawful.* * *The judgment of the Fourth Circuit isReversed.JO ANNE B. BARNHART, COMMISSIONER OF SOCIAL SECURITY, PETITIONER v. CLEVELAND B. WALTONon writ of certiorari to the united states court of appeals for the fourth circuit[March 27, 2002] Justice Scalia, concurring in part and concurring in the judgment. I join all but Part II of the Court's opinion. I agree that deference is owed to regulations of the Social Security Administration (SSA) interpreting the definition of "disability," 42 U. S. C. §§423(d)(1)(A), 1382c(a)(3)(A) (1994 ed. and Supp. V). See 65 Fed. Reg. 42774 (2000). As the Court acknowledges, the recency of these regulations is irrelevant, see ante, at 8-9 (citing Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 741 (1996); United States v. Morton, 467 U. S. 822, 835-836, n. 21 (1984)). I would therefore not go on, as the Court does, ante, at 7-9, to address the SSA's prior interpretation of the definition of "disability" in a 1982 Social Security Ruling, a 1965 Disability Insurance State Manual, and a 1957 OASI Disability Insurance Letter. I do not believe, to begin with, that "particular deference" is owed "to an agency interpretation of `longstanding' duration," ante, at 7. That notion is an anachronism — a relic of the pre-Chevron days, when there was thought to be only one "correct" interpretation of a statutory text. A "longstanding" agency interpretation, particularly one that dated back to the very origins of the statute, was more likely to reflect the single correct meaning. See, e.g., Watt v. Alaska, 451 U. S. 259, 272-273 (1981). But once it is accepted, as it was in Chevron, that there is a range of permissible interpretations, and that the agency is free to move from one to another, so long as the most recent interpretation is reasonable its antiquity should make no difference. Cf. Rust v. Sullivan, 500 U. S. 173, 186-187 (1991); Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 863-864 (1984). If, however, the Court does wish to credit the SSA's earlier interpretations — both for the purpose of giving the agency's position "particular deference" and for the purpose of relying upon congressional reenactment with presumed knowledge of the agency position, see ante, at 7-8 — then I think the Court should state why those interpretations were authoritative enough (or whatever-else-enough Mead requires) to qualify for deference. See United States v. Mead Corp., 533 U. S. 218 (2001). I of course agree that more than notice-and-comment rulemaking qualifies, see ante, at 9, but that concession alone does not validate the Social Security Ruling, the Disability Insurance State Manual, and the OASI Disability Insurance Letter. (Only the latter two, I might point out, antedate the congressional reenactments upon which the Court relies.) The SSA's recently enacted regulations emerged from notice-and-comment rulemaking and merit deference. No more need be said. |
1 | The Midland County, Texas, Commissioners Court is the governing body for that county, and like other such bodies is established by the State's Constitution and statutes. It consists of five members - a County Judge, elected at large from the entire county, and four commissioners, one elected from each of the four districts (precincts) into which the county is divided. Commissioners courts exercise broad governmental functions in the counties including the setting of tax rates, equalization of assessments, issuance of bonds, and allocation of funds; and they have wide discretion over expenditures. One district of Midland County, which includes almost all the City of Midland, had a population of 67,906, according to 1963 estimates. The others, all rural areas, had populations respectively, of about 852; 414; and 828. In this action challenging the County's districting petitioner alleged that the gross disparity in population distribution among the four districts violated the Equal Protection Clause of the Fourteenth Amendment. Three of the four commissioners testified at trial that population was not a major factor in the districting process. The trial court ruled for petitioner that each district under the State's constitutional apportionment standard should have "substantially the same number of people." An intermediate appellate court reversed. The State Supreme Court reversed that judgment, holding that under the Federal and State Constitutions the districting scheme was impermissible "for the reasons stated by the trial court." It held, however, that the work actually done by the County Commissioners "disproportionately concerns the rural areas" and that such factors as "number of qualified voters, land areas, geography, miles of county roads, and taxable values" could justify apportionment otherwise than on a basis of substantially equal populations. Held: Local units with general governmental powers over an entire geographic area may not, consistently with the Equal Protection Clause of the Fourteenth Amendment, be apportioned among single-member districts of substantially unequal population. Reynolds v. Sims, . Pp. 478-486. (a) The Equal Protection Clause reaches the exercise of state power, whether exercised by the State or a political subdivision. P. 479. (b) Although the state legislature may itself be properly apportioned the Fourteenth Amendment requires that citizens not be denied equal representation in political subdivisions which also have broad policy-making functions. P. 481. (c) The commissioners court performs some functions normally thought of as "legislative," and others typically characterized in other terms; but, regardless of the labels, this body has the power to make a large number of decisions having a broad impact on all the citizens of the county. Pp. 482-483. (d) Though the Midland County Commissioners may concentrate their attention on rural roads, their decisions also affect citizens in the City of Midland. P. 484. 406 S. W. 2d 422, vacated and remanded.Lyndon L. Olson argued the cause and filed a brief for petitioner.W. B. Browder, Jr., and F. H. Pannill argued the cause and filed a brief for respondents.Francis X. Beytagh, Jr., by special leave of Court, argued the cause for the United States, as amicus curiae, urging reversal. With him on the brief were Acting Solicitor General Spritzer and Assistant Attorney General Doar.Louis J. Lefkowitz, Attorney General, and Daniel M. Cohen and Robert W. Imrie, Assistant Attorneys General, filed a brief for the State of New York, as amicus curiae, urging reversal.MR. JUSTICE WHITE delivered the opinion of the Court.Petitioner, a taxpayer and voter in Midland County, Texas, sought a determination by this Court that the Texas Supreme Court erred in concluding that selection of the Midland County Commissioners Court from single-member districts of substantially unequal population did not necessarily violate the Fourteenth Amendment. We granted review, , because application of the one man, one vote principle of Reynolds v. Sims, , to units of local government is of broad public importance. We hold that petitioner, as a resident of Midland County, has a right to a vote for the Commissioners Court of substantially equal weight to the vote of every other resident.Midland County has a population of about 70,000. The Commissioners Court is composed of five members. One, the County Judge, is elected at large from the entire county, and in practice casts a vote only to break a tie. The other four are Commissioners chosen from districts. The population of those districts, according to the 1963 estimates that were relied upon when this case was tried, was respectively 67,906; 852; 414; and 828. This vast imbalance resulted from placing in a single district virtually the entire city of Midland, Midland County's only urban center, in which 95% of the county's population resides.The Commissioners Court is assigned by the Texas Constitution and by various statutory enactments with a variety of functions. According to the commentary to Vernon's Texas Statutes, the court:"is the general governing body of the county. It establishes a courthouse and jail, appoints numerous minor officials such as the county health officer, fills vacancies in the county offices, lets contracts in the name of the county, builds roads and bridges, administers the county's public welfare services, performs numerous duties in regard to elections, sets the county tax rate, issues bonds, adopts the county budget, and serves as a board of equalization for tax assessments."1 The court is also authorized, among other responsibilities, to build and run a hospital, Tex. Rev. Civ. Stat. Ann., Art. 4492 (1966), an airport, id., Art. 2351 (1964), and libraries, id., Art. 1677 (1962). It fixes boundaries of school districts within the county, id., Art. 2766 (1965), may establish a regional public housing authority, id., Art. 1269k, 23a (1963), and determines the districts for election of its own members, Tex. Const., Art. V, 18.Petitioner sued the Commissioners Court and its members in the Midland County District Court, alleging that the disparity in district population violated the Fourteenth Amendment and that he had standing as a resident, taxpayer, and voter in the district with the largest population. Three of the four commissioners testified at the trial, all telling the court (as indeed the population statistics for the established districts demonstrated) that population was not a major factor in the districting process. The trial court ruled for petitioner. It made no explicit reference to the Fourteenth Amendment, but said the apportionment plan in effect was not "for the convenience of the people," the apportionment standard established by Art. V, 18, of the Texas Constitution. The court ordered the defendant commissioners to adopt a new plan in which each precinct would have "substantially the same number of people."The Texas Court of Civil Appeals reversed the judgment of the District Court and entered judgment for the respondents, 397 S. W. 2d 919 (1965). It held that neither federal nor state law created a requirement that Texas county commissioners courts be districted according to population. The Texas Supreme Court reversed the Court of Civil Appeals, 406 S. W. 2d 422 (1966). It held that under "the requirements of the Texas and the United States Constitutions" the present districting scheme was impermissible "for the reasons stated by the trial court." 406 S. W. 2d, at 425. However, the Supreme Court disagreed with the trial court's conclusion that precincts must have substantially equal populations, stating that such factors as "number of qualified voters, land areas, geography, miles of county roads and taxable values" could be considered. 406 S. W. 2d, at 428. It also decreed that no Texas courts could redistrict the Commissioners Court. "This is the responsibility of the commissioners court and is to be accomplished within the constitutional boundaries we have sought to delineate." 406 S. W. 2d, at 428-429.2 In Reynolds v. Sims, supra, the Equal Protection Clause was applied to the apportionment of state legislatures. Every qualified resident, Reynolds determined, has the right to a ballot for election of state legislators of equal weight to the vote of every other resident, and that right is infringed when legislators are elected from districts of substantially unequal population. The question now before us is whether the Fourteenth Amendment likewise forbids the election of local government officials from districts of disparate population. As has almost every court which has addressed itself to this question,3 we hold that it does.4 The Equal Protection Clause reaches the exercise of state power however manifested, whether exercised directly or through subdivisions of the State."Thus the prohibitions of the Fourteenth Amendment extend to all action of the State denying equal protection of the laws; whatever the agency of the State taking the action ... ." Cooper v. Aaron, . Although the forms and functions of local government and the relationships among the various units are matters of state concern, it is now beyond question that a State's political subdivisions must comply with the Fourteenth Amendment.5 The actions of local government are the actions of the State. A city, town, or county may no more deny the equal protection of the laws than it may abridge freedom of speech, establish an official religion, arrest without probable cause, or deny due process of law.When the State apportions its legislature, it must have due regard for the Equal Protection Clause. Similarly, when the State delegates lawmaking power to local government and provides for the election of local officials from districts specified by statute, ordinance, or local charter, it must insure that those qualified to vote have the right to an equally effective voice in the election process. If voters residing in oversize districts are denied their constitutional right to participate in the election of state legislators, precisely the same kind of deprivation occurs when the members of a city council, school board, or county governing board are elected from districts of substantially unequal population. If the five senators representing a city in the state legislature may not be elected from districts ranging in size from 50,000 to 500,000, neither is it permissible to elect the members of the city council from those same districts. In either case, the votes of some residents have greater weight than those of others; in both cases the equal protection of the laws has been denied.That the state legislature may itself be properly apportioned does not exempt subdivisions from the Fourteenth Amendment. While state legislatures exercise extensive power over their constituents and over the various units of local government, the States universally leave much policy and decisionmaking to their governmental subdivisions. Legislators enact many laws but do not attempt to reach those countless matters of local concern necessarily left wholly or partly to those who govern at the local level. What is more, in providing for the governments of their cities, counties, towns, and districts, the States characteristically provide for representative government - for decisionmaking at the local level by representatives elected by the people. And, not infrequently, the delegation of power to local units is contained in constitutional provisions for local home rule which are immune from legislative interference. In a word, institutions of local government have always been a major aspect of our system, and their responsible and responsive operation is today of increasing importance to the quality of life of more and more of our citizens. We therefore see little difference, in terms of the application of the Equal Protection Clause and of the principles of Reynolds v. Sims, between the exercise of state power through legislatures and its exercise by elected officials in the cities, towns, and counties.6 We are urged to permit unequal districts for the Midland County Commissioners Court on the ground that the court's functions are not sufficiently "legislative." The parties have devoted much effort to urging that alternative labels - "administrative" versus "legislative" - be applied to the Commissioners Court. As the brief description of the court's functions above amply demonstrates, this unit of local government cannot easily be classified in the neat categories favored by civics texts. The Texas commissioners courts are assigned some tasks which would normally be thought of as "legislative," others typically assigned to "executive" or "administrative" departments, and still others which are "judicial." In this regard Midland County's Commissioners Court is representative of most of the general governing bodies of American cities, counties, towns, and villages.7 One knowledgeable commentator has written of "the states' varied, pragmatic approach in establishing governments." R. Wood, in Politics and Government in the United States 891-892 (A. Westin ed. 1965). That approach has produced a staggering number of governmental units - the preliminary calculation by the Bureau of the Census for 1967 is that there are 81,304 "units of government" in the United States8 - and an even more staggering diversity. Nonetheless, while special-purpose organizations abound and in many States the allocation of functions among units results in instances of overlap and vacuum, virtually every American lives within what he and his neighbors regard as a unit of local government with general responsibility and power for local affairs. In many cases citizens reside within and are subject to two such governments, a city and a county.The Midland County Commissioners Court is such a unit. While the Texas Supreme Court found that the Commissioners Court's legislative functions are "negligible," 406 S. W. 2d, at 426, the court does have power to make a large number of decisions having a broad range of impacts on all the citizens of the county. It sets a tax rate, equalizes assessments, and issues bonds. It then prepares and adopts a budget for allocating the county's funds, and is given by statute a wide range of discretion in choosing the subjects on which to spend. In adopting the budget the court makes both long-term judgments about the way Midland County should develop - whether industry should be solicited, roads improved, recreation facilities built, and land set aside for schools - and immediate choices among competing needs.The Texas Supreme Court concluded that the work actually done by the Commissioners Court "disproportionately concern[s] the rural areas," 406 S. W. 2d, at 428. Were the Commissioners Court a special-purpose unit of government assigned the performance of functions affecting definable groups of constituents more than other constituents, we would have to confront the question whether such a body may be apportioned in ways which give greater influence to the citizens most affected by the organization's functions. That question, however, is not presented by this case, for while Midland County authorities may concentrate their attention on rural roads, the relevant fact is that the powers of the Commissioners Court include the authority to make a substantial number of decisions that affect all citizens, whether they reside inside or outside the city limits of Midland. The Commissioners maintain buildings, administer welfare services, and determine school districts both inside and outside the city. The taxes imposed by the court fall equally on all property in the county. Indeed, it may not be mere coincidence that a body apportioned with three of its four voting members chosen by residents of the rural area surrounding the city devotes most of its attention to the problems of that area, while paying for its expenditures with a tax imposed equally on city residents and those who live outside the city. And we might point out that a decision not to exercise a function within the court's power - a decision, for example, not to build an airport or a library, or not to participate in the federal food stamp program - is just as much a decision affecting all citizens of the county as an affirmative decision.The Equal Protection Clause does not, of course, require that the State never distinguish between citizens, but only that the distinctions that are made not be arbitrary or invidious. The conclusion of Reynolds v. Sims was that bases other than population were not acceptable grounds for distinguishing among citizens when determining the size of districts used to elect members of state legislatures. We hold today only that the Constitution permits no substantial variation from equal population in drawing districts for units of local government having general governmental powers over the entire geographic area served by the body.This Court is aware of the immense pressures facing units of local government, and of the greatly varying problems with which they must deal. The Constitution does not require that a uniform straitjacket bind citizens in devising mechanisms of local government suitable for local needs and efficient in solving local problems. Last Term, for example, the Court upheld a procedure for choosing a school board that placed the selection with school boards of component districts even though the component boards had equal votes and served unequal populations. Sailors v. Board of Education, . The Court rested on the administrative nature of the area school board's functions and the essentially appointive form of the scheme employed. In Dusch v. Davis, , the Court permitted Virginia Beach to choose its legislative body by a scheme that included at-large voting for candidates, some of whom had to be residents of particular districts, even though the residence districts varied widely in population.The Sailors and Dusch cases demonstrate that the Constitution and this Court are not roadblocks in the path of innovation, experiment, and development among units of local government. We will not bar what Professor Wood has called "the emergence of a new ideology and structure of public bodies, equipped with new capacities and motivations ... ." R. Wood, 1400 Governments, at 175 (1961). Our decision today is only that the Constitution imposes one ground rule for the development of arrangements of local government: a requirement that units with general governmental powers over an entire geographic area not be apportioned among single-member districts of substantially unequal population.The judgment below is vacated and the case is remanded for disposition not inconsistent with this opinion. It is so ordered.MR. JUSTICE MARSHALL took no part in the consideration or decision of this case. |
8 | Section 13(c) of the Urban Mass Transportation Act of 1964 requires a state or local government to make arrangements to preserve transit workers' existing collective-bargaining rights before that government may receive federal financial assistance for the acquisition of a privately owned transit company. Petitioner city entered into a " 13(c) agreement" with respondent transit union in order to obtain federal funds to acquire a failing private bus company and convert it into petitioner Jackson Transit Authority. Thereafter, the Authority's unionized workers were covered by a series of collective-bargaining agreements. In 1975, however, the Authority notified the union that it no longer considered itself bound by the newest of the collective-bargaining agreements. The union subsequently filed suit in Federal District Court, seeking damages and injunctive relief and alleging that petitioners had breached the 13(c) and collective-bargaining agreements. The District Court held that it lacked subject-matter jurisdiction because the complaint rested on contract rights that should be enforced only in a state court. The Court of Appeals reversed, holding that there was subject-matter jurisdiction because the claim arose under a federal law, specifically 13(c), and that 13(c) implicitly provided a federal private right of action.Held: Section 13(c) does not provide the union with federal causes of action for alleged breaches of the 13(c) and collective-bargaining agreements. While 13(c)'s language supplies no definitive answer, the legislative history is conclusive that Congress intended that such agreements be governed by state law applied in state courts. Congress designed 13(c) as a means to accommodate state law to collective bargaining, not as a means to substitute a federal law of collective bargaining for state labor law. Pp. 20-29. 650 F.2d 1379, reversed and remanded.BLACKMUN, J., delivered the opinion for a unanimous Court. POWELL, J., filed a concurring opinion, in which O'CONNOR, J., joined, post, p. 29. Joseph S. Kaufman argued the cause for petitioners. With him on the briefs was William R. Rice.Linda R. Hirshman argued the cause for respondent. With her on the brief was Earle Putnam.* [Footnote *] Briefs of amici curiae urging reversal were filed by John J. Vlahos and Ray E. McDevitt for the American Public Transit Association; by Benjamin L. Brown, J. Lamar Shelley, James B. Brennan, Henry W. Underhill, Jr., George Agnost, Roger F. Cutler, John Dekker, Lee E. Holt, George F. Knox, Jr., Walter M. Powell, William H. Taube, John W. Witt, Max P. Zall, Conard B. Mattox, Jr., and Charles S. Rhyne for the National Institute of Municipal Law Officers; by William J. Olson and James H. Wentzel for the Public Service Research Council; and by Donald H. Clark and Gregory A. Giordano for the Tidewater Transportation District Commission.Edward J. Hickey, Jr., Michael S. Wolly, and Thomas A. Woodley filed a brief for the Railway Labor Executives' Association as amicus curiae urging affirmance.Briefs of amici curiae were filed by Joseph H. Elcock and Ronald G. Busconi for the Massachusetts Bay Transportation Authority; and by W. Stell Huie and Terrence Lee Croft for the Metropolitan Atlanta Rapid Transit Authority.JUSTICE BLACKMUN delivered the opinion of the Court.Under 13(c) of the Urban Mass Transportation Act of 1964 (Act or UMTA), 78 Stat. 307, as amended, 49 U.S.C. 1609(c),1 a state or local government must make arrangements to preserve transit workers' existing collective-bargaining rights before that government may receive federal financial assistance for the acquisition of a privately owned transit company. This case presents the issue whether 13(c) by itself permits a union to sue in federal court for alleged violations of an arrangement of this kind or of the collective-bargaining agreement between the union and the local government transit authority. IAWhen the Act was under consideration in the Congress, that body was aware of the increasingly precarious financial condition of a number of private transportation companies across the country, and it feared that communities might be left without adequate mass transportation. See S. Rep. No. 82, 88th Cong., 1st Sess., 4-5, 19-20 (1963). The Act was designed in part to provide federal aid for local governments in acquiring failing private transit companies so that communities could continue to receive the benefits of mass transportation despite the collapse of the private operations. See 2(b) and 3, as amended, 49 U.S.C. 1601(b) and 1602.At the same time, however, Congress was aware that public ownership might threaten existing collective-bargaining rights of unionized transit workers employed by private companies. If, for example, state law forbade collective bargaining by state and local government employees, the workers might lose their collective-bargaining rights when a private company was acquired by a local government. See Urban Mass Transportation - 1963, Hearings on S. 6 and S. 917 before a Subcommittee of the Senate Committee on Banking and Currency, 88th Cong., 1st Sess., 318-323 (1963) (Senate Hearings) (statement of Andrew J. Biemiller, Director, Department of Legislation, AFL-CIO). To prevent federal funds from being used to destroy the collective-bargaining rights of organized workers, Congress included 13(c) in the Act. See H. R. Rep. No. 204, 88th Cong., 1st Sess., 15-16 (1963).Section 13(c) requires, as a condition of federal assistance under the Act, that the Secretary of Labor certify that "fair and equitable arrangements" have been made "to protect the interests of employees affected by [the] assistance." The statute lists several protective steps that must be taken before a local government may receive federal aid; among these are the preservation of benefits under existing collective-bargaining agreements and the continuation of collective-bargaining rights. The protective arrangements must be specified in the contract granting federal aid.2 BIn 1966, petitioner city of Jackson, Tenn., applied for federal aid to convert a failing private bus company into a public entity, petitioner Jackson Transit Authority. See App. 12a-16a. In order to satisfy 13(c), the Authority so created entered into a " 13(c) agreement" with respondent Local Division 1285, Amalgamated Transit Union, AFL-CIO-CLC, the union that represented the private company's employees. See 29 CFR pt. 215 (1981). Among other things, the 13(c) agreement guaranteed the preservation of the transit workers' collective-bargaining rights. App. 16a-20a. The Secretary of Labor certified that the agreement was "fair and equitable." Its substance was made a part of the grant contract between the city and the United States, and the city received approximately $279,000 in federal aid. Thereafter, until 1975, the Authority's unionized workers were covered by a series of collective-bargaining agreements. Six months after a new 3-year collective-bargaining agreement was signed in 1975, see id., at 31a, however, the Authority notified the union that it no longer considered itself bound by that contract. See id., at 45a.3 Ultimately, the union filed suit in the United States District Court for the Western District of Tennessee. It sought damages and injunctive relief, alleging that petitioners had breached the 13(c) agreement and the collective-bargaining contract. App. 8a, 10a-11a.4 The District Court concluded that it lacked subject-matter jurisdiction to hear the suit because the complaint rested on contract rights that should be enforced only in a state court. 447 F. Supp. 88 (1977).The United States Court of Appeals for the Sixth Circuit reversed. 650 F.2d 1379 (1981). Relying on Bell v. Hood, , that court first determined that it had subject-matter jurisdiction under 28 U.S.C. 1331, because the union's claim arose under the laws of the United States, specifically 13(c). The court then held that 13(c) implicitly provides a federal private right of action. Section 13(c) reflects national labor policy, the Court of Appeals reasoned, and the rights protected by the statute are thus federal rights. The court concluded that it was consistent with the congressional intent behind 13(c) to permit enforcement of these federal rights in federal court.Because of the importance of the interpretation of 13(c) for local transit labor relations,5 we granted certiorari. .IIWhile the Court of Appeals treated this as a private right of action case, see, e. g., Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, , it does not fit comfortably in that mold. Indeed, since 13(c) contemplates protective arrangements between grant recipients and unions as well as subsequent collective-bargaining agreements between those parties, see H. R. Rep. No. 204, 88th Cong., 1st Sess., 16 (1963), it is reasonable to conclude that Congress expected the 13(c) agreement and the collective-bargaining agreement, like ordinary contracts, to be enforceable by private suit upon a breach. See Transamerica Mortgage Advisors, Inc. v. Lewis, . The gist of the union's position is not that 13(c) creates an implied right of action to sue for violations of the statute. Instead, the union argues that "[i]t was the intent of Congress that federal law would determine the binding effect of labor protective agreements under 13(c) and of the collective bargaining agreements reached pursuant to 13(c) between unions and recipients of UMTA funds" so that those agreements "are enforceable in the federal courts." Brief for Respondent 24.The issue, then, is not whether Congress intended the union to be able to bring contract actions for breaches of the two contracts, but whether Congress intended such contract actions to set forth federal, rather than state, claims. Admittedly, since the private right of action decisions address the related question whether Congress intended that a particular party be able to bring suit under a federal statute, those decisions may provide assistance in resolving this case. But the precise question before us is whether the union's contract actions are federal causes of action, not whether the union can bring suit at all to enforce its contracts. See Local Div. 732, Amalgamated Transit Union v. Metropolitan Atlanta Rapid Transit Authority, 667 F.2d 1327, 1329-1334 (CA11 1982).6 As the union points out, on several occasions the Court has determined that a plaintiff stated a federal claim when he sued to vindicate contractual rights set forth by federal statutes, despite the fact that the relevant statutes lacked express provisions creating federal causes of action. In Machinists v. Central Airlines, Inc., , the Court held that a union had a federal cause of action to enforce an award of an airline adjustment board included in a collective-bargaining contract pursuant to 204 of the Railway Labor Act, 45 U.S.C. 184 (1958 ed.). Similarly, in Norfolk & Western R. Co. v. Nemitz, , the Court ruled that a railroad's employees made out federal claims when they sought to enforce assurances made by the railroad to secure the Interstate Commerce Commission's approval of a consolidation under a provision of the Interstate Commerce Act, 49 U.S.C. 5(2)(f) (1970 ed.). And recently, in an analogous private right of action decision, the Court permitted a federal suit for rescission of a contract declared void by 215 of the Investment Advisers Act of 1940, 15 U.S.C. 80b-15, although the statute itself made no express provision for private suits. Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S., at 18-19. See also Mills v. Electric Auto-Lite Co., (recognizing federal right to rescind contracts rendered void by 29(b) of the Securities Exchange Act of 1934, 15 U.S.C. 78cc (b)); American Surety Co. v. Shulz, (finding federal-question jurisdiction to hear suit on supersedeas bond required by Rev. Stat. 1007).These decisions demonstrate that suits to enforce contracts contemplated by federal statutes may set forth federal claims and that private parties in appropriate cases may sue in federal court to enforce contractual rights created by federal statutes. But they do not dictate the result in this case. Whenever we determine the scope of rights and remedies under a federal statute, the critical factor is the congressional intent behind the particular provision at issue. See, e. g., Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S., at 18; Cannon v. University of Chicago, ; Machinists v. Central Airlines, Inc., 372 U.S., at 685-692; see also n. 9, infra. Thus, if Congress intended that 13(c) agreements and collective-bargaining agreements be "creations of federal law," Machinists v. Central Airlines, Inc., 372 U.S., at 692, and that the rights and duties contained in those contracts be federal in nature, see id., at 695, then the union's suit states federal claims. Otherwise, the union's complaint presents only state-law claims. See Miree v. De Kalb County, .IIIWe begin with the language of the statute itself. See, e. g., Universities Research Assn., Inc. v. Coutu, . The bare language of 13(c) is not conclusive. In some ways, the statute seems to make 13(c) agreements and collective-bargaining contracts creatures of federal law. Section 13(c) demands "fair and equitable arrangements" as prerequisites for federal aid; it requires the approval of the Secretary of Labor for those arrangements; it specifies five different varieties of protective provisions that must be included among the 13(c) arrangements; and it expressly incorporates the protective arrangements into the grant contract between the recipient and the Federal Government.7 See n. 2, supra. On the other hand, labor relations between local governments and their employees are the subject of a longstanding statutory exemption from the National Labor Relations Act. 29 U.S.C. 152(2). Section 13(c) evinces no congressional intent to upset the decision in the National Labor Relations Act to permit state law to govern the relationships between local governmental entities and the unions representing their employees. See Cort v. Ash, (noting reluctance to permit suit in federal court when "the cause of action [is] one traditionally relegated to state law").While the statutory language supplies no definitive answer, the legislative history is conclusive. A consistent theme runs throughout the consideration of 13(c): Congress intended that labor relations between transit workers and local governments would be controlled by state law.In 1963, Secretary of Labor Wirtz presented the original version of 13(c) to the relevant House and Senate Committees. Before both Committees, Members of Congress expressed concern about the effect of the statute on state laws. And Secretary Wirtz explained to both Committees that, while attempts would be made to accommodate state law to the preservation of collective-bargaining rights, state law would control local transit labor relations. The Secretary told the House Committee that "this proposal is submitted on this basis, ... that the State laws must control." Urban Mass Transportation Act of 1963, Hearings on H. R. 3881 before the House Committee on Banking and Currency, 88th Cong., 1st Sess., 482 (1963) (House Hearings). A Committee member raised the issue again; the Secretary repeated that "State laws would be controlling in the situation," though he suggested that there "would be few, if any, situations" where state law and 13(c) could not be reconciled. House Hearings, at 486. When similar concerns were expressed during his testimony before the Senate Committee, the Secretary reiterated: "I should like it quite clear that I think that there could be no superseding here of the State law." Senate Hearings, at 313.The House and Senate Reports took the Secretary at his word. The House Report advised that 13(c) would ensure protection of the interests of workers, but that "subject to the basic standards set forth in the bill, specific conditions for worker protection will normally be the product of local bargaining and negotiation." H. R. Rep. No. 204, 88th Cong., 1st Sess., 16 (1963). The Senate Report was more direct: "In regard to the question as to whether these provisions would supersede State labor laws, the committee concurs in a statement made by the Secretary of Labor `that there could be no superseding of State laws by a provision of this kind.'" S. Rep. No. 82, 88th Cong., 1st Sess., 29 (1963).During the debates, the role of state law under 13(c) was discussed at length. Senators Goldwater and Tower suggested that 13(c) would supplant state law with federal law. 109 Cong. Rec. 5416 (1963). Senator Williams, one of the bill's chief sponsors, replied: "The legislative history has to be corrected" because "we must have a record that will show that the bill does not preempt State law; it does not control or dominate with irrevocable authority local situations." Id., at 5417. The proposed statute, Senator Williams continued, would not "preempt or be a substitute for State law." Ibid. Senator Goldwater remained adamant that "we are attempting a major alteration in the Nation's labor laws." Id., at 5418. But Senator Sparkman, the Chairman of the Senate Committee, repeated the Secretary's assurance that 13(c) "will not supersede or displace or override" state law. 109 Cong. Rec. 5418 (1963).8 The Senate returned to the issue during a colloquy between Senator Goldwater and Senator Morse. Senator Goldwater feared that the proposed statute would override state laws denying public employees the right to strike. Id., at 5673. Senator Morse assured Senator Goldwater otherwise that "the State law would supervene." Ibid. When Senator Goldwater inquired about state laws other than those concerning the right to strike, Senator Morse replied in the same vein: "The amendment does not supersede any State policy." Ibid.In an important exchange, Senator Goldwater noted that local government employers were excluded from the coverage of the National Labor Relations Act, see 29 U.S.C. 152(2), and asked whether 13(c) would be inconsistent with that exclusion. 109 Cong. Rec. 5673-5674 (1963). Senator Morse responded that the language of the bill "make[s] it clear that the Taft-Hartley exemptions are not changed by the amendment." Id., at 5674. See also id., at 5422 (remarks of Sen. Javits) (state law could not be overridden "under any phase of the Taft-Hartley law"). Senator Morse underscored the purpose of the amendment: "I cannot emphasize the point more than I already have done in the legislative history in our debate. It deals with municipal and State problems, and not Federal problems." Id., at 5674. Finally, Senator Goldwater asked whether state law would control if there were no specific state law forbidding strikes by public employees. Senator Morse adhered to the same course: "In the absence of any local law, it would be for the State court to decide whether [the employees] had that right." Ibid.A similar, but more abbreviated, interchange took place on the House floor. When some Congressmen questioned the effect of 13(c) on state law, they were reassured by Congressman Multer that "[n]othing in this bill ... will infringe upon local law, whether it be of a State or municipality." 110 Cong. Rec. 14980 (1964). And Congressman Rains repeated, "there is not one line in this bill that would vitiate in any way any State or local law." Ibid.Thus, Congress made it absolutely clear that it did not intend to create a body of federal law applicable to labor relations between local governmental entities and transit workers.9 Section 13(c) would not supersede state law, it would leave intact the exclusion of local government employers from the National Labor Relations Act, and state courts would retain jurisdiction to determine the application of state policy to local government transit labor relations. Congress intended that 13(c) would be an important tool to protect the collective-bargaining rights of transit workers, by ensuring that state law preserved their rights before federal aid could be used to convert private companies into public entities.10 See 109 Cong. Rec. 5673 (1963) (remarks of Sen. Morse) (if city proposed to reject collective bargaining, it would be ineligible for federal aid). But Congress designed 13(c) as a means to accommodate state law to collective bargaining, not as a means to substitute a federal law of collective bargaining for state labor law.11 IVGiven this explicit legislative history, we cannot read 13(c) to create federal causes of action for breaches of 13(c) agreements and collective-bargaining contracts between UMTA aid recipients and transit unions.12 The legislative history indicates that Congress intended those contracts to be governed by state law applied in state courts.13 Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. |
7 | Section 232 (b) of the Trade Expansion Act of 1962, as amended by the Trade Act of 1974, provides that if the Secretary of the Treasury finds that an "article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security," the President is authorized to "take such action, and for such time, as he deems necessary to adjust the imports of [the] article and its derivatives so that ... imports [of the article] will not threaten to impair the national security." When it appeared that a prior program established under 232 (b) for adjusting oil imports was not fulfilling its objectives, the Secretary of the Treasury initiated an investigation. On the basis of this investigation the Secretary found that crude oil and its derivatives and related products were being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security, and accordingly recommended to the President that appropriate action be taken to reduce the imports. Following this recommendation, the President promptly issued a Proclamation, inter alia, raising the license fees on imported oil. Thereafter, respondents - eight States and their Governors, 10 utility companies, and a Congressman - brought suits against petitioners challenging the license fees on the ground, inter alia, that they were beyond the President's authority under 232 (b). The District Court denied relief, holding that 232 (b) is a valid delegation to the President of the power to impose license fees on imports, and that the procedures followed by the President and the Secretary in imposing the fees fully complied with the statute. The Court of Appeals reversed, holding that 232 (b) does not authorize the President to impose a license fee scheme as a method of adjusting imports, but encompasses only the use of "direct" controls such as quotas. Held: Section 232 (b) authorizes the action taken by the President. Pp. 558-571. (a) Section 232 (b) does not constitute an improper delegation of power, since it establishes clear preconditions to Presidential action, including a finding by the Secretary of the Treasury that an article is being imported in such quantities or under such circumstances as to threaten to impair the national security. Moreover, even if these preconditions are met, the President can act only to the extent he deems necessary to adjust the imports so that they will not threaten to impair the national security, and 232 (c) sets forth specific factors for him to consider in exercising his authority. Pp. 558-560. (b) In authorizing the President to "take such action and for such time, as he deems necessary to adjust the imports of [an] article and its derivatives," 232 (b)'s language clearly grants him a measure of discretion in determining the method used to adjust imports, and there is no support in the statute's language that the authorization to the President to "adjust" imports should be read to encompass only quantitative methods, i. e., quotas, as opposed to monetary methods, i. e., license fees, of effecting such adjustments; so to limit the word "adjust" would not comport with the range of factors that can trigger the President's authority under 232 (b)'s language. Pp. 561-562. (c) Furthermore, 232 (b)'s legislative history amply indicates that the President's authority extends to the imposition of monetary exactions, i. e., license fees and duties, and belies any suggestion that Congress, despite its use of broad language in the statute itself, intended to confine the President's authority to the imposition of quotas and to bar him from imposing a license fee system such as the one in question. Pp. 562-571. App. D.C. 113, 518 F.2d 1051, reversed and remanded.MARSHALL, J., delivered the opinion for a unanimous Court.Solicitor General Bork argued the cause for petitioners. With him on the briefs were Assistant Attorney General Lee, Mark L. Evans, Leonard Schaitman, and David M. Cohen.Francis X. Bellotti, Attorney General of Massachusetts, and Harold B. Dondis argued the cause for respondents. With them on the brief were S. Stephen Rosenfeld and Thomas R. Kiley, Assistant Attorneys General, James S. Hostetler, William F. Griffin, Jr., and William R. Connole.* [Footnote *] Peter Buck Feller, John D. Heckert, and David M. Repass filed a brief for McClure & Trotter as amicus curiae urging affirmance.MR. JUSTICE MARSHALL delivered the opinion of the Court.Section 232 (b) of the Trade Expansion Act of 1962, 76 Stat. 877, as amended by 127 (d) of the Trade Act of 1974, 88 Stat. 1993, 19 U.S.C. 1862 (b) (1970 ed., Supp. IV), provides that if the Secretary of the Treasury finds that an "article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security," the President is authorized to"take such action, and for such time, as he deems necessary to adjust the imports of [the] article and its derivatives so that ... imports [of the article] will not threaten to impair the national security."1 All parties to this case agree that 232 (b) authorizes the President to adjust the imports of petroleum and petroleum products by imposing quotas on such imports. What we must decide is whether 232 (b) also authorizes the President to control such imports by imposing on them a system of monetary exactions in the form of license fees.IThe predecessor statute to 232 (b) was originally enacted by Congress as 7 of the Trade Agreements Extension Act of 1955, c. 169, 69 Stat. 166 (see n. 21, infra), and amended by 8 of the Trade Agreements Extension Act of 1958, Pub. L. 85-686, 72 Stat. 678. The advisory function currently performed under 232 (b) by the Secretary of the Treasury was performed by the Director of the Office of Defense Mobilization (ODM) under the 1955 and 1958 statutes. But, like 232 (b), those statutes allowed the President, on a finding that imports of an article were threatening "to impair the national security," to "take such action as he deem[ed] necessary to adjust the imports of [the] article ... ." In 1959, President Eisenhower, having been advised by the Director of ODM that "`crude oil and the principal crude oil derivatives and products are being imported in such quantities and under such circumstances as to threaten to impair the national security,'" invoked the 1958 version of the provision and established the Mandatory Oil Import Program (MOIP). Presidential Proclamation No. 3279, 3 CFR 11 (1959-1963 Comp.). The MOIP, designed to reduce the gap between domestic supply and demand by encouraging the development of domestic production and refinery capacity, imposed a system of quotas on the importation of petroleum and petroleum products. The program was not wholly successful, however, and in the face of domestic consumption which continued to grow faster than domestic production, Presidents Kennedy, Johnson, and Nixon each felt compelled to amend it by raising the permissible quota levels. App. 211-212. In light of a Cabinet task force conclusion that the MOIP, as then constituted, was not fulfilling its objectives,2 President Nixon, acting pursuant to 232 (b), radically amended the program in 1973. Presidential Proclamation No. 4210, 3 CFR 31 (1974). The President suspended existing tariffs on oil imports and provided "for a gradual transition from the existing quota method of adjusting imports of petroleum and petroleum products to a long-term program for adjustment of imports of petroleum and petroleum products through ... the institution of a system of fees applicable to imports of crude oil, unfinished oils, and finished products ... ." Id., at 32. This amended program established a gradually increasing schedule of license fees for importers. With respect to crude oil, the fee was scheduled to increase from an initial 10 1/2 cents per barrel on May 1, 1973, to 21 cents per barrel on May 1, 1975. With respect to most finished petroleum products, the fee was to rise gradually from 15 cents per barrel on May 1, 1973, to 63 cents per barrel on November 1, 1975.3 Id., at 36. While initially some oil imports were exempted from the license fee requirements, the exemption levels were scheduled to decrease annually so that by 1980 the fees would be applicable to all oil imports.President Nixon's 1973 program apparently did not wholly fulfill the objectives to which it was directed. Accordingly, the Secretary of the Treasury, acting pursuant to 232 (b), see n. 1, supra, initiated an investigation on January 4, 1975, "to determine the effects on the national security of imports of petroleum and petroleum products." Memorandum from Secretary of the Treasury Simon to Assistant Secretary of the Treasury MacDonald (Simon Memorandum), App. 154. While 232 (b) directs the Secretary "if it is appropriate [to do so, to] hold public hearings or otherwise afford interested parties an opportunity to present information and advice" as part of such an investigation, 19 U.S.C. 1862 (b) (1970 ed., Supp. IV), the Secretary found that such procedures would interfere with "national security interests" and were "inappropriate" in this case. Simon Memorandum, App. 154. The investigation therefore proceeded without any public hearing or call for submissions from interested nongovernmental parties.The Secretary submitted a report on his investigation to President Ford on January 14, 1975. Intimating that the measures then in force under 232 (b) had indeed not solved the problems to which they were directed, the Secretary indicated that the United States' dependence on foreign oil had continued to increase since 1966 and that foreign sources currently accounted for well over a third of domestic consumption. The Secretary concluded that"crude oil, principal crude oil derivatives and products, and related products derived from natural gas and coal tar are being imported into the United States in such quantities as to threaten to impair the national security [and] the foregoing products are being imported into the United States under such circumstances as to threaten to impair the national security." App. 133. On the basis of these findings, the Secretary recommended to the President that"appropriate action be taken to reduce imports of crude oil, principal crude oil derivatives and products, and related products derived from natural gas and coal tar into the United States ... ." Ibid. The President agreed with the findings of the Secretary's investigation and concluded that it was "necessary and consistent with the national security to further discourage importation into the United States of petroleum, petroleum products, and related products ... ." Presidential Proclamation No. 4341, 3A CFR 2 (1975). Invoking 232 (b), he issued a Proclamation on January 23, 1975, which, effective immediately, raised the so-called "first-tier" license fees that were imposed in 1973, see supra, at 553, to the maximum levels previously scheduled to be reached only some months later.4 Presidential Proclamation No. 4341, supra. The Proclamation also imposed on all imported oil, whether covered by the first-tier fees or not, a supplemental fee of $1 per barrel for oil entering the United States on or after February 1, 1975. The supplemental fee was scheduled to rise to $2 a barrel for oil entering after March 1, 1975, and to $3 per barrel for oil entering after April 1, 1975.5 Finally, the Proclamation reinstated the tariffs that had been suspended in April 1973. Soon after issuance of the Proclamation, the Federal Energy Administration (FEA) amended its oil import regulations in order to implement the new program. 40 Fed. Reg. 4771-4776 (1975).Four days after the Proclamation was issued, respondents - eight States and their Governors,6 10 utility companies,7 and Congressman Robert F. Drinan of Massachusetts - challenged the license fees in two suits filed against the Secretary of the Treasury, the Administrator of the FEA, and the Treasurer of the United States in the United States District Court for the District of Columbia. Seeking declaratory and injunctive relief, they alleged that the imposition of the fees was beyond the President's constitutional and statutory authority, that the fees were imposed without necessary procedural steps having been taken, and that petitioners (hereinafter the Government) violated the National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852, 42 U.S.C. 4321 et seq., by failing to prepare an environmental impact statement prior to the imposition of the fees.The District Court denied respondents' motions for preliminary injunctions and filed findings of fact and conclusions of law which, at the request of respondents, it later declared to be final. See App. D.C. 113, 124, 126, 518 F.2d 1051, 1062, 1064 (1975) (appendix to dissenting opinion in Court of Appeals). The court found that 232 (b) is a valid delegation to the President of the power to impose license fees on oil imports. Id., at 128-129, 518 F.2d, at 1066-1067. It further ruled that the procedures followed by the President and the Secretary of the Treasury in imposing the license fees fully conformed to the requirements of the statute. Id., at 130, 518 F.2d, at 1068. Finally, the court held that "in view of the emergency nature of the problem and the need for prompt action," id., at 131, 518 F.2d, at 1069, the Government was not required to file an environmental impact statement prior to imposition of the fees and hence was not in violation of the NEPA. Ibid.Respondents' appeals from these judgments were consolidated with their petitions to the Court of Appeals for the District of Columbia Circuit for review of the FEA regulations implementing the license fee program. The allegations in the challenges to the regulations were substantially the same as those raised in the District Court actions, adding only a contention that the FEA had failed to follow certain procedural provisions of the Federal Energy Administration Act, 88 Stat. 97, 15 U.S.C. 761 et seq. (1970 ed., Supp. IV). The Court of Appeals, with one judge dissenting, held that 232 (b) does not authorize the President to impose a license fee scheme as a method of adjusting imports. App. D.C. 113, 518 F.2d 1051 (1975). According to the court, reading the statute to authorize the action taken by the President "would be an anomalous departure" from "the consistently explicit, well-defined manner in which Congress has delegated control over foreign trade and tariffs." Id., at 117, 518 F.2d, at 1055. In the court's view, 232 (b)'s legislative history indicated that Congress' authorization of the President to "adjust the imports of [an] article" encompassed only the use of "direct" controls such as quotas and did not encompass the use of license fees. Id., at 121, 518 F.2d, at 1059. Finding no need to address any of the other issues that were raised, the court reversed the judgment of the District Court instructed that court to enter appropriate relief for respondents, and set aside the challenged FEA regulations.We granted the Government's petition for certiorari, ,8 and now reverse. Both the language of 232 (b) and its legislative history lead us to conclude that it authorizes the action taken by the President in this case.9 IIAPreliminarily, we reject respondents' suggestion that we must construe 232 (b) narrowly in order to avoid "a serious question of unconstitutional delegation of legislative power." Brief for Respondents 42. Even if 232 (b) is read to authorize the imposition of a license fee system, the standards that it provides the President in its implementation are clearly sufficient to meet any delegation doctrine attack.In Hampton & Co. v. United States, , this Court upheld the constitutionality of a provision empowering the President to increase or decrease import duties in order to equalize the differences between foreign and domestic production costs for similar articles. There, the Court stated: "If Congress shall lay down by legislative act an intelligible principle to which the [President] is directed to conform, such legislative action is not a forbidden delegation of legislative power." Id., at 409. Section 232 (b) easily fulfills that test. It establishes clear preconditions to Presidential action - inter alia, a finding by the Secretary of the Treasury that an "article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security." Moreover, the leeway that the statute gives the President in deciding what action to take in the event the preconditions are fulfilled is far from unbounded. The President can act only to the extent "he deems necessary to adjust the imports of such article and its derivatives so that such imports will not threaten to impair the national security." And 232 (c), see n. 1, supra, articulates a series of specific factors to be considered by the President in exercising his authority under 232 (b).10 In light of these factors and our recognition that "[n]ecessity ... fixes a point beyond which it is unreasonable and impracticable to compel Congress to prescribe detailed rules ...," American Power & Light Co. v. SEC, , we see no looming problem of improper delegation11 that should affect our reading of 232 (b). BIn authorizing the President to "take such action, and for such time, as he deems necessary to adjust the imports of [an] article and its derivatives," the language of 232 (b) seems clearly to grant him a measure of discretion in determining the method to be used to adjust imports. We find no support in the language of the statute for respondents' contention that the authorization to the President to "adjust" imports should be read to encompass only quantitative methods - i. e., quotas - as opposed to monetary methods - i. e., license fees - of effecting such adjustments.Indeed, reading respondents' suggested limitation into the word "adjust" would be inconsistent with the range of factors that can trigger the President's authority under 232 (b)'s language. Section 232 (b) authorizes the President to act after a finding by the Secretary of the Treasury that a given article is being imported "in such quantities or under such circumstances as to threaten to impair the national security." (Emphasis added.) The emphasized language reflects Congress' judgment that "not only the quantity of imports ... but also the circumstances under which they are coming in: their use, their availability, their character" could endanger the national security and hence should be a potential basis for Presidential action. 104 Cong. Rec. 10542-10543 (1958) (remarks of Rep. Mills). It is most unlikely that Congress would have provided that dangers posed by factors other than the strict quantitative level of imports can justify Presidential action, but that that action must be confined to the imposition of quotas. Unless one assumes, and we do not, that quotas will always be a feasible method of dealing directly with national security threats posed by the "circumstances" under which imports are entering the country, limiting the President to the use of quotas would effectively and artificially prohibit him from directly dealing with some of the very problems against which 232 (b) is directed.Turning from 232's language to its legislative history, again there is much to suggest that the President's authority extends to the imposition of monetary exactions - i. e., license fees and duties. The original enactment of the provision in 1955 as well as Congress' periodic reconsideration of it in subsequent years gives us substantial grounds on which to conclude that its authorization extends beyond the imposition of quotas to the type of action challenged here.During congressional hearings on the Trade Agreements Extension Act of 1955, there was substantial testimony that increased imports were threatening to damage various domestic industries whose viability was perceived to be critical to the national security.12 In an effort to deal with the problem, the Senate Committee on Finance considered several proposals designed to supplement the existing statutory provision, known as the Symington Amendment,13 that barred reductions in duties "on any article if the President finds that such reduction would threaten domestic production needed for projected national defense requirements." Act of July 1, 1954, Pub. L. 464, 2, 68 Stat. 360.14 Among these amendments was one proposed by Senator Neely which provided in relevant part:"[T]he President shall take such action as is necessary to restrict imports of commodities whenever such imports threaten to retard the domestic development and expansion or maintenance of domestic production of natural resource commodities or any other commodities which he determines to be essential to the national security... ." Hearings on H. R. 1 before the Senate Committee on Finance, 84th Cong., 1st Sess., 1033 (1955) (emphasis added).15 In explaining what action would be authorized under the Neely Amendment, Senator Martin, one of its co-sponsors, explained that it authorized the President "to take such action as is necessary, including the imposition of import quotas or the increase in duties, to protect the domestic industry concerned." Id., at 2097 (emphasis added). Thus, the Neely Amendment clearly would have given the President the authority to impose monetary exactions as a method of restricting imports.While the Neely Amendment was not reported out of committee, it is strikingly similar in language to the Byrd-Millikin Amendment - the substitute provision that was reported out and eventually enacted into law. The Byrd-Millikin Amendment authorized the President, after appropriate recommendations had been made by the Director of the ODM, to "take such action as he deems necessary to adjust the imports of [an] article to a level that will not threaten to impair the national security." S. Rep. No. 232, 84th Cong., 1st Sess., 14 (1955).16 Given the similarity in the operative language of the two proposals, it is fair to infer that if, as Senator Martin stated, the Neely Amendment was intended to authorize the imposition of monetary exactions, so too was the Byrd-Millikin Amendment.The debate on the Senate floor lends further support to this reading of the Byrd-Millikin Amendment. Senator Millikin himself stated without contradiction that the Amendment authorized the President "to take whatever action he deems necessary to adjust imports ... [including the use of] tariffs, quotas, import taxes or other methods of import restriction." 101 Cong. Rec. 5299 (1955). As a statement of one of the legislation's sponsors, this explanation deserves to be accorded substantial weight in interpreting the statute. National Woodwork Mfrs. Assn. v. NLRB, ; Schwegmann Bros. v. Calvert Distillers Corp., .17 Senator Millikin's statement does not stand alone. Senator Byrd, another of the Amendment's sponsors, explained in colloquy with Senator Saltonstall that the Amendment put all commodities "on the same basis as agricultural commodities. It simply leaves to the President the power, in his discretion, to decide whether to impose a quota or to reduce the imports." 101 Cong. Rec. 5297 (1955) (emphasis added). The reference in the emphasized phrase is to 22 of the Agricultural Adjustment Act, the subject of an earlier exchange between Senator Byrd and Senator Thye. 101 Cong. Rec. 5296 (1955). Section 22 allows the President under certain circumstances to "impose such fees ... or such quantitative limitations" as he finds necessary to protect the domestic production of an agricultural commodity. 49 Stat. 773, as amended, 7 U.S.C. 624 (b) (emphasis added). Senator Byrd's comparison of 22 and the Byrd-Millikin Amendment thus appears to reflect his understanding that Presidential authority under the Amendment extended to the imposition of fees.18 Finally, we note two other statements on the floor of the Senate which lend direct support to the Government's reading of the Byrd-Millikin Amendment. Senator Bennett stated that it was his understanding that the amendment would authorize use of "the entire scope of tariffs, quotas, restrictions, stockpiling, and any other variation of these programs in order to protect a particular industry." 101 Cong. Rec. 5588 (1955).19 And Senator Barkley, a member of the Senate Committee on Finance, expressed his understanding that the Amendment would allow the President to "impose such quotas or take such other steps as he may believe to be desirable in order to maintain the national security." Id., at 5298 (emphasis added).In the House debate following Senate passage of the Byrd-Milliken Amendment, id., at 5655, and its acceptance with a minor modification by the House conferees, H. R. Conf. Rep. No. 745, 84th Cong., 1st Sess., 2, 6-7 (1955), we find further indications that the Amendment authorized the imposition of monetary exactions. In explaining the provisions of the Amendment, Congressman Cooper, chairman of the House Ways and Means Committee and a member of the Conference Committee, indicated his concern that "any modification of a duty on imports or a quota would [because of retaliation from abroad] inevitably result in a curtailment of exports by the United States." 101 Cong. Rec. 8161 (1955) (emphasis added). Furthermore, as part of his explanation of the Amendment, Cooper presented a letter he had received from Gerald D. Morgan, Special Counsel to the President, which expressed the administration's understanding that under the Amendment, the President's action to adjust imports "could take any form that was appropriate to the situation." Id., at 8162.20 Thus, when Congress finally enacted the Byrd-Millikin Amendment's national security provision, 69 Stat. 166,21 as part of the Trade Agreement Extension Act of 1955, not only had Members of both Houses indicated that the provision authorized the imposition of monetary exactions, but the Executive Branch, too, had advised the Congress of its understanding of the broad scope of the authority granted by the Amendment.22 Three years later, in the context of its consideration of the Trade Agreements Extension Act of 1958, Congress re-examined the Byrd-Millikin national security provision. In the course of its deliberations, the Subcommittee on Foreign Trade Policy of the House Ways and Means Committee had before it a 1957 report submitted to it by the ODM, expressing the views of the Executive Branch that "the imposition of new or increased tariff duties on imports ... [was] authorized by the language adopted."23 Fully aware that the Executive Branch then, as in 1955, understood the provision as authorizing the imposition of monetary exactions, the Committee did not recommend any change in its wording to confine more narrowly the bounds of its authorization. On the contrary, the Committee in its report indicated with approval its own understanding that the statute provided "those best able to judge national security needs ... [with] a way of taking whatever action is needed to avoid a threat to the national security through imports." H. R. Rep. No. 1761, 85th Cong., 2d Sess., 13 (1958) (emphasis added).While Congress in 1958 made several procedural changes in the statute and established criteria to guide the President's determination as to whether action under the provision might be necessary, it added no limitations with respect to the type of action that the President was authorized to take.24 8, 72 Stat. 678. The 1958 re-enactment, like the 1955 provision, authorized the President under appropriate conditions to "take such action" "as he deems necessary to adjust the imports ... ." Ibid.When the national security provision next came up for re-examination, it was re-enacted without material change as 232 (b) of the Trade Expansion Act of 1962. In its analysis the Court of Appeals placed great emphasis on the fact that in the course of Congress' deliberations the Senate passed and the Conference Committee deleted, H. R. Conf. Rep. No. 2518, 87th Cong., 2d Sess., 13 (1962), an amendment which provided: "Notwithstanding any other provision of law, the President may, when he finds it in the national interest, proclaim with respect to any article imported into the United States - "(1) the increase of any existing duty on such article to such rate as he finds necessary; "(2) the imposition of a duty on such article (if it is not otherwise subject to duty) at such rate as he finds necessary, and "(3) the imposition of such other import restrictions as he finds necessary." 108 Cong. Rec. 19573 (1962). The Court of Appeals inferred from the rejection of this amendment that Congress understood the then existing grant of authority to be limited to the imposition of quotas. According to the court, the amendment would have "explicitly [given] the President the same authority he claims derives implicitly from [232 (b),]" App. D.C., at 121, 518 F.2d, at 1059, and Congress' refusal to enact the amendment was tantamount to a rejection of the Government's interpretation of the statute.We disagree, however, with the Court of Appeals' assessment of the proposed amendment. The amendment was in reality far more than an articulation of the authority that the Government finds to be contained in 232 (b). Unlike 232 (b), the rejected proposal would not have required a prior investigation and findings by an executive department as a prerequisite to Presidential action. Moreover, the broad "national interest" language of the proposal, together with its lack of any standards for implementing that language, stands in stark contrast with 232 (b)'s narrower criterion of "national security" and 232 (c)'s articulation of standards to guide the invocation of the President's powers under 232 (b). In light of these clear differences between the rejected proposal and 232 (b), we decline to infer from the fact that the Senate amendment was proposed, or from the fact that it was rejected, that Congress felt that the President had no power to impose monetary exactions under 232 (b).Only a few months after President Nixon invoked the provision to initiate the import license fee system challenged here, Congress once again re-enacted the Presidential authorization encompassed in 232 (b) without material change. Trade Act of 1974, Pub. L. 93-618, 88 Stat. 1993. Making no mention of the President's action, both the Senate Committee report and the conference report recited the language of the statute itself to reaffirm that under 232 (b) the President "may ... take such action, and for such time, as he deems necessary, to adjust imports so as to prevent impairment of the national security." H. R. Conf. Rep. No. 93-1644, p. 29 (1974); S. Rep. No. 93-1298, pp. 96-97 (1974). The congressional acquiescence in President Nixon's action manifested by the re-enactment of 232 (b) provides yet further corroboration that 232 (b) was understood and intended to authorize the imposition of monetary exactions as a means of adjusting imports.Taken as a whole then, the legislative history of 232 (b) belies any suggestion that Congress, despite its use of broad language in the statute itself, intended to limit the President's authority to the imposition of quotas and to bar the President from imposing a license fee system like the one challenged here. To the contrary, the provision's original enactment, and its subsequent re-enactment in 1958, 1962, and 1974 in the face of repeated expressions from Members of Congress and the Executive Branch as to their broad understanding of its language, all lead to the conclusion that 232 (b) does in fact authorize the actions of the President challenged here. Accordingly, the judgment of the Court of Appeals to the contrary cannot stand.CA final word is in order. Our holding today is a limited one. As respondents themselves acknowledge, a license fee as much as a quota has its initial and direct impact on imports, albeit on their price as opposed to their quantity. Brief for Respondents 26. As a consequence, our conclusion here, fully supported by the relevant legislative history, that the imposition of a license fee is authorized by 232 (b) in no way compels the further conclusion that any action the President might take, as long as it has even a remote impact on imports, is also so authorized.The judgment of the Court of Appeals is reversed, and this case is remanded to that court for proceedings consistent with this opinion. So ordered. |
7 | [Footnote *] Together with No. 72-1491, Dougherty, Executor, et al. v. Texaco Inc. et al., also on certiorari to the same court. Following its notice of proposed rulemaking "propos[ing] prospectively to exempt from regulation under the Natural Gas Act all existing and all future jurisdictional sales made by small producers ...," and the filing of comments and informal conferences, the Federal Power Commission (FPC) issued Order No. 428, which exempted all existing and future sales by "small producers" from direct rate regulation, and provided that they could thereunder contract for the sale of their gas at any obtainable rates, without refund obligations with respect to increased rates, if any, collected for sales regulated thereunder to the pipelines. The FPC asserted that the order did not amount to "deregulation of sales by small producers," but was intended to regulate small producers' sales in the course of regulating the rates of pipeline and large-producer customers of the small producers. Pipelines purchasing from small producers above ceiling prices were to be allowed "tracking increases" in their rates, but those rates would be subject to refund "with respect to new small producer sales, but only as to that part of the rate which is unreasonably high considering appropriate comparisons with highest contract prices for sales by large producers or the prevailing market prices for intrastate sales in the same producing area." The FPC asserted its intention of reviewing small-producer prices to maintain reasonable rates and specified that small producers remain subject to 7 (b) of the Natural Gas Act. The Court of Appeals set aside the FPC order, holding that the small-producer blanket certificate procedure contravened the FPC's statutory responsibilities under 4 and 5 of the Act to ensure "just and reasonable rates." It viewed the order as merely calling for rates that were not unreasonably high as compared with the highest contract prices for large-producer sales or the prevailing market price in the intrastate market, and the court held unacceptable the possible contention that market prices themselves would produce just and reasonable rates. Held: 1. The scheme for regulating small-producer rates indirectly did not exceed the FPC's statutory authority. Pp. 386-393. (a) Order No. 428 is not invalid because it does not initially consider each company and the reasonableness of its rates, or because it has a two-tier system for small producers and large producers. Cf. Permian Basin Area Rate Cases, . P. 390. (b) Since pipeline rates are subject to refund to the extent that the purchased gas component of their rates is excessive, there is an incentive "to bargain prices down." Pp. 390-391. (c) Requiring the pipelines and the large producers to assume risks in bargaining for reasonable prices from small producers that might entail refunds unrecoverable from the small producers, is not an abuse of the FPC's discretion under 4 (e) in balancing the interests involved. Pp. 391-392. (d) It is premature to assert that the indirect regulation contemplated by Order No. 428 is confiscatory, especially since the FPC is to maintain a close review of the avowedly experimental scheme. Pp. 392-393. 2. But it is not clear from the wording of Order No. 428 that it satisfies the statutory requirement that the sale price for gas sold in interstate commerce be just and reasonable; at the least, the order is too ambiguous to satisfy the standard of clarity that an administrative order must exhibit, and the implication that the reasonableness of the small producers' rates would be judged by the assertion that the FPC "would consider all relevant factors" in determining whether the proposed rates comported with the "public convenience and necessity," is insufficient to sustain the order. Pp. 394-397. 3. The FPC lacks authority to rely exclusively on market prices as the final measure of "just and reasonable" rates mandated by the Act; moreover, the FPC order made no finding as to the actual impact the market price increases would have on consumer gas expenditures. Pp. 397-399. App. D.C. 168, 474 F.2d 416, vacated and remanded.WHITE, J., delivered the opinion of the Court, in which all Members joined except STEWART, J., who took no part in the consideration or decision of the cases. Mark L. Evans argued the cause for petitioner in No. 72-1490. With him on the briefs were Solicitor General Bork, Leo E. Forquer, and George W. McHenry, Jr. Ben F. Vaughan III argued the cause for petitioners in No. 72-1491. With him on the briefs was William Terry Bray.Christopher T. Boland and Peter H. Schiff argued the cause for respondents in both cases. With Mr. Boland on the brief for respondent Interstate Natural Gas Association of America were Jerome J. McGrath and Robert G. Hardy. With Mr. Schiff on the brief for respondent Public Service Commission of the State of New York was Richard A. Solomon. Kirk W. Weinert and C. Fielding Early, Jr., filed a brief for respondent Texaco Inc. Kenneth Heady, John L. Williford, Charles E. McGee, John T. Ketcham, and Robert J. Haggerty filed a brief for respondent Phillips Petroleum Co. Melvin Richter and L. F. Cadenhead filed a brief for respondent Tennessee Gas Pipeline Co., a Division of Tenneco Inc. Edward H. Forgotson filed a brief for respondent Forgotson.Fn Fn Briefs of amici curiae urging reversal in both cases were filed by L. Dan Jones for the Independent Petroleum Association of America, and by J. Evans Atwell and Lynn R. Coleman for the Small Producers Group.MR. JUSTICE WHITE delivered the opinion of the Court.This litigation involves the validity of Order No. 428 of the Federal Power Commission, 45 F. P. C. 454 (1971), which provides a blanket certificate procedure for small producers of natural gas, and relieves them of almost all filing requirements. The rates of small producers would no longer be directly regulated but would be subjected to indirect regulation through the review of purchased gas costs of the pipelines and large producers to whom these small producers sell. The Court of Appeals, with one judge dissenting, set aside the orderApp. D.C. 168, 474 F.2d 416 (1972), concluding that the Commission's order amounted to "deregulation" of small producers and was unauthorized by the Natural Gas Act (the Act), 52 Stat. 821, 15 U.S.C. 717 et seq. Because the validity of the order is of obvious importance, we granted the petition for a writ of certiorari filed by the Commission in No. 72-1490 and by the estate of Mrs. James R. Dougherty, an intervenor in the Court of Appeals, in No. 72-1491. .IOn July 23, 1970, the Federal Power Commission issued a notice of proposed rulemaking "propos[ing] prospectively to exempt from regulation under the Natural Gas Act all existing and all future jurisdictional sales made by small producers ... ." 35 Fed. Reg. 12,220 (1970). Following the filing of comments and informal conferences, the Commission, noting that one of its important responsibilities was "to assure maintenance of an adequate gas supply for the interstate market," issued Order No. 428, aimed at encouraging "small producers1 to increase their exploratory efforts which are so important to the discovery of new sources of gas ... to facilitate the entry of the small producer into the interstate market and to stimulate competition among producers to sell gas in interstate commerce."2 The small producer was to be assured that "when he enters into a new contract for the interstate sale of gas, the provisions of his contract will not be subject to change. We also want to relieve the small producer of the expenses and burdens relating to regulatory matters." 45 F. P. C., at 455. Accordingly, the order provided for a nationwide blanket certificate for small producers and relieved them, with some exceptions, from all filing requirements under the Act. Unlike large producers, subject to Commission-fixed ceilings on rates charged, the small producers could sell gas at the price the market would bear, even though in excess of maximum rates set for producers in pertinent area rate proceedings. Furthermore, they would have "no refund obligations with respect to increased rates, if any, collected for sales regulated hereunder to pipelines ... ." Id., at 457.The order nevertheless asserted that the "action taken here in our view does not constitute deregulation of sales by small producers," id., at 455, and that the Commission would continue to regulate such sales in the course of regulating the rates of pipelines and large producers to whom the small producers sell their gas. Pipelines purchasing from small producers at prices in excess of existing ceilings were to be permitted to file "tracking increases" in their rates, but those rates would be subject to refund "with respect to new small producer sales, but only as to that part of the rate which is unreasonably high considering appropriate comparisons with highest contract prices for sales by large producers or the prevailing market price for intrastate sales in the same producing area." Id., at 457. The issue would be resolved either in pipeline rate cases, a proceeding limited to the tracking increase, or in certificate cases. "The Commission shall consider all relevant factors." Id., at 458. Review of tracking increases by pipelines was not anticipated as to existing contracts with small producers; the order authorized small producers to increase their rates under these contracts, terms permitting.Large producers buying from small producers would be permitted tracking increases to the extent authorized by their contracts and without refund obligation "as long as the price differential is consistent with prevailing price differentials in the area and as long as the small producer prices for new gas are not unreasonably high, considering appropriate comparisons with highest contract prices by large producers or the prevailing market price for intrastate sales in the same producing area." Id., at 456. To the extent that they reflected small-producer prices in excess of that standard, large-producer tracking increases would be subject to refund.The Commission finally asserted that "[w]e intend to review the prices established in new contracts or contract amendments relating to sales by small producers to assure the reasonableness of the rates charged by such producers pursuant to the action we are taking herein. In the event we determine that this approach is inimical to the interests of consumers, we shall take further action to protect the consumers." Id., at 459. The Commission apparently remained free to institute separate proceedings under 5 (a) of the Act, 15 U.S.C. 717d (a), to reduce the producer's rates prospectively.The Commission also made clear that small producers remain subject to the requirements of 7 (b) of the Act, 15 U.S.C. 717f (b), with respect to the abandonment of jurisdictional sales, including those sales dealt with in the order. The order also limited the use of indefinite price escalation clauses in small-producer contracts and excluded from the reach of the order small-producer sales made from reserves transferred by large producers.3 The Court of Appeals set aside the Commission order, holding that under the statute all natural gas sold in interstate commerce must carry just and reasonable rates and that even if indirect regulation was permissible under the statute, Order No. 428 was infirm because nothing in it satisfied the Commission's "duty to insure that all rates are `just and reasonable.'" App. D.C., at 173, 474 F.2d, at 421. Instead, the order was thought merely to call for rates that were not unreasonably high as compared with the highest contract prices for large-producer sales or the prevailing market price in the intrastate market - "factors which [the Commission] does not regulate or which derive solely from market forces." Ibid. Nor could the court accept the possible argument that market forces themselves would produce just and reasonable rates, particularly when it understood the Commission itself to take the position that the just-and-reasonable standard was in no event mandatory. The Court of Appeals accordingly set aside the Commission's order.IIThe Commission does not contend in this Court that the Act permits it to exempt small-producer rates from regulation or to regulate those rates by any criterion less demanding than the just-and-reasonable standard mandated by 4 and 5 of the Act, 15 U.S.C. 717c and 717d. Its major propositions are, first, that Order No. 428, when properly understood, provides for just and reasonable rates but through the means of indirect, rather than direct, regulation; and, second, that the Act does not forbid this kind of indirect regulation. Respondents, on the other hand, contend that the duty imposed by the Act to provide just and reasonable rates cannot be satisfied by indirect regulation and that Order No. 428 in any event abandons the just-and-reasonable standard with respect to small-producer rates.We face first the issue as to the validity of indirect regulation of small-producer rates: on the assumption that Order No. 428 allows pipelines and large producers to reflect in their rates only just and reasonable charges for gas purchased from small producers, is the order valid? We hold that it is, for we see nothing in the Act which requires the Commission to fix the rates chargeable by small producers by orders directly addressed to them or which proscribes the kind of indirect regulation undertaken here.The Act directs that all producer rates be just and reasonable but it does not specify the means by which that regulatory prescription is to be attained. That every rate of every natural gas company must be just and and reasonable does not require that the cost of each company be ascertained and its rates fixed with respect to its own costs. Although for a time following Phillips Petroleum Co. v. Wisconsin, , the Commission proceeded to regulate rates company by company, there was soon a shift to the technique of setting area rates based on composite cost considerations. We sustained this mode of rate regulation.In Wisconsin v. FPC, , the Court affirmed the Commission's decision to abandon the individual cost-of-service method of fixing rates and to substitute area ratemaking. The Court said:"To declare that a particular method of rate regulation is so sanctified as to make it highly unlikely that any other method could be sustained would be wholly out of keeping with this Court's consistent and clearly articulated approach to the question of the Commission's power to regulate rates. It has repeatedly been stated that no single method need be followed by the Commission in considering the justness and reasonableness of rates ... ." This was wholly consistent with the Court's prior views, see FPC v. Natural Gas Pipeline Co., ; FPC v. Hope Natural Gas Co., ; Colorado Interstate Gas Co. v. FPC, , and reaffirmed the principle which had been clearly stated in the Hope case: "Under the statutory standard of `just and reasonable' it is the result reached not the method employed which is controlling." 320 U.S., at 602.The principles of these prior cases were recognized and applied in the Permian Basin Area Rate Cases, , where we sustained a two-tier system of rates for natural gas producers. In the course of doing so, we recognized that encouraging the exploration for and development of new sources of natural gas was one of the aims of the Act and one of the functions of the Commission. The performance of this role obviously involved the rate structure and implied a broad discretion for the Commission. The Court summarized the principles controlling the judicial review of Commission orders in terms very pertinent here:"The Act was intended to create, through the exercise of the national power over interstate commerce, `an agency for regulating the wholesale distribution to public service companies of natural gas moving interstate'; Illinois Gas Co. v. Public Service Co., ; it was for this purpose expected to `balanc[e] ... the investor and the consumer interests.' FPC v. Hope Natural Gas Co. [320 U.S.], at 603. This Court has repeatedly held that the width of administrative authority must be measured in part by the purposes for which it was conferred; see, e. g., Piedmont & Northern R. Co. v. Comm'n, ; Phelps Dodge Corp. v. Labor Board, ; National Broadcasting Co. v. United States, ; American Trucking Assns. v. United States, . Surely the Commission's broad responsibilities therefore demand a generous construction of its statutory authority. [Footnote omitted.] "Such a construction is consistent with the view of administrative rate making uniformly taken by this Court. The Court has said that the `legislative discretion implied in the rate making power necessarily extends to the entire legislative process, embracing the method used in reaching the legislative determination as well as that determination itself.' Los Angeles Gas Co. v. Railroad Comm'n, . And see San Diego Land & Town Co. v. Jasper, . It follows that rate-making agencies are not bound to the service of any single regulatory formula; they are permitted, unless their statutory authority otherwise plainly indicates, `to make the pragmatic adjustments which may be called for by particular circumstances.' FPC v. Natural Gas Pipeline Co. [315 U.S.], at 586." 390 U.S., at 776-777. It followed that Commission action taken in the pursuit of a legitimate statutory goal enjoyed the presumption of validity, id., at 767, and that he who would upset the rate order under the Act carries "`the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences.'" Ibid. Accepting these views of our role as a court sitting in review, we cannot at this point say that the Commission has exceeded its powers by instituting a regime of indirect regulation of small-producer rates. Surely it is not fatal to Order No. 428 that it does not, as an initial matter, consider the costs of each company and the reasonableness of its rates. Nor is the order vulnerable because there will be one level of just and reasonable rates for small producers and another for large producers. As previously noted, the Court approved two sets of just and reasonable rates in the Permian Basin cases, the justification being the necessity to stimulate exploration for and the development of new supplies of natural gas. Id., at 796-797.Indirect regulation through the mechanism of controlling large-producer costs will not merely recreate the situation which the Court in the Phillips case found to be inconsistent with the Natural Gas Act. In the pre-Phillips era, although asserting the right to pass on the prudentiality of various items of the pipelines' costs, the Commission did not purport to regulate the rates of producers with the aim of keeping them within just and reasonable limits, as the Commission now asserts it is doing under Order No. 428.It is argued that permitting the small producers initially to charge what the market will bear and relying on later regulation of pipeline rates to protect the consumer is contrary to Atlantic Refining Co. v. Public Service Comm'n, (CATCO). But pipelines and large producers must file with the Commission their new contracts with the small producers, and their rates will be subject to suspension and refund within the limits set out in Order No. 428. As the Court noted in FPC v. Sunray DX Oil Co., , the basic assumption which must have underlain the Court's CATCO decision was "that the purchasing pipeline, whose cost of purchase is a current operating expense which the pipeline is entitled to pass on to its customers as part of its rates, lacks sufficient incentive to bargain prices down." Here, on the other hand, the incentive is provided - pipeline rates are subject to refund to the extent that the purchased gas cost component of their rates is excessive.This leads to the contention of the pipelines and the large producers that the scheme of indirect regulation envisioned by Order No. 428 unfairly subjects them to the risk of later determination that their gas costs are unjust and unreasonable and to the obligation to make refunds which they cannot in turn recover from the small producers whose rates have been found too high.4 But those whose rates are regulated characteristically bear the burden and the risk of justifying their rates and their costs. Rate regulation unavoidably limits profits as well as income. "The fixing of prices, like other applications of the police power, may reduce the value of the property which is being regulated. But the fact that the value is reduced does not mean that the regulation is invalid." FPC v. Hope Natural Gas Co., 320 U.S., at 601. All that is protected against, in a constitutional sense, is that the rates fixed by the Commission be higher than a confiscatory level. FPC v. Natural Gas Pipeline Co., 315 U.S., at 585. In the context of the Act's rate regulation, whether any rate is confiscatory, or for that matter "just and reasonable," can only be judged by "the result reached, not the method employed." FPC v. Hope Natural Gas Co., supra, at 602. In the Permian Basin Area Rate Cases, 390 U.S., at 769, we stated a truism of rate regulation: "Regulation may, consistently with the Constitution limit stringently the return recovered on investment, for investors' interests provide only one of the variables in the constitutional calculus of reasonableness."Here, requiring pipelines and the large producers to assume the risk in bargaining for reasonable prices from small producers is within the Commission's discretion in working out the balance of the interests necessarily involved. The consumer would be protected from current excessive rates, but at the expense of the pipeline, rather than the producer, who is engaged in necessary exploratory activity, thus serving the public interest in getting greater gas production but at just and reasonable rates. Under such circumstances, it is surely not an abuse of the discretion the Commission retains under 4 (e) of the Act, see Permian Basin Area Rate Cases, supra, at 826-827, to refrain from imposing a refund obligation on the small producers.Any broadside assertion that indirect regulation will be confiscatory is premature. The consequences of indirect regulation can only be viewed in the entirety of the rate of return allowed on investment, and this effect will be unknown until the Commission has applied its scheme in individual cases over a period of time. Moreover, the "regulation of producer prices is avowedly still experimental," id., at 772, and Order No. 428 asserts the Commission's intention to keep the experiment under close review. The Commission claims and is entitled to no license to be arbitrary or capricious in disallowing purchased gas costs of large producers and pipelines. The Commission may not exceed its authority under the Act; its orders are subject to judicial review; and reviewing courts must determine whether Commission orders, issued pursuant to indirect regulation, are supported by substantial evidence and whether it is rational to expect them "to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risk they have assumed, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable." Id., at 792.If, in the course of the necessary bargaining with small producers, the large producers and the pipelines are given no guidance whatsoever as to what the standards of the Commission may be, the risk of incurring unrefundable expenses that may later be disallowed is considerably enhanced. The scope of this possible difficulty is measured by the standards, or lack of them, by which the Commission will review the purchased gas costs of the large producers and the pipelines. As Order No. 428 reveals, the Commission is surely aware of the problem, and we would expect additional attention to be given this question in the course of the remand proceedings which, as explained in Part III, we think are necessary here.5 IIIWe turn now to whether Order No. 428 is invalid for failure to comply with the Act's requirement that the sale price for gas sold in interstate commerce be just and reasonable. The Court of Appeals rejected what it apparently understood was "the Commission's basic contention all along ... that the `just and reasonable' standard was not mandatory and that the FPC can simply choose not to regulate rates." App. D.C., at 175, 474 F.2d, at 422. Whatever the position of the Commission heretofore has been, it wisely does not challenge that aspect of the Court of Appeals judgment. Sections 4 and 5 of the Act require that all gas rates be just and reasonable; and the Court held in Phillips that this very prescription applies to the rates of all gas producers. The Commission may have great discretion as to how to insure just and reasonable rates, but it is plain enough to us that the Act does not empower it to exempt small-producer rates from compliance with that standard.Section 16, 15 U.S.C. 717o, upon which the Commission relies, is not to the contrary. It authorizes the Commission to perform any and all acts and to issue any and all rules and regulations "as it may find necessary or appropriate to carry out the provisions of this Act"; and "[f]or the purposes of its rules and regulations, the Commission may classify persons and matters within its jurisdiction and prescribe different requirements for different classes of persons or matters." But 16 obviously does not vest authority in the Commission to set unjust and unreasonable rates, even for small producers. It does not authorize the Commission to set at naught an explicit provision of the Act. No producer is exempt from 4 and 5. Neither the Permian Basin Area Rate Cases nor FPC v. Louisiana Power & Light Co., , on which the Government relies, suggests or holds that 16 permits the Commission to ignore the specific mandates of those sections.6 The Court of Appeals also read Order No. 428 as failing to provide a mechanism for insuring that small-producer rates will be just and reasonable. In its view, the order provided a pure market standard for the approval of the purchased gas costs of large producers and pipelines, a standard which fell short of the requirements of the Act. Accordingly, it set aside the order.The Commission does not assert here that it is free under the Act to equate just and reasonable rates with the prices for gas prevailing in the market place. Its major remaining contention is that the Court of Appeals misread Order No. 428 and that the order, properly understood, contemplates a scheme of indirect regulation that would assure just and reasonable small-producer rates for natural gas and that would judge small-producer rates not only by market factors but by all the relevant considerations necessary to arrive at the considered judgment contemplated by the Act. For present purposes, then, the Commission accepts the Court of Appeals' construction of the Act; but insists that the order is consistent with the statute as so construed.In this posture of the case, we think it clear that Order No. 428 cannot stand in its present form and that the cases should be remanded for further proceedings before the Commission. We have studied the order with care, and we cannot accept the construction of it that the Commission now presses upon us. At the very least, the order is so ambiguous that it falls short of that standard of clarity that administrative orders must exhibit. The Commission was bound to exercise its discretion within the limits of the standards expressed by the Act; and "for the courts to determine whether the agency has done so, it must `disclose the basis of its order' and `give clear indication that it has exercised the discretion with which Congress has empowered it.'" Burlington Truck Lines v. United States, , quoting in part from Phelps Dodge Corp. v. NLRB, . We shall indicate briefly our basis for this conclusion.In the first place, Order No. 428 does not expressly mention the just-and-reasonable standard. It comes no closer than to subject pipeline rates to reduction and refund "only as to that part of the rate which is unreasonably high considering appropriate comparisons with highest contract prices for sales by large producers or the prevailing market price for intrastate sales ... ." 45 F. P. C., at 457. (Emphasis added.) The order took a very similar approach to the tracking increases by large producers. Moreover, under the order, contractually authorized increases in rates for flowing gas under existing contracts could be automatically passed through by the pipelines and would not be subject to examination under the standard proposed by the order with respect to new sales by small producers. There was no finding that these contemplated increased rates for flowing gas would be just and reasonable. The Commission merely asserts in its brief here that it was familiar with the existing contracts and must have considered the rates reserved to be acceptable under the Act.It is true that pipeline and large-producer costs for new small-producer gas were not to be "unreasonable" but the implication appears to be that reasonableness would be judged by the standard of the marketplace. It is also true that the Commission asserted that it was not deregulating small-producer rates, that the Commission "shall consider all relevant factors" in determining whether proposed rates were consistent with the "public convenience and necessity," and that the Commission intended to review new contract prices charged by small producers "to assure ... the reasonableness of the rates charged by such producers pursuant to the action we are taking herein." But these generalities do not supply the requisite clarity to the order or convince us that it should be sustained.Had the order unambiguously provided what the Commission now asserts it was intended to provide,7 we would have a far different case to decide. But as it is, we cannot "accept appellate counsel's post hoc rationalizations for agency action"; for an agency's order must be upheld, if at all, "on the same basis articulated in the order by the agency itself." Burlington Truck Lines, 371 U.S., at 168-169; SEC v. Chenery Corp., .IVFor the purposes of the proceedings that may occur on remand, we should also stress that in our view the prevailing price in the marketplace cannot be the final measure of "just and reasonable" rates mandated by the Act. It is abundantly clear from the history of the Act and from the events that prompted its adoption that Congress considered that the natural gas industry was heavily concentrated and that monopolistic forces were distorting the market price for natural gas.8 Hence, the necessity for regulation and hence the statement in Sunray DX, 391 U.S., at 25, that if contract prices for gas were set at the market price, this"would necessarily be based on a belief that the current contract prices in an area approximate closely the `true' market price - the just and reasonable rate. Although there is doubtless some relationship, and some economists have urged that it is intimate, such a belief would contradict the basic assumption that has caused natural gas production to be subjected to regulation ... ." (Footnote omitted.) In subjecting producers to regulation because of anti-competitive conditions in the industry, Congress could not have assumed that "just and reasonable" rates could conclusively be determined by reference to market price. Our holding in Phillips implies just the opposite. This does not mean that the market price of gas would never, in an individual case, coincide with just and reasonable rates or not be a relevant consideration in the setting of area rates, see Permian Basin Area Rate Cases, 390 U.S., at 793-795; it may certainly be taken into account along with other factors, Southern Louisiana Area Rate Cases, 428 F.2d 407, 441 (CA5), cert. denied sub nom. Associated Gas Distributors v. Austral Oil Co., . It does require, however, the conclusion that Congress rejected the identity between the "true" and the "actual" market price.The Court is not unresponsive to the special needs of small producers who play a critical role in exploratory efforts in the natural gas industry and ameliorating the supply shortage. The requirements of the Act, however, do not distinguish between small and large producers with respect to just and reasonable rates. Even if the effect of increased small-producer prices would make a small dent in the consumer's pocket, when compared with the rates charged by the large producers, the Act makes unlawful all rates which are not just and reasonable, and does not say a little unlawfulness is permitted. Moreover, there is no finding in the Commission's order as to the actual impact the projected market price increases would have on consumer expenditures for gas, and the Commission is previously on record in its Permian decision, as stating: "[T]he impact of small producer prices on consumers is by no means de minimis on an area basis, and is of great impact in some situations." 34 F. P. C. 159, 235 (1965). VIn concluding that the Commission lacks the authority to place exclusive reliance on market prices, we bow to our perception of legislative intent. It may be, as some economists have persuasively argued,9 that the assumptions of the 1930's about the competitive structure of the natural gas industry, if true then, are no longer true today. It may also be that control of prices in this industry, in a time of shortage, if such there be, is counterproductive to the interests of the consumer in increasing the production of natural gas. It is not the Court's role, however, to overturn congressional assumptions embedded into the framework of regulation established by the Act. This is a proper task for the Legislature where the public interest may be considered from the multifaceted points of view of the representational process.Attempts have been made in the past to exempt producers from the coverage of the Act, but these attempts have been unsuccessful. The Court realized as much in the Phillips case. 347 U.S., at 685, and n. 14. In 1950, Congress had passed a bill, H. R. 1758, 81st Cong., 2d Sess., to exempt gas producers from the Act, but President Truman vetoed the bill stating that "there is a clear possibility that competition will not be effective, at least in some cases, in holding prices to reasonable levels. Accordingly, to remove the authority to regulate, as this bill would do, does not seem to me to be wise public policy." The President made this judgment despite the arguments that imposition of price control would discourage exploration and development of new wells. Public Papers of the Presidents, Harry S. Truman, 1950, p. 257 (1965). For the Court to step outside its role in construing this statute, and insert itself into the debate on economics and the public interest, would be an unwarranted intrusion into the legislative forum where the debate again rages on the question of deregulation of natural gas producers.We do, however, make clear that under the present Act the Commission is free to engage in indirect regulation of small producers by reviewing pipeline costs of purchased gas, providing that it insures that the rates paid by pipelines, and ultimately borne by the consumer, are just and reasonable. It may be, as some of the respondents suggest, that ensuring just and reasonable rates by means of indirect regulation will not be administratively feasible, but this is a matter for the Commission to consider.We agree with the Court of Appeals that the order of the Commission must be set aside; but for reasons previously stated, we vacate the judgment of the Court of Appeals and remand the cases to that court with instructions to remand the cases to the Commission for further proceedings consistent with this opinion. Vacated and remanded.MR. JUSTICE STEWART took no part in the consideration or decision of these cases. |
2 | A New York statute authorizes closure of a building found to be a public health nuisance because it was being used as a place for prostitution and lewdness. After a county Deputy Sheriff's undercover investigation of respondents' "adult" bookstore disclosed that illicit sexual activities, including solicitation of prostitution, occurred on the premises, a civil complaint was filed against respondents seeking closure of the premises under the statute. Respondents answered by alleging, inter alia, that a closure would impermissibly interfere with their First Amendment right to sell books on the premises and that the closure statute was not intended to apply to establishments other than houses of prostitution. The New York trial court denied respondents' motion for a summary judgment, holding that the statute applied to respondents. The Appellate Division affirmed. The New York Court of Appeals reversed on First Amendment grounds. Applying the test of United States v. O'Brien, , for determining the validity of a statute regulating conduct that has an expressive element, the court held that the closure statute failed the part of the O'Brien test that requires the statute to be no broader than necessary to achieve its purpose, because the closure order was much broader than necessary to achieve the restriction against illicit sexual activities and because an injunction against continuing those activities could achieve the same effect without restricting respondents' bookselling activities.Held: The First Amendment does not bar enforcement of the closure statute against respondents' bookstore. United States v. O'Brien, supra, has no relevance to a statute directed at imposing sanctions on nonexpressive activity, and the sexual activities carried on in this case manifest absolutely no element of protected expression. The closure statute is directed at unlawful conduct having nothing to do with books or other expressive activity. Bookselling on premises used for prostitution does not confer First Amendment coverage to defeat a statute aimed at penalizing and terminating illegal uses of premises. Pp. 702-707. 65 N. Y. 2d 324, 480 N. E. 2d 1089, reversed.BURGER, C. J., delivered the opinion of the Court, in which WHITE, POWELL, REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. O'CONNOR, J., filed a concurring opinion, in which STEVENS, J., joined, post, p. 708. BLACKMUN, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 708.John J. DeFranks argued the cause for petitioner. With him on the briefs were Richard J. Arcara, pro se, and Louis A. Haremski.Paul John Cambria, Jr., argued the cause and filed a brief for respondents.* [Footnote *] Frederick A. O. Schwarz, Jr., and Leonard Koerner filed a brief for the city of New York as amicus curiae urging reversal. Steven R. Shapiro, Burt Neuborne, and Charles S. Sims filed a brief for the American Civil Liberties Union et al. as amici curiae urging affirmance. Edward Cooper and James J. Clancy filed a brief for the city of Santa Ana, California, as amicus curiae.CHIEF JUSTICE BURGER delivered the opinion of the Court.We granted certiorari to decide whether the First Amendment bars enforcement of a statute authorizing closure of a premises found to be used as a place for prostitution and lewdness because the premises are also used as an adult bookstore.IARespondents own and operate the "Village Books and News Store" in Kenmore, New York. The establishment characterizes itself as an "adult" bookstore and sells sexually explicit books and magazines with booths available for the viewing of sexually explicit movies. No issue is presented with respect to whether the movies or other materials available at respondents' store are obscene pornographic materials.During September and October 1982, the Erie County Sheriff's Department conducted an undercover investigation into reported illicit sexual activities occurring on respondents' premises. A Deputy Sheriff personally observed instances of masturbation, fondling, and fellatio by patrons on the premises of the store, all within the observation of the proprietor. He also observed instances of solicitation of prostitution, and was himself solicited on at least four occasions by men who offered to perform sexual acts in exchange for money. The Deputy Sheriff reported that the management of the "Village Books and News Store" was fully aware of the sexual activity on the premises. App. to Pet. for Cert. A-54, A-56, A-57, A-58.BThe results of the undercover investigation formed the basis of a civil complaint against respondents seeking closure of the premises under 2321 of the New York Public Health Law. Section 2320 of the New York Public Health Law defines places of prostitution, lewdness, and assignation as public health nuisances: "1. Whoever shall erect, establish, continue, maintain, use, own, or lease any building, erection, or place used for the purpose of lewdness, assignation, or prostitution is guilty of maintaining a nuisance. "2. The building, erection, or place, or the ground itself, in or upon which any lewdness, assignation, or prostitution is conducted, permitted, or carried on, continued, or exists, and the furniture, fixtures, musical instruments, and movable property used in conducting or maintaining such nuisance, are hereby declared to be a nuisance and shall be enjoined and abated as hereafter provided." N. Y. Pub. Health Law 2320 (McKinney 1985). Section 2329 provides for the closure of any building found to be a public health nuisance under 2320: "1. If the existence of the nuisance be admitted or established in an action as provided in this article, or in a criminal proceeding in any court, an order of abatement shall be entered as part of the judgment in the case, which order ... shall direct the effectual closing of the building, erection or place against its use for any purpose, and so keeping it closed for a period of one year ... ." N. Y. Pub. Health Law 2329 (McKinney 1985). Section 2321 of the statute authorizes a suit by the district attorney, among others, to enforce its provisions.Respondents answered the complaint by denying the allegations of the Deputy Sheriff that sexual activities occurred on the premises with respondents' knowledge, and also by asserting that a closure of the premises would impermissibly interfere with their First Amendment right to sell books on the premises. Respondents moved for partial summary judgment on these First Amendment grounds, and also advanced an argument that the statute was not intended to reach establishments other than houses of prostitution in the traditional sense. The Trial Division of the New York Supreme Court, Special Term, denied the motion for summary judgment, holding that the statute was applicable to respondents; it rejected respondents' First Amendment claims as well, reasoning that the closure order sought did not involve a prior restraint of materials presumptively protected by the First Amendment. It also held that respondents' bookselling activities could not be employed as "a curtain behind which illegal activity can be freely encouraged and conducted."The Appellate Division, Fourth Department, affirmed. People ex rel. Arcara v. Cloud Books, Inc., 101 App. Div. 2d 163, 475 N. Y. S. 2d 173 (1984). The Appellate Division agreed with the trial court that the statute applied to the premises in which respondents' bookstore was operated; closure of the premises would not violate the First Amendment since the admittedly unlawful conduct and activities giving rise to the abatement action were not presumptively protected expressive conduct, and respondents' sales of books on the premises did not shield it from enforcement of the closure statute. The Appellate Division granted respondents' motion for leave to appeal to the New York Court of Appeals, and certified both the statutory question whether the statute reached establishments other than houses of prostitution and the First Amendment issue.The New York Court of Appeals reversed. People ex rel. Arcara v. Cloud Books, Inc., 65 N. Y. 2d 324, 480 N. E. 2d 1089 (1985). That court agreed that the Public Health Law applied to establishments other than houses of prostitution, but reversed on First Amendment grounds. The court relied on cases from other jurisdictions which analogized an order closing a bookstore or movie theater based upon previous distribution of obscene materials to an unconstitutional prior restraint. E. g., Gayety Theatres, Inc. v. City of Miami, 719 F.2d 1550 (CA11 1983); General Corp. v. State ex rel Sweeton, 294 Ala. 657, 320 So.2d 668 (1975), cert. denied, ; People ex rel. Busch v. Projection Room Theater, 17 Cal. 3d 42, 550 P.2d 600, cert. denied sub nom. Van de Kamp v. Projection Room Theater, .The New York Court of Appeals relied on the impact of the closure order upon respondents' protected bookselling activities, and concluded that that circumstance required scrutiny under this Court's First Amendment analysis of regulations aimed at nonspeech activity but having an incidental effect on speech. Purporting to apply the four-part test of United States v. O'Brien, , the New York Court of Appeals determined that the closure remedy fell within the constitutional power of the State; that the closure remedy furthered a substantial state interest in thwarting prostitution; and that the purpose of the closure remedy was unrelated to the suppression of speech.Notwithstanding that analysis, the court determined that the closure remedy failed the fourth part of the O'Brien test, which requires that the statute incidentally restricting speech be no broader than necessary to achieve its purpose. The court reasoned that upon the summary judgment record before it, an order closing the premises for a year was much broader than necessary to achieve the restriction against illicit commercial sexual activities and that an injunction against continuing the admittedly illegal activity on the premises could achieve the same effect without restricting respondents' bookselling activities.We granted certiorari.1 . We reverse.IIThis Court has applied First Amendment scrutiny to a statute regulating conduct which has the incidental effect of burdening the expression of a particular political opinion. United States v. O'Brien, supra. In O'Brien, the Court considered the First Amendment ramifications of a statute which imposed criminal sanctions on one who "knowingly destroys, knowingly mutilates, or in any manner changes" a draft registration certificate. 50 U.S.C. App. 462(b). The O'Brien Court noted that on its face the statute did not regulate conduct that was necessarily expressive, since the destruction of a draft card is not ordinarily expressive conduct. The defendant in O'Brien had, as respondents here do not, at least the semblance of expressive activity in his claim that the otherwise unlawful burning of a draft card was to "carry a message" of the actor's opposition to the draft. As the Court noted in O'Brien: "This Court has held that when `speech' and `nonspeech' elements are combined in the same course of conduct, a sufficiently important governmental interest in regulating the nonspeech element can justify incidental limitations on First Amendment freedoms. To characterize the quality of the governmental interest which must appear, the Court has employed a variety of descriptive terms: compelling; substantial; subordinating; paramount; cogent; strong. Whatever imprecision inheres in these terms, we think it clear that a government regulation is sufficiently justified if it is within the constitutional power of the Government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest." 391 U.S., at 376-377 (footnotes omitted). The Court determined that the prohibition against mutilation of draft cards met these requirements and could constitutionally be applied against one who publicly burned his draft card as a symbolic protest.We have applied O'Brien to other cases involving governmental regulation of conduct that has an expressive element. In Clark v. Community for Creative Non-Violence, , we considered the application of a ban on camping and sleeping in Lafayette Park and on the Mall in Washington, D.C., to demonstrators who sought to sleep overnight in these parks as a protest of the plight of homeless people. Again in United States v. Albertini, , (1985), we considered a protester's conviction for reentering a military base after being subject to an order barring him from entering that establishment based on his previous improper conduct on the base. In each of these cases we considered the expressive element of the conduct regulated and upheld the regulations as constitutionally permissible.We have also applied First Amendment scrutiny to some statutes which, although directed at activity with no expressive component, impose a disproportionate burden upon those engaged in protected First Amendment activities. In Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, , we struck down a tax imposed on the sale of large quantities of newsprint and ink because the tax had the effect of singling out newspapers to shoulder its burden. We imposed a greater burden of justification on the State even though the tax was imposed upon a nonexpressive activity, since the burden of the tax inevitably fell disproportionately - in fact, almost exclusively - upon the shoulders of newspapers exercising the constitutionally protected freedom of the press. Even while striking down the tax in Minneapolis Star, we emphasized: "Clearly, the First Amendment does not prohibit all regulation of the press. It is beyond dispute that the States and the Federal Government can subject newspapers to generally applicable economic regulations without creating constitutional problems. See, e. g., Citizen Publishing Co. v. United States, (antitrust laws); Lorain Journal Co. v. United States, (same); Breard v. Alexandria, (prohibition of door-to-door solicitation); Oklahoma Press Publishing Co. v. Walling, (Fair Labor Standards Act); Mabee v. White Plains Publishing Co., (same); Associated Press v. United States, , 19-20 (1945) (antitrust laws); Associated Press v. NLRB, (National Labor Relations Act); see also Branzburg v. Hayes, (enforcement of subpoenas)." Id., at 581.IIIThe New York Court of Appeals held that the O'Brien test for permissible governmental regulation was applicable to this case because the closure order sought by petitioner would also impose an incidental burden upon respondents' bookselling activities. That court ignored a crucial distinction between the circumstances presented in O'Brien and the circumstances of this case: unlike the symbolic draft card burning in O'Brien, the sexual activity carried on in this case manifests absolutely no element of protected expression. In Paris Adult Theatre I v. Slaton, , we underscored the fallacy of seeking to use the First Amendment as a cloak for obviously unlawful public sexual conduct by the diaphanous device of attributing protected expressive attributes to that conduct. First Amendment values may not be invoked by merely linking the words "sex" and "books."Nor does the distinction drawn by the New York Public Health Law inevitably single out bookstores or others engaged in First Amendment protected activities for the imposition of its burden, as did the tax struck down in Minneapolis Star. As we noted in Minneapolis Star, neither the press nor booksellers may claim special protection from governmental regulations of general applicability simply by virtue of their First Amendment protected activities. If the city imposed closure penalties for demonstrated Fire Code violations or health hazards from inadequate sewage treatment, the First Amendment would not aid the owner of premises who had knowingly allowed such violations to persist.Nonetheless, respondents argue that the effect of the statutory closure remedy impermissibly burdens its First Amendment protected bookselling activities. The severity of this burden is dubious at best, and is mitigated by the fact that respondents remain free to sell the same materials at another location.2 In any event, this argument proves too much, since every civil and criminal remedy imposes some conceivable burden on First Amendment protected activities. One liable for a civil damages award has less money to spend on paid political announcements or to contribute to political causes, yet no one would suggest that such liability gives rise to a valid First Amendment claim. Cf. Buckley v. Valeo, . Similarly, a thief who is sent to prison might complain that his First Amendment right to speak in public places has been infringed because of the confinement, but we have explicitly rejected a prisoner's claim to a prison environment least restrictive of his desire to speak to outsiders. See Pell v. Procunier, ; see also Jones v. North Carolina Prisoners Union, .It is true that the closure order in this case would require respondents to move their bookselling business to another location. Yet we have not traditionally subjected every criminal and civil sanction imposed through legal process to "least restrictive means" scrutiny simply because each particular remedy will have some effect on the First Amendment activities of those subject to sanction. Rather, we have subjected such restrictions to scrutiny only where it was conduct with a significant expressive element that drew the legal remedy in the first place, as in O'Brien,3 or where a statute based on a nonexpressive activity has the inevitable effect of singling out those engaged in expressive activity, as in Minneapolis Star. This case involves neither situation, and we conclude the First Amendment is not implicated by the enforcement of a public health regulation of general application against the physical premises in which respondents happen to sell books.The New York Court of Appeals thus misread O'Brien, which has no relevance to a statute directed at imposing sanctions on nonexpressive activity. The legislation providing the closure sanction was directed at unlawful conduct having nothing to do with books or other expressive activity. Book-selling in an establishment used for prostitution does not confer First Amendment coverage to defeat a valid statute aimed at penalizing and terminating illegal uses of premises. The legislature properly sought to protect the environment of the community by directing the sanction at premises knowingly used for lawless activities.4 The judgment of the New York Court of Appeals is Reversed. |
0 | Judgment affirmed.Bernard B. Polak argued the cause for petitioner. On the brief was Irwin L. Germaise.Theodore George Gilinsky argued the cause for the United States. With him on the brief were Solicitor General Cox, Assistant Attorney General Miller and Beatrice Rosenberg.PER CURIAM.The judgment of the Court of Appeals for the Second Circuit is affirmed. United States v. Robinson, .MR. JUSTICE BLACK, with whom THE CHIEF JUSTICE, MR. JUSTICE DOUGLAS, and MR. JUSTICE GOLDBERG join, dissenting.This case seems to me to be decided on the premise that it is more important that the Federal Rules of Criminal Procedure be slavishly followed than that justice be done. I cannot agree to any such principle and therefore dissent.Petitioner was convicted in the United States District Court for the Southern District of New York on two counts - one of possessing counterfeit currency and one of receiving stolen securities. He was sentenced to concurrent prison terms of two years on each count and a total fine of $2,000. He decided to appeal. Federal Rule of Criminal Procedure 37 (a) (2) requires a notice of appeal to be filed within 10 days. Here the tenth day fell on Saturday. On the preceding Friday an associate to whom petitioner's attorney had given the notice of appeal for filing left the office with a fever and went home to bed, where he stayed until late Sunday. Because of the associate's illness, the notice was not filed on Saturday; instead, it was filed Monday morning. The Court of Appeals, on motion of the Government, dismissed the appeal on the ground that under Rule 37 (a) (2) and Rule 45 (a) the notice for appeal had been filed one day late. Two days after this dismissal, petitioner, as authorized by Fed. Rule Crim. Proc. 35, moved in the District Court for reduction of the sentence. This motion, with supporting affidavits, pointed out to the District Court that petitioner's appeal had been dismissed because it was one day late. Indeed, a principal ground urged upon the court for acting on the motion was that granting the motion would enable petitioner to appeal from the amended sentence and challenge the validity of the original conviction. The prosecuting attorney objected, saying, "I think he has had his one shot, and it's all over. He has no further right to appeal if the sentence is reduced." The District Judge, stating that his understanding was "contrary" to that of the prosecutor, granted petitioner's motion and, exercising his authority under Rule 35, reduced the sentence on each count from two years to one year and eight months and reduced the fine on each count. The following day, petitioner's counsel filed a second notice of appeal, but again the Court of Appeals granted the Government's motion to dismiss, rejecting the District Court's holding that the time for appeal began to run anew upon the partial rejection of the defendant's Rule 35 motion. This Court now affirms with the simple citation of United States v. Robinson, . Because I think that United States v. Robinson should be confined to its particular facts, and for a number of other reasons, I would reverse the judgment of the Court of Appeals. In this case petitioner, Berman, has contended since the time of his first appeal that evidence introduced at his trial had been obtained as a result of an unlawful search and seizure and that a statement by way of a confession made by him was involuntary and therefore should have been excluded as a violation of the Fifth Amendment. The most perfunctory review of this record shows that neither of those two questions is frivolous.* In Fay v. Noia, , this Court, after an exhaustive discussion of the question and the citation of many prior decisions of this Court, held that a defendant who had been convicted by use of a coerced confession in a state court could obtain relief in a federal habeas corpus proceeding notwithstanding the fact of a procedural default in the state courts which barred any challenge to the conviction in those courts. It is unthinkable that the same rule should not be applied in federal courts so as to grant relief to a defendant who has been denied a federally guaranteed right because of his failure to comply with the rule which requires the notice of appeal to be filed within 10 days. It is particularly abhorrent to think that such a rule can be enforced in the federal court where, as here, the sole reason for cutting off the defendant's right of appeal to the Court of Appeals is the fact that, after the defendant has decided to appeal, the lawyer to whom he entrusts the duty of physically transporting his notice of appeal to the Court of Appeals fails to get it there because he is taken ill. Moreover, the Court in the Robinson case, which the Court now holds is controlling here, expressly stated, 361 U.S., at 230 n. 14, that the allowance of an appeal after expiration of the prescribed time"seems unnecessary for the accomplishment of substantial justice, for there are a number of collateral remedies available to redress denial of basic rights. Examples are: The power of a District Court under Rule 35 to correct an illegal sentence at any time ...; the power of a District Court to entertain a collateral attack upon a judgment of conviction and to vacate, set aside or correct the sentence under 28 U.S.C. 2255 ... ." It is not strange that the Court in Robinson directed its attention to 2255 proceedings since that section expressly provides that "A prisoner in custody under sentence of a court established by Act of Congress claiming the right to be released upon the ground that the sentence was imposed in violation of the Constitution ... may move the court which imposed the sentence to vacate, set aside or correct the sentence."My belief is that, even if Rule 37 (a) (2) is held to require dismissal of this appeal, and I do not think it should be, this Court should remand the case to the Court of Appeals with directions to treat the appeal as an application for collateral relief under 28 U.S.C. 2255. Such a course was followed in similar circumstances by the Tenth Circuit in Hixon v. United States, 268 F.2d 667, where, as here, the appeal was late under Rule 37 (a) (2). And we said in Bartone v. United States, : "Where state procedural snarls or obstacles preclude an effective state remedy against unconstitutional convictions, federal courts have no other choice but to grant relief in the collateral proceeding. See Fay v. Noia, . But the situation is different in federal proceedings, over which both the Courts of Appeals and this Court (McNabb v. United States, ) have broad powers of supervision. It is more appropriate, whenever possible, to correct errors reachable by the appeal rather than remit the parties to a new collateral proceeding." This is precisely what I think should be done in this case but the Court insists on affirming the harsh action of the Court of Appeals in dismissing the appeal. For a number of reasons, however, I would not affirm that dismissal.I believe that petitioner's original appeal was timely under Rule 37 (a) (2) if that rule is given a liberal, but permissible, construction more consonant with the ends of justice. The rule says that appeals must be taken "within 10 days" after the entry of the order appealed from. Rule 45 (a) says that the last day of the 10-day period is not to be counted if "it is a Sunday or legal holiday"; in such case, the period runs "until the end of the next day which is neither a Sunday nor a holiday." Neither of these rules says what is to happen if the tenth day is a Saturday, and neither defines what is a "legal holiday." Rule 56, however, sheds some light, for it states that federal courts shall be open for the filing of papers during business hours "on all days except Sundays and legal holidays," and the notes of the Advisory Committee responsible for the language of the Criminal Rules state that "legal holidays" include not only federal holidays but also "holidays prescribed by the laws of the State where the clerk's office is located." (Emphasis supplied.) On this point, New York law is specific. In New York City, where the United States District Court for the Southern District of New York sits, the offices of clerks of courts are closed on Saturdays by a state statute which provides: "Whenever the last day on which any paper shall be filed or act done or performed in any such office expires on Saturday, the time therefor is hereby extended to and including the next business day." N. Y. Judiciary Law, 282 (1963 Cum. Pocket Part). The practice is the same in other public offices in New York; for example, Saturday is not a business day in the offices of the county clerk in New York City, N. Y. County Law, 902, or in county offices in other counties, id., 206-a (1963 Cum. Pocket Part).The situation, simply put, is this: The Federal Rules say that an appeal must be filed within 10 days. They obviously intend to extend the time when the tenth day falls upon some day upon which the bar is not able or accustomed to filing legal papers in the courts - such as Sundays and legal holidays. The Rules refer practitioners and courts to state laws defining legal holidays, the better to avoid pitfalls for local lawyers who might otherwise lose their clients' cases because of their reliance upon the holiday closings of local courts. At the very outset of the Rules, their authors proclaimed that the Rules "are intended to provide for the just determination of every criminal proceeding" and so commanded courts to construe them so as "to secure simplicity in procedure, fairness in administration and the elimination of unjustifiable expense and delay." Fed. Rule Crim. Proc. 2. With these principles in mind, how, then, can we take the problem of deciding what happens when the tenth day falls on Saturday - something not expressly covered by the Rules - and treat it as if it were an impersonal, academic exercise in symbolic logic? Here, quite contrary to the Rules' promise, constitutional questions are denied a hearing on appeal because of a draconian interpretation of those very Rules. The associate who became ill stated, by affidavit in the Court of Appeals, that he was not aware that the federal courts did not follow the New York practice of extending time for filing until Monday where it would otherwise run out on Saturday. This affidavit is undisputed. Where the Federal Criminal Rules are not clear and leave a particular question to a court's interpretation, I fail to see how procedure is simplified, administration of justice is made fairer, and expense and delay are eliminated by choosing the strictest and most rigorous possible interpretation of the Rules.There is another way in which the Rules could be fairly construed so as to avoid the unjust result the Court here reaches. After the appellate court dismissed the original appeal, petitioner went back to the District Court and made the Rule 35 motion, as stated above. That motion was granted, and the next day petitioner filed a second notice of appeal; again the Court of Appeals dismissed. I think the reasoning of Corey v. United States, , fits this case. In Corey, the petitioner had been committed to custody under 18 U.S.C. 4208 (b), pending a report from the Bureau of Prisons. Three months later, after the report had been received, Corey was sentenced. Three days after that he filed a notice of appeal, but the Court of Appeals dismissed, holding that the 10 days for appeal had begun running from the time of the original custody order. This Court reversed, holding that an appeal could be taken, at the defendant's option, either from the original order or from the final sentencing. Similarly, in this case I think the fact that petitioner could have appealed from the first judgment of the District Court did not foreclose him from appealing from the second, amended judgment. As we said in Corey, 375 U.S., at 175, "simply because a defendant could have sought review of his conviction" after the initial order does not mean that Congress intended to deny review from a later order. Furthermore, we have consistently held that once a reviewing court has jurisdiction of one issue of a case (here the reduction of sentence), it may consider questions arising in earlier stages of the case. See Mercer v. Theriot, ; Urie v. Thompson, . Oddly enough, because the Court now holds there is no appeal from the second order of the District Court, this man convicted of a crime is worse off than a civil litigant, whose timely motion under Fed. Rule Civ. Proc. 73 to "alter or amend" the judgment would cause the time for an appeal to run anew. Moreover, even a motion which is not timely has been held sufficient in civil cases under Rule 73's provision dealing with "excusable neglect." See Wolfsohn v. Hankin, ; Thompson v. Immigration and Naturalization Service, ; Harris Truck Lines, Inc., v. Cherry Meat Packers, Inc., . Surely the rule in criminal cases should not be more strictly applied. Even more odd is the fact that this petitioner, because he had a lawyer, is worse off than a defendant who does not have a lawyer. Cf. Fallen v. United States, ante, p. 139. The same rule which is being used here to cut off petitioner's appeal says that when a defendant not represented by counsel is sentenced, "the defendant shall be advised of his right to appeal and if he so requests, the clerk shall prepare and file" the notice of appeal for the defendant. Here petitioner took the equivalent steps: he executed the notice of appeal for his lawyer on Thursday. But the lawyer's associate fell ill, and the Court of Appeals treated Saturday in a way most apt to confuse and trap even a perfectly healthy New York lawyer familiar with local New York practice. Having several ways in which it could have heard the merits of petitioner's constitutional claim, the Court of Appeals, now followed by this Court I regret to say, chose to interpret the Rules not so as to reach, but rather to defeat, a "just determination" of this case.Throughout history men have had to suffer from legal systems which worshipped rigid formalities at the expense of justice. It is for this that we remember the Laws of the Medes and Persians and the injustice spawned by the tortuous labyrinth of common-law pleading which it took the creation of courts of equity to counteract. Of course, any civilized system of judicial administration should have enough looseness in the joints to avert gross denials of a litigant's rights growing out of his lawyer's mistake or even negligence in failing to file the proper kind of pleading at precisely the prescribed moment. Cf. Link v. Wabash R. Co., (dissenting opinion). The Criminal Rules were framed with the declared purpose of ensuring that justice not be thwarted by those with too little imagination to see that procedural rules are not ends in themselves, but simply means to an end: the achievement of equal justice for all. I have no doubt that the disposition of this case would have been very congenial to the climate of Baron Parke's day. I confess, however, that I am uncomfortable with the notion that courts exist to fashion and preserve rules inviolate instead of to apply those rules to do justice to litigants.[Footnote *] In addition to those questions sought to be raised by petitioner in his appeal, this Court's decision in Jackson v. Denno, ante, p. 368, creates a third. The judge in this case did not himself pass on the voluntariness of Berman's confession; instead, he charged the jury that they must be the "sole judges" of the voluntariness of the confession. In so doing, the judge followed what is called the "New York rule" - a rule which this Court in Jackson says is unconstitutional. |
2 | 1. Antipicketing ordinance, virtually identical with one invalidated as violative of equal protection in Police Department of Chicago v. Mosley, ante, p. 92, is likewise invalid. P. 107.2. Antinoise ordinance prohibiting a person while on grounds adjacent to a building in which a school is in session from willfully making a noise or diversion that disturbs or tends to disturb the peace or good order of the school session is not unconstitutionally vague or overbroad. The ordinance is not vague since, with fair warning, it prohibits only actual or imminent, and willful, interference with normal school activity, and is not a broad invitation to discriminatory enforcement. Cox v. Louisiana, ; Coates v. Cincinnati, , distinguished. The ordinance is not overbroad as unduly interfering with First Amendment rights since expressive activity is prohibited only if it "materially disrupts classwork." Tinker v. Des Moines School District, . Pp. 107-121. 46 Ill. 2d 492, 263 N. E. 2d 866, affirmed in part and reversed in part.MARSHALL, J., delivered the opinion of the Court, in which BURGER, C. J., and BRENNAN, STEWART, WHITE, POWELL, and REHNQUIST, JJ., joined. BLACKMUN, J., filed a statement joining in the judgment and in Part I of the Court's opinion and concurring in the result as to Part II of the opinion, post, p. 121. DOUGLAS, J., filed an opinion dissenting in part and joining in Part I of the Court's opinion, post, p. 121.Sophia H. Hall argued the cause for appellant. With her on the briefs were William R. Ming, Jr., and Aldus S. Mitchell.William E. Collins argued the cause for appellee. With him on the brief were A. Curtis Washburn and Charles F. Thomas. MR. JUSTICE MARSHALL delivered the opinion of the Court.Appellant Richard Grayned was convicted for his part in a demonstration in front of West Senior High School in Rockford, Illinois. Negro students at the school had first presented their grievances to school administrators. When the principal took no action on crucial complaints, a more public demonstration of protest was planned. On April 25, 1969, approximately 200 people - students, their family members, and friends - gathered next to the school grounds. Appellant, whose brother and twin sisters were attending the school, was part of this group. The demonstrators marched around on a sidewalk about 100 feet from the school building, which was set back from the street. Many carried signs which summarized the grievances: "Black cheerleaders to cheer too"; "Black history with black teachers"; "Equal rights, Negro counselors." Others, without placards, made the "power to the people" sign with their upraised and clenched fists.In other respects, the evidence at appellant's trial was sharply contradictory. Government witnesses reported that the demonstrators repeatedly cheered, chanted, baited policemen, and made other noise that was audible in the school; that hundreds of students were distracted from their school activities and lined the classroom windows to watch the demonstration; that some demonstrators successfully yelled to their friends to leave the school building and join the demonstration; that uncontrolled latenesses after period changes in the school were far greater than usual, with late students admitting that they had been watching the demonstration; and that, in general, orderly school procedure was disrupted. Defense witnesses claimed that the demonstrators were at all times quiet and orderly; that they did not seek to violate the law, but only to "make a point"; that the only noise was made by policemen using loudspeakers; that almost no students were noticeable at the schoolhouse windows; and that orderly school procedure was not disrupted.After warning the demonstrators, the police arrested 40 of them, including appellant.1 For participating in the demonstration, Grayned was tried and convicted of violating two Rockford ordinances, hereinafter referred to as the "antipicketing" ordinance and the "antinoise" ordinance. A $25 fine was imposed for each violation. Since Grayned challenged the constitutionality of each ordinance, he appealed directly to the Supreme Court of Illinois. Ill. Sup. Ct. Rule 302. He claimed that the ordinances were invalid on their face, but did not urge that, as applied to him, the ordinances had punished constitutionally protected activity. The Supreme Court of Illinois held that both ordinances were constitutional on their face. 46 Ill. 2d 492, 263 N. E. 2d 866 (1970). We noted probable jurisdiction, . We conclude that the antipicketing ordinance is unconstitutional, but affirm the court below with respect to the antinoise ordinance. IAt the time of appellant's arrest and conviction, Rockford's antipicketing ordinance provided that "A person commits disorderly conduct when he knowingly: ... . . "(i) Pickets or demonstrates on a public way within 150 feet of any primary or secondary school building while the school is in session and one-half hour before the school is in session and one-half hour after the school session has been concluded, provided that this subsection does not prohibit the peaceful picketing of any school involved in a labor dispute ... ." Code of Ordinances, c. 28, 18.1 (i). This ordinance is identical to the Chicago disorderly conduct ordinance we have today considered in Police Department of Chicago v. Mosley, ante, p. 92. For the reasons given in Mosley, we agree with dissenting Justice Schaefer below, and hold that 18.1 (i) violates the Equal Protection Clause of the Fourteenth Amendment. Appellant's conviction under this invalid ordinance must be reversed.2 IIThe antinoise ordinance reads, in pertinent part, as follows: "[N]o person, while on public or private grounds adjacent to any building in which a school or any class thereof is in session, shall willfully make or assist in the making of any noise or diversion which disturbs or tends to disturb the peace or good order of such school session or class thereof... ." Code of Ordinances, c. 28, 19.2 (a). Appellant claims that, on its face, this ordinance is both vague and overbroad, and therefore unconstitutional. We conclude, however, that the ordinance suffers from neither of these related infirmities. A. Vagueness It is a basic principle of due process that an enactment is void for vagueness if its prohibitions are not clearly defined. Vague laws offend several important values. First, because we assume that man is free to steer between lawful and unlawful conduct, we insist that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly. Vague laws may trap the innocent by not providing fair warning.3 Second, if arbitrary and discriminatory enforcement is to be prevented, laws must provide explicit standards for those who apply them.4 A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application.5 Third, but related, where a vague statute "abut[s] upon sensitive areas of basic First Amendment freedoms,"6 it "operates to inhibit the exercise of [those] freedoms."7 Uncertain meanings inevitably lead citizens to "`steer far wider of the unlawful zone' ... than if the boundaries of the forbidden areas were clearly marked."8 Although the question is close, we conclude that the antinoise ordinance is not impermissibly vague. The court below rejected appellant's arguments "that proscribed conduct was not sufficiently specified and that police were given too broad a discretion in determining whether conduct was proscribed." 46 Ill. 2d, at 494, 263 N. E. 2d, at 867. Although it referred to other, similar statutes it had recently construed and upheld, the court below did not elaborate on the meaning of the antinoise ordinance.9 In this situation, as Mr. Justice Frankfurter put it, we must "extrapolate its allowable meaning."10 Here, we are "relegated ... to the words of the ordinance itself,"11 to the interpretations the court below has given to analogous statutes,12 and, perhaps to some degree, to the interpretation of the statute given by those charged with enforcing it.13 "Extrapolation," of course, is a delicate task, for it is not within our power to construe and narrow state laws.14 With that warning, we find no unconstitutional vagueness in the antinoise ordinance. Condemned to the use of words, we can never expect mathematical certainty from our language.15 The words of the Rockford ordinance are marked by "flexibility and reasonable breadth, rather than meticulous specificity," Esteban v. Central Missouri State College, 415 F.2d 1077, 1088 (CA8 1969) (Blackmun, J.), cert. denied, , but we think it is clear what the ordinance as a whole prohibits. Designed, according to its preamble, "for the protection of Schools," the ordinance forbids deliberately noisy or diversionary16 activity that disrupts or is about to disrupt normal school activities. It forbids this willful activity at fixed times - when school is in session - and at a sufficiently fixed place - "adjacent" to the school.17 Were we left with just the words of the ordinance, we might be troubled by the imprecision of the phrase "tends to disturb."18 However, in Chicago v. Meyer, 44 Ill. 2d 1, 4, 253 N. E. 2d 400, 402 (1969), and Chicago v. Gregory, 39 Ill. 2d 47, 233 N. E. 2d 422 (1968), reversed on other grounds, , the Supreme Court of Illinois construed a Chicago ordinance prohibiting, inter alia, a "diversion tending to disturb the peace," and held that it permitted conviction only where there was "imminent threat of violence." (Emphasis supplied.) See Gregory v. Chicago, , 121-122 (1969) (Black, J., concurring).19 Since Meyer was specifically cited in the opinion below, and it in turn drew heavily on Gregory, we think it proper to conclude that the Supreme Court of Illinois would interpret the Rockford ordinance to prohibit only actual or imminent interference with the "peace or good order" of the school.20 Although the prohibited quantum of disturbance is not specified in the ordinance, it is apparent from the statute's announced purpose that the measure is whether normal school activity has been or is about to be disrupted. We do not have here a vague, general "breach of the peace" ordinance, but a statute written specifically for the school context, where the prohibited disturbances are easily measured by their impact on the normal activities of the school. Given this "particular context," the ordinance gives "fair notice to those to whom [it] is directed."21 Although the Rockford ordinance may not be as precise as the statute we upheld in Cameron v. Johnson, - which prohibited picketing "in such a manner as to obstruct or unreasonably interfere with free ingress or egress to and from" any courthouse - we think that, as in Cameron, the ordinance here clearly "delineates its reach in words of common understanding." Id., at 616. Cox v. Louisiana, , and Coates v. Cincinnati, , on which appellant particularly relies, presented completely different situations. In Cox, a general breach of the peace ordinance had been construed by state courts to mean "to agitate, to arouse from a state of repose, to molest, to interrupt, to hinder, to disquiet." The Court correctly concluded that, as construed, the ordinance permitted persons to be punished for merely expressing unpopular views.22 In Coates, the ordinance punished the sidewalk assembly of three or more persons who "conduct themselves in a manner annoying to persons passing by ... ." We held, in part, that the ordinance was impermissibly vague because enforcement depended on the completely subjective standard of "annoyance."In contrast, Rockford's antinoise ordinance does not permit punishment for the expression of an unpopular point of view, and it contains no broad invitation to subjective or discriminatory enforcement. Rockford does not claim the broad power to punish all "noises" and "diversions."23 The vagueness of these terms, by themselves, is dispelled by the ordinance's requirements that (1) the "noise or diversion" be actually incompatible with normal school activity; (2) there be a demonstrated causality between the disruption that occurs and the "noise or diversion"; and (3) the acts be "willfully" done.24 "Undesirables" or their "annoying" conduct may not be punished. The ordinance does not permit people to "stand on a public sidewalk ... only at the whim of any police officer."25 Rather, there must be demonstrated interference with school activities. As always, enforcement requires the exercise of some degree of police judgment, but, as confined, that degree of judgment here is permissible. The Rockford City Council has made the basic policy choices, and has given fair warning as to what is prohibited. "[T]he ordinance defines boundaries sufficiently distinct" for citizens, policemen, juries, and appellate judges.26 It is not impermissibly vague. B. Overbreadth A clear and precise enactment may nevertheless be "overbroad" if in its reach it prohibits constitutionally protected conduct.27 Although appellant does not claim that, as applied to him, the antinoise ordinance has punished protected expressive activity, he claims that the ordinance is overbroad on its face. Because overbroad laws, like vague ones, deter privileged activity, our cases firmly establish appellant's standing to raise an over-breadth challenge.28 The crucial question, then, is whether the ordinance sweeps within its prohibitions what may not be punished under the First and Fourteenth Amendments. Specifically, appellant contends that the Rockford ordinance unduly interferes with First and Fourteenth Amendment rights to picket on a public sidewalk near a school. We disagree."In considering the right of a municipality to control the use of public streets for the expression of religious [or political] views, we start with the words of Mr. Justice Roberts that `Wherever the title of streets and parks may rest, they have immemorially been held in trust for the use of the public and, time out of mind, have been used for purposes of assembly, communicating thoughts between citizens, and discussing public questions.' Hague v. CIO, ." Kunz v. New York, . See Shuttlesworth v. Birmingham, . The right to use a public place for expressive activity may be restricted only for weighty reasons. Clearly, government has no power to restrict such activity because of its message.29 Our cases make equally clear, however, that reasonable "time, place and manner" regulations may be necessary to further significant governmental interests, and are permitted.30 For example, two parades cannot march on the same street simultaneously, and government may allow only one. Cox v. New Hampshire, . A demonstration or parade on a large street during rush hour might put an intolerable burden on the essential flow of traffic, and for that reason could be prohibited. Cox v. Louisiana, 379 U.S., at 554. If overamplified loudspeakers assault the citizenry, government may turn them down. Kovacs v. Cooper, ; Saia v. New York, . Subject to such reasonable regulation, however, peaceful demonstrations in public places are protected by the First Amendment.31 Of course, where demonstrations turn violent, they lose their protected quality as expression under the First Amendment.32 The nature of a place, "the pattern of its normal activities, dictate the kinds of regulations of time, place, and manner that are reasonable."33 Although a silent vigil may not unduly interfere with a public library, Brown v. Louisiana, , making a speech in the reading room almost certainly would. That same speech should be perfectly appropriate in a park. The crucial question is whether the manner of expression is basically incompatible with the normal activity of a particular place at a particular time. Our cases make clear that in assessing the reasonableness of a regulation, we must weigh heavily the fact that communication is involved;34 the regulation must be narrowly tailored to further the State's legitimate interest.35 Access to the "streets, sidewalks, parks, and other similar public places ... for the purpose of exercising [First Amendment rights] cannot constitutionally be denied broadly ... ."36 Free expression "must not, in the guise of regulation, be abridged or denied."37 In light of these general principles, we do not think that Rockford's ordinance is an unconstitutional regulation of activity around a school. Our touchstone is Tinker v. Des Moines School District, , in which we considered the question of how to accommodate First Amendment rights with the "special characteristics of the school environment." Id., at 506. Tinker held that the Des Moines School District could not punish students for wearing black armbands to school in protest of the Vietnam war. Recognizing that "`wide exposure to ... robust exchange of ideas'" is an "important part of the educational process" and should be nurtured, id., at 512, we concluded that free expression could not be barred from the school campus. We made clear that "undifferentiated fear or apprehension of disturbance is not enough to overcome the right to freedom of expression," id., at 508,38 and that particular expressive activity could not be prohibited because of a "mere desire to avoid the discomfort and unpleasantness that always accompany an unpopular viewpoint," id., at 509. But we nowhere suggested that students, teachers, or anyone else has an absolute constitutional right to use all parts of a school building or its immediate environs for his unlimited expressive purposes. Expressive activity could certainly be restricted, but only if the forbidden conduct "materially disrupts classwork or involves substantial disorder or invasion of the rights of others." Id., at 513. The wearing of armbands was protected in Tinker because the students "neither interrupted school activities nor sought to intrude in the school affairs or the lives of others. They caused discussion outside of the classrooms, but no interference with work and no disorder." Id., at 514. Compare Burnside v. Byars, 363 F.2d 744 (CA5 1966), and Butts v. Dallas Ind. School District, 436 F.2d 728 (CA5 1971), with Blackwell v. Issaquena County Board of Education, 363 F.2d 749 (CA5 1966).Just as Tinker made clear that school property may not be declared off limits for expressive activity by students, we think it clear that the public sidewalk adjacent to school grounds may not be declared off limits for expressive activity by members of the public. But in each case, expressive activity may be prohibited if it "materially disrupts classwork or involves substantial disorder or invasion of the rights of others." Tinker v. Des Moines School District, 393 U.S., at 513.39 We would be ignoring reality if we did not recognize that the public schools in a community are important institutions, and are often the focus of significant grievances.40 Without interfering with normal school activities, daytime picketing and handbilling on public grounds near a school can effectively publicize those grievances to pedestrians, school visitors, and deliverymen, as well as to teachers, administrators, and students. Some picketing to that end will be quiet and peaceful, and will in no way disturb the normal functioning of the school. For example, it would be highly unusual if the classic expressive gesture of the solitary picket disrupts anything related to the school, at least on a public sidewalk open to pedestrians.41 On the other hand, schools could hardly tolerate boisterous demonstrators who drown out classroom conversation, make studying impossible, block entrances, or incite children to leave the schoolhouse.42 Rockford's antinoise ordinance goes no further than Tinker says a municipality may go to prevent interference with its schools. It is narrowly tailored to further Rockford's compelling interest in having an undisrupted school session conducive to the students' learning, and does not unnecessarily interfere with First Amendment rights. Far from having an impermissibly broad prophylactic ordinance,43 Rockford punishes only conduct which disrupts or is about to disrupt normal school activities. That decision is made, as it should be, on an individualized basis, given the particular fact situation. Peaceful picketing which does not interfere with the ordinary functioning of the school is permitted. And the ordinance gives no license to punish anyone because of what he is saying.44 We recognize that the ordinance prohibits some picketing that is neither violent nor physically obstructive. Noisy demonstrations that disrupt or are incompatible with normal school activities are obviously within the ordinance's reach. Such expressive conduct may be constitutionally protected at other places or other times, cf. Edwards v. South Carolina, ; Cox v. Louisiana, , but next to a school, while classes are in session, it may be prohibited.45 The antinoise ordinance imposes no such restriction on expressive activity before or after the school session, while the student/faculty "audience" enters and leaves the school.In Cox v. Louisiana, , this Court indicated that, because of the special nature of the place,46 persons could be constitutionally prohibited from picketing "in or near" a courthouse "with the intent of interfering with, obstructing, or impeding the administration of justice." Likewise, in Cameron v. Johnson, , we upheld a statute prohibiting picketing "in such a manner as to obstruct or unreasonably interfere with free ingress or egress to and from any ... county ... courthouses."47 As in those two cases, Rockford's modest restriction on some peaceful picketing represents a considered and specific legislative judgment that some kinds of expressive activity should be restricted at a particular time and place, here in order to protect the schools.48 Such a reasonable regulation is not inconsistent with the First and Fourteenth Amendments.49 The antinoise ordinance is not invalid on its face.50 The judgment is Affirmed in part and reversed in part.MR. JUSTICE BLACKMUN joins in the judgment and in Part I of the opinion of the Court. He concurs in the result as to Part II of the opinion. |
0 | Petitioner was one of four men arrested after the auto in which they were riding was stopped by police shortly after an armed robbery of a service station. The arrests resulted from information supplied by the service station attendant and bystanders. The car was driven to a police station, where a search disclosed two revolvers, one loaded with dumdum bullets, and cards bearing the name of an attendant at another service station who had been robbed at gunpoint a week earlier. In a warrant-authorized search of petitioner's home the next day police found and seized ammunition, including dumdum bullets similar to those found in one of the guns in the car. At his first trial, which ended in a mistrial, petitioner was represented by a Legal Aid Society attorney. Another Legal Aid Society attorney, who represented him at the second trial, did not confer with petitioner until a few minutes before that trial began. The materials taken from the car and the bullets seized from petitioner's home were introduced in evidence and petitioner was convicted of robbery of both service stations. Petitioner did not take a direct appeal, but sought, unsuccessfully, a writ of habeas corpus in the Pennsylvania courts and in the federal courts, challenging the admissibility of the materials taken from the car and the ammunition seized in his home, and claiming that he was denied the effective assistance of counsel. The Court of Appeals dealt with the claim that the attorney's lack of preparation resulted in the failure to exclude the guns and ammunition by finding harmless error in the admission of the bullets and ruling that the materials seized from the car were admissible in evidence, and concluded that the claim of prejudice from substitution of counsel was without substantial basis. Held: 1. The warrantless search of the automobile was valid and the materials seized therefrom were properly introduced in evidence. Pp. 46-52. (a) The search, made at the police station some time after the arrest, cannot be justified as incident to the arrest. Pp. 46-47. (b) Just as there was probable cause to arrest the occupants of the car, there was probable cause to search the car for guns and stolen money. Pp. 47-48. (c) If there is probable cause, an automobile, because of its mobility, may be searched without a warrant in circumstances that would not justify a warrantless search of a house or office. Carroll v. United States, . Pp. 48-51. (d) Given probable cause, there is no difference under the Fourth Amendment between (1) seizing and holding a car before presenting the issue of probable cause to a magistrate, and (2) carrying out an immediate warrantless search. Pp. 51-52. 2. The findings of the District Court and the Court of Appeals that, if there was error in admitting in evidence the ammunition seized from petitioner's house, it was harmless error beyond a reasonable doubt, are affirmed on the basis of the Court's review of the record. Pp. 52-53. 3. Based on a careful examination of the state court record, the Court of Appeals' judgment denying a hearing as to the adequacy of representation by counsel, is not disturbed. Pp. 53-54. 408 F.2d 1186, affirmed.Vincent J. Grogan, by appointment of the Court, , argued the cause and filed a brief for petitioner.Carol Mary Los argued the cause for respondent, pro hac vice. With her on the brief was Robert W. Duggan.Louis J. Lefkowitz, Attorney General, Samuel A. Hirshowitz, First Assistant Attorney General, and Amy Juviler and Brenda Soloff, Assistant Attorneys General, filed a brief for the State of New York as amicus curiae.MR. JUSTICE WHITE delivered the opinion of the Court.The principal question in this case concerns the admissibility of evidence seized from an automobile, in which petitioner was riding at the time of his arrest, after the automobile was taken to a police station and was there thoroughly searched without a warrant. The Court of Appeals for the Third Circuit found no violation of petitioner's Fourth Amendment rights. We affirm. IDuring the night of May 20, 1963, a Gulf service station in North Braddock, Pennsylvania, was robbed by two men, each of whom carried and displayed a gun. The robbers took the currency from the cash register; the service station attendant, one Stephen Kovacich, was directed to place the coins in his right-hand glove, which was then taken by the robbers. Two teen-agers, who had earlier noticed a blue compact station wagon circling the block in the vicinity of the Gulf station, then saw the station wagon speed away from a parking lot close to the Gulf station. About the same time, they learned that the Gulf station had been robbed. They reported to police, who arrived immediately, that four men were in the station wagon and one was wearing a green sweater. Kovacich told the police that one of the men who robbed him was wearing a green sweater and the other was wearing a trench coat. A description of the car and the two robbers was broadcast over the police radio. Within an hour, a light blue compact station wagon answering the description and carrying four men was stopped by the police about two miles from the Gulf station. Petitioner was one of the men in the station wagon. He was wearing a green sweater and there was a trench coat in the car. The occupants were arrested and the car was driven to the police station. In the course of a thorough search of the car at the station, the police found concealed in a compartment under the dashboard two .38-caliber revolvers (one loaded with dumdum bullets), a righthand glove containing small change, and certain cards bearing the name of Raymond Havicon, the attendant at a Boron service station in McKeesport, Pennsylvania, who had been robbed at gunpoint on May 13, 1963. In the course of a warrant-authorized search of petitioner's home the day after petitioner's arrest, police found and seized certain .38-caliber ammunition, including some dumdum bullets similar to those found in one of the guns taken from the station wagon.Petitioner was indicted for both robberies.1 His first trial ended in a mistrial but he was convicted of both robberies at the second trial. Both Kovacich and Havicon identified petitioner as one of the robbers.2 The materials taken from the station wagon were introduced into evidence, Kovacich identifying his glove and Havicon the cards taken in the May 13 robbery. The bullets seized at petitioner's house were also introduced over objections of petitioner's counsel.3 Petitioner was sentenced to a term of four to eight years' imprisonment for the May 13 robbery and to a term of two to seven years' imprisonment for the May 20 robbery, the sentences to run consecutively.4 Petitioner did not take a direct appeal from these convictions. In 1965, petitioner sought a writ of habeas corpus in the state court, which denied the writ after a brief evidentiary hearing; the denial of the writ was affirmed on appeal in the Pennsylvania appellate courts. Habeas corpus proceedings were then commenced in the United States District Court for the Western District of Pennsylvania. An order to show cause was issued. Based on the State's response and the state court record, the petition for habeas corpus was denied without a hearing. The Court of Appeals for the Third Circuit affirmed, 408 F.2d 1186, and we granted certiorari, .5 IIWe pass quickly the claim that the search of the automobile was the fruit of an unlawful arrest. Both the courts below thought the arresting officers had probable cause to make the arrest. We agree. Having talked to the teen-age observers and to the victim Kovacich, the police had ample cause to stop a light blue compact station wagon carrying four men and to arrest the occupants, one of whom was wearing a green sweater and one of whom had a trench coat with him in the car.6 Even so, the search that produced the incriminating evidence was made at the police station some time after the arrest and cannot be justified as a search incident to an arrest: "Once an accused is under arrest and in custody, then a search made at another place, without a warrant, is simply not incident to the arrest." Preston v. United States, . Dyke v. Taylor Implement Mfg. Co., , is to the same effect; the reasons that have been thought sufficient to justify warrantless searches carried out in connection with an. arrest no longer obtain when the accused is safely in custody at the station house.There are, however, alternative grounds arguably justifying the search of the car in this case. In Preston, supra, the arrest was for vagrancy; it was apparent that the officers had no cause to believe that evidence of crime was concealed in the auto. In Dyke, supra, the Court expressly rejected the suggestion that there was probable cause to search the car, 391 U.S., at 221-222. Here the situation is different, for the police had probable cause to believe that the robbers, carrying guns and the fruits of the crime, had fled the scene in a light blue compact station wagon which would be carrying four men, one wearing a green sweater and another wearing a trench coat. As the state courts correctly held, there was probable cause to arrest the occupants of the station wagon that the officers stopped; just as obviously was there probable cause to search the car for guns and stolen money.In terms of the circumstances justifying a warrantless search, the Court has long distinguished between an automobile and a home or office. In Carroll v. United States, , the issue was the admissibility in evidence of contraband liquor seized in a warrantless search of a car on the highway. After surveying the law from the time of the adoption of the Fourth Amendment onward, the Court held that automobiles and other conveyances may be searched without a warrant in circumstances that would not justify the search without a warrant of a house or an office, provided that there is probable cause to believe that the car contains articles that the officers are entitled to seize. The Court expressed its holding as follows: "We have made a somewhat extended reference to these statutes to show that the guaranty of freedom from unreasonable searches and seizures by the Fourth Amendment has been construed, practically since the beginning of the Government, as recognizing a necessary difference between a search of a store, dwelling house or other structure in respect of which a proper official warrant readily may be obtained, and a search of a ship, motor boat, wagon or automobile, for contraband goods, where it is not practicable to secure a warrant because the vehicle can be quickly moved out of the locality or jurisdiction in which the warrant must be sought. "Having thus established that contraband goods concealed and illegally transported in an automobile or other vehicle may be searched for without a warrant, we come now to consider under what circumstances such search may be made... . [T]hose lawfully within the country, entitled to use the public highways, have a right to free passage without interruption or search unless there is known to a competent official authorized to search, probable cause for believing that their vehicles are carrying contraband or illegal merchandise... . ... . ."The measure of legality of such a seizure is, therefore, that the seizing officer shall have reasonable or probable cause for believing that the automobile which he stops and seizes has contraband liquor therein which is being illegally transported." 267 U.S., at 153-154, 155-156. The Court also noted that the search of an auto on probable cause proceeds on a theory wholly different from that justifying the search incident to an arrest:"The right to search and the validity of the seizure are not dependent on the right to arrest. They are dependent on the reasonable cause the seizing officer has for belief that the contents of the automobile offend against the law." 267 U.S., at 158-159. Finding that there was probable cause for the search and seizure at issue before it, the Court affirmed the convictions.Carroll was followed and applied in Husty v. United States, , and Scher v. United States, . It was reaffirmed and followed in Brinegar v. United States, . In 1964, the opinion in Preston, supra, cited both Brinegar and Carroll with approval, 376 U.S., at 366-367. In Cooper v. California, ,7 the Court read Preston as dealing primarily with a search incident to arrest and cited that case for the proposition that the mobility of a car may make the search of a car without a warrant reasonable "although the result might be the opposite in a search of a home, a store, or other fixed piece of property." 386 U.S., at 59. The Court's opinion in Dyke, 391 U.S., at 221, recognized that "[a]utomobiles, because of their mobility, may be searched without a warrant upon facts not justifying a warrantless search of a residence or office," citing Brinegar and Carroll, supra. However, because there was insufficient reason to search the car involved in the Dyke case, the Court did not reach the question of whether those cases "extend to a warrantless search, based upon probable cause, of an automobile which, having been stopped originally on a highway, is parked outside a courthouse." 391 U.S., at 222.8 Neither Carroll, supra, nor other cases in this Court require or suggest that in every conceivable circumstances the search of an auto even with probable cause may be made without the extra protection for privacy that a warrant affords. But the circumstances that furnish probable cause to search a particular auto for particular articles are most often unforeseeable; moreover, the opportunity to search is fleeting since a car is readily movable. Where this is true, as in Carroll and the case before us now, if an effective search is to be made at any time, either the search must be made immediately without a warrant or the car itself must be seized and held without a warrant for whatever period is necessary to obtain a warrant for the search.9 In enforcing the Fourth Amendment's prohibition against unreasonable searches and seizures, the Court has insisted upon probable cause as a minimum requirement for a reasonable search permitted by the Constitution. As a general rule, it has also required the judgment of a magistrate on the probable-cause issue and the issuance of a warrant before a search is made. Only in exigent circumstances will the judgment of the police as to probable cause serve as a sufficient authorization for a search. Carroll, supra, holds a search warrant unnecessary where there is probable cause to search an automobile stopped on the highway; the car is movable, the occupants are alerted, and the car's contents may never be found again if a warrant must be obtained. Hence an immediate search is constitutionally permissible.Arguably, because of the preference for a magistrate's judgment, only the immobilization of the car should be permitted until a search warrant is obtained; arguably, only the "lesser" intrusion is permissible until the magistrate authorizes the "greater." But which is the "greater" and which the "lesser" intrusion is itself a debatable question and the answer may depend on a variety of circumstances. For constitutional purposes, we see no difference between on the one hand seizing and holding a car before presenting the probable cause issue to a magistrate and on the other hand carrying out an immediate search without a warrant. Given probable cause to search, either course is reasonable under the Fourth Amendment.On the facts before us, the blue station wagon could have been searched on the spot when it was stopped since there was probable cause to search and it was a fleeting target for a search. The probable-cause factor still obtained at the station house and so did the mobility of the car unless the Fourth Amendment permits a warrantless seizure of the car and the denial of its use to anyone until a warrant is secured. In that event there is little to choose in terms of practical consequences between an immediate search without a warrant and the car's immobilization until a warrant is obtained.10 The same consequences may not follow where there is unforeseeable cause to search a house. Compare Vale v. Louisiana, ante, p. 30. But as Carroll, supra, held, for the purposes of the Fourth Amendment there is a constitutional difference between houses and cars.IIINeither of petitioner's remaining contentions warrants reversal of the judgment of the Court of Appeals. One of them challenges the admissibility at trial of the .38-caliber ammunition seized in the course of a search of petitioner's house. The circumstances relevant to this issue are somewhat confused, involving as they do questions of probable cause, a lost search warrant, and the Pennsylvania procedure for challenging the admissibility of evidence seized. Both the District Court and the Court of Appeals, however, after careful examination of the record, found that if there was error in admitting the ammunition, the error was harmless beyond a reasonable doubt. Having ourselves studied this record, we are not prepared to differ with the two courts below. See Harrington v. California, .The final claim is that petitioner was not afforded the effective assistance of counsel. The facts pertinent to this claim are these: The Legal Aid Society of Allegheny County was appointed to represent petitioner prior to his first trial. A representative of the society conferred with petitioner, and a member of its staff, Mr. Middleman, appeared for petitioner at the first trial. There is no claim that petitioner was not then adequately represented by fully prepared counsel. The difficulty arises out of the second trial. Apparently no one from the Legal Aid Society again conferred with petitioner until a few minutes before the second trial began. The attorney who then appeared to represent petitioner was not Mr. Middleman but Mr. Tamburo, another Legal Aid Society attorney. No charge is made that Mr. Tamburo was incompetent or inexperienced; rather the claim is that his appearance for petitioner was so belated that he could not have furnished effective legal assistance at the second trial. Without granting an evidentiary hearing, the District Court rejected petitioner's claim. The Court of Appeals dealt with the matter in an extensive opinion. After carefully examining the state court record, which it had before it, the court found ample grounds for holding that the appearance of a different attorney at the second trial had not resulted in prejudice to petitioner. The claim that Mr. Tamburo was unprepared centered around his allegedly inadequate efforts to have the guns and ammunition excluded from evidence. But the Court of Appeals found harmless any error in the admission of the bullets and ruled that the guns and other materials seized from the car were admissible evidence. Hence the claim of prejudice from the substitution of counsel was without substantial basis.11 In this posture of the case we are not inclined to disturb the judgment of the Court of Appeals as to what the state record shows with respect to the adequacy of counsel. Unquestionably, the courts should make every effort to effect early appointments of counsel in all cases. But we are not disposed to fashion a per se rule requiring reversal of every conviction following tardy appointment of counsel or to hold that, whenever a habeas corpus petition alleges a belated appointment, an evidentiary hearing must be held to determine whether the defendant has been denied his constitutional right to counsel. The Court of Appeals reached the right result in denying a hearing in this case. Affirmed.MR. JUSTICE BLACKMUN took no part in the consideration or decision of this case. |
9 | Ohio's antitrust law may not be applied to prevent the contracting parties from carrying out a collective bargaining agreement upon a subject matter as to which the National Labor Relations Act directs them to bargain. Teamsters Union v. Oliver, . Therefore, certiorari is granted and the judgment below is reversed. Pp. 605-606. 170 Ohio St. 207, 163 N. E. 2d 383, reversed.David Previant, Robert C. Knee, Bruce Laybourne and David Leo Uelmen for petitioners.Bernard J. Roetzel and Charles R. Iden for respondents.PER CURIAM.The motion for leave to use the 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, , 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 petitioners and respondents A. C. E. Transportation Co. and Interstate Truck Service, Inc., from 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. XXXII, 4 and 5, 358 U.S., at 298-299. 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 295.The judgment accordingly is Reversed.MR. JUSTICE WHITTAKER dissents.MR. JUSTICE FRANKFURTER and MR. JUSTICE STEWART took no part in the consideration or decision of this case. |
6 | Rehearing Denied March 7, 1949. See . [ Vermilya-Brown Co. v. Connell ], 378] Mr. Charles Fahy, of Washington, D.C., for petitioner. Mr. Solt. Firstenberg, of New York City, for respondents. Mr. Justice REED delivered the opinion of the Court. This case brings before us for review the applicability of the Fair Labor Standards Act of 1938, 52 Stat. 1060, 29 U.S.C.A. 201 et seq., to employees allegedly engaged in commerce or the production of goods for commerce on a leasehold of the United States, located on the Crown Colony of Bermuda. The leasehold, a military base, was obtained by the United States through a lease executed by the British Government. This lease was the result of negotiations adequately summarized for consideration by the letters of The Marquess of Lothian, the British Ambassador to the United States, of date September 2, 1940; the reply , 379] of Mr. Cordell Hull, then our Secretary of State, of the same date; and the Agreement of March 27, 1941, between the two nations to further effectuate the declarations of the Ambassador in his letter. 1 The Fair Labor Standards Act covers commerce 'among the several States or from any State to any place outside thereof.' State means 'any State of the United States or the District of Columbia or any Territory or possession of the United States.' 3(b) and (c) of the Act. Certain employees of contractors who had contracts for work for the United States on the Bermuda base brought this suit under 16(b) of the Act for recovery of unpaid overtime compensation and damages, claimed to be due them for the employer's violation of 7, requiring overtime compensation. We do not enter into any consideration of the employees' right to recover if the Fair Labor Standards Act is applicable to employment on the Bermuda base, for the complaint was dismissed on defendant's motion for summary judgment on the ground that the applicability depended upon the 'sovereign jurisdiction of the United States,' that the executive and legislative branches of the Government had indicated that such leased reas were not under our sovereign jurisdiction and that this was a political question outside of judicial power. Connell v. Vermilya-Brown Co., D.C., 73 F.Supp. 860. The United States Court of Appeals for the Second Circuit, holding that the Act applied to the Bermuda base, reversed this judgment and remanded the case to the District Court for further proceedings on the merits. 164 F.2d 924. Our affirmance of this judgment approves that disposition of the appeal. , 380] On account of the obvious importance of the case from the standpoint of administration, in view of the number of leased areas occupied by the United States, we granted certiorari. . (1) We shall consider first our power to explore the problem as to whether the Fair Labor Standards Act covers this leased area. Or, to phrase it differently, is this a political question beyond the competence of courts to decide? Cf. Coleman v. Miller, , 980, 122 A.L.R. 695; Colegrove v. Green, , 1199. There is nothing that indicates to us that this Court should refuse to decide a controversy between litigants because the geographical coverage of this statute is involved. Recognizing that the determination of sovereignty over an area is for the legislative and executive departments, Jones v. United States, , does not debar courts from examining the status resulting from prior action. De Lima v. Bidwell, S. Ct. 743; Hooven & Allison Co. v. Evatt, , 65 S. Ct. 870. We have no occasion for this opinion to differ from the view as to sovereignty expressed 'for the Secretary of State' by The Legal Adviser of the Department in his letter of January 30, 1948, to the Attorney General in relation to further legal steps in the present controversy after the judgment of the Court of Appeals. It was there stated:'The arrangements under which the leased bases were acquired from Great Britain did not and were not intended to transfer sovereignty over the leased areas from Great Britain to the United States.' Nothing in this opinion is intended to intimate that we have any different view from that expressed for the Secretary of State. In the light of the statement of the Department of State, we predicate our views on the issue presented upon the postulate that the leased area is under the sovereignty of Great Britain and that it is not territory , 381] of the United States in a political sense, that is, a part of its national domain. (2) We have no doubt that Congress has power in certain situations, to regulate the actions of our citizens outside the territorial jurisdiction of the United States whether or not the act punished occurred within the territory of a foreign nation. This was established as to crimes directly affecting the Government in United States v. Bowman, . This Court there pointed outat page 102, 43 S.Ct. at page 42, that clearly such legislation concerning our citizens could not offend the dignity or right of sovereignty of another nation. See Blackmer v. United States, , 254; Skiriotes v. State of Florida, , 73, 78, 927, 929. A fortiori civil controls may apply, we think, to liabilities created by statutory regulation of labor contracts, even if aliens may be involved, where the incidents regulated occur on areas under the control, though not within the territorial jurisdiction or sovereignty of the nation enacting the legislation. 2 This is implicitly conceded by all parties. This power is placed specifically in Congress by virtue of the authorization for 'needful Rules and Regulations respecting the Territory or other Property belonging to the United States'. Constitution, Art. IV, 3, cl. 2.3 It does not depend upon sovereignt in the political or any sense over the territory. So the Administrator of the Wage-Hour Division has issued a statement of general policy or interpretation that directs all officers and agencies of his division to apply this Act to the Canal Zone, admittedly territory over which we do not have sovereignty. C.F.R., 1947 Supp., tit. 29, pp. 4392-93. , 382] (3) In this view of the relationship of our government to a leased area, the terms of this particular lease become important. Reference, note 1, supra, has been made to the United States Statutes where the title documents are readily available. It is unnecessary to print them here in full. In the margin are extracts that indicate their meaning as to the control intended to be granted. 4 Under , 383] this agreement we have no doubt that the United States is authorized by the lessor to provide for maximum hours and minimum wages for employers and employees within the area, and the question of whether the Fair Labor Standards Act applies is one of statutory construction, not legislative power. (4) At the time of the enactment of the Act, June 25, 1938, the United States had no leased base in Bermuda. This country did have a lease from the Republic of Cuba of an area at Guantanamo Bay for a coaling or naval station 'for the time required for the purposes of coaling and naval stations.' The United States was granted by the Cuban lease substantially the same rights as it has in the Bermuda lease. 5 The time limits of the grant were redefined on June 9, 1934, as extending until agreement for abrogation or unilateral abandonment by , 384] the United States. A similar arrangement existed in regard to the Panama Canal Zone. 6 Further, in the Philippine Independence Acts of January 17, 1933, and March 24, 1934, provisions existed looking toward the retention of military and other bases in the Philippine Islands. 47 Stat. 761, 5 and 10; 48 Stat. 456, 5 and 10, 48 U.S.C.A. 1232, 1235, 1240.7 A Convention between the governments of Nicaragua and the United States of America, proclaimed June 24, 1916, 39 Stat. 1661, gave the United States for 99 years 'sovereign authority' over certain islands in the , 385] Caribbean Sea. 8 None of these international arrangements were discussed in reports or the debates concerning the scope of the Fair Labor Standards Act. After the passage of the Fair Labor Standards Act and during World War II, a number of bases for military operations were leased by the United States not only on territory of the British Commonwealth of Nations but on that of other sovereignties also. The provisions of these leases paralleled in many respects the Bermuda lease. > 9 Neither this lack of specific reference in the legislative history to leased areas, however, nor the fact that the particular Bermuda base was acquired after the passage of the Act seems to us decisive of its coverage. 'The reach of the act is not sustained or opposed by the fact that it is sought to bring new situations under its terms.'10 The Sherman Act of 1890, 15 U.S.C.A. 1-7, 15 note, a date when we had no insular possessions, was held by its use of the word 'Territory' in its 3 to be applicable in Puerto Rico, a dependency acquired by the Treaty of Paris in 1898, 30 Stat. 1754.11 The answer as to the scope of the Wage-Hour Act lies in the purpose of Congress in defining its reach. , 386] (5) The point of statutory construction for our determination is as to whether the word 'possession,' used by Congress to bound the geographical coverage of the Fair Labor Standards Act, fixes the limits of the Act's scope so as to include the Bermuda base. The word 'possession' is not a word of art, descriptive of a recognized geographical or governmental entity. What was said of 'territories' in the Shell Co. case, , at page 258, 58 S.Ct. at page 169, is aplicable:'Words generally have different shades of meaning, and are to be construed if reasonably possible to effectuate the intent of the lawmakers; and this meaning in particular instances is to be arried at not only by a consideration of the words themselves, but by considering, as well, the context, the purposes of the law, and the circumstances under which the words were employed.' The word 'possession' has been employed in a number of statutes both before and since the Fair Labor Standards Act to describe the areas to which various congressional statutes apply. 12 We do not find that these examples sufficiently outline the meaning of the word to furnish , 387] a definition that would include or exclude this base. While the general purpose of the Congress in the enactment of the Fair Labor Standards Act is clear13 no , 388] such definite indication of the purpose to include or exclude leased areas, such as the Bermuda base, in the word 'possession' appears. We cannot even say, 'We see what you are driving at, but you have not said it, and therefore we shall go on as before.'14 Under such circumstances, our duty as a Court is to construe the word 'possession' as our judgment instructs us the lawmakers, within constitutional limits, would have done had they acted at the time of the legislation with the present situation in mind. The word 'possession' in the Act includes far off islands whose economy differs markedly from our own. Thus the employees of Puerto Rico, Guam, the guano islands, Samoa and the Virgin Islands have the protection of the Act. See C.F.R.,1947 Supp., 4393. Since drastic change in local economy was not a deterrent in these instances, there is no reason for saying that the wage-hour provisions of the Act were not intended to bring these minimum changes into the labor market of the bases. 15 Since its passage of the Act, Congress has extended the coverage of the Longshoremen's and Harborworkers' Compensation Act to the bases acquired since January 1, , 389] 1940, and to Guantanomo Bay. 16 When one reads the comprehensive definition of the reach of the Fair Labor Standards Act, it is difficult to formulate a boundary to its coverage short of areas over which the power of Congress extends, by our sovereignty or by voluntary grant of the authority by the sovereign lessor to legislate upon maximum hours and minimum wages. Under the terms of the lease, we feel sure that the house of assembly of Bermuda would not also undertake legislation similar to our Fair Labor Standards Act to control labor relations on the base. Since citizens of this country would be numerous among employees on the bases, the natural legislative impulse would be to give these employees the same protection that was given those similarly employed on the islands of the Pacific. Under subdivisions 2 and 3, supra, we have pointed out that the power rests in Congress under our Constitution and the provisions of the lease to regulate labor relations on the base. We have also pointed out that it is a matter , 390] of statutory interpretation as to whether or not statutes are effective beyond the limits of national sovereignty. It depends upon the purpose of the statute. Where as here the purpose is to regulate labor relations in an area vital to our national life, it seems reasonable to interpret its provisions to have force where the nation has sole power, rather than to limit the coverage to sovereignty. Such an interpretation is consonant with the Administrator's inclusion of the Panama Canal Zone within the meaning of 'possession.' We think these facts indicate an intention on the part of Congress in its use of the word 'possession' to have the Act apply to employer- employee relationship on foreign territory under lease for bases. Such a construction seems to us to carry out the remedial enactment in accord with the purpose of Congress. Affirmed. Mr. Justice JACKSON, dissenting. The serious question in this case is not as to the meaning of the Fair Labor Standards Act. It means just what it says when it provides that it shall apply in any Territory or possession of the United States and I would apply it to every foot of soil that, up to the time of this decision, has been regarded as our possession. The real issue here, and it is a novel one, is whether this Court will construe the lease under which the United States occupies a military buse in Bermuda as adding it to our possessions. The labor for which overtime nder the Act is sought was performed for a government contractor on this military base. The base did not exist when the Act was passed and it does not either expressly or impliedly purport to cover work in that area, unless the word 'possession' shall be construed to include the leased lands. Whether it is appropriate or permissible to hold , 391] as matter of law that our tenure there constitutes the leasehold area a possession obviously turns on a reading of the lease from Great Britain. The Court of Appeals read the lease to give 'sweeping powers' to the United States and declared that 'the areas are subject to fully as complete control by the United States as obtains in other areas long known as 'possessions' of the United States.' It names as comparable possessions Alaska, Hawaii, Puerto Rico, Guam, Samoan Islands, Virgin Islands and the Canal Zone. This Court seems to approve that premise because it affirms, citing some if not all of the same examples; but it also says, '* * * it is difficult to formulate a boundary to its (the Act's) coverage short of areas over which the power of Congress extends * * * to legislate upon maximum hours and minimum wages.'1 Thus application of the Act to the leased area is put on two grounds: first, that the area is a possession of the United States; and second, since the Act applies to those 'engaged in commerce or in the production of goods for commerce,'2 it operates wherever Congress has power to act with respect to commerce. Presumably the Court will not shrink from applying the converse of the latter proposition; that the Act does not apply where this country or its nationals are not engaged in commerce. , 392] Bermuda and like bases are not, in my opinion, our possessions on a juridical and geopolitical footing with the possessions enumerated. I also believe that there is not and under the lease there can not be in the leased area any 'commerce' subject to the Act. To consider the bases as possessions in that sense is incompatible with the spirit of the negotiations and with the letter of the lease by which the bases were acquired. It enlarges the responsibilities which the United States was willing to accept and the privileges which Great Britain was willing to concede. This will appear from the history of the transaction whose meaning we interpret. When organized resistance in the Low Countries and in France went down and the German Wehrmacht stood poised on Europe's Atlantic seaboard, it was suspected, as it since has been proved, that the design for conquest embraced seizure of Atlantic islands as a pathway for future operations against the United States. 3 Disasters on land and sea had brought threat of invasion of the British Isles nearer to reality than at any time since the Spanish , 393] Armada. Consequently, Great Britain could divert no forces to the defense of her island possessions in our hemisphere, which after all were strategic spots to assail our commerce and stepping stones to our gateways. 4 Great Britain, however, desperately in need of destroyers to defend her shores, intimated a readiness to put the United States in a position to defend these islands and the Americas as a quid pro quo for overaged American destroyers. 5 Among those who saw in the development of air warfare a necessity for moving our air defense outposts seaward from the cities which dot our own shores, an influential and respected group favored asking England to cede her island possessions in this hemisphere to us as an outright transfer of sovereignty. If this cession had been asked and granted, the Court would now rightly hold the bases to be our 'possessions.' But it was President Roosevelt himself who determined for this country that it was the part of wisdom neither to seek nor to accept sovereignty or supreme authority over any part of these islands. He decided that it was in our self-interest to limit the responsibilities of the United States strictly to establishment, maintenance and operation of military, naval and air installations. His reasons have been partially disclosed6 and one of them, apparent to anyone , 394] even casually travelled in those islands, was the great disparity of social, economic and labor conditions between the islands and our Continent. Also he knew full well the different customs and institutions prevailing there, particularly the relations between the white, colored and native races, and the difficulty of assimilating them into the American pattern-a prospect that would arouse emotional tensions in this country as well as in the Islands and which indeed caused some anxiety even in Westminster. 7 Thus it was settled American policy, grounded, as I think, on the highest wisdom, that, whatever technical form the transaction should take, we should acquire no such responsibilities as would require us to import to those islands our laws, institutions and social conditions beyond the necessities of controlling a military base and its garrison, dependents and incidental personnel. Knowledge of that policy and purpose gives a measure of the novel and dubious grounds for the Court's present determination to put these bases upon the egislative and juridical footing of 'Territories and possessions.' It is a first step in the direction of the very imprudence that was sought to be avoided by the limited tenure devised for the bases. But if American interests neither require nor admit of the assumption that the bases have become our possessions, the bounds of the grant as understood and expressed by Great Britain deny it with even more compelling force. The confined character of the granted priv- , 395] ileges and their incompatibility with either sovereignty or proprietorship on our part appear from the letter of the Marquess of Lothian to Secretary Hull of September 2, 1940, which committed the United Kingdom to grant to the United States 'the lease for immediate establishment and use of Naval and Air bases and facilities for entrance thereto and the operation and protection thereof,' on the Great Bay of Bermuda. 8 All of the specific provisions of the formal lease were subsidiary to and within this general measure of the rights yielded. It comprehended all that it was intended to bestow and all that we intended to take. Its dimensions were well defined by Mr. Stimson as 'the right to fortify and defend.'9 Details of the formal lease do but emphasize the common purpose of Great Britain to so confine the concession and that of President Roosevelt to so circumscribe our responsibilities. The leasehold right of the United States, in war time or emergency, to conduct military operations on land, water or in the air, which was the heart of the matter for us, is without bounds or restrictions except for a pledge of good neighborliness and friendly cooperation in their exercise. The leasehold terms, however, are well chosen, carefully to deny every commercial and political right to the United States except as they are incidental and appurtenant to this primary military usufruct. American nationals cannot go there for any purpose other than governmental except in conformity to Bermudian laws. Its immigration laws are relaxed only to admit 'any member of the United States forces posted to a leased area' and 'any person (not being a national of a Power at war , 396] with His Majesty the King) employed by, or under, a contract with the Government of the United States in connection with the construction, maintenance, operation or defense of the Bases.' Even so, the lessee must submit to measures to identify such persons and to establish their status. In what formerly recognized possession of the United States mentioned by the Court is American citizens' privilege of ingress and egress, of transit and of residence, so limited? Private trade and commerce by our citizens likewise are wholly in control of the Colony and is no more dependent upon out laws than in any other part of the United Kingdom or any foreign country. Bermudian customs duties are waived only on material for construction and maintenance of our bases, for consumption by our garrisons and supporting personnel, and on their household goods; and we undertake to prevent abuse of this customs privilege and to prevent resale of such imports. This is not greater than the immunity allowed by every foreign country to our diplomatic corps and staffs, and the power reserved by Britain over imports and customs is wholly inconsistent with the concept that these are our possessions. The lease also expressly and unconditionally provides that no business can be established in the leased area and that no person shall habitually render any professional services except for the Government and its personnel. No wireless or submarine cable may be operated except for military purposes. Are such stifling restraints by another state consistent with the idea of our possession? Payment of local income and property taxes are only waived as against those in the area when they are members of our a med forces, employees engaged in our works or contractors with our Government. In short, no actual possession of the United States used by the Court as a standard of reference is so insulated from the United , 397] States in fiscal, social, economic, commercial and political affairs. In none is the commerce power of Congress so stripped of subject matter for regulation or our permissible range of activity so circumscribed. Possessions such as Puerto Rico, Guam, the guano islands, Samoa and the Virgin Islands, which the Court mentions as standards for the treatment of Bermuda, are, in vital respects, as different from it as night from day. Not one of them is subject to even a frivolous claim adverse to our complete ownership. They belong to us or they belong to no one. They are ceded territory over which United States sovereignty is as complete and as unquestioned as over the District of Columbia and they are subject to no dual control or divided allegiance. They are incorporated into our economy, freely trading in our markets, and 'protected' by our tariff walls. They are integrated with our social and, in some degree at least, with our political life as well; some of them being authorized to send delegates to our Congress. On the other hand, however, Bermuda never has ceased in its entirety to be a Crown Colony of Great Britain. Social, industrial and labor conditions prevailing at the Island bases are such that both nations made every effort to insulate them from the damaging effects of our limited occupation for military purposes. It seems to me unsound policy as well as capricious statutory interpretation for the Court blindly to mingle them by imposing statutory policies that were not shaped with their existence or peculiarities in mind. It may be that, in some matters, the same policies suited to our legitimate possessions will also be considered adaptable to the bases. But it is not necessarily or presumptively so, and where the bases are to be brought into our scheme of things, it should be deliberately and consciously done by the Congress, in particular matters and with particular , 398] regard to local conditions, 10 and perhaps after consultation with the United Kingdom or Colonial authorities. We should not by the process of judicial interpretation impose upon the bases not only the policies of the Act before us but those of many Acts not involved here and as to which we are even less informed. 11 , 399] Neither should we embark upon a course of making the same naked words mean one thing in one Act and something else in another. It cannot be pretended that such an interpretation as the Court announces is in response to any demonstrable intention of Congress on the , 400] subject, for when this Act was passed the Bermuda base was not in being nor was it within the contemplation of even the more foresighted. It should be enough to dispose of this matter to point out that the United States has no supreme authority or sovereign function in Bermuda, where every commer- , 401] cial activity is subject to control by another sovereign which is our political superior in the island. We have no commercial rights in Bermuda in the sense of private enterprise such as Congress by this Act sought to regulate. The United States cannot in good faith conduct or permit its nationals to engage in industry, manufacture or trade there. It cannot authorize them to conduct commerce there or to produce goods for commerce, which are the conditions which this Act itself makes necessary to bring the Labor Standards Act into play. To do so would be a flagrant breach of good faith with the United Kingdom and an overreaching of the people of Bermuda. Small wonder that the Department of State feels constrained to inform us that it 'regards as unfortunate' the conclusion of the court below, which is now affirmed, and adds a warning that any holding that the bases are 'possessions' of the United States in a political sense 'would not in the Department's view be calculated to improve our relations with that Government.'12 , 402] The Canal Zone has been cited as a possession with which Bermuda is comparable. But the Isthmian Canal Convention of 1903, which ceded the Canal Zone to the United States, provides in Art. III that the United States is to have 'all the rights, power and authority within the zone * * * which the United States would possess and exercise if it were the sovereign * * * to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.'13 Our State Department has firmly maintained that this treaty confers upon the United States complete power of commerce. 14 To such an extent, indeed, are we sovereign in the Canal Zone that Panama has been granted special commercial rights only by express and formal concession,15 and this Court has reviewed the history of the acquisition and oncluded that the title of the United States is cimplete and perfect. Wilson v. Shaw, , at pages 32, 33, 234, 235. , 403] But the Panama Canal history may well be explanatory of a paragraph of the Bermudian lease from Great Britain, upon which the court below and respondent heavily rely and which this Court cites as one of the significant provisions. This clause provides that the 'leased area is not a part of the territory of the United States for the purpose of coastwise shipping laws so as to exclude British vessels from trade between the United States and the leased area.' From this provision it is sought to draw the conclusion that for all other purposes the area is part of the territory of the United States. The remaining provisions of the identical paragraph are sufficient to negative any idea that the territory becomes a United States possession. 16 But coastwise shipping privileges had been the subject of friction between the United States and Great Britain over the Panama Canal and the plain purport of the article is to say that we do not want to repeat that experience. The Panama Canal Act of 1912, 37 Stat. 560, 562, exempted American coastwise shipping from tolls, which the British Government represented to be a violation of the Hay-Pauncefote Treaty of 1901, 32 Stat. 1903, and which it considered a corollary of the Clayton- Bulwer Treaty of 1850, 9 Stat. 995. President Wilson recommended that Congress repeal the exemption favoring American coastwise shipping as against British shipping17 and the action , 404] was taken only after a bitter and extensive debate. 18 I think that the clause, instead of being read to create a possession of the leased bases would, in the light of our tendency to favor our shipping, be more accurately read , 405] to say 'even for the purpose of coastwise shipping, the leased area shall not be considered a possession.' Guantanamo Naval Base, also referred to, is a leased base in Cuba upon which we have agreed that 'no person, partnership or corporation shall be permitted to establish or maintain a commercial, industrial or other enterprise.' But Guantanomo has been ruled by the Attorney General not to be a possession;19 it has not been listed by the State Department as among our 'non-self-governing territories,'20 and the Administrator of the very Act before us has not listed it among our possessions. 21 Its treatment confirms our view that neither is Bermuda a possession. Among responsible agencies of the United States, this Court alone insists that the Bermuda bases are possessions. The Department of Justice files a brief urging the Court against this position; the Department of State warns of its dangers and harmful effects upon our foreign relations; the Wage-Hour Administrator ruled administratively against coverage in Bermuda. 22 Congress , 406] has shown that it has not regarded the leased areas as 'possessions.' 23 Heretofore it has been thought that the Court should follow rather than overrule the Executive department in matters of this kind. 24 , 407] What I have said does not reflect the slightest doubt about the power of Congress to make government contractors, doing work in Bermuda or anywhere else in the world, whether in our own or in foreign possessions, pay time-and-a-half for overtime or to enforce almost any , 408] labor policy upon them. 25 The power of Congress, by appropriate legislation, to govern such a relationship is not impaired if we hold that the place where the contract is performed is not our 'possession.' The holding that it is a possession is not essential to enable Congress to act but serves only the purpose of expanding the coverage of this Act to the bases without specific action by Congress. We need not resort to such an unwarranted and disturbing interpretation of our relations with Bermuda and the United Kingdom in order to preserve the full power of Congress to extend all proper protection to the wages and hours of all personnel at the base, because they are and can be there only by virtue of government assignment or government contracts. In summary: Congress made the Act applicable in our 'possessions.' There is no indication or reason to believe that, had Congress considered the matter, it would have regarded our tenure in the Bermuda base as creating a 'possession,' or would have applied an Act regulating private employment to an area where no such private enterprise could exist. There is no indication of a purpose to apply the Act to an exclusively military operation; indeed the Act indicates the contrary by exempting government employees from its operation. 26 It would not concern the United Kingdom, or the Colony of Bermuda, if the United States should require its contractors to pay overtime, upon any assumptions which do not imply a possession adverse to theirs. But I do think it will cause understandable anxiety if this Court does it by holding, as matter of law, that the leased areas are possessions of the United States, like those we , 409] govern to the exclusion of all others. Such a decision by this Court initiates a philosophy of annexation and establishes a psychological accretion to our possessions at the expense of our lessors, not unlikely to be received in more critical quarters abroad as confirmation of the suspicion that commitments made by our Executive are lightly repudiated by another branch of our Government. It should be the scrupulous concern of every branch of our Government not to overreach any commitment or limitation to which any branch has agreed. 27 I would reverse the judgment below and direct dismissal of the complaint. > 28 I am authorized to state that The CHIEF JUSTICE, Mr. Justice FRANKFURTER and Mr. Justice BURTON join in this opinion. |
0 | Respondent Oakland Cannabis Buyers' Cooperative was organized to distribute marijuana to qualified patients for medical purposes. The United States sued to enjoin the Cooperative and its executive director, also a respondent (together, the Cooperative), under the Controlled Substances Act. The United States argued that the Cooperative's activities violated the Act's prohibitions on distributing, manufacturing, and possessing with the intent to distribute or manufacture a controlled substance. The District Court enjoined the Cooperative's activities, but the Cooperative continued to distribute marijuana. The District Court found the Cooperative in contempt, rejecting its defense that any distributions were medically necessary. The court later rejected the Cooperative's motion to modify the injunction to permit medically necessary distributions. The Cooperative appealed, and the Ninth Circuit reversed and remanded the ruling on the motion to modify the injunction. According to the Ninth Circuit, medical necessity is a legally cognizable defense likely applicable in the circumstances, the District Court mistakenly believed it had no discretion to issue an injunction more limited in scope than the Controlled Substances Act, and the District Court should have weighed the public interest and considered factors such as the serious harm in depriving patients of marijuana in deciding whether to modify the injunction.Held: 1. There is no medical necessity exception to the Controlled Substances Act's prohibitions on manufacturing and distributing marijuana. Pp. 5-11. (a) Because that Act classifies marijuana as a schedule I controlled substance, it provides only one express exception to the prohibitions on manufacturing and distributing the drug: Government-approved research projects. The Cooperative's contention that a common-law medical necessity defense should be written into the Act is rejected. There is an open question whether federal courts ever have authority to recognize a necessity defense not provided by statute. But that question need not be answered to resolve the issue presented here, for the terms of the Controlled Substances Act leave no doubt that the medical necessity defense is unavailable. Pp. 5-7. (b) Under any conception of legal necessity, the defense cannot succeed when the legislature itself has made a determination of values. Here, the Act reflects a determination that marijuana has no medical benefits worthy of an exception (other than Government-approved research). Whereas other drugs can be dispensed and prescribed for medical use, see 21 U. S. C. §829, the same is not true for marijuana, which has "no currently accepted medial use" at all, §811. This conclusion is supported by the structure of the Act, which divides drugs into five schedules, depending in part on whether a drug has a currently accepted medical use, and then imposes restrictions according to the schedule in which it has been placed. The Attorney General is authorized to include a drug in schedule I, the most restrictive schedule, only if the drug has no currently accepted medical use. The Cooperative errs in arguing that, because Congress, instead of the Attorney General, placed marijuana into that schedule, marijuana can be distributed when medically necessary. The statute treats all schedule I drugs alike, and there is no reason why drugs that Congress placed there should be subject to fewer controls than those that the Attorney General placed there. Also rejected is the Cooperative's argument that a drug may be found medically necessary for a particular patient or class even when it has not achieved general acceptance as a medical treatment. It is clear from the text of the Act that Congress determined that marijuana has no medical benefits worthy of an exception granted to other drugs. The statute expressly contemplates that many drugs have a useful medical purpose, see §801(1), but it includes no exception at all for any medical use of marijuana. This Court is unwilling to view that omission as an accident and is unable, in any event, to override a legislative determination manifest in the statute. Finally, the canon of constitutional avoidance has no application here, because there is no statutory ambiguity. Pp. 7-11. 2. The discretion that courts of equity traditionally possess in fashioning relief does not serve as a basis for affirming the Ninth Circuit in this case. To be sure, district courts properly acting as courts of equity have discretion unless a statute clearly provides otherwise. But the mere fact that the District Court had discretion does not suggest that the court, when evaluating the motion, could consider any and all factors that might relate to the public interest or the parties' conveniences, including medical needs. Equity courts cannot ignore Congress' judgment expressed in legislation. Their choice is whether a particular means of enforcement should be chosen over another permissible means, not whether enforcement is preferable to no enforcement at all. To the extent a district court considers the public interest and parties' conveniences, the court is limited to evaluating how those factors are affected by the selection of an injunction over other enforcement mechanisms. Because the Controlled Substances Act covers even those who have what could be termed a medical necessity, it precludes consideration of the evidence that the Ninth Circuit deemed relevant. Pp. 11-15.190 F. 3d 1109, reversed and remanded. Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O'Connor, Scalia, and Kennedy, JJ., joined. Stevens, J., filed an opinion concurring in the judgment, in which Souter and Ginsburg, JJ., joined. Breyer, J., took no part in the consideration or decision of the case.UNITED STATES, PETITIONER v. OAKLANDCANNABIS BUYERS' COOPERATIVEand JEFFREY JONESon writ of certiorari to the united states court ofappeals for the ninth circuit[May 14, 2001] Justice Thomas delivered the opinion of the Court. The Controlled Substances Act, 84 Stat. 1242, 21 U. S. C. §801 et seq., prohibits the manufacture and distribution of various drugs, including marijuana. In this case, we must decide whether there is a medical necessity exception to these prohibitions. We hold that there is not.I In November 1996, California voters enacted an initiative measure entitled the Compassionate Use Act of 1996. Attempting "[t]o ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes," Cal. Health & Safety Code Ann. §11362.5 (West Supp. 2001), the statute creates an exception to California laws prohibiting the possession and cultivation of marijuana. These prohibitions no longer apply to a patient or his primary caregiver who possesses or cultivates marijuana for the patient's medical purposes upon the recommendation or approval of a physician. Ibid. In the wake of this voter initiative, several groups organized "medical cannabis dispensaries" to meet the needs of qualified patients. United States v. Cannabis Cultivators Club, 5 F. Supp. 2d 1086, 1092 (ND Cal. 1998). Respondent Oakland Cannabis Buyers' Cooperative is one of these groups. The Cooperative is a not-for-profit organization that operates in downtown Oakland. A physician serves as medical director, and registered nurses staff the Cooperative during business hours. To become a member, a patient must provide a written statement from a treating physician assenting to marijuana therapy and must submit to a screening interview. If accepted as a member, the patient receives an identification card entitling him to obtain marijuana from the Cooperative. In January 1998, the United States sued the Cooperative and its executive director, respondent Jeffrey Jones (together, the Cooperative), in the United States District Court for the Northern District of California. Seeking to enjoin the Cooperative from distributing and manufacturing marijuana,1 the United States argued that, whether or not the Cooperative's activities are legal under California law, they violate federal law. Specifically, the Government argued that the Cooperative violated the Controlled Substances Act's prohibitions on distributing, manufacturing, and possessing with the intent to distribute or manufacture a controlled substance. 21 U. S. C. §841(a). Concluding that the Government had established a probability of success on the merits, the District Court granted a preliminary injunction. App. to Pet. for Cert. 39a-40a, 5 F. Supp. 2d, at 1105. The Cooperative did not appeal the injunction but instead openly violated it by distributing marijuana to numerous persons, App. to Pet. for Cert. at 21a-23a. To terminate these violations, the Government initiated contempt proceedings. In defense, the Cooperative contended that any distributions were medically necessary. Marijuana is the only drug, according to the Cooperative, that can alleviate the severe pain and other debilitating symptoms of the Cooperative's patients. Id., at 29a. The District Court rejected this defense, however, after determining there was insufficient evidence that each recipient of marijuana was in actual danger of imminent harm without the drug. Id., at 29a-32a. The District Court found the Cooperative in contempt and, at the Government's request, modified the preliminary injunction to empower the United States Marshal to seize the Cooperative's premises. Id., at 37a. Although recognizing that "human suffering" could result, the District Court reasoned that a court's "equitable powers [do] not permit it to ignore federal law." Ibid. Three days later, the District Court summarily rejected a motion by the Cooperative to modify the injunction to permit distributions that are medically necessary. The Cooperative appealed both the contempt order and the denial of the Cooperative's motion to modify. Before the Court of Appeals for the Ninth Circuit decided the case, however, the Cooperative voluntarily purged its contempt by promising the District Court that it would comply with the initial preliminary injunction. Consequently, the Court of Appeals determined that the appeal of the contempt order was moot. 190 F. 3d 1109, 1112-1113 (1999). The denial of the Cooperative's motion to modify the injunction, however, presented a live controversy that was appealable under 28 U. S. C. §1292(a)(1). Reaching the merits of this issue, the Court of Appeals reversed and remanded. According to the Court of Appeals, the medical necessity defense was a "legally cognizable defense" that likely would apply in the circumstances. 190 F. 3d, at 1114. Moreover, the Court of Appeals reasoned, the District Court erroneously "believed that it had no discretion to issue an injunction that was more limited in scope than the Controlled Substances Act itself." Id., at 1114-1115. Because, according to the Court of Appeals, district courts retain "broad equitable discretion" to fashion injunctive relief, the District Court could have, and should have, weighed the "public interest" and considered factors such as the serious harm in depriving patients of marijuana. Ibid. Remanding the case, the Court of Appeals instructed the District Court to consider "the criteria for a medical necessity exemption, and, should it modify the injunction, to set forth those criteria in the modification order." Id., at 1115. Following these instructions, the District Court granted the Cooperative's motion to modify the injunction to incorporate a medical necessity defense.2 The United States petitioned for certiorari to review the Court of Appeals' decision that medical necessity is a legally cognizable defense to violations of the Controlled Substances Act. Because the decision raises significant questions as to the ability of the United States to enforce the Nation's drug laws, we granted certiorari. 531 U. S. 1010 (2000).II The Controlled Substances Act provides that, "[e]xcept as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally ... to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance." 21 U. S. C. §841(a)(1). The subchapter, in turn, establishes exceptions. For marijuana (and other drugs that have been classified as "schedule I" controlled substances), there is but one express exception, and it is available only for Government-approved research projects, §823(f). Not conducting such a project, the Cooperative cannot, and indeed does not, claim this statutory exemption. The Cooperative contends, however, that notwithstanding the apparently absolute language of §841(a), the statute is subject to additional, implied exceptions, one of which is medical necessity. According to the Cooperative, because necessity was a defense at common law, medical necessity should be read into the Controlled Substances Act. We disagree. As an initial matter, we note that it is an open question whether federal courts ever have authority to recognize a necessity defense not provided by statute. A necessity defense "traditionally covered the situation where physical forces beyond the actor's control rendered illegal conduct the lesser of two evils." United States v. Bailey, 444 U. S. 394, 410 (1980). Even at common law, the defense of necessity was somewhat controversial. See, e.g., Queen v. Dudley & Stephens, 14 Q. B. 273 (1884). And under our constitutional system, in which federal crimes are defined by statute rather than by common law, see United States v. Hudson, 7 Cranch 32, 34 (1812), it is especially so. As we have stated: "Whether, as a policy matter, an exemption should be created is a question for legislative judgment, not judicial inference." United States v. Rutherford, 442 U. S. 544, 559 (1979). Nonetheless, we recognize that this Court has discussed the possibility of a necessity defense without altogether rejecting it. See, e.g., Bailey, supra, at 415.3 We need not decide, however, whether necessity can ever be a defense when the federal statute does not expressly provide for it. In this case, to resolve the question presented, we need only recognize that a medical necessity exception for marijuana is at odds with the terms of the Controlled Substances Act. The statute, to be sure, does not explicitly abrogate the defense.4 But its provisions leave no doubt that the defense is unavailable. Under any conception of legal necessity, one principle is clear: The defense cannot succeed when the legislature itself has made a "determination of values." 1 W. LaFave & A. Scott, Substantive Criminal Law §5.4, p. 629 (1986). In the case of the Controlled Substances Act, the statute reflects a determination that marijuana has no medical benefits worthy of an exception (outside the confines of a Government-approved research project). Whereas some other drugs can be dispensed and prescribed for medical use, see 21 U. S. C. §829, the same is not true for marijuana. Indeed, for purposes of the Controlled Substances Act, marijuana has "no currently accepted medical use" at all. §811. The structure of the Act supports this conclusion. The statute divides drugs into five schedules, depending in part on whether the particular drug has a currently accepted medical use. The Act then imposes restrictions on the manufacture and distribution of the substance according to the schedule in which it has been placed. Schedule I is the most restrictive schedule.5 The Attorney General can include a drug in schedule I only if the drug "has no currently accepted medical use in treatment in the United States," "has a high potential for abuse," and has "a lack of accepted safety for use ... under medical supervision." §§812(b)(1)(A)-(C). Under the statute, the Attorney General could not put marijuana into schedule I if marijuana had any accepted medical use. The Cooperative points out, however, that the Attorney General did not place marijuana into schedule I. Congress put it there, and Congress was not required to find that a drug lacks an accepted medical use before including the drug in schedule I. We are not persuaded that this distinction has any significance to our inquiry. Under the Cooperative's logic, drugs that Congress places in schedule I could be distributed when medically necessary whereas drugs that the Attorney General places in schedule I could not. Nothing in the statute, however, suggests that there are two tiers of schedule I narcotics, with drugs in one tier more readily available than drugs in the other. On the contrary, the statute consistently treats all schedule I drugs alike. See, e.g., §823(a) (providing criteria for Attorney General to consider when determining whether to register an applicant to manufacture schedule I controlled substances), §823(b) (providing criteria for Attorney General to consider when determining whether to register an applicant to distribute schedule I controlled substances), §823(f) (providing procedures for becoming a government-approved research project), §826 (establishing production quotas for schedule I drugs). Moreover, the Cooperative offers no convincing explanation for why drugs that Congress placed on schedule I should be subject to fewer controls than the drugs that the Attorney General placed on the schedule. Indeed, the Cooperative argues that, in placing marijuana and other drugs on schedule I, Congress "wishe[d] to assert the most restrictive level of controls created by the [Controlled Substances Act]." Brief for Respondents 24. If marijuana should be subject to the most restrictive level of controls, it should not be treated any less restrictively than other schedule I drugs. The Cooperative further argues that use of schedule I drugs generally — whether placed in schedule I by Congress or the Attorney General — can be medically necessary, notwithstanding that they have "no currently accepted medical use." According to the Cooperative, a drug may not yet have achieved general acceptance as a medical treatment but may nonetheless have medical benefits to a particular patient or class of patients. We decline to parse the statute in this manner. It is clear from the text of the Act that Congress has made a determination that marijuana has no medical benefits worthy of an exception. The statute expressly contemplates that many drugs "have a useful and legitimate medical purpose and are necessary to maintain the health and general welfare of the American people," §801(1), but it includes no exception at all for any medical use of marijuana. Unwilling to view this omission as an accident, and unable in any event to override a legislative determination manifest in a statute, we reject the Cooperative's argument.6 Finally, the Cooperative contends that we should construe the Controlled Substances Act to include a medical necessity defense in order to avoid what it considers to be difficult constitutional questions. In particular, the Cooperative asserts that, shorn of a medical necessity defense, the statute exceeds Congress' Commerce Clause powers, violates the substantive due process rights of patients, and offends the fundamental liberties of the people under the Fifth, Ninth, and Tenth Amendments. As the Cooperative acknowledges, however, the canon of constitutional avoidance has no application in the absence of statutory ambiguity. Because we have no doubt that the Controlled Substances Act cannot bear a medical necessity defense to distributions of marijuana, we do not find guidance in this avoidance principle. Nor do we consider the underlying constitutional issues today. Because the Court of Appeals did not address these claims, we decline to do so in the first instance. For these reasons, we hold that medical necessity is not a defense to manufacturing and distributing marijuana.7 The Court of Appeals erred when it held that medical necessity is a "legally cognizable defense." 190 F. 3d, at 1114. It further erred when it instructed the District Court on remand to consider "the criteria for a medical necessity exemption, and, should it modify the injunction, to set forth those criteria in the modification order." Id., at 1115.III The Cooperative contends that, even if the Controlled Substances Act forecloses the medical necessity defense, there is an alternative ground for affirming the Court of Appeals. This case, the Cooperative reminds us, arises from a motion to modify an injunction to permit distributions that are medically necessary. According to the Cooperative, the Court of Appeals was correct that the District Court had "broad equitable discretion" to tailor the injunctive relief to account for medical necessity, irrespective of whether there is a legal defense of necessity in the statute. Id., at 1114. To sustain the judgment below, the argument goes, we need only reaffirm that federal courts, in the exercise of their equity jurisdiction, have discretion to modify an injunction based upon a weighing of the public interest.8 We disagree. Although district courts whose equity powers have been properly invoked indeed have discretion in fashioning injunctive relief (in the absence of a statutory restriction), the Court of Appeals erred concerning the factors that the district courts may consider in exercising such discretion.A As an initial matter, the Cooperative is correct that, when district courts are properly acting as courts of equity, they have discretion unless a statute clearly provides otherwise. For "several hundred years," courts of equity have enjoyed "sound discretion" to consider the "necessities of the public interest" when fashioning injunctive relief. Hecht Co. v. Bowles, 321 U. S. 321, 329-330 (1944). See also id., at 329 ("The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it"); Weinberger v. Romero-Barcelo, 456 U. S. 305, 312 (1982) ("In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction"). Such discretion is displaced only by a "clear and valid legislative command." Porter v. Warner Holding Co., 328 U. S. 395, 398 (1946). See also Romero-Barcelo, supra, at 313 ("Of course, Congress may intervene and guide or control the exercise of the courts' discretion, but we do not lightly assume that Congress has intended to depart from established principles"). The Cooperative is also correct that the District Court in this case had discretion. The Controlled Substances Act vests district courts with jurisdiction to enjoin violations of the Act, 21 U. S. C. §882(a). But a "grant of jurisdiction to issue [equitable relief] hardly suggests an absolute duty to do so under any and all circumstances," Hecht, supra, at 329 (emphasis omitted). Because the District Court's use of equitable power is not textually required by any "clear and valid legislative command," the court did not have to issue an injunction. TVA v. Hill, 437 U. S. 153 (1978), does not support the Government's contention that the District Court lacked discretion in fashioning injunctive relief. In Hill, the Court held that the Endangered Species Act of 1973 required the District Court to enjoin completion of a dam, whose operation would either eradicate the known population of the snail darter or destroy its critical habitat. Id., at 193-195. The District Court lacked discretion because an injunction was the "only means of ensuring compliance." Romero-Barcelo, supra, at 314 (explaining why the District Court in Hill lacked discretion). Congress' "order of priorities," as expressed in the statute, would be deprived of effect if the District Court could choose to deny injunctive relief. Hill, supra, at 194. In effect, the District Court had only a Hobson's choice. By contrast, with respect to the Controlled Substances Act, criminal enforcement is an alternative, and indeed the customary, means of ensuring compliance with the statute. Congress' resolution of the policy issues can be (and usually is) upheld without an injunction.B But the mere fact that the District Court had discretion does not suggest that the District Court, when evaluating the motion to modify the injunction, could consider any and all factors that might relate to the public interest or the conveniences of the parties, including the medical needs of the Cooperative's patients. On the contrary, a court sitting in equity cannot "ignore the judgment of Congress, deliberately expressed in legislation." Virginian R. Co. v. Railway Employees, 300 U. S. 515, 551 (1937). A district court cannot, for example, override Congress' policy choice, articulated in a statute, as to what behavior should be prohibited. "Once Congress, exercising its delegated powers, has decided the order of priorities in a given area, it is ... for the courts to enforce them when enforcement is sought." Hill, 437 U. S., at 194. Courts of equity cannot, in their discretion, reject the balance that Congress has struck in a statute. Id., at 194-195. Their choice (unless there is statutory language to the contrary) is simply whether a particular means of enforcing the statute should be chosen over another permissible means; their choice is not whether enforcement is preferable to no enforcement at all.9 Consequently, when a court of equity exercises its discretion, it may not consider the advantages and disadvantages of nonenforcement of the statute, but only the advantages and disadvantages of "employing the extraordinary remedy of injunction," Romero-Barcelo, 456 U. S., at 311, over the other available methods of enforcement. Cf. id., at 316 (referring to "discretion to rely on remedies other than an immediate prohibitory injunction") To the extent the district court considers the public interest and the conveniences of the parties, the court is limited to evaluating how such interest and conveniences are affected by the selection of an injunction over other enforcement mechanisms.C In this case, the Court of Appeals erred by considering relevant the evidence that some people have "serious medical conditions for whom the use of cannabis is necessary in order to treat or alleviate those conditions or their symptoms," that these people "will suffer serious harm if they are denied cannabis," and that "there is no legal alternative to cannabis for the effective treatment of their medical conditions." 190 F. 3d, at 1115. As explained above, in the Controlled Substances Act, the balance already has been struck against a medical necessity exception. Because the statutory prohibitions cover even those who have what could be termed a medical necessity, the Act precludes consideration of this evidence. It was thus error for the Court of Appeals to instruct the District Court on remand to consider "the criteria for a medical necessity exemption, and, should it modify the injunction, to set forth those criteria in the modification order." Ibid.* * * The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.It is so ordered. Justice Breyer took no part in the consideration or decision of this case.UNITED STATES, PETITIONER v. OAKLANDCANNABIS BUYERS' COOPERATIVEand JEFFREY JONESon writ of certiorari to the united states court ofappeals for the ninth circuit[May 14, 2001] Justice Stevens, with whom Justice Souter and Justice Ginsburg join, concurring in the judgment. Lest the Court's narrow holding be lost in its broad dicta, let me restate it here: "[W]e hold that medical necessity is not a defense to manufacturing and distributing marijuana." Ante, at 10 (emphasis added). This confined holding is consistent with our grant of certiorari, which was limited to the question "[w]hether the Controlled Substances Act, 21 U. S. C. 801 et seq., forecloses a medical necessity defense to the Act's prohibition against manufacturing and distributing marijuana, a Schedule I controlled substance." Pet. for Cert. (I) (emphasis added). And, at least with respect to distribution, this holding is consistent with how the issue was raised and litigated below. As stated by the District Court, the question before it was "whether [respondents'] admitted distribution of marijuana for use by seriously ill persons upon a physician's recommendation violates federal law," and if so, whether such distribution "should be enjoined pursuant to the injunctive relief provisions of the federal Controlled Substances Act." United States v. Cannabis Cultivators Club, 5 F. Supp. 2d 1086, 1091 (ND Cal. 1998) (emphasis added). Accordingly, in the lower courts as well as here, respondents have raised the medical necessity defense as a justification for distributing marijuana to cooperative members, and it was in that context that the Ninth Circuit determined that respondents had "a legally cognizable defense." 190 F. 3d 1109, 1114 (1999). The Court is surely correct to reverse that determination. Congress' classification of marijuana as a schedule I controlled substance — that is, one that cannot be distributed outside of approved research projects, see 21 U. S. C. §§812, 823(f), 829 — makes it clear that "the Controlled Substances Act cannot bear a medical necessity defense to distributions of marijuana," ante, at 10 (emphasis added)).1 Apart from its limited holding, the Court takes two unwarranted and unfortunate excursions that prevent me from joining its opinion. First, the Court reaches beyond its holding, and beyond the facts of the case, by suggesting that the defense of necessity is unavailable for anyone under the Controlled Substances Act. Ante, at 6-9, 10, n. 7, 15. Because necessity was raised in this case as a defense to distribution, the Court need not venture an opinion on whether the defense is available to anyone other than distributors. Most notably, whether the defense might be available to a seriously ill patient for whom there is no alternative means of avoiding starvation or extraordinary suffering is a difficult issue that is not presented here.2 Second, the Court gratuitously casts doubt on "whether necessity can ever be a defense" to any federal statute that does not explicitly provide for it, calling such a defense into question by a misleading reference to its existence as an "open question." Ante, at 5, 6. By contrast, our precedent has expressed no doubt about the viability of the common-law defense, even in the context of federal criminal statutes that do not provide for it in so many words. See, e.g., United States v. Bailey, 444 U. S. 394, 415 (1980) ("We therefore hold that, where a criminal defendant is charged with escape and claims that he is entitled to an instruction on the theory of duress or necessity, he must proffer evidence of a bona fide effort to surrender or return to custody as soon as the claimed duress or necessity had lost its coercive force"); id., at 415, n. 11 ("Our principal difference with the dissent, therefore, is not as to the existence of such a defense but as to the importance of surrender as an element of it" (emphasis added)). Indeed, the Court's comment on the general availability of the necessity defense is completely unnecessary because the Government has made no such suggestion. Cf. Brief for Petitioner 17-18 (narrowly arguing that necessity defense cannot succeed if legislature has already "canvassed the issue" and precluded it for a particular statute (internal quotation marks omitted)). The Court's opinion on this point is pure dictum. The overbroad language of the Court's opinion is especially unfortunate given the importance of showing respect for the sovereign States that comprise our Federal Union. That respect imposes a duty on federal courts, whenever possible, to avoid or minimize conflict between federal and state law, particularly in situations in which the citizens of a State have chosen to "serve as a laboratory" in the trial of "novel social and economic experiments without risk to the rest of the country." New State Ice Co. v. Liebmann, 285 U. S. 262, 311 (1932) (Brandeis, J., dissenting). In my view, this is such a case.3 By passing Proposition 215, California voters have decided that seriously ill patients and their primary caregivers should be exempt from prosecution under state laws for cultivating and possessing marijuana if the patient's physician recommends using the drug for treatment.4 This case does not call upon the Court to deprive all such patients of the benefit of the necessity defense to federal prosecution, when the case itself does not involve any such patients. An additional point deserves emphasis. This case does not require us to rule on the scope of the District Court's discretion to enjoin, or to refuse to enjoin, the possession of marijuana or other potential violations of the Controlled Substances Act by a seriously ill patient for whom the drug may be a necessity. Whether it would be an abuse of discretion for the District Court to refuse to enjoin those sorts of violations, and whether the District Court may consider the availability of the necessity defense for that sort of violator, are questions that should be decided on the authority of cases such as Hecht Co. v. Bowles, 321 U. S. 321 (1944), and Weinberger v. Romero-Barcelo, 456 U. S. 305 (1982), and that properly should be left "open" by this case. I join the Court's judgment of reversal because I agree that a distributor of marijuana does not have a medical necessity defense under the Controlled Substances Act. I do not, however, join the dicta in the Court's opinion.FOOTNOTESFootnote 1 The Government requested, and the District Court granted, an injunction that prohibited the possession of marijuana with the intent to manufacture and distribute, as well as the distribution and manufacture of marijuana. For simplicity, in this opinion, we refer to these activities collectively as distributing and manufacturing marijuana. The legal issues are the same for all of these activities.Footnote 2 The amended preliminary injunction reaffirmed that the Cooperative is generally enjoined from manufacturing, distributing, and possessing with the intent to manufacture or distribute marijuana, but it carved out an exception for cases of medical necessity. Specifically, the District Court ordered that "[t]he foregoing injunction does not apply to the distribution of cannabis by [the Cooperative] to patient-members who (1) suffer from a serious medical condition, (2) will suffer imminent harm if the patient-member does not have access to cannabis, (3) need cannabis for the treatment of the patient-member's medical condition, or need cannabis to alleviate the medical condition or symptoms associated with the medical condition, and (4) have no reasonable legal alternative to cannabis for the effective treatment or alleviation of the patient-member's medical condition or symptoms associated with the medical condition because the patient-member has tried all other legal alternatives to cannabis and the alternatives have been ineffective in treating or alleviating the patient-member's medical condition or symptoms associated with the medical condition, or the alternatives result in side effects which the patient-member cannot reasonably tolerate." App. to Pet. for Cert. 16a-17a. The United States appealed the District Court's order amending the preliminary injunction. At the Government's request, we stayed the order pending the appeal. 530 U. S. 1298 (2000). The Court of Appeals has postponed oral argument pending our decision in this case. Footnote 3 The Cooperative is incorrect to suggest that Bailey has settled the question whether federal courts have authority to recognize a necessity defense not provided by statute. There, the Court rejected the necessity defense of a prisoner who contended that adverse prison conditions justified his prison escape. The Court held that the necessity defense is unavailable to prisoners, like Bailey, who fail to present evidence of a bona fide effort to surrender as soon as the claimed necessity had lost its coercive force. 444 U. S., at 415. It was not argued, and so there was no occasion to consider, whether the statute might be unable to bear any necessity defense at all. And although the Court noted that Congress "legislates against a background of Anglo-Saxon common law" and thus "may" have contemplated a necessity defense, the Court refused to "balanc[e] [the] harms," explaining that "we are construing an Act of Congress, not drafting it." Id., at 415, n. 11.Footnote 4 We reject the Cooperative's intimation that elimination of the defense requires an "explici[t]" statement. Brief for Respondents 21. Considering that we have never held necessity to be a viable justification for violating a federal statute, see supra, at 5-6, and n. 3, and that such a defense would entail a social balancing that is better left to Congress, we decline to set the bar so high.Footnote 5 As noted, supra, at 5, the only express exception for schedule I drugs is the Government-approved research project, see 21 U. S. C. §823(f). Unlike drugs in other schedules, see §829, schedule I drugs cannot be dispensed under a prescription.Footnote 6 The Government argues that the 1998 "sense of the Congress" resolution, 112 Stat. 2681-760 to 2681-761, supports its position that Congress has foreclosed the medical necessity defense. Entitled "Not Legalizing Marijuana for Medicinal Use," the resolution declares that "Congress continues to support the existing Federal legal process for determining the safety and efficacy of drugs and opposes efforts to circumvent this process by legalizing marijuana, and other Schedule I drugs, for medicinal use without valid scientific evidence and the approval of the Food and Drug Administration." Because we conclude that the Controlled Substances Act cannot sustain the medical necessity defense, we need not consider whether the 1998 "sense of the Congress resolution" is additional evidence of a legislative determination to eliminate the defense. Footnote 7 Lest there be any confusion, we clarify that nothing in our analysis, or the statute, suggests that a distinction should be drawn between the prohibitions on manufacturing and distributing and the other prohibitions in the Controlled Substances Act. Furthermore, the very point of our holding is that there is no medical necessity exception to the prohibitions at issue, even when the patient is "seriously ill" and lacks alternative avenues for relief. Indeed, it is the Cooperative's argument that its patients are "seriously ill," see, e.g., Brief for Respondents 11, 13, 17, and lacking "alternatives," see, e.g., id., at 13. We reject the argument that these factors warrant a medical necessity exception. If we did not, we would be affirming instead of reversing the Court of Appeals. Finally, we share Justice Stevens' concern for "showing respect for the sovereign States that comprise our Federal Union." Post, at 3 (opinion concurring in judgment). However, we are "construing an Act of Congress, not drafting it." United States v. Bailey, 444 U. S. 394, 415, n. 11 (1980). Because federal courts interpret, rather than author, the federal criminal code, we are not at liberty to rewrite it. Nor are we passing today on a constitutional question, such as whether the Controlled Substances Act exceeds Congress' power under the Commerce Clause.Footnote 8 Notwithstanding Justice Stevens' concerns, post, at 4, it is appropriate for us to address this issue because this case arises from a motion to modify the injunction, because the Court of Appeals held that the District Court misconstrued its equitable discretion, and because the Cooperative offers this conclusion as an alternative ground for affirmance.Footnote 9 Hecht Co. v. Bowles, 321 U. S. 321 (1944), for example, held that the District Court was not required to issue an injunction to restrain violations of the Emergency Price Control Act of 1942 and regulations thereunder when "some `other order' might be more appropriate, or at least so appear to the court." Id., at 328 (quoting statutory provision that enabled district court to issue an injunction, a restraining order, "or other order"). Weinberger v. Romero-Barcelo, 456 U. S. 305 (1982), held that a District Court had discretion not to issue an injunction precluding the United States Navy from releasing ordnance into water, but to rely on other means of ensuring compliance, including ordering the Navy to obtain a permit. Id., at 314-318. See also Amoco Production Co. v. Gambell, 480 U. S. 531, 544-546 (1987) (holding that a District Court did not err in declining to issue an injunction to bar exploratory drilling on Alaskan public lands, because the district court's decision "did not undermine" the policy of the Alaska National Interest Lands Conservation Act, 16 U. S. C. §3120, and because the Secretary of the Interior had other means of meaningfully complying with the statute).FOOTNOTESFootnote 1 In any event, respondents do not fit the paradigm of a defendant who may assert necessity. The defense "traditionally covered the situation where physical forces beyond the actor's control rendered illegal conduct the lesser of two evils." United States v. Bailey, 444 U. S. 394, 410 (1980); see generally 1 W. LaFave & A. Scott, Substantive Criminal Law §5.4, pp. 627-640 (1986). Respondents, on the other hand, have not been forced to confront a choice of evils — violating federal law by distributing marijuana to seriously ill patients or letting those individuals suffer — but have thrust that choice upon themselves by electing to become distributors for such patients. Of course, respondents also cannot claim necessity based upon the choice of evils facing seriously ill patients, as that is not the same choice respondents face.Footnote 2 As a result, perhaps the most glaring example of the Court's dicta is its footnote 7, where it opines that "nothing in our analysis, or the statute, suggests that a distinction should be drawn between the prohibitions on manufacturing and distributing and the other prohibitions in the Controlled Substances Act." Ante, at 10, n. 7.Footnote 3 Cf. Feeney, Bush Backs States' Rights on Marijuana: He Opposes Medical Use But Favors Local Control, Dallas Morning News, Oct. 20, 1999, p. 6A, 1999 WL 28018944 (then-Governor Bush supporting state self-determination on medical marijuana use).Footnote 4 Since 1996, six other States — Alaska, Colorado, Maine, Nevada, Oregon, and Washington — have passed medical marijuana initiatives, and Hawaii has enacted a similar measure through its legislature. See Alaska Stat. Ann. §§11.71.090, 17.37.010 to 17.37.080 (2000); Colo. Const., Art. XVIII, §14; Haw. Rev. Stat. §§329-121 to 329-128 (Supp. 2000); Me. Rev. Stat. Ann., Tit. 22, §2383-B(5) (2000); Nev. Const., Art. 4, §38; Ore. Rev. Stat. §§475.300 to 475.346 (1999); Wash. Rev. Code §§69.51A.005 to 69.51A.902 (1997 and Supp. 2000-2001). |
0 | Under the Federal Rules of Criminal Procedure, the filing of a notice of appeal in a criminal case after expiration of the time prescribed in Rule 37 (a) (2) does not confer jurisdiction upon the Court of Appeals, even though the District Court, proceeding under Rule 45 (b), has found that the late filing of the notice of appeal was the result of "excusable neglect." Pp. 220-230. (a) To recognize a late notice of appeal is actually to "enlarge" the period for taking an appeal, which is explicitly forbidden by Rule 45 (b). Pp. 224-229. (b) The policy question whether greater flexibility should be allowed with respect to the time for taking an appeal must be resolved through the rule-making process, not by judicial decision; and it cannot be resolved by the Court of Appeals. Pp. 229-230. App. D.C. 200, 260 F.2d 718, reversed.Beatrice Rosenberg argued the cause for the United States. With her on the brief were Solicitor General Rankin, Assistant Attorney General Wilkey, J. Dwight Evans, Jr. and Theodore George Gilinsky.I. William Stempil argued the cause and filed a brief for respondents.MR. JUSTICE WHITTAKER delivered the opinion of the Court.Respondents were indicted for murder in the District Court for the District of Columbia, and upon a trial were found guilty by a jury of the lesser included offense of manslaughter. After their motions for a new trial were considered and denied, the court entered judgment of conviction on May 7, 1958. Twenty-one days thereafter, on May 28, respondents separately filed in the District Court their notices of appeal. On the same day they each asked and were granted by the District Court, leave to prosecute their appeals in forma pauperis. On June 30, the Government moved the Court of Appeals to dismiss respondents' appeals for want of jurisdiction, because their notices of appeal were not filed within 10 days after entry of the judgment. In opposition to the motion, affidavits of respondent Travit Robinson, and of counsel for both respondents, were filed in the Court of Appeals. They tended to show that the late filing of the notices of appeal was due to a misunderstanding as to whether the notices were to be filed by respondents themselves or by their counsel.1 The Court of Appeals, one judge dissenting, held that the notices of appeal, although filed 11 days after expiration of the time prescribed in Rule 37 (a) (2) of the Federal Rules of Criminal Procedure,2 were sufficient to confer jurisdiction of the appeals if the District Court actually had found, under Rule 45 (b), that the failure to file the notices of appeal within 10 days after entry of the judgment "was the result of excusable neglect." Being unable to determine from the record whether the District Court had so found, the Court of Appeals, on October 2, remanded to the District Court "for supplementation of the record" on that score, meanwhile holding in abeyance the Government's motion to dismiss. On October 8, the District Court "ordered that the record reflect that the appeals were allowed and failure to act was due to excusable neglect under Rule 45 (b) of the Federal Rules of Criminal Procedure." On November 5, the Court of Appeals en banc, two judges dissenting, denied the Government's petition for rehearingApp. D.C. 200, 260 F.2d 718. Because of the importance of the question to the proper and uniform administration of the Federal Rules of Criminal Procedure, we granted certiorari. .The single question presented is whether the filing of a notice of appeal in a criminal case after expiration of the time prescribed in Rule 37 (a) (2) confers jurisdiction of the appeal upon the Court of Appeals if the District Court, proceeding under Rule 45 (b), has found that the late filing of the notice of appeal was the result of excusable neglect.There being no dispute about the fact that the notices of appeal were not filed within the 10-day period prescribed by Rule 37 (a) (2),3 the answer to the question presented depends upon the proper interpretation of Rule 45 (b). It provides: "Enlargement. When an act is required or allowed to be done at or within a specified time, the court for cause shown may at any time in its discretion (1) with or without motion or notice, order the period enlarged if application therefor is made before the expiration of the period originally prescribed or as extended by a previous order or (2) upon motion permit the act to be done after the expiration of the specified period if the failure to act was the result of excusable neglect; but the court may not enlarge the period for taking any action under Rules 33, 34 and 35, except as otherwise provided in those rules, or the period for taking an appeal." In interpreting that Rule, the Court of Appeals took the view that, although "the District Court has no authority to grant a greater period than ten days for taking an [appeal, it] may, however, if satisfied that the failure to note an appeal within ten days is excusable, permit late filing." It thought that there was "ample justification in reason for different treatment of pre-expiration and post-expiration applications"; that if a defendant "can make a timely application for an extension of time, he can readily and with less effort file the notice of appeal itself." But if, "for some cause amounting legally to `excusable neglect' the party fails to take any action during the prescribed time, the rule seems plainly to allow the District Court discretion to permit him to file a late notice of appeal." It thought that so doing would not be to "enlarge" the period for taking an appeal, but rather would be only to "permit the act to be done" after expiration of the specified period. This conclusion has, at least, enough surface plausibility to require a detailed examination of the language, judicial interpretations, and history of Rule 45 (b) and the related Federal Rules of Criminal Procedure.On its face, Rule 45 (b) appears to be quite plain and clear. It specifically says that "the court may not enlarge ... the period for taking an appeal." We think that to recognize a late notice of appeal is actually to "enlarge" the period for taking an appeal. Giving the words of 45 (b) their plain meaning, it would seem that the conclusion of the Court of Appeals is in direct conflict with that Rule. No authority was cited by the Court of Appeals in support of its conclusion, nor is any supporting authority cited by respondents here. The Government insists, it appears correctly, that there is no case that supports the Court of Appeals' conclusion. Every other decision to which we have been cited, and that we have found, holds that the filing of a notice of appeal within the 10-day period prescribed by Rule 37 (a) (2) is mandatory and jurisdictional.4 It is quite significant that Rule 45 (b) not only prohibits the court from enlarging the period for taking an appeal, but, by the same language in the same sentence, also prohibits enlargement of the period for taking any action under Rules 33, 34 and 35, except as provided in those Rules. That language is: "... but the court may not enlarge the period for taking any action under Rules 33, 34 and 35, except as otherwise provided in those Rules, or the period for taking an appeal." If, as the Court of Appeals has held, the delayed filing of a notice of appeal - found to have resulted from "excusable neglect" - is sufficient to confer jurisdiction of the appeal, it would consistently follow that a District Court may, upon a like finding, permit delayed filing of a motion for new trial under Rule 33,5 of a motion in arrest of judgment under Rule 34,6 and the reduction of sentence under Rule 35,7 at any time - months or even years - after expiration of the periods specifically prescribed in those Rules.This is not only contrary to the language of those Rules, but also contrary to the decisions of this Court. In United States v. Smith, , it was held that the power of the District Court sua sponte to grant a new trial under Rule 33 is limited to the time fixed in that Rule. There, quite like here, it was argued "that because the literal language of the Rule places the five-day limit only on the making of the motion [for a new trial], it does not limit the power of the court later to grant [a new trial] ... ." 331 U.S., at 473. This Court rejected the contention that such power "lingers on indefinitely," and pointed out that the Rules, in abolishing the limitation based on the Court Term, did not substitute indefiniteness, but prescribed precise times within which the power of the courts must be confined. 331 U.S., at 474. See also Marion v. United States, 171 F.2d 185 (C. A. 9th Cir.); Drown v. United States, 198 F.2d 999 (C. A. 9th Cir.). The same rule must apply with respect to the time within which a motion in arrest of judgment may be filed under Rule 34. Similarly, it has been held that a District Court may not reduce a sentence under Rule 35 after expiration of the 60-day period prescribed by that Rule regardless of excuse. United States v. Hunter, 162 F.2d 644 (C. A. 7th Cir.). Cf. Affronti v. United States, .The right of appeal in criminal cases in federal courts is of relatively recent origin. Carroll v. United States, . By the Act of February 24, 1933, 47 Stat. 904 (now 18 U.S.C. 3772) Congress first gave this Court authority to promulgate rules regulating the time and manner for taking appeals in criminal cases. One of the principal purposes was to eliminate delays in such appeals. H. R. Rep. No. 2047, 72d Cong., 2d Sess., to accompany S. 4020. The first Criminal Appeals Rules promulgated under that Act were the 13 Rules effective September 1, 1934. . Rule III provided a 5-day time limit for the taking of an appeal from a judgment of conviction. It was uniformly held that Rule III was mandatory and jurisdictional, and appeals not taken within that time appear always to have been dismissed regardless of excuse.8 From this review, it would seem that there is nothing in the language of Rule 45 (b), or in the judicial interpretations of that Rule or its predecessor, which supports the conclusion of the Court of Appeals. We turn, then, to the history of Rule 45 (b) to see whether any support for the court's conclusion can be found in that source.Under the Act of June 29, 1940, 54 Stat. 688, as amended (now 18 U.S.C. 3771), this Court was authorized to prescribe Rules of Criminal Procedure to and including verdict, which would become effective upon passive acceptance by Congress. Under that Act and the previous authority (the Act of February 24, 1933, 47 Stat. 904 - now 18 U.S.C. 3772), and with the aid of an advisory committee, this Court promulgated the Federal Rules of Criminal Procedure. Rules 32 through 39 were made effective by order of the Court, , and the remaining Rules became effective by acceptance of Congress. What are now Rules 37 (a) (2) and 45 (b) underwent a number of draft changes before adoption. The first preliminary draft of Rule 37 (a) (2) changed from 5 days to 10 days the time limit for the taking of an appeal, but of more significance is the fact that the preliminary draft of that Rule stated, in effect, that when a court imposes sentence upon a defendant, represented by appointed counsel or not represented by any counsel, the court shall ask the defendant whether he wishes to appeal and, if he answers in the affirmative, "the court shall direct the clerk forthwith to prepare, file, and serve on behalf of the defendant a notice of appeal or shall extend the time specified by rule for the filing of a notice of appeal."9 (Emphasis added.) In conformity with that draft proposal, the preliminary draft of what is now Rule 45 (b)10 stated: "... but it may not enlarge ... the period for taking an appeal except as provided in Rule 35 (a) (2)." The limited provision for an extension of the time within which to appeal that was contained in the first preliminary draft of those Rules was eliminated by the second preliminary draft11 and never reappeared. This seems almost conclusively to show a deliberate intention to eliminate any power of the courts to extend the time for the taking of an appeal.But there is more. The prototype for Rule 45 (b) was Rule 6 of the Federal Rules of Civil Procedure.12 When the original Criminal Rules were being prepared, the limiting clause of Rule 6 (b) of the Federal Rules of Civil Procedure stated: "... but it may not enlarge the period for taking any action under Rule 59, except as stated in subdivision (c) thereof, or the period for taking an appeal as provided by law." It had consistently been held that Civil Rule 6 (b) was mandatory and jurisdictional and could not be extended regardless of excuse.13 It must be presumed that the Advisory Committee and the Justices of this Court were aware of the limiting language of Civil Rule 6 (b) and of the judicial construction it had received when they prepared and adopted the Federal Rules of Criminal Procedure. No support for the conclusion of the Court of Appeals can be found in this history of Rule 45 (b).Rule 45 (b) says in plain words that "... the court may not enlarge ... the period for taking an appeal." The courts have uniformly held that the taking of an appeal within the prescribed time is mandatory and jurisdictional. The history of Rule 45 (b) shows that consideration was given to the matter of vesting a limited discretion in the courts to grant an extension of time for the taking of an appeal, but, upon further consideration, the idea was deliberately abandoned. It follows that the plain words, the judicial interpretations, and the history, of Rule 45 (b) not only fail to support, but actually oppose, the conclusion of the Court of Appeals, and therefore its judgment cannot stand.That powerful policy arguments may be made both for and against greater flexibility with respect to the time for the taking of an appeal is indeed evident. But that policy question, involving, as it does, many weighty and conflicting considerations, must be resolved through the rule-making process and not by judicial decision. United States v. Isthmian S. S. Co., . If, by that process, the courts are ever given power to extend the time for the filing of a notice of appeal upon a finding of excusable neglect, it seems reasonable to think that some definite limitation upon the time within which they might do so would be prescribed; for otherwise, as under the decision of the court below, many appeals might - almost surely would - be indefinitely delayed. Certainly that possibility would unnecessarily14 produce intolerable uncertainty and confusion. Whatever may be the proper resolution of the policy question involved, it was beyond the power of the Court of Appeals to resolve it. Reversed.MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS dissent, as they share the view of Judge BazelonApp. D.C. 200, 201, 260 F.2d 718, 719, that an extension of time, granted after the 10-day period for an appeal has passed, is not an "enlargement" of the time in the narrow sense in which Rule 45 (b) uses the word. |
7 | Appellee, a public storage warehouseman, was charged by criminal information with violations of 301 (k) of the Federal Food, Drug, and Cosmetic Act, which prohibits acts involving defacement of labels of food and other specified articles held for sale after interstate shipment and the "doing of any other act" with respect to such articles which results in their being adulterated or misbranded. Under 402 (a) (4) adulteration is defined to include holding food under insanitary conditions whereby it may have been contaminated with filth. The District Court, construing the statute under the rule of ejusdem generis as applying only to acts of the same general nature as those specifically enumerated with respect to label-defacing and as being too vague to include the mere "holding" of articles, dismissed the information for failure to state an offense. Held: 1. Section 301 (k), as is clear from its wording and legislative history, defines two distinct offenses - one concerning label-defacing and the other concerning adulteration; and the criminal information properly charged an offense for adulteration under the Act. Pp. 89-92. 2. Section 301 (k) is not limited to one holding title to goods and therefore applies to a public storage warehouseman whether he owns the goods stored or not. P. 92. 217 F. Supp. 638, reversed and remanded.Louis F. Claiborne argued the cause for the United States. With him on the brief were Solicitor General Cox, Assistant Attorney General Miller, Beatrice Rosenberg and William W. Goodrich.James S. Taylor argued the cause for appellee. With him on the brief was Clarence G. Ashby. MR. JUSTICE STEWART delivered the opinion of the Court.Section 301 (k) of the Federal Food, Drug, and Cosmetic Act prohibits the "alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic, if such act is done while such article is held for sale ... after shipment in interstate commerce and results in such article being adulterated or misbranded."1 Section 402 of the Act provides, among other things, that "[a] food shall be deemed to be adulterated - (a) ... (3) if it consists in whole or in part of any filthy, putrid, or decomposed substance, or if it is otherwise unfit for food; or (4) if it has been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health ... ."2 The question presented by this appeal is whether a criminal information which alleges the holding of food by a public storage warehouseman (after interstate shipment and before ultimate sale) under insanitary conditions in a building accessible to rodents, birds and insects, where it may have become contaminated with filth, charges an offense under 301 (k).The Government filed a criminal information containing allegations to this effect3 in the District Court for the Middle District of Florida, charging the appellee, a public storage warehouseman, with violations of 301 (k). The court construed 301 (k) as not applying to the mere act of "holding" goods, and dismissed the information for failure to allege an offense under the statute. 217 F. Supp. 638, 639. The order of dismissal was appealed by the Government under the Criminal Appeals Act, which gives this Court jurisdiction to review on direct appeal a judgment dismissing an information on the basis of a "construction of the statute upon which the ... information is founded."4 We noted probable jurisdiction. . For the reasons which follow, we reverse the judgment of the District Court.In arriving at its construction of the statute, the District Court reasoned that 301 (k) "as it is presently written, is too vague and indefinite to apply to the mere act of `holding' goods." 217 F. Supp., at 639. Accordingly, "in an effort to uphold the statute as constitutional," the court applied the rule of ejusdem generis to limit the words "the doing of any other act" in 301 (k) to acts of "the same general nature" as those specifically enumerated in the subsection, i. e., acts relating to the alteration, mutilation, destruction, obliteration, or removal of the labeling of articles. Ibid. We find such reliance on the rule of ejusdem generis misplaced; its application to 301 (k) is contrary to both the text and legislative history of the subsection, and unnecessary to a constitutionally permissible construction of the statute.The language of 301 (k) unambiguously defines two distinct offenses with respect to food held for sale after interstate shipment. As originally enacted in 1938, the subsection prohibited "[t]he alteration, mutilation, destruction, obliteration, or removal" of the label, or "the doing of any other act" with respect to the product which "results in such article being misbranded."5 The section was amended in 1948 to prohibit additionally "the doing of any other act" with respect to the product which "results in such article being adulterated."6 The acts specifically enumerated in the original enactment relate to the offense of misbranding through labeling or the lack thereof. The separate offense of adulteration, on the other hand, is concerned solely with deterioration or contamination of the commodity itself. For the most part, acts resulting in misbranding and acts resulting in adulteration are wholly distinct. Consequently, since the enumerated label-defacing offenses bear no textual or logical relation to the scope of the general language condemning acts of product adulteration,7 application of the rule of ejusdem generis to limit the words "the doing of any other act" resulting in product adulteration in 301 (k) to acts of the same general character as those specifically enumerated with respect to misbranding is wholly inappropriate.Moreover, the legislative history makes plain that no such application of the rule was intended. As the House Committee Report on the proposed 1948 amendment unequivocally stated: "It seems clear that under the subsection as now in force the rule of ejusdem generis would not apply in interpreting the words `or the doing of any other act ...,' and it is even more clear that this rule will not apply in the interpretation of the subsection as amended by this bill."8 It is equally clear from this legislative history that Congress intended to proscribe the particular conduct charged in the information filed below - the holding of food under insanitary conditions whereby it may have become contaminated. The House Committee Report noted that the amended section would "penalize, among other acts resulting in adulteration or misbranding, the act of holding articles under insanitary conditions whereby they may become contaminated with filth or rendered injurious to health," and emphasized that the Committee intended the amendments to be applied to their fullest constitutional limits.9 Congress chose statutory language appropriate to effectuate this purpose. Section 301 (k), as amended, prohibits "any ... act" which results in adulteration of the product. And food is adulterated if it "has been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth."10 This language defines with particularity an explicit standard of conduct. Section 301 (k), read together with the definition of food adulteration contained in 402 (a) (4), therefore, gives ample warning that the "holding" or storing of food under insanitary conditions whereby it may have become contaminated is prohibited.It is settled law in the area of food and drug regulation that a guilty intent is not always a prerequisite to the imposition of criminal sanctions. Food and drug legislation, concerned as it is with protecting the lives and health of human beings, under circumstances in which they might be unable to protect themselves, often "dispenses with the conventional requirement for criminal conduct - awareness of some wrongdoing. In the interest of the larger good it puts the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger. United States v. Balint, ." United States v. Dotterweich, .It is argued, nevertheless, that the Government in this case is seeking to impose criminal sanctions upon one "who is, by the very nature of his business powerless" to protect against this kind of contamination, however high the standard of care exercised. Whatever the truth of this claim, it involves factual proof to be raised defensively at a trial on the merits. We are here concerned only with the construction of the statute as it relates to the sufficiency of the information, and not with the scope and reach of the statute as applied to such facts as may be developed by evidence adduced at a trial.Finally, the appellee attempts to uphold the dismissal of the information on a ground not relied on by the District Court. The appellee says that it was a bailee of the food, not a seller, and that it was not holding the food for sale within the meaning of 301 (k). Both the language and the purpose of the statute refute this construction. The language of 301 (k) does not limit its application to one holding title to the goods, and since the danger to the public from insanitary storage of food is the same regardless of the proprietary status of the person storing it, the purpose of the legislation - to safeguard the consumer from the time the food is introduced into the channels of interstate commerce to the point that it is delivered to the ultimate consumer - would be substantially thwarted by such an unwarranted reading of the statutory language. United States v. Kocmond, 200 F.2d 370, 372; cf. United States v. Sullivan, ; United States v. Dotterweich, .Accordingly, we hold that a criminal information charging a public storage warehouseman with holding food (after interstate shipment and before ultimate sale) under insanitary conditions whereby it may have become contaminated with filth, charges an offense under 301 (k) of the Federal Food, Drug, and Cosmetic Act. The order of the District Court dismissing the information is therefore reversed and the case is remanded to that court for further proceedings consistent with this opinion. Reversed and remanded. |
10 | Following institution of this original action by New Hampshire against Maine to locate the lateral marine boundary separating the States between the mouth of Portsmouth Harbor and the entrance to Gosport Harbor in the Isles of Shoals, a settlement agreement was reached and a joint motion was filed for entry of judgment by consent, together with a proposed decree, based on a stipulated record, which the Special Master concluded should be submitted to the Court, at the same time expressing the view that the decree was impermissible under Vermont v. New York, , but recommending its entry if the Court concluded otherwise. Thereafter the Special Master declared the entire case, including the proposed consent decree, to be under submission. The States had agreed with the Special Master's conclusion that King George II's decree of 1740 fixed the boundary in the Piscataqua (now Portsmouth) Harbor area but had differed over the location of certain points by the terms of the decree. The consent decree embodied the States' agreement upon the meaning of those terms. Held: 1. Entry of the consent decree proposes a wholly permissible final resolution of the controversy both as to the facts and the law and comports with the Court's Art. III function. The States' agreement can therefore be effectuated. The proposed decree in Vermont v. New York, supra, provided that "no findings shall be made" and that "it shall not constitute an adjudication of any issue of fact or law, or evidence, or any admission by any party with respect to any such issue," whereas the proposed consent decree here records the States' agreement as to the meaning and extent of hitherto imprecisely described locations in line with the relevant evidence; nor is anything like the "arbitral" function for resolution of future disputes in Vermont v. New York involved in the proposed consent decree here. Pp. 367-369. 2. Adoption of the proposed consent decree does not involve a compact under Art. I, 10, cl. 3, requiring the consent of Congress. The application of that Clause is limited to agreements "directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon ... the just supremacy of the United States," Virginia v. Tennessee, . Here the litigant States are not adjusting the boundary between them, which was fixed by the 1740 decree; the consent decree simply locates precisely the already existing boundary, and neither State is enhancing its power and threatening supremacy of the Federal Government. Pp. 369-370. BRENNAN, J., delivered the opinion of the Court, in which BURGER, C. J., and STEWART, MARSHALL, POWELL, and REHNQUIST, JJ., joined. WHITE, J., filed a dissenting opinion, in which BLACKMUN and STEVENS, JJ., joined, post, p. 370.Richard F. Upton argued the cause for plaintiff on exceptions to the Report of the Special Master. With him on the briefs were Warren B. Rudman, Attorney General of New Hampshire, and David H. Souter, Deputy Attorney General.Edward F. Bradley, Jr., Assistant Attorney General of Maine, argued the cause for defendant on exceptions to the Report. With him on the briefs were Joseph E. Brennan, Attorney General, and Donald G. Alexander and Robert J. Stolt, Assistant Attorneys General.* [Footnote *] Stephen R. Katz filed a brief for the New Hampshire Commercial Fishermen's Assn. as amicus curiae.MR. JUSTICE BRENNAN delivered the opinion of the Court.Both New Hampshire and Maine have filed exceptions to the Report of the Special Master in this original action brought by New Hampshire against Maine, , to locate the lateral marine boundary separating the States between the mouth of Portsmouth Harbor and the entrance to Gosport Harbor in the Isles of Shoals.1 Prior to trial the Attorneys General of New Hampshire and Maine agreed upon a settlement and jointly filed a "Motion for Entry of Judgment by Consent of Plaintiff and Defendant," together with a proposed consent decree, based on a stipulated record.2 The Special Master thereafter, without further hearing but with supplemental briefs, declared the entire case, including the proposed consent decree, to be under submission.The Special Master "concluded that the proposed consent decree should be submitted to the Court for its consideration," Report of Special Master 3, but expressed the view that rejection of the decree must be recommended as not permissible under the principle of Vermont v. New York, , that "mere settlements by the parties acting under compulsions and motives that have no relation to performance of [the Court's] Art. III functions" do not relieve the Court of its constitutional duty to decide the merits of the controversy between the States. However, the Special Master recommended entry of the consent decree if its entry would be consistent with performance of the Court's Art. III function.3 We hold that entry of the consent decree is consistent with that function. We therefore sustain Maine's exception to the rejection of the proposed consent decree. Accordingly, we have no occasion to address the other exceptions filed by the States.The boundary in dispute was in fact fixed in 1740 by decree of King George II of England. That decree set the boundary as follows:"That the Dividing Line shall pass up thro the Mouth of Piscataqua Harbour and up the Middle of the River ... . And that the Dividing Line shall part the Isles of Shoals and run thro the Middle of the Harbour between the Islands to the Sea on the Southerly Side... ." The historical events that produced this 1740 decree, summarized briefly here, are detailed in the Special Master's Report. In the early 18th century, a major boundary dispute arose between the provinces of New Hampshire and Massachusetts regarding the southern border of New Hampshire. The legal issues focused on the Merrimack River, but the boundary between New Hampshire and the Maine portion of Massachusetts was also involved. When representatives of the two provinces were unable in 1731 to reach agreement, the New Hampshire representatives presented the matter to King George II. The King referred the dispute to the Board of Trade, which in 1735 recommended that commissioners from the other New England Colonies be designated to resolve the question. In 1737 the King accordingly appointed 20 members of the Provincial Councils of New York, New Jersey, Rhode Island, and Nova Scotia to serve as commissioners. Although much of the debate related only to the Merrimack question, the Piscataqua boundary between Maine and New Hampshire was also a point of controversy. The commission rendered its decision later that year, but both provinces appealed the decision to the King. In 1738 the King referred the matter to the Lords of the Committee of the Privy Council for Hearing Appeals from the Plantations, which recommended acceptance of the commission's resolution without change. In 1740 King George II signed a decree accepting this recommendation and, employing the quoted language, thereby permanently fixed the Maine-New Hampshire boundary. This boundary was the fixed boundary when the Union, including Massachusetts and New Hampshire, was formed, and when Maine was formally separated from Massachusetts and admitted to the Union.The States expressly agree with the conclusion of the Special Master that "the decree of 1740 fixed the boundary in the Piscataqua Harbor area." Their quarrel was over the location by the decree of the "Mouth of Piscataqua River," "Middle of the River," and "Middle of the Harbour" within the contemplation of the decree. The proposed consent decree embodies the States' agreement upon the meaning of those terms, and we hold that the Court may give effect to the States' agreement consistently with performance of our Art. III function and duty.The Special Master found that a "case or controversy" existed when this original action was filed, but that the effect of the compromise represented by the joint motion for entry of the consent decree was that "[a]t this point in time ... the moving papers do not propose a case or controversy in which the Court might apply `principles of law or equity to the facts, distilled by hearings or stipulations.' [Vermont v. New York, supra, at 277.]" Report of Special Master 3-4. This was true of the circumstances before the Court in Vermont v. New York, but it is not true of the circumstances before the Court in this case.The proposed consent decree in Vermont provided that "no findings shall be made" and that "it shall not constitute an adjudication on any issue of fact or law, or evidence, or any admission by any party with respect to any such issue." 417 U.S., at 271. The decree also provided for appointment by the Court of a Special Master authorized to consider all future disputes, after exhaustion of administrative and other remedies, and to file recommendations with the Court; these recommendations were to become decisions of the Court unless disapproved. Obviously this proposal "would materially change the function of the Court in these interstate contests." Id., at 277. If we were to agree to police prospectively the conduct of the parties, "we would be acting more in an arbitral rather than a judicial manner." Ibid.In contrast, the 1740 decree, not the proposed consent decree, permanently fixed the boundary between the States; the proposed consent decree does nothing except record the States' agreement upon the location of the "Mouth of Piscataqua River," "Middle of the River," and "Middle of the Harbour" within the contemplation of the 1740 decree. The consent decree expressly states that it "determines the lateral marine boundary line between New Hampshire and Maine from the inner Portsmouth Harbor to the breakwater at the end of the inner Gosport Harbor in the Isles of Shoals."The consent decree therefore proposes a wholly permissible final resolution of the controversy both as to facts and law. Nothing remotely resembling "arbitral" rather than "judicial" functions is involved, unlike the proposed consent decree in Vermont v. New York. Moreover, there is nothing to suggest that the location of the 1740 boundary agreed upon by the States is wholly contrary to relevant evidence, and we therefore see no reason not to give it effect, even if we would reach a different conclusion upon the same evidence. The nature of the dispute is such that the States' resolution of it does not fall into the category of agreements that we reject because acceptance would not be consistent with our Art. III function and duty. Vermont v. New York does not proscribe the acceptance of settlements between the States that merely have the effect, as here, of reasonably investing imprecise terms with definitions that give effect to a decree that permanently fixed the boundary between the States.New Hampshire suggests, however, that acceptance of the consent decree without an independent determination by the Court as to the validity of the legal principles on which it is based would be a circumvention of the Compact Clause, Art. I, 10, cl. 3. The premise of this argument is that the proposed settlement is an "Agreement or Compact" within the meaning of the Clause and thus requires the consent of Congress to be effective. We disagree.The application of the Compact Clause is limited to agreements that are "directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States." Virginia v. Tennessee, . Whether a particular agreement respecting boundaries is within the Clause will depend on whether "the establishment of the boundary line may lead or not to the increase of the political power or influence of the States affected, and thus encroach or not upon the full and free exercise of Federal authority." Id., at 520. See Wharton v. Wise, .The proposed consent decree plainly falls without the Compact Clause under this test. New Hampshire and Maine are not here adjusting the boundary between them; the boundary was fixed over two centuries ago by the 1740 decree, and the consent decree is directed simply to locating precisely this already existing boundary. Accordingly, neither State can be viewed as enhancing its power in any sense that threatens the supremacy of the Federal Government. The boundary defined by the proposed decree "takes effect, not as an alienation of territory, but as a definition of the true and ancient boundary." Virginia v. Tennessee, supra, at 522. See North Carolina v. Tennessee, .The proposed consent decree will be entered. So ordered. |
3 | Appellant, who had been seen to drive his car late at night from a parking lot and discharge a female at an apartment house, park on the street, and use a two-way radio, and who thereafter gave the police multiple addresses and denied knowledge of his friend's identity, was convicted of violating the Euclid, Ohio, "suspicious person ordinance," which makes it a crime to (1) wander about the streets or be abroad at late or unusual hours; (2) be at the time without visible or lawful business; and (3) fail satisfactorily to explain one's presence on the streets. His conviction was upheld on appeal. Held: The ordinance is unconstitutionally vague as applied to appellant since it gave insufficient notice that appellant's conduct in the parked car or in discharging his passenger was enough to show him to be "without visible or lawful business." Reversed.Niki Z. Schwartz argued the cause for appellant. With him on the brief was Joshua J. Kancelbaum.David J. Lombardo argued the cause for appellee. With him on the brief was William T. Monroe.PER CURIAM.Appellant Palmer was convicted by a jury of violating the City of Euclid's "suspicious person ordinance," that is, of being "[a]ny person who wanders about the streets or other public ways or who is found abroad at late or unusual hours in the night without any visible or lawful business and who does not give satisfactory account of himself." He was fined $50 and sentenced to 30 days in jail. The County Court of Appeals affirmed the judgment and appeal to the Supreme Court of Ohio was dismissed "for the reason that no substantial constitutional question exists herein." We noted probable jurisdiction. .We reverse the judgment against Palmer because the ordinance is so vague and lacking in ascertainable standards of guilt that, as applied to Palmer, it failed to give "a person of ordinary intelligence fair notice that his contemplated conduct is forbidden ... ." United States v. Harriss, .The elements of the crime defined by the ordinance apparently are (1) wandering about the streets or being abroad at late or unusual hours; (2) being at the time without visible or lawful business;* and (3) failing to give a satisfactory explanation for his presence on the streets. Palmer, in his car, was seen late at night in a parking lot. A female left his car and entered by the front door an adjoining apartment house. Palmer then pulled onto the street, parked with his lights on, and used a two-way radio. He was not armed. He said he had just let off a friend. He was then arrested. At the station he gave three different addresses for himself and said he did not know his friend's name or where she was going when she left his car. Palmer could reasonably be charged with knowing that he was on the streets at a late or unusual hour and that denying knowledge of his friend's identity and claiming multiple addresses amounted to an unsatisfactory explanation under the ordinance. But in our view the ordinance gave insufficient notice to the average person that discharging a friend at an apartment house and then talking on a car radio while parked on the street was enough to show him to be "without any visible or lawful business." Insofar as this record reveals, everything appellant did was quite visible and there is no suggestion whatsoever that what he did was unlawful under local, state, or federal law. If his conduct nevertheless satisfied the being-without-visible-or-lawful-business element of the ordinance, as the state courts must have held, it is quite unreasonable in our view to charge him with notice that such would be the construction of the ordinance. "The underlying principle is that no man shall be held criminally responsible for conduct which he could not reasonably understand to be proscribed." United States v. Harriss, supra, at 617; Bouie v. Columbia, ; Wright v. Georgia, .The judgment of the Supreme Court of Ohio is reversed. It is so ordered.MR. JUSTICE HARLAN concurs in the result.[Footnote *] The ordinance seemingly requires a "business" purpose to be on the streets. But it seems irrational to construe the ordinance as permitting only visible and lawful commercial activities on the streets, thus in effect converting the ordinance into a curfew with exceptions for lawful commercial conduct. Neither the lower court nor appellee city suggests that the ordinance should be construed in this manner or that anyone would expect that it would be so construed.MR. JUSTICE STEWART, with whom MR. JUSTICE DOUGLAS joins, concurring.While I agree with the Court that Euclid's "suspicious person ordinance" is unconstitutional as applied to the appellant, I would go further and hold that the ordinance is unconstitutionally vague on its face.A policeman has a duty to investigate suspicious circumstances, and the circumstance of a person wandering the streets late at night without apparent lawful business may often present the occasion for police inquiry. But in my view government does not have constitutional power to make that circumstance, without more, a criminal offense. |
0 | On respondent's direct appeal from a rape conviction, the California appellate courts rejected his contention that the prosecution's failure to turn over to him an exculpatory laboratory report stating that scientific tests failed to reveal the presence of sperm on vaginal smear slides taken from the victim or on her clothing, violated his right to a fair trial. Subsequently the Federal District Court upheld such contention in a habeas corpus petition and issued a conditional writ compelling respondent's release unless the State provided him with the report and retried him, and the Court of Appeals affirmed. But in advance of the scheduled retrial, it was discovered that the slides and the victim's clothing had been routinely destroyed after respondent's conviction had become final, and respondent moved to dismiss the charges on the ground that the destruction of this evidence deprived him of the opportunity for a fair trial. After the trial court had denied this motion, the California Court of Appeal and the Supreme Court denied respondent's applications for writs of prohibition. In the meantime the District Court granted respondent's motion to replace the conditional writ of habeas corpus with an absolute writ because of the destruction of evidence, and the Court of Appeals affirmed. Held: Respondent failed to exhaust available state remedies on the claim that formed the basis for the unconditional writ, and hence he is entitled to no relief based upon a claim with respect to which state remedies have not been exhausted. (a) Since the state appellate courts' denials of respondent's applications for writs of prohibition cannot be fairly taken to adjudicate the merits of his claim, and full posttrial appellate review is available if respondent is convicted again on retrial, the denial of the applications did not exhaust respondent's available state remedies. (b) Neither Fed. Rule Civ. Proc. 60 (b), which permits a district court to grant relief from a final order, nor 28 U.S.C. 2254, which requires exhaustion of available state remedies as a precondition to consideration of a federal habeas corpus petition, nor the two read together, permit a federal habeas court to maintain a continuing supervision over a retrial conducted pursuant to a conditional writ granted by the habeas court. Certiorari granted; reversed and remanded.PER CURIAM.Respondent Davis was convicted in 1967 in the Superior Court of Los Angeles County of rape, kidnaping, and oral copulation; he was sentenced to state prison. On direct appeal in the California courts, respondent argued, inter alia, that the failure of the state prosecutor in his case to turn over to him an exculpatory laboratory report, despite his request for all material reports, violated his Fourteenth Amendment right to a fair trial under our decision in Brady v. Maryland, . The laboratory report stated that scientific tests by police officials failed to reveal the presence of sperm either on vaginal smear slides taken from the victim after the rape or on clothing worn by the victim at the time of the rape. State courts rejected this contention on direct appeal.Respondent twice unsuccessfully pursued this contention in petitions for habeas corpus filed under 28 U.S.C. 2254 in the United States District Court for the Central District of California. In 1972 a third habeas corpus petition in that court proved more successful, and the District Court ruled that the failure of the prosecutor to supply respondent with the laboratory report denied him a fair trial under Brady, supra. The court issued a conditional writ of habeas corpus which provided that habeas corpus would issue, compelling the petitioner to release respondent from custody, unless California provided respondent with the laboratory report and moved to retry him within 60 days. This judgment was affirmed by the United States Court of Appeals for the Ninth Circuit.1 California moved to retry respondent in accordance with the terms of the conditional writ, and the case was set for trial in state court. The laboratory report forming the basis of respondent's Brady claim was turned over to him. In a discovery motion made in advance of trial, respondent requested the State to make the vaginal smear slides and clothing worn by the victim at the time of the rape available to him. Although this physical evidence had been available at respondent's prior trial, it was destroyed as a matter of police routine sometime during the six years between the time respondent's conviction became final and issuance of the conditional writ of habeas corpus.Respondent then moved in state court to dismiss the charges against him on the grounds that the routine destruction of this physical evidence constituted an incurable suppression of exculpatory evidence in violation of Brady which deprived him of any opportunity, present or future, to a fair trial. After a hearing the state trial court denied respondent's motion, finding that the physical evidence had not been willfully suppressed and further finding that it would not have materially aided respondent's defense.Respondent then filed an application for a writ of prohibition in the California Court of Appeal. During the pendency of this application, he also filed a motion in the United States District Court seeking to "modify" its prior conditional writ of habeas corpus and replace it with an order granting an absolute writ and enjoining any retrial on the pending state charges. The basis for this motion was the destruction of the clothing and slides. The District Court temporarily enjoined the pending retrial2 but deferred ruling on respondent's motion.The California Court of Appeal and the California Supreme Court denied respondent's applications for writs of prohibition without opinion. The District Court then, without permitting the trial to proceed in the state court, conducted a hearing of its own. The court held that destruction of the slides and clothing violated Brady, supra. In the opinion of the court the destruction of this evidence precluded certain additional scientific testing which might possibly have established that respondent was not the perpetrator of the crime, and since this defect was incurable, the court found that respondent could never receive a fair trial on the charges. Respondent's motion was granted.3 The United States Court of Appeals for the Ninth Circuit affirmed, and petitioner sought certiorari here from that judgment.Habeas corpus jurisdiction of persons in custody pursuant to the judgment of a state court is conferred on federal courts by 28 U.S.C. 2254. That statute requires exhaustion of available state remedies as a precondition to consideration of a federal habeas corpus petition: "(b) An application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment of a State court shall not be granted unless it appears that the applicant has exhausted the remedies available in the courts of the State, or that there is either an absence of available State corrective process or the existence of circumstances rendering such process ineffective to protect the rights of the prisoner. "(c) An applicant shall not be deemed to have exhausted the remedies available in the courts of the State, within the meaning of this section, if he has the right under the law of the State to raise, by any available procedure, the question presented." See, e. g., Nelson v. George, ; Irvin v. Dowd, ; Ex parte Royall, . In the instant case, the unavailability of the physical evidence sought by respondent in connection with his retrial was never raised until he filed his pretrial motion in state court to dismiss the charges.4 The issue was neither raised in nor considered by state courts during the course of his direct appeal from the first conviction or by the federal courts during the proceedings resulting in issuance of the conditional writ of habeas corpus. And respondent does not contest that, should he be convicted upon retrial, full appellate review in state courts will be available on whatever contentions he chooses to raise concerning the nonavailability of the physical evidence now sought.Under our decision in Picard v. Connor, , exhaustion of state remedies is required as a prerequisite to consideration of each claim sought to be presented in federal habeas: "We emphasize that the federal claim must be fairly presented to the state courts. If the exhaustion doctrine is to prevent `unnecessary conflict between courts equally bound to guard and protect rights secured by the Constitution,' Ex parte Royall, supra, at 251, it is not sufficient merely that the federal habeas applicant has been through the state courts. The rule would serve no purpose if it could be satisfied by raising one claim in the state courts and another in the federal courts." Id., at 275-276. While recognizing the exhaustion requirement for invoking federal habeas relief, the Court of Appeals found that 2254 did not preclude consideration of the additional contention raised in respondent's motion to amend the District Court's original conditional order for two reasons.First, the Court of Appeals felt that respondent's effort to secure a writ of prohibition from the state appellate courts on the grounds of destruction of the physical evidence constituted sufficient exhaustion of state remedies under these circumstances.Both the California Court of Appeal and the California Supreme Court denied the applications without opinion. In California it is well established that a writ of prohibition is an extraordinary writ, whose use for pretrial review is normally limited to "questions of first impression and general importance." People v. Medina, 6 Cal. 3d 484, 491, 492 P.2d 686, 690 (1972) (en banc). The denial of an application for writ of prohibition does not constitute, and cannot be fairly read as, an adjudication on the merits of the claim presented. Inclusion of an asserted point of error in a denied pretrial application for writ of prohibition does not bar raising the same points on post-trial direct appeal. Ibid.In Ex parte Hawk, , we held that denial of an application for an extraordinary writ by state appellate courts did not serve to exhaust state remedies where the denial could not be fairly taken as an adjudication of the merits of claims presented, and where normal state channels for review were available. In the instant case, denial by state appellate courts of respondent's applications cannot be fairly taken to be an adjudication of the merits of his claim and full post-trial appellate review is available if respondent is convicted. On these facts, the denial of respondent's applications did not serve to exhaust his available state remedies. The second reason advanced by the Court of Appeals was that the exhaustion requirement is inapplicable to the new contention raised in respondent's motion, since the motion was authorized under Fed. Rule Civ. Proc. 60 (b) (6) as a motion for relief from a final order. It reasoned that since the District Court would have granted an absolute writ if it had been presented with the destruction of the physical evidence at the time of issuance of the conditional writ, the District Court was justified under this rule in amending its prior judgment to make the writ absolute.Rule 60 (b) provides in part: "On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment ... for the following reasons: ... (6) any other reason justifying relief from the operation of the judgment." The Rule does not by its terms speak to the requirement of exhaustion of remedies as a prerequisite for federal habeas relief. The exhaustion requirement, Picard v. Connor, 404 U.S., at 276, is statutorily incorporated in 28 U.S.C. 2254 (b) and (c), and Fed. Rule Civ. Proc. 81 (a) (2) provides: "These rules are applicable to proceedings for admission to citizenship, habeas corpus, and quo warranto, to the extent that the practice in such proceedings is not set forth in statutes of the United States ... ." Since the exhaustion requirement is statutorily codified, even if Rule 60 (b) could be read to apply to this situation it could not alter the statutory command. The second reason advanced by the Court of Appeals is not persuasive, therefore, unless it was correct in its reasoning on the issue of exhaustion. We believe for the reasons previously stated that it was incorrect in its treatment of the exhaustion issue.Respondent failed to exhaust available state remedies on the claim which formed the basis for the unconditional writ, and he is entitled to no relief based upon a claim with respect to which state remedies have not been exhausted. Neither Rule 60 (b)C 2254, nor the two read together, permit a federal habeas court to maintain a continuing supervision over a retrial conducted pursuant to a conditional writ granted by the habeas court. Cf. Stefanelli v. Minard, .The motion of the respondent for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment of the Court of Appeals is reversed and the case is remanded to the District Court with directions to vacate the orders which it entered subsequent to the order granting a conditional writ of habeas corpus. It is so ordered.MR. JUSTICE DOUGLAS took no part in the consideration or decision of this case. |
2 | Pursuant to 6514 and 6515 of the New York State Education Law, authorizing disciplinary action against any physician "convicted in a court of competent jurisdiction, either within or without this state, of a crime," appellant's license to practice as a physician was suspended for six months, because he had been convicted in the United States District Court for the District of Columbia, under 2 U.S.C. 192, of failing to produce before a Congressional Committee certain papers subpoenaed by that Committee. Held: The New York law, on its face or as so construed and applied, does not violate the Due Process Clause of the Fourteenth Amendment. Pp. 443-456. (a) The decision of the highest state court that a violation of 2 U.S.C. 192, though not a crime under New York law, was a "crime" within the meaning of 6514-2 (b) of the State Education Law, is conclusive here. P. 448. (b) Section 6514-2 (b) is not unconstitutionally vague. P. 448. (c) The subsequent designation of certain other contempts of Congress as federal "crimes" (18 U.S.C. 402) does not prevent a violation of 2 U.S.C. 192 from being a "crime" within the meaning of the New York law. P. 449, n. 8. (d) The establishment and enforcement of standards of conduct within its borders relative to the health of its people is a vital part of a state's police power. P. 449. (e) The practice of medicine is a privilege granted by the State under its substantially plenary power to fix the terms of admission. P. 451. (f) A state's legitimate concern for maintaining high standards of professional conduct extends beyond initial licensing. P. 451. (g) The suspension of appellant's license because of his conviction in a foreign jurisdiction, for an offense not involving moral turpitude and not criminal under New York law, does not so far transcend the State's legitimate concern in professional standards as to violate the Fourteenth Amendment. Pp. 451-452. (h) The provisions of 6515 of the State Education Law prescribing the procedure for disciplinary action are, on their face, reasonable and satisfy the requirements of due process. Pp. 452-453. (i) The record in this case does not support a conclusion that the Board of Regents, in fixing the measure of discipline at a six months' suspension of appellant's license as a physician, made an arbitrary or capricious decision or relied upon irrelevant evidence. Pp. 453-456. 305 N. Y. 89, 691, 111 N. E. 2d 222, 112 N. E. 2d 773, affirmed.Abraham Fishbein argued the cause and filed a brief for appellant.Henry S. Manley, Assistant Attorney General of New York, argued the cause for appellee. With him on the brief were Nathaniel L. Goldstein, Attorney General, and Wendell P. Brown, Solicitor General.MR. JUSTICE BURTON delivered the opinion of the Court.The principal question here presented is whether the New York State Education Law,1 on its face or as here construed and applied, violates the Constitution of the United States by authorizing the suspension from practice, for six months, of a physician because he has been convicted, in the United States District Court for the District of Columbia, of failing to produce, before a Committee of the United States House of Representatives, certain papers subpoenaed by that Committee.2 For the reasons hereafter stated, we hold that it does not. In 1945, the Committee of the United States House of Representatives, known as the Committee on Un-American Activities, was authorized to make investigations of "the extent, character, and objects of un-American propaganda activities in the United States."3 In 1946, in the course of that investigation, the Committee subpoenaed Dr. Edward K. Barsky, appellant herein, who was then the national chairman and a member of the executive board of the Joint Anti-Fascist Refugee Committee, to produce "all books, ledgers, records and papers relating to the receipt and disbursement of money by or on account of the Joint Anti-Fascist Refugee Committee or any subsidiary or any subcommittee thereof, together with all correspondence and memoranda of communications by any means whatsoever with persons in foreign countries for the period from January 1, 1945, to March 29, 1946."4 Similar subpoenas were served on the executive secretary and the other members of the executive board of the Refugee Committee. Appellant appeared before the Congressional Committee but, pursuant to advice of counsel and the action of his executive board, he and the other officers of the Refugee Committee failed and refused to produce the subpoenaed papers.In 1947, appellant, the executive secretary and several members of the executive board of the Refugee Committee were convicted by a jury, in the United States District Court for the District of Columbia, of violating R. S. 102, as amended, 2 U.S.C. 192, by failing to produce the subpoenaed papers. Appellant was sentenced to serve six months in jail and pay $500. See United States v. Bryan, 72 F. Supp. 58; United States v. Barsky, 72 F. Supp. 165. In 1948, this judgment was affirmed by the Court of Appeals, Barsky v. United StatesApp. D.C. 127, 167 F.2d 241, and certiorari was denied, . In 1950, a rehearing was denied. Two Justices noted their dissents, and two did not participate. . Appellant served his sentence, being actually confined five months.5 Appellant was a physician who practiced his profession in New York under a license issued in 1919. However, in 1948, following the affirmance of his above-mentioned conviction, charges were filed against him with the Department of Education of the State of New York by an inspector of that department. This was done under 6515 of the Education Law, seeking disciplinary action pursuant to subdivision 2 (b) of 6514 of that law: "2. The license or registration of a practitioner of medicine, osteopathy or physiotherapy may be revoked, suspended or annulled or such practitioner reprimanded or disciplined in accordance with the provisions and procedure of this article upon decision after due hearing in any of the following cases: ... . . "(b) That a physician, osteopath or physiotherapist has been convicted in a court of competent jurisdiction, either within or without this state, of a crime; or ... ." In 1951, after filing an amended answer, appellant was given an extended hearing before a subcommittee of the Department's Medical Committee on Grievances. The three doctors constituting the subcommittee made a written report of their findings, determination and recommendation, expressly taking into consideration the five months during which appellant had been separated from his practice while confined in jail, and also the testimony and letters submitted in support of his character. They recommended finding him guilty as charged and suspending him from practice for three months. The ten doctors constituting the full Grievance Committee unanimously found appellant guilty as charged. They also adopted the findings, determination and recommendation of their subcommittee, except that, by a vote of six to four, they fixed appellant's suspension at six months. Promptly thereafter, the Committee on Discipline of the Board of Regents of the University of the State of New York held a further hearing at which appellant appeared in person and by counsel. This committee consisted of two lawyers and one doctor. After reviewing the facts and issues, it filed a detailed report recommending that, while appellant was guilty as charged, his license be not suspended and that he merely be censured and reprimanded.6 The Board of Regents, however, returned to and sustained the determination of the Medical Committee on Grievances, and suspended appellant's license for six months.7 Appellant sought a review of this determination, under 6515 of the Education Law, supra, and Article 78 of the New York Civil Practice Act, Gilbert-Bliss' N. Y. Civ. Prac., Vol. 6B, 1944, 1283-1306. The proceeding was instituted in the Supreme Court for the County of Albany and transferred to the Appellate Division, Third Department. That court confirmed the order of the Board of Regents. In re Barsky, 279 App. Div. 1117, 112 N. Y. S. 2d 778, and see 279 App. Div. 447, 111 N. Y. S. 2d 393, and 279 App. Div. 1101, 112 N. Y. S. 2d 780, 781. The Court of Appeals, with one judge dissenting, affirmed. 305 N. Y. 89, 111 N. E. 2d 222. That court allowed an appeal to this Court and amended its remittitur by adding the following:"Upon the appeals herein there were presented and necessarily passed upon questions under the Federal Constitution, viz., whether sections 6514 and 6515 of the Education Law, as construed and applied here, are violative of the due process clause of the Fourteenth Amendment. The Court of Appeals held that the rights of the petitioners under the Fourteenth Amendment of the Constitution of the United States had not been violated or denied." 305 N. Y. 691, 112 N. E. 2d 773. We noted probable jurisdiction, THE CHIEF JUSTICE not participating at that time. .That appellant was convicted of a violation of R. S. 102, as amended, 2 U.S.C. 192, in a court of competent jurisdiction is settled. In the New York courts, appellant argued that a violation of that section of the federal statutes was not a crime under the law of New York and that, accordingly, it was not a "crime" within the meaning of 6514-2 (b) of the New York Education Law. He argued that his conviction, therefore, did not afford the New York Board of Regents the required basis for suspending his license. That issue was settled adversely to him by the Court of Appeals of New York and that court's interpretation of the state statute is conclusive here.He argues that 6514-2 (b) is unconstitutionally vague. As interpreted by the New York courts, the provision is extremely broad in that it includes convictions for any crime in any court of competent jurisdiction within or without New York State. This may be stringent and harsh but it is not vague. The professional standard is clear. The discretion left to enforcing officers is not one of defining the offense. It is merely that of matching the measure of the discipline to the specific case.A violation of R. S. 102, as amended, 2 U.S.C. 192, is expressly declared by Congress to be a misdemeanor. It is punishable by a fine of not more than $1,000 nor less than $100 and imprisonment for not less than one month nor more than twelve months. See note 2, supra. For its violation appellant received a sentence of one-half the maximum and served five months in jail. There can be no doubt that appellant was convicted in a court of competent jurisdiction of a crime within the meaning of the New York statute.8 It is elemental that a state has broad power to establish and enforce standards of conduct within its borders relative to the health of everyone there. It is a vital part of a state's police power. The state's discretion in that field extends naturally to the regulation of all professions concerned with health. In Title VIII of its Education Law, the State of New York regulates many fields of professional practice, including medicine, osteopathy, physiotherapy, dentistry, veterinary medicine, pharmacy, nursing, podiatry and optometry. New York has had long experience with the supervision of standards of medical practice by representatives of that profession exercising wide discretion as to the discipline to be applied. It has established detailed procedures for investigations, hearings and reviews with ample opportunity for the accused practitioner to have his case thoroughly considered and reviewed.Section 6514, as a whole,9 demonstrates the broad field of professional conduct supervised by the Medical Committee on Grievances of the Department of Education and the Board of Regents of the University of the State of New York. In the present instance, the violation of 6514-2 (b) is obvious. The real problem for the state agencies is that of the appropriate disciplinary action to be applied. The practice of medicine in New York is lawfully prohibited by the State except upon the conditions it imposes. Such practice is a privilege granted by the State under its substantially plenary power to fix the terms of admission. The issue is not before us but it has not been questioned that the State could make it a condition of admission to practice that applicants shall not have been convicted of a crime in a court of competent jurisdiction either within or without the State of New York. It could at least require a disclosure of such convictions as a condition of admission and leave it to a competent board to determine, after opportunity for a fair hearing, whether the convictions, if any, were of such a date and nature as to justify denial of admission to practice in the light of all material circumstances before the board.It is equally clear that a state's legitimate concern for maintaining high standards of professional conduct extends beyond initial licensing. Without continuing supervision, initial examinations afford little protection. Appellant contends, however, that the standard which New York has adopted exceeds reasonable supervision and deprives him of property rights in his license and his established practice, without due process of law in violation of the Fourteenth Amendment.He argues that New York's suspension of his license because of his conviction in a foreign jurisdiction, for an offense not involving moral turpitude10 and not criminal under the law of New York, so far transcends that State's legitimate concern in professional standards as to violate the Fourteenth Amendment. We disagree and hold that New York's governmental discretion is not so restricted.This statute is readily distinguishable from one which would require the automatic termination of a professional license because of some criminal conviction of its holder.11 Realizing the importance of high standards of character and law observance on the part of practicing physicians, the State has adopted a flexible procedure to protect the public against the practice of medicine by those convicted of many more kinds and degrees of crime than it can well list specifically. It accordingly has sought to attain its justifiable end by making the conviction of any crime a violation of its professional medical standards, and then leaving it to a qualified board of doctors to determine initially the measure of discipline to be applied to the offending practitioner.Section 6515 of the New York Education Law thus meets the charge of unreasonableness. All charges are passed upon by a Committee on Grievances of the department. That committee consists of ten licensed physicians, appointed by the Board of Regents. The term of each member is five years. They serve without compensation. Three are "members of conspicuous professional standing" appointed upon the board's own nomination. 6515-2. The others are appointed from lists of nominees submitted respectively by the New York State Medical, Homeopathic and Osteopathic Societies. Charges must be filed in writing and a subcommittee of three or more members hears and reports on them. At least ten days' notice of a hearing is required and opportunity is afforded the accused to appear personally, or by counsel, with the right to produce witnesses and evidence on his own behalf, to cross-examine witnesses, to examine evidence produced against him and to have subpoenas issued by the committee. The subcommittee transmits its report, findings and recommendation, together with a transcript of evidence, to the Committee on Grievances. That committee may take further testimony. It determines the merit of the charges and, if the practitioner is found guilty by a unanimous verdict, the record, together with the findings and determination of the committee, is transmitted to the Board of Regents. That board, "after due hearing," may accept or modify the committee's recommendation, or find the practitioner not guilty and dismiss the charges. 6515-7. "The committee on grievances shall not be bound by the laws of evidence in the conduct of its proceedings, but the determination shall be founded upon sufficient legal evidence to sustain the same." 6515-5. If the accused is found guilty, he may institute proceedings for review under Article 78 of the Civil Practice Act, returnable before the Appellate Division of the Third Judicial Department.The above provisions, on their face, are well within the degree of reasonableness required to constitute due process of law in a field so permeated with public responsibility as that of health.The statutory procedure as above outlined has been meticulously followed in this case and no objection is made on that score. Appellant, nevertheless, complains that, as construed and applied by the Medical Committee on Grievances and its subcommittee, his hearing violated the due process of law required by the Fourteenth Amendment. He contends that evidence was introduced which was immaterial and prejudicial and that the committee based its determination upon that evidence. He contends, in effect, that the committee reached its determination without "sufficient legal evidence to sustain the same," thus exceeding its statutory authority. He claims further that the committee acted capriciously and arbitrarily upon immaterial and prejudicial evidence, thus not only exceeding its statutory authority but depriving him of his property without due process of law.The state courts have determined that the hearing did not violate the statute and, accordingly, we are concerned only with the constitutional question. The claim is that immaterial and prejudicial evidence of the alleged subversive activities of the Refugee Committee was introduced and relied upon. Emphasis is given to evidence that the Refugee Committee had been placed on the Attorney General's list of subversive or Communistic organizations. To emphasize the prejudicial character of this testimony, appellant refers to the fact that, at the time of the subcommittee hearing, litigation involving such list was pending in the courts and had resulted in a decision adverse to appellant, whereas that decision subsequently was set aside by this Court.12 The State's answer to these claims is that such testimony was invited by appellant's own testimony as to the activities of the Refugee Committee.13 The State shows also that while such evidence was not necessary to establish appellant's violation of the federal statute as to the subpoenaed papers, it was material and admissible to assist the Committee on Grievances and the other agencies in determining the appropriate disciplinary measures to be applied to appellant under the state law. Appellant recognized this materiality by endeavoring to use evidence as to the Refugee Committee's charitable activities to justify and excuse his failure to produce the subpoenaed papers.We find nothing sufficient to sustain a conclusion that the Board of Regents or the recommending committees made an arbitrary or capricious decision or relied upon irrelevant evidence. The report made by the original subcommittee of three that heard the evidence indicates that it was not influenced by the character of the Refugee Committee. It said:"We do not feel that we are now concerned, nor would we be able to determine, whether the books and records of that Committee would disclose whether the Committee was completely philanthropic in character, or whether it was engaged in subversive activities." The painstaking complete review of the evidence and the issues by the Committee on Discipline of the Board of Regents demonstrates a high degree of unbiased objectivity. Before the final action of the Board of Regents, the Committee on Discipline in its report to that board noted that -"After the hearing below and the determination of the Medical Committee on Grievances, the Supreme Court of the United States reversed an order of the District Court dismissing a complaint by the Refugee Committee in an action by it for declaratory and injunctive relief (Joint Anti-Fascist Refugee Committee v. McGrath, Attorney General, ), some of the majority justices going on the ground that a determination of this kind could not constitutionally be made without a hearing and opportunity to offer proof and disproof. In view of this decision, no evidentiary weight can be given in the present proceeding to the listing by the Attorney General." That committee thus recognized the existence of a valid basis for disciplinary action but found "no valid basis for discipline beyond the statutory minimum of censure and reprimand." With this recommendation before the Board of Regents, we see no reason to conclude that the board disregarded it or acted arbitrarily, capriciously or through prejudice and deprived appellant of due process of law. The board made no specific findings. It accepted and sustained the unanimous determination of the Medical Committee on Grievances, which was that appellant was guilty. Then, in compliance with the recommendation of that committee, it fixed the measure of discipline at a six months' suspension of appellant's registration as a physician.The Court has considered the other points raised by appellant but finds no substantial federal constitutional objection in them, even assuming that they are before us as having been considered by the Court of Appeals, although not mentioned in its opinion or the amendment to its remittitur.The judgment of the Court of Appeals of the State of New York, accordingly, is Affirmed. |
0 | Petitioner was charged in a five-count indictment, which was read to the jury at the beginning of the trial, and convicted of "assault with malice aforethought with intent to murder; repetition of offense." The first count charged the assault. The other counts, pursuant to the Texas recidivist statutes, alleged prior felony convictions, one in Texas for burglary, and three in Tennessee for forgery, which, if proved, would have made petitioner subject to life imprisonment upon his being convicted under count one. In the jury's presence the prosecution offered evidence of two differing certified copies of one of the Tennessee convictions and a certified copy of the indictment in the prior Texas prosecution. The court admitted the Texas conviction into evidence but later sustained petitioner's objection as to that judgment and struck it from the evidence. The court upheld petitioner's objection to the first version of the Tennessee conviction on the ground that the judgment showed on its face that petitioner was not represented by counsel in violation of the Sixth Amendment made applicable to the States by the Fourteenth Amendment. It overruled his objection on the same ground to the second version, which stated that petitioner had appeared "in proper person" but did not add (as did the first version) "without counsel." There was no explanation of the discrepancy between the two versions. Reference was also made in the second version to the jury's having retired to consider its verdict after "argument of counsel," but with no indication whether the word was being used in the singular or plural. After testimony was heard on the substantive offense, the court instructed the jury not to consider the prior offenses for any purpose whatsoever in arriving at its verdict. Petitioner was convicted and appealed, urging error in the reading to the jury of the indictment containing the prior felony conviction counts and in the failure to sustain his objection to the admission into evidence of the second version of the Tennessee conviction. The appellate court upheld the conviction, holding that there had been no error since the trial court had instructed the jury to disregard the prior offenses and petitioner had not received the enhanced punishment prescribed by the recidivist statutes. Held: 1. The certified records of the Tennessee conviction raise a presumption that petitioner was denied his right to counsel in that proceeding and that the conviction was void under Gideon v. Wainwright, . To permit a conviction obtained in violation of Gideon to be used either to support guilt or enhance punishment for another offense would erode the principle of that case and allow an unconstitutional procedure to injure a defendant twice. Pp. 114-115. 2. The admission into evidence of a constitutionally invalid prior conviction is inherently prejudicial and it cannot be said that instructions to disregard such error made it "harmless beyond a reasonable doubt," within the meaning of Chapman v. California, . Spencer v. Texas, , distinguished. Pp. 115-116. 397 S. W. 2d 79, reversed.Gordon Gooch, by appointment of the Court, , argued the cause and filed briefs for petitioner.Leon Douglas argued the cause for respondent. With him on the brief were Crawford Martin, Attorney General of Texas, George Cowden, First Assistant Attorney General, A. J. Carubbi and R. L. Lattimore.MR. JUSTICE DOUGLAS delivered the opinion of the Court.Petitioner was convicted of "assault with malice aforethought with intent to murder; repetition of offense." The jury fixed the punishment at 10 years in the Texas State Penitentiary.1 On appeal, the Texas Court of Criminal Appeals affirmed petitioner's conviction.2 We granted certiorari, . Petitioner was charged in a five-count indictment. In the first count the State alleged that he had cut one Bradley with a knife and had stabbed at Bradley's throat with intent to kill. Pursuant to the Texas recidivist statutes,3 the remaining counts of the indictment consisted of allegations that petitioner had incurred four previous felony convictions: a Texas conviction for burglary, and three Tennessee convictions for forgery. If these allegations were found to be true, petitioner would be subject to a term of life imprisonment upon conviction of the offense charged in count one.4 Petitioner's counsel filed a pretrial motion to quash the four counts of the indictment referring to the prior convictions for failure to apprise the defense of what the State would attempt to prove.5 The record is silent as to the court's action on this motion. But when the indictment was read to the jury at the beginning of the trial, before any evidence was introduced, the four counts relating to the prior convictions were included. During the course of the trial, while the jury was present, the State offered into evidence a certified copy of one of the Tennessee convictions. The conviction read in part, "Came the Assistant Attorney-General for the State and the Defendant in proper person and without Counsel." Petitioner's counsel objected to the introduction of the record on the ground that the judgment on its face showed that petitioner was not represented by counsel in violation of the Fourteenth Amendment. There was no indication in the record that counsel had been waived. The court stated that it would reserve ruling on the objection, apparently to give the State an opportunity to offer any of the other convictions into evidence. The State then offered a second version of the same Tennessee conviction which stated that petitioner had appeared "in proper person" but did not contain the additional words "without counsel." This second version also stated that "After said jury had heard the evidence, argument of counsel, and the charge of the Court, they retired to consider of their verdict." It is not clear, however, whether "counsel" was being used in the singular or plural, and in any event no explanation was offered for the discrepancy between the two records. Petitioner's counsel objected to this second version on the same ground. The court again reserved its ruling.The State then offered into evidence a certified copy of the indictment in the prior Texas case. Petitioner's counsel indicated he had no objection, and that record was received into evidence. Thereafter, testimony was offered concerning the judgment and sentence in the prior Texas case. After some testimony had been given, the jury was excused and the hearing continued out of its presence. At the conclusion of the hearing, petitioner's attorney objected that the Texas judgment was void on its face under state law. The court sustained that objection, and the record of the Texas conviction was stricken from evidence. At the same time, the court sustained petitioner's objection to the first version of the Tennessee conviction; but overruled the objection to the second version of the same conviction. The jury was then recalled and testimony was heard on the substantive offense charged. The next reference to the prior convictions was when the court instructed the jury not to consider the prior offenses6 for any purpose whatsoever in arriving at the verdict.Petitioner's motion for a new trial was denied. In the Court of Criminal Appeals, petitioner argued, inter alia, that the court erred in permitting counts two through five of the indictment to be read to the jury at the beginning of the trial, and in failing to sustain petitioner's objection to the admission into evidence of the second version of the Tennessee conviction. The Court of Criminal Appeals held that since petitioner had not suffered the enhanced punishment provided by the recidivist statutes, and since the instruction to disregard the prior offenses had been given, no error was presented.We do not sit as a court of criminal appeals to review state cases. The States are free to provide such procedures as they choose, including rules of evidence, provided that none of them infringes a guarantee in the Federal Constitution. The recent right-to-counsel cases, starting with Gideon v. Wainwright, , are illustrative of the limitations which the Constitution places on state criminal procedures. Those limitations sometimes touch rules of evidence.The exclusion of coerced confessions is one example. Chambers v. Florida, .The exclusion of evidence seized in violation of the Fourth and Fourteenth Amendments is another. Mapp v. Ohio, .Still another is illustrated by Pointer v. Texas, . In that case we held that a transcript of a preliminary hearing had to be excluded from a state criminal trial because the defendant had no lawyer at that hearing, and did not, therefore, have the opportunity to cross-examine the principal witness against him who since that time had left the State. The exclusionary rule that we fashioned was designed to protect the privilege of confrontation guaranteed by the Sixth Amendment and made applicable to the States by the Fourteenth.The same result must follow here. Gideon v. Wainwright established the rule that the right to counsel guaranteed by the Sixth Amendment was applicable to the States by virtue of the Fourteenth, making it unconstitutional to try a person for a felony in a state court unless he had a lawyer or had validly waived one. And that ruling was not limited to prospective applications. See Doughty v. Maxwell, ; Pickelsimer v. Wainwright, . In this case the certified records of the Tennessee conviction on their face raise a presumption that petitioner was denied his right to counsel in the Tennessee proceeding, and therefore that his conviction was void. Presuming waiver of counsel from a silent record is impermissible. Carnley v. Cochran, . To permit a conviction obtained in violation of Gideon v. Wainwright to be used against a person either to support guilt or enhance punishment for another offense (see Greer v. Beto, ) is to erode the principle of that case. Worse yet, since the defect in the prior conviction was denial of the right to counsel, the accused in effect suffers anew from the deprivation of that Sixth Amendment right.The admission of a prior criminal conviction which is constitutionally infirm under the standards of Gideon v. Wainwright is inherently prejudicial and we are unable to say that the instructions to disregard it7 made the constitutional error "harmless beyond a reasonable doubt" within the meaning of Chapman v. California, .Our decision last Term in Spencer v. Texas, , is not relevant to our present problem. In Spencer the prior convictions were not presumptively void. Moreover, the contention was that the guilt phase of the trial was prejudiced by the introduction of the evidence of prior crimes. As the Court noted, "[i]n the procedures before us ... no specific federal right - such as that dealing with confessions - is involved; reliance is placed solely on a general `fairness' approach." Id., at 565. In this case, however, petitioner's right to counsel, a "specific federal right," is being denied anew. This Court cannot permit such a result unless Gideon v. Wainwright is to suffer serious erosion. Reversed. |
2 | [Footnote *] Together with No. 150, Associated Press v. Walker, on certiorari to the Court of Civil Appeals of Texas, 2d Supreme Judicial District. In No. 37, respondent brought a diversity libel action in federal court seeking compensatory and punitive damages for an article which was published in petitioner's magazine accusing respondent of conspiring to "fix" a football game between the University of Alabama and the University of Georgia, where he was privately employed as the athletic director. The article was based upon an affidavit concerning a telephone conversation between respondent and the Alabama coach which the affiant, Burnett, had accidentally overheard. Respondent challenged the truth of the article and claimed a serious departure by the magazine from good investigative standards of the accuracy of its charges amounting to reckless and wanton conduct. He submitted evidence at the trial showing, inter alia, that petitioner's magazine, which had instituted a policy of "sophisticated muckraking," knew that Burnett was on criminal probation but had published the story without any independent support for his affidavit; that it did not before publication view his notes (the information in which, if not valueless, would be readily available to any coach); that the magazine did not interview a person with Burnett when the phone call was overheard, view the game films, or check for any adjustments in Alabama's plans after the information was divulged; and that the magazine assigned the story to a writer not a football expert and made no effort to have such an expert check the story. The jury was instructed on the issue of truth as a defense and was also instructed that it could award punitive damages and could assess the reliability and the nature of the sources of the magazine's information and its care in checking the assertions, considerations relevant to determining whether the magazine had proceeded with "wanton and reckless indifference." The jury returned a verdict of general and punitive damages which was reduced by remittitur. The trial court rejected the defense's new trial motion based on New York Times Co. v. Sullivan, (which was decided after the filing of the complaint in and trial of this case), holding that decision inapplicable to one like petitioner not a public official. It also held the evidence amply supported the conclusion that the magazine had acted in reckless disregard of whether the article was false or not. The Court of Appeals affirmed on the merits. It did not reach the constitutional claim based on New York Times, holding that petitioner had waived the right to make that challenge since some of its lawyers had been involved in the latter case, yet the defense was based solely on the issue of truth. In No. 150, petitioner, a news association, published a dispatch about a massive riot on the University of Mississippi campus attending federal efforts to enforce a court decree ordering a Negro's enrollment. The dispatch stated that respondent, a politically prominent figure whose statements on federal intervention had been widely publicized, had taken command of the violent crowd and led a charge against federal marshals trying to enforce the court's decree, had encouraged violence and given technical advice to the rioters. Respondent brought a libel action in the Texas state courts for compensatory and punitive damages. Petitioner's defense was based on truth and constitutional rights. The evidence showed that the dispatch had been made on the scene and almost immediately reported to the petitioner by a competent correspondent. There was no significant showing of improper preparation of the dispatch, or any prejudice by petitioner or its correspondent. The jury was instructed that compensatory damages could be awarded if the dispatch was not substantially true and that punitive damages could be added if the article was actuated by ill will or entire want of care. The jury returned a verdict for both compensatory and punitive damages. The trial court refused to enter an award for the latter. The court held New York Times inapplicable but that if applicable it would require a verdict for the petitioner since there was no evidence of malice. Both sides appealed. The Texas Court of Civil Appeals affirmed and the Texas Supreme Court denied review. Held: The judgment in No. 37 is affirmed. The judgment in No. 150 is reversed and the case remanded. Pp. 133-174. No. 37, 351 F.2d 702, affirmed; No. 150, 393 S. W. 2d 671, reversed and remanded. MR. JUSTICE HARLAN, joined by MR. JUSTICE CLARK, MR. JUSTICE STEWART, and MR. JUSTICE FORTAS, concluded that: 1. Petitioner's failure in No. 37 to raise the constitutional defense before trial constituted no waiver of its right to do so after New York Times was decided. Pp. 142-145. 2. The New York Times rule prohibiting a public official from recovering damages for defamatory falsehood relating to his official conduct absent actual malice as therein defined, though necessary there to protect against prosecutions close to seditious libel for criticizing official conduct, should not be inexorably applied to defamation actions by "public figures" like those here, where different considerations are present. Pp. 148, 152-154. 3. A "public figure" who is not a public official may recover damages for defamatory falsehood substantially endangering his reputation on a showing of highly unreasonable conduct constituting an extreme departure from the standards of investigation and reporting ordinarily adhered to by responsible publishers. P. 155. 4. In view of the court's instructions in No. 37, the jury must have decided that the magazine's investigation was grossly inadequate, and the evidence amply supported a finding of the highly unreasonable conduct referred to above. Pp. 156-158. 5. In No. 150, where the courts found the evidence insufficient to support more than a finding of even ordinary negligence, respondent is not entitled to damages. Pp. 158-159. 6. Misconduct sufficient to justify compensatory damages also justifies punitive damages; the same constitutional standards apply to both. Pp. 159-161. THE CHIEF JUSTICE concluded that: 1. The New York Times standard applies to defamation actions by "public figures" as well as those by "public officials." Pp. 162-165. 2. The judgment in No. 150, being in clear conflict with New York Times, must be reversed. P. 165. 3. Retrial of No. 37 is not necessary since the jury's verdict therein in view of instructions which invoked the elements later held necessary in New York Times most probably was based on the requirement of reckless disregard for the truth enunciated in that case. Pp. 165-167. 4. The overlapping of counsel in No. 37 with counsel in New York Times and in a libel action against petitioner by the Alabama coach, in which a First Amendment defense was also made, compels the conclusion that the failure to defend on those grounds here was deliberate. Pp. 167-168. 5. The evidence shows that petitioner in No. 37 acted in reckless disregard for the truth. Pp. 168-170. MR. JUSTICE BLACK, joined by MR. JUSTICE DOUGLAS, concluded that in order to dispose of No. 150 he concurs in the grounds stated by THE CHIEF JUSTICE which are summarized in paragraphs 1 and 2, supra, of THE CHIEF JUSTICE's conclusions but does not recede from his previously expressed views about the much wider press and speech freedoms of the First and Fourteenth Amendments. P. 170. MR. JUSTICE BRENNAN, joined by MR. JUSTICE WHITE, concluded that the grounds stated by THE CHIEF JUSTICE which are summarized in paragraphs 1 and 2, supra, of THE CHIEF JUSTICE's conclusions in No. 150 govern that case. P. 172. Herbert Wechsler argued the cause for petitioner in No. 37. With him on the brief was Philip H. Strubing. William P. Rogers argued the cause for petitioner in No. 150. With him on the briefs were Leo P. Larkin, Jr., Stanley Godofsky, Arthur Moynihan and J. A. Gooch.Allen E. Lockerman and William H. Schroder argued the cause for respondent in No. 37. With them on the brief was Robert S. Sams. Clyde J. Watts argued the cause for respondent in No. 150. With him on the brief was William Andress, Jr.Howard Ellis, Keith Masters, Don H. Reuben and Lawrence Gunnels filed a brief for the Tribune Company, as amicus curiae, urging reversal in No. 150.MR. JUSTICE HARLAN announced the judgments of the Court and delivered an opinion in which MR. JUSTICE CLARK, MR. JUSTICE STEWART, and MR. JUSTICE FORTAS join.ü In New York Times Co. v. Sullivan, , this Court held that "[t]he constitutional guarantees [of freedom of speech and press] require ... a federal rule that prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with `actual malice' that is, with knowledge that it was false or with reckless disregard of whether it was false or not." We brought these two cases here, U.S. 812, to consider the impact of that decision on libel actions instituted by persons who are not public officials, but who are "public figures" and involved in issues in which the public has a justified and important interest. The sweep of the New York Times rule in libel actions brought under state law was a question expressly reserved in that case, 376 U.S., at 283, n. 23, and while that question has been involved in later cases, Garrison v. Louisiana, ; Rosenblatt v. Baer, ; Time, Inc. v. Hill, , it has not been fully settled.The matter has, however, been passed on by a considerable number of state and lower federal courts and has produced a sharp division of opinion as to whether the New York Times rule should apply only in actions brought by public officials or whether it has a longer reach. Compare, e. g., Pearson v. Fairbanks Publishing Co., 413 P.2d 711 (Alaska), with Clark v. Pearson, 248 F. Supp. 188.1 The resolution of the uncertainty in this area of libel actions requires, at bottom, some further exploration and clarification of the relationship between libel law and the freedom of speech and press, lest the New York Times rule become a talisman which gives the press constitutionally adequate protection only in a limited field, or, what would be equally unfortunate, one which goes far to immunize the press from having to make just reparation for the infliction of needless injury upon honor and reputation through false publication. These two libel actions, although they arise out of quite different sets of circumstances, provide that opportunity. We think they are best treated together in one opinion. I. No. 37, Curtis Publishing Co. v. Butts, stems from an article published in petitioner's Saturday Evening Post which accused respondent of conspiring to "fix" a football game between the University of Georgia and the University of Alabama, played in 1962. At the time of the article, Butts was the athletic director of the University of Georgia and had overall responsibility for the administration of its athletic program. Georgia is a state university, but Butts was employed by the Georgia Athletic Association, a private corporation, rather than by the State itself.2 Butts had previously served as head football coach of the University and was a well-known and respected figure in coaching ranks. He had maintained an interest in coaching and was negotiating for a position with a professional team at the time of publication.The article was entitled "The Story of a College Football Fix" and prefaced by a note from the editors stating: "Not since the Chicago White Sox threw the 1919 World Series has there been a sports story as shocking as this one... . Before the University of Georgia played the University of Alabama ... Wally Butts ... gave [to its coach] ... Georgia's plays, defensive patterns, all the significant secrets Georgia's football team possessed." The text revealed that one George Burnett, an Atlanta insurance salesman, had accidentally overheard, because of electronic error, a telephone conversation between Butts and the head coach of the University of Alabama, Paul Bryant, which took place approximately one week prior to the game. Burnett was said to have listened while "Butts outlined Georgia's offensive plays ... and told ... how Georgia planned to defend ... . Butts mentioned both players and plays by name." The readers were told that Burnett had made notes of the conversation, and specific examples of the divulged secrets were set out.The article went on to discuss the game and the players' reaction to the game, concluding that "[t]he Georgia players, their moves analyzed and forecast like those of rats in a maze, took a frightful physical beating," and said that the players, and other sideline observers, were aware that Alabama was privy to Georgia's secrets. It set out the series of events commencing with Burnett's later presentation of his notes to the Georgia head coach, Johnny Griffith, and culminating in Butts' resignation from the University's athletic affairs, for health and business reasons. The article's conclusion made clear its expected impact:"The chances are that Wally Butts will never help any football team again... . The investigation by university and Southeastern Conference officials is continuing; motion pictures of other games are being scrutinized; where it will end no one so far can say. But careers will be ruined, that is sure." Butts brought this diversity libel action in the federal courts in Georgia seeking $5,000,000 compensatory and $5,000,000 punitive damages. The complaint was filed, and the trial completed, before this Court handed down its decision in New York Times, and the only defense raised by petitioner Curtis was one of substantial truth. No constitutional defenses were interposed although Curtis' counsel were aware of the progress of the New York Times case, and although general constitutional defenses had been raised by Curtis in a libel action instituted by the Alabama coach who was a state employee.Evidence at trial was directed both to the truth of the article and to its preparation. The latter point was put in issue by the claim for punitive damages which required a finding of "malice" under Georgia law. The evidence showed that Burnett had indeed overheard a conversation between Butts and the Alabama coach, but the content of that conversation was hotly disputed. It was Butts' contention that the conversation had been general football talk and that nothing Burnett had overheard would have been of any particular value to an opposing coach. Expert witnesses supported Butts by analyzing Burnett's notes and the films of the game itself. The Saturday Evening Post's version of the game and of the players' remarks about the game was severely contradicted. The evidence on the preparation of the article, on which we shall focus in more detail later, cast serious doubt on the adequacy of the investigation underlying the article. It was Butts' contention that the magazine had departed greatly from the standards of good investigation and reporting and that this was especially reprehensible, amounting to reckless and wanton conduct, in light of the devastating nature of the article's assertions.The jury was instructed that in order for the defense of truth to be sustained it was "necessary that the truth be substantially portrayed in those parts of the article which libel the plaintiff." The "sting of the libel" was said to be "the charge that the plaintiff rigged and fixed the 1962 Georgia-Alabama game by giving Coach Bryant [of Alabama] information which was calculated to or could have affected the outcome of the game." The jury was also instructed that it could award punitive damages "to deter the wrong-doer from repeating the trespass" in an amount within its sole discretion if it found that actual malice had been proved.3 The jury returned a verdict for $60,000 in general damages and for $3,000,000 in punitive damages. The trial court reduced the total to $460,000 by remittitur. Soon thereafter we handed down our decision in New York Times and Curtis immediately brought it to the attention of the trial court by a motion for new trial. The trial judge rejected Curtis' motion on two grounds. He first held that New York Times was inapplicable because Butts was not a public official. He also held that "there was ample evidence from which a jury could have concluded that there was reckless disregard by defendant of whether the article was false or not."Curtis appealed to the Court of Appeals for the Fifth Circuit which affirmed the judgment of the District Court by a two-to-one vote. The majority there did not reach the merits of petitioner's constitutional claim, holding that Curtis had "clearly waived any right it may have had to challenge the verdict and judgment on any of the constitutional grounds asserted in Times," 351 F.2d 702, 713, on the basis of Michel v. Louisiana, . It found Curtis chargeable with knowledge of the constitutional limitations on libel law at the time it filed its pleadings below because of its "interlocking battery of able and distinguished attorneys" some of whom were involved in the New York Times litigation. This holding rendered the compensatory damage decision purely one of state law and no error was found in its application. Turning to the punitive damage award, the majority upheld it as stemming from the "enlightened conscience" of the jury as adjusted by the lawful action of the trial judge. It was in "complete accord" with the trial court's determination that the evidence justified the finding "that what the Post did was done with reckless disregard of whether the article was false or not." 351 F.2d, at 719.Judge Rives dissented, arguing that the record did not support a finding of knowing waiver of constitutional defenses. He concluded that the New York Times rule was applicable because Butts was involved in activities of great interest to the public. He would have reversed because "the jury might well have understood the district court's charge to allow recovery on a showing of intent to inflict harm or even the culpably negligent infliction of harm, rather than the intent to inflict harm through falsehood ... ." 351 F.2d, at 723.Rehearing was denied, 351 F.2d, at 733, and we granted certiorari, as indicated above. For reasons given below, we would affirm. II. No. 150, Associated Press v. Walker, arose out of the distribution of a news dispatch giving an eyewitness account of events on the campus of the University of Mississippi on the night of September 30, 1962, when a massive riot erupted because of federal efforts to enforce a court decree ordering the enrollment of a Negro, James Meredith, as a student in the University. The dispatch stated that respondent Walker, who was present on the campus, had taken command of the violent crowd and had personally led a charge against federal marshals sent there to effectuate the court's decree and to assist in preserving order. It also described Walker as encouraging rioters to use violence and giving them technical advice on combating the effects of tear gas.Walker was a private citizen at the time of the riot and publication. He had pursued a long and honorable career in the United States Army before resigning to engage in political activity, and had, in fact, been in command of the federal troops during the school segregation confrontation at Little Rock, Arkansas, in 1957. He was acutely interested in the issue of physical federal intervention, and had made a number of strong statements against such action which had received wide publicity. Walker had his own following, the "Friends of Walker," and could fairly be deemed a man of some political prominence.Walker initiated this libel action in the state courts of Texas, seeking a total of $2,000,000 in compensatory and punitive damages. Associated Press raised both the defense of truth and constitutional defenses. At trial both sides attempted to reconstruct the stormy events on the campus of the University of Mississippi. Walker admitted his presence on the campus and conceded that he had spoken to a group of students. He claimed, however, that he had counseled restraint and peaceful protest, and exercised no control whatever over the crowd which had rejected his plea. He denied categorically taking part in any charge against the federal marshals.There was little evidence relating to the preparation of the news dispatch. It was clear, however, that the author of this dispatch, Van Savell, was actually present during the events described and had reported them almost immediately to the Associated Press office in Atlanta. A discrepancy was shown between an oral account given the office and a later written dispatch, but it related solely to whether Walker had spoken to the group before or after approaching the marshals. No other showing of improper preparation was attempted, nor was there any evidence of personal prejudice or incompetency on the part of Savell or the Associated Press.The jury was instructed that an award of compensatory damages could be made if the dispatch was not substantially true,4 and that punitive damages could be added if the article was actuated by "ill will, bad or evil motive, or that entire want of care which would raise the belief that the act or omission complained of was the result of a conscious indifference to the right or welfare of the person to be affected by it."A verdict of $500,000 compensatory damages and $300,000 punitive damages was returned. The trial judge, however, found that there was "no evidence to support the jury's answers that there was actual malice" and refused to enter the punitive award. He concluded that the failure further to investigate the minor discrepancy between the oral and written versions of the incident could not "be construed as that entire want of care which would amount to a conscious indifference to the rights of plaintiff. Negligence, it may have been; malice, it was not. Moreover, the mere fact that AP permitted a young reporter to cover the story of the riot is not evidence of malice." (Emphasis in original.) The trial judge also noted that this lack of "malice" would require a verdict for the Associated Press if New York Times were applicable. But he rejected its applicability since there were "no compelling reasons of public policy requiring additional defenses to suits for libel. Truth alone should be an adequate defense."Both sides appealed and the Texas Court of Civil Appeals affirmed both the award of compensatory damages and the striking of punitive damages. It stated without elaboration that New York Times was inapplicable. As to the punitive damage award, the plea for reinstatement was refused because "[i]n view of all the surrounding circumstances, the rapid and confused occurrence of events on the occasion in question, and in the light of all the evidence, we hold that appellee failed to prove malice ... ." 393 S. W. 2d 671, 683.The Supreme Court of Texas denied a writ of error, and we granted certiorari, as already indicated. For reasons given below, we would reverse. III. Before we reach the constitutional arguments put forward by the respective petitioners, we must first determine whether Curtis has waived its right to assert such arguments by failing to assert them before trial. As our dispositions of Rosenblatt v. Baer, , and other cases involving constitutional questions indicate,5 the mere failure to interpose such a defense prior to the announcement of a decision which might support it cannot prevent a litigant from later invoking such a ground. Of course it is equally clear that even constitutional objections may be waived by a failure to raise them at a proper time, Michel v. Louisiana, supra, at 99,6 but an effective waiver must, as was said in Johnson v. Zerbst, , be one of a "known right or privilege."Butts makes two arguments in support of his contention that Curtis' failure to raise constitutional defenses amounted to a knowing waiver. The first is that the general state of the law at the time of this trial was such that Curtis should, in the words of the Fifth Circuit majority, have seen "the handwriting on the wall." 351 F.2d, at 734. We cannot accept this contention. Although our decision in New York Times did draw upon earlier precedents in state law, e. g., Coleman v. MacLennan, 78 Kan. 711, 98 P. 281, and there were intimations in a prior opinion and the extra-judicial comments of one Justice,7 that some applications of libel law might be in conflict with the guarantees of free speech and press, there was strong precedent indicating that civil libel actions were immune from general constitutional scrutiny.8 Given the state of the law prior to our decision in New York Times, we do not think it unreasonable for a lawyer trying a case of this kind, where the plaintiff was not even a public official under state law to have looked solely to the defenses provided by state libel law. Nor do we think that the previous grant of certiorari in New York Times alone indicates a different conclusion. The questions presented for review there were premised on Sullivan's status as an elected public official, and elected officials traditionally have been subject to special rules of libel law.9 Butts' second contention is that whatever defenses might reasonably have been apparent to the average lawyer, some of Curtis' trial attorneys were involved in the New York Times litigation and thus should have been especially alert to constitutional contentions. This was the argument which swayed the Court of Appeals, but we do not find it convincing.First, as a general matter, we think it inadvisable to determine whether a "right or privilege" is "known" by relying on information outside the record concerning the special legal knowledge of particular attorneys. Second, even a lawyer fully cognizant of the record and briefs in the New York Times litigation might reasonably have expected the resolution of that case to have no impact on this litigation, since the arguments advanced there depended so heavily on the analogy to seditious libel. We think that it was our eventual resolution of New York Times, rather than its facts and the arguments presented by counsel, which brought out the constitutional question here. We would not hold that Curtis waived a "known right" before it was aware of the New York Times decision. It is agreed that Curtis' presentation of the constitutional issue after our decision in New York Times was prompt.Our rejection of Butts' arguments is supported by factors which point to the justice of that conclusion. See Hormel v. Helvering, . Curtis' constitutional points were raised early enough so that this Court has had the benefit of some ventilation of them by the courts below. The resolution of the merits of Curtis' contentions by the District Court makes it evident that Butts was not prejudiced by the time at which Curtis raised its argument, for it cannot be asserted that an earlier interposition would have resulted in any different proceedings below.10 Finally the constitutional protection which Butts contends that Curtis has waived safeguards a freedom which is the "matrix, the indispensable condition, of nearly every other form of freedom." Palko v. Connecticut, . Where the ultimate effect of sustaining a claim of waiver might be an imposition on that valued freedom, we are unwilling to find waiver in circumstances which fall short of being clear and compelling. Cf. New York Times Co. v. Connor, 365 F.2d 567, 572. IV. We thus turn to a consideration, on the merits, of the constitutional claims raised by Curtis in Butts and by the Associated Press in Walker. Powerful arguments are brought to bear for the extension of the New York Times rule in both cases. In Butts it is contended that the facts are on all fours with those of Rosenblatt v. Baer, supra, since Butts was charged with the important responsibility of managing the athletic affairs of a state university. It is argued that while the Athletic Association is financially independent from the State and Butts was not technically a state employee, as was Baer, his role in state administration was so significant that this technical distinction from Rosenblatt should be ignored. Even if this factor is to be given some weight, we are told that the public interest in education in general, and in the conduct of the athletic affairs of educational institutions in particular, justifies constitutional protection of discussion of persons involved in it equivalent to the protection afforded discussion of public officials.A similar argument is raised in the Walker case where the important public interest in being informed about the events and personalities involved in the Mississippi riot is pressed. In that case we are also urged to recognize that Walker's claims to the protection of libel laws are limited since he thrust himself into the "vortex" of the controversy.We are urged by the respondents, Butts and Walker, to recognize society's "pervasive and strong interest in preventing and redressing attacks upon reputation," and the "important social values which underlie the law of defamation." Rosenblatt v. Baer, supra, at 86. It is pointed out that the publicity in these instances was not directed at employees of government and that these cases cannot be analogized to seditious libel prosecutions. Id., at 92 (STEWART, J., concurring). We are told that "[t]he rule that permits satisfaction of the deep-seated need for vindication of honor is not a mere historic relic, but promotes the law's civilizing function of providing an acceptable substitute for violence in the settlement of disputes," Afro-American Publishing Co. v. JaffeApp. D.C. 70, 81, 366 F.2d 649, 660, and that:"Newspapers, magazines, and broadcasting companies are businesses conducted for profit and often make very large ones. Like other enterprises that inflict damage in the course of performing a service highly useful to the public ... they must pay the freight; and injured persons should not be relegated [to remedies which] make collection of their claims difficult or impossible unless strong policy considerations demand." Buckley v. New York Post Corp., 373 F.2d 175, 182. We fully recognize the force of these competing considerations and the fact that an accommodation between them is necessary not only in these cases, but in all libel actions arising from a publication concerning public issues. In Time, Inc. v. Hill, , we held that "[t]he guarantees for speech and press are not the preserve of political expression or comment upon public affairs ..." and affirmed that freedom of discussion "must embrace all issues about which information is needed or appropriate to enable the members of society to cope with the exigencies of their period." Thornhill v. Alabama, . This carries out the intent of the Founders who felt that a free press would advance "truth, science, morality, and arts in general" as well as responsible government. Letter to the Inhabitants of Quebec, 1 Journals of the Continental Cong. 108. From the point of view of deciding whether a constitutional interest of free speech and press is properly involved in the resolution of a libel question a rational distinction "cannot be founded on the assumption that criticism of private citizens who seek to lead in the determination of ... policy will be less important to the public interest than will criticism of government officials." Pauling v. Globe-Democrat Publishing Co., 362 F.2d 188, 196.On the other hand, to take the rule found appropriate in New York Times to resolve the "tension" between the particular constitutional interest there involved and the interests of personal reputation and press responsibility, Rosenblatt v. Baer, supra, at 86, as being applicable throughout the realm of the broader constitutional interest, would be to attribute to this aspect of New York Times an unintended inexorability at the threshold of this new constitutional development. In Time, Inc. v. Hill, supra, at 390, we counseled against "blind application of New York Times Co. v. Sullivan" and considered "the factors which arise in the particular context." Here we must undertake a parallel evaluation.11 The modern history of the guarantee of freedom of speech and press mainly has been one of a search for the outer limits of that right. From the fountainhead opinions of Justices Holmes and Brandeis in Schenck, Abrams, and Whitney,12 which considered the problem when the disruptive effects of speech might strip the protection from the speaker, to our recent decision in Adderley v. Florida, , where we found freedom of speech not to include a freedom to trespass, the Court's primary concern has been to determine the extent of the right and the surrounding safeguards necessary to give it "breathing space." NAACP v. Button, . That concern has perhaps omitted from searching consideration the "real problem" of defining or delimiting the right itself. See Freund, Mr. Justice Black and the Judicial Function, 14 U. C. L. A. L. Rev. 467, 471.It is significant that the guarantee of freedom of speech and press falls between the religious guarantees and the guarantee of the right to petition for redress of grievances in the text of the First Amendment, the principles of which are carried to the States by the Fourteenth Amendment. It partakes of the nature of both, for it is as much a guarantee to individuals of their personal right to make their thoughts public and put them before the community, see Holt, Of the Liberty of the Press, in Nelson, Freedom of the Press from Hamilton to the Warren Court 18-19, as it is a social necessity required for the "maintenance of our political system and an open society." Time, Inc. v. Hill, supra, at 389. It is because of the personal nature of this right that we have rejected all manner of prior restraint on publication, Near v. Minnesota, , despite strong arguments that if the material was unprotected the time of suppression was immaterial. Pound, Equitable Relief Against Defamation and Injuries to Personality, 29 Harv. L. Rev. 640. The dissemination of the individual's opinions on matters of public interest is for us, in the historic words of the Declaration of Independence, an "unalienable right" that "governments are instituted among men to secure." History shows us that the Founders were not always convinced that unlimited discussion of public issues would be "for the benefit of all of us"13 but that they firmly adhered to the proposition that the "true liberty of the press" permitted "every man to publish his opinion." Respublica v. Oswald, 1 Dall. 319, 325 (Pa.).The fact that dissemination of information and opinion on questions of public concern is ordinarily a legitimate, protected and indeed cherished activity does not mean, however, that one may in all respects carry on that activity exempt from sanctions designed to safeguard the legitimate interests of others. A business "is not immune from regulation because it is an agency of the press. The publisher of a newspaper has no special immunity from the application of general laws. He has no special privilege to invade the rights and liberties of others." Associated Press v. Labor Board, . Federal securities regulation,14 mail fraud statutes,15 and common-law actions for deceit and misrepresentation16 are only some examples of our understanding that the right to communicate information of public interest is not "unconditional." See Note, Freedom of Expression in a Commercial Context, 78 Harv. L. Rev. 1191. However, as our decision in New York Times makes explicit, while protected activity may in some respects be subjected to sanctions, it is not open to all forms of regulation. The guarantees of freedom of speech and press were not designed to prevent "the censorship of the press merely, but any action of the government by means of which it might prevent such free and general discussion of public matters as seems absolutely essential ... ." 2 Cooley, Constitutional Limitations 886 (8th ed.). Our touchstones are that acceptable limitations must neither affect "the impartial distribution of news" and ideas, Associated Press v. Labor Board, supra, at 133, nor because of their history or impact constitute a special burden on the press, Grosjean v. American Press Co., Inc., , nor deprive our free society of the stimulating benefit of varied ideas because their purveyors fear physical or economic retribution solely because of what they choose to think and publish.The history of libel law leaves little doubt that it originated in soil entirely different from that which nurtured these constitutional values. Early libel was primarily a criminal remedy, the function of which was to make punishable any writing which tended to bring into disrepute the state, established religion, or any individual likely to be provoked to a breach of the peace because of the words. Truth was no defense in such actions and while a proof of truth might prevent recovery in a civil action, this limitation is more readily explained as a manifestation of judicial reluctance to enrich an undeserving plaintiff than by the supposition that the defendant was protected by the truth of the publication. The same truthful statement might be the basis of a criminal libel action. See Commonwealth v. Clap, 4 Mass. 163; see generally Veeder, The History and Theory of the Law of Defamation, 3 Col. L. Rev. 546, 4 Col. L. Rev. 33.The law of libel has, of course, changed substantially since the early days of the Republic, and this change is "the direct consequence of the friction between it ... and the highly cherished right of free speech." State v. Browne, 86 N. J. Super. 217, 228, 206 A. 2d 591, 597. The emphasis has shifted from criminal to civil remedies, from the protection of absolute social values to the safeguarding of valid personal interests. Truth has become an absolute defense in almost all cases,17 and privileges designed to foster free communication are almost universally recognized.18 But the basic theory of libel has not changed, and words defamatory of another are still placed "in the same class with the use of explosives or the keeping of dangerous animals." Prosser, The Law of Torts 108. at 792. Thus some antithesis between freedom of speech and press and libel actions persists, for libel remains premised on the content of speech and limits the freedom of the publisher to express certain sentiments, at least without guaranteeing legal proof of their substantial accuracy.While the truth of the underlying facts might be said to mark the line between publications which are of significant social value and those which might be suppressed without serious social harm and thus resolve the antithesis on a neutral ground, we have rejected, in prior cases involving materials and persons commanding justified and important public interest, the argument that a finding of falsity alone should strip protections from the publisher. New York Times Co. v. Sullivan, supra, at 272. We have recognized "the inevitability of some error in the situation presented in free debate," Time, Inc. v. Hill, supra, at 406 (opinion of this writer), and that "putting to the pre-existing prejudices of a jury the determination of what is `true' may effectively institute a system of censorship."Our resolution of New York Times Co. v. Sullivan, in the context of the numerous statutes and cases which allow ideologically neutral, and generally applicable regulatory measures to be applied to publication, makes clear, however, that neither the interests of the publisher nor those of society necessarily preclude a damage award based on improper conduct which creates a false publication. It is the conduct element, therefore, on which we must principally focus if we are successfully to resolve the antithesis between civil libel actions and the freedom of speech and press. Impositions based on misconduct can be neutral with respect to content of the speech involved, free of historical taint, and adjusted to strike a fair balance between the interests of the community in free circulation of information and those of individuals in seeking recompense for harm done by the circulation of defamatory falsehood.In New York Times we were adjudicating in an area which lay close to seditious libel, and history dictated extreme caution in imposing liability. The plaintiff in that case was an official whose position in government was such "that the public [had] an independent interest in the qualifications and performance of the person who [held] it." Rosenblatt v. Baer, supra, at 86. Such officials usually enjoy a privilege against libel actions for their utterances, see, e. g., Barr v. Matteo, , and there were analogous considerations involved in New York Times, supra, at 282. Thus we invoked "the hypothesis that speech can rebut speech, propaganda will answer propaganda, free debate of ideas will result in the wisest governmental policies," Dennis v. United States, , and limited recovery to those cases where "calculated falsehood" placed the publisher "at odds with the premises of democratic government and with the orderly manner in which economic, social, or political change is to be effected." Garrison v. Louisiana, . That is to say, such officials were permitted to recover in libel only when they could prove that the publication involved was deliberately falsified, or published recklessly despite the publisher's awareness of probable falsity. Investigatory failures alone were held insufficient to satisfy this standard. See New York Times, at 286-288, 292; Garrison v. Louisiana, supra, at 73-75, 79.In the cases we decide today none of the particular considerations involved in New York Times is present. These actions cannot be analogized to prosecutions for seditious libel. Neither plaintiff has any position in government which would permit a recovery by him to be viewed as a vindication of governmental policy. Neither was entitled to a special privilege protecting his utterances against accountability in libel. We are prompted, therefore, to seek guidance from the rules of liability which prevail in our society with respect to compensation of persons injured by the improper performance of a legitimate activity by another. Under these rules, a departure from the kind of care society may expect from a reasonable man performing such activity leaves the actor open to a judicial shifting of loss. In defining these rules, and especially in formulating the standards for determining the degree of care to be expected in the circumstances, courts have consistently given much attention to the importance of defendants' activities. Prosser, The Law of Torts 31, at 151. The courts have also, especially in libel cases, investigated the plaintiff's position to determine whether he has a legitimate call upon the court for protection in light of his prior activities and means of self-defense. See Brewer v. Hearst Publishing Co., 185 F.2d 846; Flanagan v. Nicholson Publishing Co., 137 La. 588, 68 So. 964. We note that the public interest in the circulation of the materials here involved, and the publisher's interest in circulating them, is not less than that involved in New York Times. And both Butts and Walker commanded a substantial amount of independent public interest at the time of the publications; both, in our opinion, would have been labeled "public figures" under ordinary tort rules. See Spahn v. Julian Messner, Inc., 18 N. Y. 2d 324, 221 N. E. 2d 543, remanded on other grounds, . Butts may have attained that status by position alone and Walker by his purposeful activity amounting to a thrusting of his personality into the "vortex" of an important public controversy, but both commanded sufficient continuing public interest and had sufficient access to the means of counterargument to be able "to expose through discussion the falsehood and fallacies" of the defamatory statements. Whitney v. California, (Brandeis, J., dissenting).These similarities and differences between libel actions involving persons who are public officials and libel actions involving those circumstanced as were Butts and Walker, viewed in light of the principles of liability which are of general applicability in our society, lead us to the conclusion that libel actions of the present kind cannot be left entirely to state libel laws, unlimited by any overriding constitutional safeguard, but that the rigorous federal requirements of New York Times are not the only appropriate accommodation of the conflicting interests at stake. We consider and would hold that a "public figure" who is not a public official may also recover damages for a defamatory falsehood whose substance makes substantial danger to reputation apparent, on a showing of highly unreasonable conduct constituting an extreme departure from the standards of investigation and reporting ordinarily adhered to by responsible publishers. Cf. Sulzberger, Responsibility and Freedom, in Nelson, Freedom of the Press from Hamilton to the Warren Court 409, 412.Nothing in this opinion is meant to affect the holdings in New York Times and its progeny, including our recent decision in Time, Inc. v. Hill.19 V. Having set forth the standard by which we believe the constitutionality of the damage awards in these cases must be judged, we turn now, as the Court did in New York Times, to the question whether the evidence and findings below meet that standard. We find the standard satisfied in No. 37, Butts, and not satisfied by either the evidence or the findings in No. 150, Walker.The Butts jury was instructed, in considering punitive damages, to assess "the reliability, the nature of the sources of the defendant's information, its acceptance or rejection of the sources, and its care in checking upon assertions." These considerations were said to be relevant to a determination whether defendant had proceeded with "wanton and reckless indifference." In this light we consider that the jury must have decided that the investigation undertaken by the Saturday Evening Post, upon which much evidence and argument was centered,20 was grossly inadequate in the circumstances. The impact of a jury instruction "is not to be ascertained by merely considering isolated statements but by taking into view all the instructions given and the tendencies of the proof in the case to which they could possibly be applied." Seaboard Air Line R. Co. v. Padgett, .This jury finding was found to be supported by the evidence by the trial judge and the majority in the Fifth Circuit. Given the extended history of the case, the amount of the evidence pointing to serious deficiencies in investigatory procedure, and the severe harm inflicted on Butts, we would not feel justified in ordering a retrial of the compensatory damage issue, either on the theory that this aspect of the case was submitted to the jury only under the issue of "truth,"21 or on the very slim possibility that the jury finding regarding punitive damages might have been based on Curtis' attitude toward Butts rather than on Curtis' conduct.The evidence showed that the Butts story was in no sense "hot news" and the editors of the magazine recognized the need for a thorough investigation of the serious charges. Elementary precautions were, nevertheless, ignored. The Saturday Evening Post knew that Burnett had been placed on probation in connection with bad check charges, but proceeded to publish the story on the basis of his affidavit without substantial independent support. Burnett's notes were not even viewed by any of the magazine's personnel prior to publication. John Carmichael who was supposed to have been with Burnett when the phone call was overheard was not interviewed. No attempt was made to screen the films of the game to see if Burnett's information was accurate, and no attempt was made to find out whether Alabama had adjusted its plans after the alleged divulgence of information. The Post writer assigned to the story was not a football expert and no attempt was made to check the story with someone knowledgeable in the sport. At trial such experts indicated that the information in the Burnett notes was either such that it would be evident to any opposing coach from game films regularly exchanged or valueless. Those assisting the Post writer in his investigation were already deeply involved in another libel action, based on a different article, brought against Curtis Publishing Co. by the Alabama coach and unlikely to be the source of a complete and objective investigation. The Saturday Evening Post was anxious to change its image by instituting a policy of "sophisticated muckraking," and the pressure to produce a successful expose might have induced a stretching of standards. In short, the evidence is ample to support a finding of highly unreasonable conduct constituting an extreme departure from the standards of investigation and reporting ordinarily adhered to by responsible publishers.The situation in Walker is considerably different. There the trial court found the evidence insufficient to support more than a finding of even ordinary negligence and the Court of Civil Appeals supported the trial court's view of the evidence. Ordinarily we would, under the governing constitutional standard, reverse the decision below on the concurrent findings rule. Graver Tank & Mfg. Co. v. Linde Air Products Co., . But, as in New York Times, we think it better to face for ourselves the question whether there is sufficient evidence to support the finding we would require.In contrast to the Butts article, the dispatch which concerns us in Walker was news which required immediate dissemination. The Associated Press received the information from a correspondent who was present at the scene of the events and gave every indication of being trustworthy and competent. His dispatches in this instance, with one minor exception, were internally consistent and would not have seemed unreasonable to one familiar with General Walker's prior publicized statements on the underlying controversy.22 Considering the necessity for rapid dissemination, nothing in this series of events gives the slightest hint of a severe departure from accepted publishing standards. We therefore conclude that General Walker should not be entitled to damages from the Associated Press. VI. We come finally to Curtis' contention that whether or not it can be required to compensate Butts for any injury it may have caused him, it cannot be subjected to an assessment for punitive damages limited only by the "enlightened conscience" of the community. Curtis recognizes that the Constitution presents no general bar to the assessment of punitive damages in a civil case, Day v. Woodworth, 13 How. 363, 370-371, but contends that an unlimited punitive award against a magazine publisher constitutes an effective prior restraint by giving the jury the power to destroy the publisher's business. We cannot accept this reasoning. Publishers like Curtis engage in a wide variety of activities which may lead to tort suits where punitive damages are a possibility. To exempt a publisher, because of the nature of his calling, from an imposition generally exacted from other members of the community, would be to extend a protection not required by the constitutional guarantee. Associated Press v. Labor Board, . We think the constitutional guarantee of freedom of speech and press is adequately served by judicial control over excessive jury verdicts, manifested in this instance by the trial court's remittitur, and by the general rule that a verdict based on jury prejudice cannot be sustained even when punitive damages are warranted. See, e. g., Minneapolis, St. P. & S. S. M. R. Co. v. Moquin, .Despite this conclusion, it might be argued that an award of punitive damages cannot be justified constitutionally by the same degree of misconduct required to support a compensatory award. The usual rule in libel actions, and other state-created tort actions, is that a higher degree of fault is necessary to sustain a punitive imposition than a compensatory award. And it might be asserted that the need to compensate the injured plaintiff is not relevant to the issue of punitive damages in libel since an award of general damages compensates for any possible pecuniary and intangible harm. Thus the argument would be that the strong speech and press interest in publishing material on public issues, which we have recognized as parallel to the interest in publishing political criticism present in New York Times, must be served by a limitation on punitive damages restricting them to cases of "actual malice" as defined in New York Times and Garrison v. Louisiana, supra. We find the force of any such argument quite insufficient to overcome the compelling contrary considerations, and there is, moreover, nothing in any of our past cases which suggests that compensatory and punitive damages are subject to different constitutional standards of misconduct. Where a publisher's departure from standards of press responsibility is severe enough to strip from him the constitutional protection our decision acknowledges, we think it entirely proper for the State to act not only for the protection of the individual injured but to safeguard all those similarly situated against like abuse. Moreover, punitive damages require a finding of "ill will" under general libel law and it is not unjust that a publisher be forced to pay for the "venting of his spleen" in a manner which does not meet even the minimum standards required for constitutional protection. Especially in those cases where circumstances outside the publication itself reduce its impact sufficiently to make a compensatory imposition an inordinately light burden, punitive damages serve a wholly legitimate purpose in the protection of individual reputation. We would hold, therefore, that misconduct sufficient to justify the award of compensatory damages also justifies the imposition of a punitive award, subject of course to the limitation that such award is not demonstrated to be founded on the mere prejudice of the jury. As we have already noted (supra, pp. 156-158) the case on punitive damages was put to the jury under instructions which satisfied the constitutional test we would apply in cases of this kind, and the evidence amply supported the jury's findings.23 The judgment of the Court of Appeals for the Fifth Circuit in No. 37 is affirmed. The judgment of the Texas Court of Civil Appeals in No. 150 is reversed and the case is remanded to that court for further proceedings not inconsistent with the opinions that have been filed herein by THE CHIEF JUSTICE, MR. JUSTICE BLACK, and MR. JUSTICE BRENNAN. It is so ordered. |
8 | Consumers traditionally access the Internet through "dial-up" connections provided via local telephone lines. Internet service providers (ISPs), in turn, link those calls to the Internet network, not only by providing a physical connection, but also by offering consumers the ability to translate raw data into information they may both view on their own computers and transmit to others connected to the Internet. Technological limitations of local telephone wires, however, retard the speed at which Internet data may be transmitted through such "narrowband" connections. "Broadband" Internet service, by contrast, transmits data at much higher speeds. There are two principal kinds of broadband service: cable modem service, which transmits data between the Internet and users' computers via the network of television cable lines owned by cable companies, and Digital Subscriber Line (DSL) service, which uses high-speed wires owned by local telephone companies. Other ways of transmitting high-speed Internet data, including terrestrial- and satellite-based wireless networks, are also emerging. The Communications Act of 1934, as amended by the Telecommunications Act of 1996, defines two categories of entities relevant here. "Information service" providers — those "offering ... a capability for [processing] information via telecommunications," 47 U. S. C. §153(20)--are subject to mandatory regulation by the Federal Communications Commission as common carriers under Title II of the Act. Conversely, telecommunications carriers — i.e., those "offering ... telecommunications for a fee directly to the public ... regardless of the facilities used," §153(46)--are not subject to mandatory Title II regulation. These two classifications originated in the late 1970's, as the Commission developed rules to regulate data-processing services offered over telephone wires. Regulated "telecommunications service" under the 1996 Act is the analog to "basic service" under the prior regime, the Computer II rules. Those rules defined such service as a "pure" or "transparent" transmission capability over a communications path enabling the consumer to transmit an ordinary-language message to another point without computer processing or storage of the information, such as via a telephone or a facsimile. Under the 1996 Act, "[i]nformation service" is the analog to "enhanced" service, defined by the Computer II rules as computer-processing applications that act on the subscriber's information, such as voice and data storage services, as well as "protocol conversion," i.e., the ability to communicate between networks that employ different data-transmission formats. In the Declaratory Ruling under review, the Commission classified broadband cable modem service as an "information service" but not a "telecommunications service" under the 1996 Act, so that it is not subject to mandatory Title II common-carrier regulation. The Commission relied heavily on its Universal Service Report, which earlier classified "non-facilities-based" ISPs — those that do not own the transmission facilities they use to connect the end user to the Internet — solely as information-service providers. Because Internet access is a capability for manipulating and storing information, the Commission concluded, it was an "information service." However, the integrated nature of such access and the high-speed wire used to provide it led the Commission to conclude that cable companies providing it are not "telecommunications service" providers. Adopting the Universal Service Report's reasoning, the Commission held that cable companies offering broadband Internet access, like non-facilities-based ISPs, do not offer the end user telecommunications service, but merely use telecommunications to provide end users with cable modem service. Numerous parties petitioned for review. By judicial lottery, the Court of Appeals for the Ninth Circuit was selected as the venue for the challenge. That court granted the petitions in part, vacated the Declaratory Ruling in part, and remanded for further proceedings. In particular, the court held that the Commission could not permissibly construe the Communications Act to exempt cable companies providing cable modem service from mandatory Title II regulation. Rather than analyzing the permissibility of that construction under the deferential framework of Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, however, the court grounded that holding in the stare decisis effect of its decision in AT&T Corp. v. Portland, 216 F. 3d 871, which had held that cable modem service is a "telecommunications service." Held: The Commission's conclusion that broadband cable modem companies are exempt from mandatory common-carrier regulation is a lawful construction of the Communications Act under Chevron and the Administrative Procedure Act. Pp. 8-32. 1. Chevron's framework applies to the Commission's interpretation of "telecommunications service." Pp. 8-14. (a) Chevron governs this Court's review of the Commission's construction. See, e.g., National Cable & Telecommunications Assn., Inc. v. Gulf Power Co., 534 U. S. 327, 333-339. Chevron requires a federal court to defer to an agency's construction, even if it differs from what the court believes to be the best interpretation, if the particular statute is within the agency's jurisdiction to administer, the statute is ambiguous on the point at issue, and the agency's construction is reasonable. 467 U. S., at 843-844, and n. 11, 865-866. The Commission's statutory authority to "execute and enforce" the Communications Act, §151, and to "prescribe such rules and regulations as may be necessary ... to carry out the [Act's] provisions," §201(b), give the Commission power to promulgate binding legal rules; the Commission issued the order under review in the exercise of that authority; and there is no dispute that the order is within the Commission's jurisdiction. Pp. 8-10. (b) The Ninth Circuit should have applied Chevron's framework, instead of following the contrary construction it adopted in Portland. A court's prior construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. See Smiley, supra, at 740-741. Because Portland held only that the best reading of §153(46) was that cable modem service was "telecommunications service," not that this was the only permissible reading or that the Communications Act unambiguously required it, the Ninth Circuit erred in refusing to apply Chevron. Pp. 10-14. 2. The Commission's construction of §153(46)'s "telecommunications service" definition is a permissible reading of the Communications Act at both steps of Chevron's test. Pp. 14-29. (a) For the Commission, the question whether cable companies providing cable modem service "offe[r]" telecommunications within §153(46)'s meaning turned on the nature of the functions offered the end user. Seen from the consumer's point of view, the Commission concluded, the cable wire is used to access the World Wide Web, newsgroups, etc., rather than "transparently" to transmit and receive ordinary-language messages without computer processing or storage of the message. The integrated character of this offering led the Commission to conclude that cable companies do not make a stand-alone, transparent offering of telecommunications. Pp. 15-17. (b) The Commission's construction of §153(46) is permissible at Chevron's first step, which asks whether the statute's plain terms "directly addres[s] the precise question at issue." 467 U. S., at 843. This conclusion follows both from the ordinary meaning of "offering" and the Communications Act's regulatory history. Pp. 17-25. (1) Where a statute's plain terms admit of two or more reasonable ordinary usages, the Commission's choice of one of them is entitled to deference. See, e.g., Verizon Communications Inc. v. FCC, 535 U. S. 467, 498. It is common usage to describe what a company "offers" to a consumer as what the consumer perceives to be the integrated finished product, even to the exclusion of discrete components that compose the product. What cable companies providing cable modem service "offer" is finished Internet service, though they do so using the discrete components composing the end product, including data transmission. Such functionally integrated components need not be described as distinct "offerings." Pp. 17-21. (2) The Commission's traditional distinction between basic and enhanced service also supports the conclusion that the Communications Act is ambiguous about whether cable companies "offer" telecommunications with cable modem service. Congress passed the Act's definitions against the background of this regulatory history, and it may be assumed that the parallel terms "telecommunications service" and "information service" substantially incorporated the meaning of "basic" and "enhanced" service. That history in at least two respects confirms that the term "telecommunications service" is ambiguous. First, in the Computer II order establishing the terms "basic" and "enhanced" services, the Commission defined those terms functionally, based on how the consumer interacts with the provided information, just as the Commission did in the order under review. Cable modem service is not "transparent" in terms of its interaction with customer-supplied information; the transmission occurs only in connection with information processing. It was therefore consistent with the statute's terms for the Commission to assume that the parallel term "telecommunications service" in §153(46) likewise describes a "pure" or "transparent" communications path not necessarily separately present in an integrated information-processing service from the end-user's perspective. Second, the Commission's application of the basic/enhanced service distinction to non-facilities-based ISPs also supports the Court's conclusion. The Commission has historically not subjected non-facilities-based information-service providers to common carrier regulation. That history suggests, in turn, that the Act does not unambiguously classify nonfacilities based ISPs as "offerors" of telecommunications. If the Act does not unambiguously classify such providers as "offering telecommunications," it also does not unambiguously so classify facilities-based information-service providers such as cable companies; the relevant definitions do not distinguish the two types of carriers. The Act's silence suggests, instead, that the Commission has the discretion to fill the statutory gap. Pp. 21-25. (c) The Commission's interpretation is also permissible at Chevron's step two because it is "a reasonable policy choice for the agency to make," 467 U. S., at 845. Respondents argue unpersuasively that the Commission's construction is unreasonable because it allows any communications provider to evade common-carrier regulation simply by bundling information service with telecommunications. That result does not follow from the interpretation adopted in the Declaratory Ruling. The Commission classified cable modem service solely as an information service because the telecommunications input used to provide cable modem service is not separable from the service's data-processing capabilities, but is part and parcel of that service and integral to its other capabilities, and therefore is not a telecommunications offering. This construction does not leave all information-service offerings unregulated under Title II. It is plain, for example, that a local telephone company cannot escape regulation by packaging its telephone service with voice mail because such packaging offers a transparent transmission path — telephone service — that transmits information independent of the information-storage capabilities voice mail provides. By contrast, the high-speed transmission used to provide cable modem service is a functionally integrated component of Internet service because it transmits data only in connection with the further processing of information and is necessary to provide such service. The Commission's construction therefore was more limited than respondents assume. Respondents' argument that cable modem service does, in fact, provide "transparent" transmission from the consumer's perspective is also mistaken. Their characterization of the "information-service" offering of Internet access as consisting only of access to a cable company's e-mail service, its Web page, and the ability it provides to create a personal Web page conflicts with the Commission's reasonable understanding of the nature of Internet service. When an end user accesses a third party's Web site, the Commission concluded, he is equally using the information service provided by the cable company as when he accesses that company's own Web site, its e-mail service, or his personal webpage. As the Commission recognized, the service that Internet access providers offer the public is Internet access, not a transparent ability (from the end-user's perspective) to transmit information. Pp. 25-29. 3. The Court rejects respondent MCI, Inc.'s argument that the Commission's treatment of cable modem service is inconsistent with its treatment of DSL service and is therefore an arbitrary and capricious deviation from agency policy under the Administrative Procedure Act, see 5 U. S. C. §706(2)(A). MCI points out that when local telephone companies began to offer Internet access through DSL technology, the Commission required them to make the telephone lines used to provide DSL available to competing ISPs on nondiscriminatory, common-carrier terms. Respondents claim that the Commission has not adequately explained its decision not to regulate cable companies similarly. The Court thinks that the Commission has provided a reasoned explanation for this decision. The traditional reason for its Computer II common-carrier treatment of facilities-based carriers was that the telephone network was the primary, if not the exclusive, means through which information service providers could gain access to their customers. The Commission applied the same treatment to DSL service based on that history, rather than on an analysis of contemporaneous market conditions. The Commission's Declaratory Ruling, by contrast, concluded that changed market conditions warrant different treatment of cable modem service. Unlike at the time of the DSL order, substitute forms of Internet transmission exist today, including wireline, cable, terrestrial wireless, and satellite. The Commission therefore concluded that broadband services should exist in a minimal regulatory environment that promotes investment and innovation in a competitive market. There is nothing arbitrary or capricious about applying a fresh analysis to the cable industry. Pp. 29-31.345 F. 3d 1120, reversed and remanded. Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, O'Connor, Kennedy, and Breyer, JJ., joined. Stevens, J., and Breyer, J., filed concurring opinions. Scalia, J., filed a dissenting opinion, in which Souter and Ginsburg JJ., joined as to Part I.NATIONAL CABLE & TELECOMMUNICATIONSASSOCIATION, et al., PETITIONERS04-277 v.BRAND X INTERNET SERVICES et al.FEDERAL COMMUNICATIONS COMMISSION ANDUNITED STATES, PETITIONERS04-281 v.BRAND X INTERNET SERVICES et al.on writs of certiorari to the united states court ofappeals for the ninth circuit[June 27, 2005] Justice Thomas delivered the opinion of the Court. Title II of the Communications Act of 1934, 48 Stat. 1064, as amended, 47 U. S. C. §151 et seq., subjects all providers of "telecommunications servic[e]" to mandatory common-carrier regulation, §153(44). In the order under review, the Federal Communications Commission concluded that cable companies that sell broadband Internet service do not provide "telecommunications servic[e]" as the Communications Act defines that term, and hence are exempt from mandatory common-carrier regulation under Title II. We must decide whether that conclusion is a lawful construction of the Communications Act under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), and the Administrative Procedure Act, 5 U. S. C. §555 et seq. We hold that it is.I The traditional means by which consumers in the United States access the network of interconnected computers that make up the Internet is through "dial-up" connections provided over local telephone facilities. See 345 F. 3d 1120, 1123-1124 (CA9 2003) (cases below); In re Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities, 17 FCC Rcd. 4798, 4802-4803, ¶9 (2002) (hereinafter Declaratory Ruling). Using these connections, consumers access the Internet by making calls with computer modems through the telephone wires owned by local phone companies. See Verizon Communications Inc. v. FCC, 535 U. S. 467, 489-490 (2002) (describing the physical structure of a local telephone exchange). Internet service providers (ISPs), in turn, link those calls to the Internet network, not only by providing a physical connection, but also by offering consumers the ability to translate raw Internet data into information they may both view on their personal computers and transmit to other computers connected to the Internet. See In re Federal-State Joint Board on Universal Service, 13 FCC Rcd. 11501, 11531, ¶63 (1998) (hereinafter Universal Service Report); P. Huber, M. Kellogg, & J. Thorne, Federal Telecommunications Law 988 (2d ed. 1999) (hereinafter Huber); 345 F. 3d, at 1123-1124. Technological limitations of local telephone wires, however, retard the speed at which data from the Internet may be transmitted through end users' dial-up connections. Dial-up connections are therefore known as "narrowband," or slower speed, connections. "Broadband" Internet service, by contrast, transmits data at much higher speeds. There are two principal kinds of broadband Internet service: cable modem service and Digital Subscriber Line (DSL) service. Cable modem service transmits data between the Internet and users' computers via the network of television cable lines owned by cable companies. See id., at 1124. DSL service provides high-speed access using the local telephone wires owned by local telephone companies. See WorldCom, Inc. v. FCC, 246 F. 3d 690, 692 (CADC 2001) (describing DSL technology). Cable companies and telephone companies can either provide Internet access directly to consumers, thus acting as ISPs themselves, or can lease their transmission facilities to independent ISPs that then use the facilities to provide consumers with Internet access. Other ways of transmitting high-speed Internet data into homes, including terrestrial- and satellite-based wireless networks, are also emerging. Declaratory Ruling 4802, ¶6.II At issue in these cases is the proper regulatory classification under the Communications Act of broadband cable Internet service. The Act, as amended by the Telecommunications Act of 1996, 110 Stat. 56, defines two categories of regulated entities relevant to these cases: telecommunications carriers and information-service providers. The Act regulates telecommunications carriers, but not information-service providers, as common carriers. Telecommunications carriers, for example, must charge just and reasonable, nondiscriminatory rates to their customers, 47 U. S. C. §§201-209, design their systems so that other carriers can interconnect with their communications networks, §251(a)(1), and contribute to the federal "universal service" fund, §254(d). These provisions are mandatory, but the Commission must forbear from applying them if it determines that the public interest requires it. §§160(a), (b). Information-service providers, by contrast, are not subject to mandatory common-carrier regulation under Title II, though the Commission has jurisdiction to impose additional regulatory obligations under its Title I ancillary jurisdiction to regulate interstate and foreign communications, see §§151-161. These two statutory classifications originated in the late 1970's, as the Commission developed rules to regulate data-processing services offered over telephone wires. That regime, the "Computer II" rules, distinguished between "basic" service (like telephone service) and "enhanced" service (computer-processing service offered over telephone lines). In re Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), 77 F. C. C. 2d 384, 417-423, ¶¶86-101 (1980) (hereinafter Computer II Order). The Computer II rules defined both basic and enhanced services by reference to how the consumer perceives the service being offered. In particular, the Commission defined "basic service" as "a pure transmission capability over a communications path that is virtually transparent in terms of its interaction with customer supplied information." Id., at 420, ¶96. By "pure" or "transparent" transmission, the Commission meant a communications path that enabled the consumer to transmit an ordinary-language message to another point, with no computer processing or storage of the information, other than the processing or storage needed to convert the message into electronic form and then back into ordinary language for purposes of transmitting itover the network — such as via a telephone or a facsimile. Id., at 419-420, ¶¶94-95. Basic service was subject to common-carrier regulation. Id., at 428, ¶114. "[E]nhanced service," however, was service in which "computer processing applications [were] used to act on the content, code, protocol, and other aspects of the subscriber's information," such as voice and data storage services, id., at 420-421, ¶97, as well as "protocol conversion" (i.e., ability to communicate between networks that employ different data-transmission formats), id., at 421-422, ¶99. By contrast to basic service, the Commission decided not to subject providers of enhanced service, even enhanced service offered via transmission wires, to Title II common-carrier regulation. Id., at 428-432, ¶¶115-123. The Commission explained that it was unwise to subject enhanced service to common-carrier regulation given the "fast-moving, competitive market" in which they were offered. Id., at 434, ¶129. The definitions of the terms "telecommunications service" and "information service" established by the 1996 Act are similar to the Computer II basic- and enhanced-service classifications. "Telecommunications service"--the analog to basic service — is "the offering of telecommunications for a fee directly to the public ... regardless of the facilities used." 47 U. S. C. §153(46). "Telecommunications" is "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." §153(43). "Telecommunications carrier[s]"--those subjected to mandatory Title II common-carrier regulation — are defined as "provider[s] of telecommunications services." §153(44). And "information service"--the analog to enhanced service — is "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications ... ." §153(20). In September 2000, the Commission initiated a rulemaking proceeding to, among other things, apply these classifications to cable companies that offer broadband Internet service directly to consumers. In March 2002, that rulemaking culminated in the Declaratory Ruling under review in these cases. In the Declaratory Ruling, the Commission concluded that broadband Internet service provided by cable companies is an "information service" but not a "telecommunications service" under the Act, and therefore not subject to mandatory Title II common-carrier regulation. In support of this conclusion, the Commission relied heavily on its Universal Service Report. See Declaratory Ruling 4821-4822, ¶¶36-37 (citing Universal Service Report or Report). The Universal Service Report classified "non-facilities-based" ISPs — those that do not own the transmission facilities they use to connect the end user to the Internet — solely as information-service providers. See Universal Service Report 11533, ¶67. Unlike those ISPs, cable companies own the cable lines they use to provide Internet access. Nevertheless, in the Declaratory Ruling, the Commission found no basis in the statutory definitions for treating cable companies differently from non-facilities-based ISPs: Both offer "a single, integrated service that enables the subscriber to utilize Internet access service ... and to realize the benefits of a comprehensive service offering." Declaratory Ruling 4823, ¶38. Because Internet access provides a capability for manipulating and storing information, the Commission concluded that it was an information service. Ibid. The integrated nature of Internet access and the high-speed wire used to provide Internet access led the Commission to conclude that cable companies providing Internet access are not telecommunications providers. This conclusion, the Commission reasoned, followed from the logic of the Universal Service Report. The Report had concluded that, though Internet service "involves data transport elements" because "an Internet access provider must enable the movement of information between customers' own computers and distant computers with which those customers seek to interact," it also "offers end users information-service capabilities inextricably intertwined with data transport." Universal Service Report 11539-11540, ¶80. ISPs, therefore, were not "offering ... telecommunications ... directly to the public," §153(46), and so were not properly classified as telecommunications carriers, see id., at 11540, ¶81. In other words, the Commission reasoned that consumers use their cable modems not to transmit information "transparently," such as by using a telephone, but instead to obtain Internet access. The Commission applied this same reasoning to cable companies offering broadband Internet access. Its logic was that, like non-facilities-based ISPs, cable companies do not "offe[r] telecommunications service to the end user, but rather ... merely us[e] telecommunications to provide end users with cable modem service." Declaratory Ruling 4824, ¶41. Though the Commission declined to apply mandatory Title II common-carrier regulation to cable companies, it invited comment on whether under its Title I jurisdiction it should require cable companies to offer other ISPs access to their facilities on common-carrier terms. Id., at 4839, ¶72. Numerous parties petitioned for judicial review, challenging the Commission's conclusion that cable modem service was not telecommunications service. By judicial lottery, the Court of Appeals for the Ninth Circuit was selected as the venue for the challenge. The Court of Appeals granted the petitions in part, vacated the Declaratory Ruling in part, and remanded to the Commission for further proceedings. In particular, the Court of Appeals vacated the ruling to the extent it concluded that cable modem service was not "telecommunications service" under the Communications Act. It held that the Commission could not permissibly construe the Communications Act to exempt cable companies providing Internet service from Title II regulation. See 345 F. 3d, at 1132. Rather than analyzing the permissibility of that construction under the deferential framework of Chevron, 467 U. S. 837, however, the Court of Appeals grounded its holding in the stare decisis effect of AT&T Corp. v. Portland, 216 F. 3d 871 (CA9 2000). See 345 F. 3d, at 1128-1132. Portland held that cable modem service was a "telecommunications service," though the court in that case was not reviewing an administrative proceeding and the Commission was not a party to the case. See 216 F. 3d, at 877-880. Nevertheless, Portland's holding, the Court of Appeals reasoned, overrode the contrary interpretation reached by the Commission in the Declaratory Ruling. See 345 F. 3d, at 1130-1131. We granted certiorari to settle the important questions of federal law that these cases present. 543 U. S. __ (2004).III We first consider whether we should apply Chevron's framework to the Commission's interpretation of the term "telecommunications service." We conclude that we should. We also conclude that the Court of Appeals should have done the same, instead of following the contrary construction it adopted in Portland.A In Chevron, this Court held that ambiguities in statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps, the Court explained, involves difficult policy choices that agencies are better equipped to make than courts. 467 U. S., at 865-866. If a statute is ambiguous, and if the implementing agency's construction is reasonable, Chevron requires a federal court to accept the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation. Id., at 843-844, and n. 11. The Chevron framework governs our review of the Commission's construction. Congress has delegated to the Commission the authority to "execute and enforce" the Communications Act, §151, and to "prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions" of the Act, §201(b); AT&T Corp. v. Iowa Utilities Bd., 525 U. S. 366, 377-378 (1999). These provisions give the Commission the authority to promulgate binding legal rules; the Commission issued the order under review in the exercise of that authority; and no one questions that the order is within the Commission's jurisdiction. See Household Credit Services, Inc. v. Pfennig, 541 U. S. 232, 238-239 (2004); United States v. Mead Corp., 533 U. S. 218, 231-234 (2001); Christensen v. Harris County, 529 U. S. 576, 586-588 (2000). Hence, as we have in the past, we apply the Chevron framework to the Commission's interpretation of the Communications Act. See National Cable & Telecommunications Assn., Inc. v. Gulf Power Co., 534 U. S. 327, 333-339 (2002); Verizon, 535 U. S., at 501-502. Some of the respondents dispute this conclusion, on the ground that the Commission's interpretation is inconsistent with its past practice. We reject this argument. Agency inconsistency is not a basis for declining to analyze the agency's interpretation under the Chevron framework. Unexplained inconsistency is, at most, a reason for holding an interpretation to be an arbitrary and capricious change from agency practice under the Administrative Procedure Act. See Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 46-57 (1983). For if the agency adequately explains the reasons for a reversal of policy, "change is not invalidating, since the whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency." Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 742 (1996); see also Rust v. Sullivan, 500 U. S. 173, 186-187 (1991); Barnhart v. Walton, 535 U. S. 212, 226 (2002) (Scalia, J., concurring in part and concurring in judgment). "An initial agency interpretation is not instantly carved in stone. On the contrary, the agency ... must consider varying interpretations and the wisdom of its policy on a continuing basis," Chevron, supra, at 863-864, for example, in response to changed factual circumstances, or a change in administrations, see State Farm, supra, at 59 (Rehnquist, J., concurring in part and dissenting in part). That is no doubt why in Chevron itself, this Court deferred to an agency interpretation that was a recent reversal of agency policy. See 467 U. S., at 857-858. We therefore have no difficulty concluding that Chevron applies.B The Court of Appeals declined to apply Chevron because it thought the Commission's interpretation of the Communications Act foreclosed by the conflicting construction of the Act it had adopted in Portland, supra. See 345 F. 3d, at 1127-1132. It based that holding on the assumption that Portland's construction overrode the Commission's, regardless of whether Portland had held the statute to be unambiguous. 345 F. 3d, at 1131. That reasoning was incorrect. A court's prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. This principle follows from Chevron itself. Chevron established a "presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows." Smiley, supra, at 740-741. Yet allowing a judicial precedent to foreclose an agency from interpreting an ambiguous statute, as the Court of Appeals assumed it could, would allow a court's interpretation to override an agency's. Chevron's premise is that it is for agencies, not courts, to fill statutory gaps. See 467 U. S., at 843-844, and n. 11. The better rule is to hold judicial interpretations contained in precedents to the same demanding Chevron step one standard that applies if the court is reviewing the agency's construction on a blank slate: Only a judicial precedent holding that the statute unambiguously forecloses the agency's interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction. A contrary rule would produce anomalous results. It would mean that whether an agency's interpretation of an ambiguous statute is entitled to Chevron deference would turn on the order in which the interpretations issue: If the court's construction came first, its construction would prevail, whereas if the agency's came first, the agency's construction would command Chevron deference. Yet whether Congress has delegated to an agency the authority to interpret a statute does not depend on the order in which the judicial and administrative constructions occur. The Court of Appeals' rule, moreover, would "lead to the ossification of large portions of our statutory law," Mead, supra, at 247 (Scalia, J., dissenting), by precluding agencies from revising unwise judicial constructions of ambiguous statutes. Neither Chevron nor the doctrine of stare decisis requires these haphazard results. The dissent answers that allowing an agency to override what a court believes to be the best interpretation of a statute makes "judicial decisions subject to reversal by Executive officers." Post, at 13 (opinion of Scalia, J.). It does not. Since Chevron teaches that a court's opinion as to the best reading of an ambiguous statute an agency is charged with administering is not authoritative, the agency's decision to construe that statute differently from a court does not say that the court's holding was legally wrong. Instead, the agency may, consistent with the court's holding, choose a different construction, since the agency remains the authoritative interpreter (within the limits of reason) of such statutes. In all other respects, the court's prior ruling remains binding law (for example, as to agency interpretations to which Chevron is inapplicable). The precedent has not been "reversed" by the agency, any more than a federal court's interpretation of a State's law can be said to have been "reversed" by a state court that adopts a conflicting (yet authoritative) interpretation of state law. The Court of Appeals derived a contrary rule from a mistaken reading of this Court's decisions. It read Neal v. United States, 516 U. S. 284 (1996), to establish that a prior judicial construction of a statute categorically controls an agency's contrary construction. 345 F. 3d, at 1131-1132; see also post, at 12, n. 11 (Scalia, J., dissenting). Neal established no such proposition. Neal declined to defer to a construction adopted by the United States Sentencing Commission that conflicted with one the Court previously had adopted in Chapman v. United States, 500 U. S. 453 (1991). Neal, supra, at 290-295. Chapman, however, had held the relevant statute to be unambiguous. See 497 U. S. 116, 131 (1990) (emphasis added); see also Lechmere, Inc. v. NLRB, 502 U. S. 527, 536-537 (1992). Those decisions allow a court's prior interpretation of a statute to override an agency's interpretation only if the relevant court decision held the statute unambiguous. Against this background, the Court of Appeals erred in refusing to apply Chevron to the Commission's interpretation of the definition of "telecommunications service," 47 U. S. C. §153(46). Its prior decision in Portland held only that the best reading of §153(46) was that cable modem service was a "telecommunications service," not that it was the only permissible reading of the statute. See 216 F. 3d, at 877-880. Nothing in Portland held that the Communications Act unambiguously required treating cable Internet providers as telecommunications carriers. Instead, the court noted that it was "not presented with a case involving potential deference to an administrative agency's statutory construction pursuant to the Chevron doctrine," id., at 876; and the court invoked no other rule of construction (such as the rule of lenity) requiring it to conclude that the statute was unambiguous to reach its judgment. Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency's, the court must hold that the statute unambiguously requires the court's construction. Portland did not do so. As the dissent points out, it is not logically necessary for us to reach the question whether the Court of Appeals misapplied Chevron for us to decide whether the Commission acted lawfully. See post, at 16-17 (opinion of Scalia, J.). Nevertheless, it is no "great mystery" why we are reaching the point here. Ibid. There is genuine confusion in the lower courts over the interaction between the Chevron doctrine and stare decisis principles, as the petitioners informed us at the certiorari stage of this litigation. See Pet. for Cert. of Federal Communications Commission et al. in No. 04-281, pp. 19-23; Pet. for Cert. of National Cable & Telecomm. Assn. et al. in No. 04-277, pp. 22-29. The point has been briefed. See Brief for Federal Petitioners 38-44; Brief for Cable-Industry Petitioners 30-36. And not reaching the point could undermine the purpose of our grant of certiorari: to settle authoritatively whether the Commission's Declaratory Ruling is lawful. Were we to uphold the Declaratory Ruling without reaching the Chevron point, the Court of Appeals could once again strike down the Commission's rule based on its Portland decision. Portland (at least arguably) could compel the Court of Appeals once again to reverse the Commission despite our decision, since our conclusion that it is reasonable to read the Communications Act to classify cable modem service solely as an "information service" leaves untouched Portland's holding that the Commission's interpretation is not the best reading of the statute. We have before decided similar questions that were not, strictly speaking, necessary to our disposition. See, e.g., Agostini v. Felton, 521 U. S. 203, 237 (1997) (requiring the Courts of Appeals to adhere to our directly controlling precedents, even those that rest on reasons rejected in other decisions); Roper v. Simmons, 543 U. S. ___ , ___ (2005) (slip op., at 23-24) (Scalia, J., dissenting) (criticizing this Court for not reaching the question whether the Missouri Supreme Court erred by failing to follow directly controlling Supreme Court precedent, though that conclusion was not necessary to the Court's decision). It is prudent for us to do so once again today.IV We next address whether the Commission's construction of the definition of "telecommunications service," 47 U. S. C. §153(46), is a permissible reading of the Communications Act under the Chevron framework. Chevron established a familiar two-step procedure for evaluating whether an agency's interpretation of a statute is lawful. At the first step, we ask whether the statute's plain terms "directly addres[s] the precise question at issue." 467 U. S., at 843. If the statute is ambiguous on the point, we defer at step two to the agency's interpretation so long as the construction is "a reasonable policy choice for the agency to make." Id., at 845. The Commission's interpretation is permissible at both steps.A We first set forth our understanding of the interpretation of the Communications Act that the Commission embraced. The issue before the Commission was whether cable companies providing cable modem service are providing a "telecommunications service" in addition to an "information service." The Commission first concluded that cable modem service is an "information service," a conclusion unchallenged here. The Act defines "information service" as "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications ... ." §153(20). Cable modem service is an information service, the Commission reasoned, because it provides consumers with a comprehensive capability for manipulating information using the Internet via high-speed telecommunications. That service enables users, for example, to browse the World Wide Web, to transfer files from file archives available on the Internet via the "File Transfer Protocol," and to access e-mail and Usenet newsgroups. Declaratory Ruling 4821, ¶37; Universal Service Report 11537, ¶76. Like other forms of Internet service, cable modem service also gives users access to the Domain Name System (DNS). DNS, among other things, matches the Web page addresses that end users type into their browsers (or "click" on) with the Internet Protocol (IP) addresses1 of the servers containing the Web pages the users wish to access. Declaratory Ruling 4821-4822, ¶37. All of these features, the Commission concluded, were part of the information service that cable companies provide consumers. Id., at 4821-4823, ¶¶36-38; see also Universal Service Report 11536-11539, ¶¶75-79. At the same time, the Commission concluded that cable modem service was not "telecommunications service." "Telecommunications service" is "the offering of telecommunications for a fee directly to the public." 47 U. S. C. §153(46). "Telecommunications," in turn, is defined as "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." §153(43). The Commission conceded that, like all information-service providers, cable companies use "telecommunications" to provide consumers with Internet service; cable companies provide such service via the high-speed wire that transmits signals to and from an end user's computer. Declaratory Ruling 4823, ¶40. For the Commission, however, the question whether cable broadband Internet providers "offer" telecommunications involved more than whether telecommunications was one necessary component of cable modem service. Instead, whether that service also includes a telecommunications "offering" "tur[ned] on the nature of the functions the end user is offered," id., at 4822, ¶38 (emphasis added), for the statutory definition of "telecommunications service" does not "res[t] on the particular types of facilities used," id., at 4821, ¶35; see §153(46) (definition of "telecommunications service" applies "regardless of the facilities used"). Seen from the consumer's point of view, the Commission concluded, cable modem service is not a telecommunications offering because the consumer uses the high-speed wire always in connection with the information-processing capabilities provided by Internet access, and because the transmission is a necessary component of Internet access: "As provided to the end user the telecommunications is part and parcel of cable modem service and is integral to its other capabilities." Declaratory Ruling 4823, ¶39. The wire is used, in other words, to access the World Wide Web, newsgroups, and so forth, rather than "transparently" to transmit and receive ordinary-language messages without computer processing or storage of the message. See supra, at 4 (noting the Computer II notion of "transparent" transmission). The integrated character of this offering led the Commission to conclude that cable modem service is not a "stand-alone," transparent offering of telecommunications. Declaratory Ruling 4823-4825, ¶¶41-43.B This construction passes Chevron's first step. Respondents argue that it does not, on the ground that cable companies providing Internet service necessarily "offe[r]" the underlying telecommunications used to transmit that service. The word "offering" as used in §153(46), however, does not unambiguously require that result. Instead, "offering" can reasonably be read to mean a "stand-alone" offering of telecommunications, i.e., an offered service that, from the user's perspective, transmits messages unadulterated by computer processing. That conclusion follows not only from the ordinary meaning of the word "offering," but also from the regulatory history of the Communications Act.1 Cable companies in the broadband Internet service business "offe[r]" consumers an information service in the form of Internet access and they do so "via telecommunications," §153(20), but it does not inexorably follow as a matter of ordinary language that they also "offe[r]" consumers the high-speed data transmission (telecommunications) that is an input used to provide this service, §153(46). We have held that where a statute's plain terms admit of two or more reasonable ordinary usages, the Commission's choice of one of them is entitled to deference. See Verizon, 503 U. S. 407, 418 (1992) (agency construction entitled to deference where there were "alternative dictionary definitions of the word" at issue). The term "offe[r]" as used in the definition of telecommunications service, 47 U. S. C. §153(46), is ambiguous in this way. It is common usage to describe what a company "offers" to a consumer as what the consumer perceives to be the integrated finished product, even to the exclusion of discrete components that compose the product, as the dissent concedes. See post, at 3 (opinion of Scalia, J.). One might well say that a car dealership "offers" cars, but does not "offer" the integrated major inputs that make purchasing the car valuable, such as the engine or the chassis. It would, in fact, be odd to describe a car dealership as "offering" consumers the car's components in addition to the car itself. Even if it is linguistically permissible to say that the car dealership "offers" engines when it offers cars, that shows, at most, that the term "offer," when applied to a commercial transaction, is ambiguous about whether it describes only the offered finished product, or the product's discrete components as well. It does not show that no other usage is permitted. The question, then, is whether the transmission component of cable modem service is sufficiently integrated with the finished service to make it reasonable to describe the two as a single, integrated offering. See ibid. We think that they are sufficiently integrated, because "[a] consumer uses the high-speed wire always in connection with the information-processing capabilities provided by Internet access, and because the transmission is a necessary component of Internet access." Supra, at 16. In the telecommunications context, it is at least reasonable to describe companies as not "offering" to consumers each discrete input that is necessary to providing, and is always used in connection with, a finished service. We think it no misuse of language, for example, to say that cable companies providing Internet service do not "offer" consumers DNS, even though DNS is essential to providing Internet access. Declaratory Ruling 4810, n. 74, 4822-4823, ¶38. Likewise, a telephone company "offers" consumers a transparent transmission path that conveys an ordinary-language message, not necessarily the data transmission facilities that also "transmi[t] ... information of the user's choosing," §153(43), or other physical elements of the facilities used to provide telephone service, like the trunks and switches, or the copper in the wires. What cable companies providing cable modem service and telephone companies providing telephone service "offer" is Internet service and telephone service respectively — the finished services, though they do so using (or "via") the discrete components composing the end product, including data transmission. Such functionally integrated components need not be described as distinct "offerings." In response, the dissent argues that the high-speed transmission component necessary to providing cable modem service is necessarily "offered" with Internet service because cable modem service is like the offering of pizza delivery service together with pizza, and the offering of puppies together with dog leashes. Post, at 3-4 (opinion of Scalia, J.). The dissent's appeal to these analogies only underscores that the term "offer" is ambiguous in the way that we have described. The entire question is whether the products here are functionally integrated (like the components of a car) or functionally separate (like pets and leashes). That question turns not on the language of the Act, but on the factual particulars of how Internet technology works and how it is provided, questions Chevron leaves to the Commission to resolve in the first instance. As the Commission has candidly recognized, "the question may not always be straightforward whether, on the one hand, an entity is providing a single information service with communications and computing components, or, on the other hand, is providing two distinct services, one of which is a telecommunications service." Universal Service Report 11530, ¶60. Because the term "offer" can sometimes refer to a single, finished product and sometimes to the "individual components in a package being offered" (depending on whether the components "still possess sufficient identity to be described as separate objects," post, at 3), the statute fails unambiguously to classify the telecommunications component of cable modem service as a distinct offering. This leaves federal telecommunications policy in this technical and complex area to be set by the Commission, not by warringanalogies. We also do not share the dissent's certainty that cable modem service is so obviously like pizza delivery service and the combination of dog leashes and dogs that the Commission could not reasonably have thought otherwise. Post, at 3-4. For example, unlike the transmission component of Internet service, delivery service and dog leashes are not integral components of the finished products (pizzas and pet dogs). One can pick up a pizza rather than having it delivered, and one can own a dog without buying a leash. By contrast, the Commission reasonably concluded, a consumer cannot purchase Internet service without also purchasing a connection to the Internet and the transmission always occurs in connection with information processing. In any event, we doubt that a statute that, for example, subjected offerors of "delivery" service (such as Federal Express and United Parcel Service) to common-carrier regulation would unambiguously require pizza-delivery companies to offer their delivery services on a common carrier basis.2 The Commission's traditional distinction between basic and enhanced service, see supra, at 4-5, also supports the conclusion that the Communications Act is ambiguous about whether cable companies "offer" telecommunications with cable modem service. Congress passed the definitions in the Communications Act against the background of this regulatory history, and we may assume that the parallel terms "telecommunications service" and "information service" substantially incorporated their meaning, as the Commission has held. See, e.g., In re Federal-State Joint Board on Universal Service, 12 FCC Rcd. 8776, 9179-9180, ¶788 (1997) (noting that the "definition of enhanced services is substantially similar to the definition of information services" and that "all services previously considered 'enhanced services' are 'information services' "); Commissioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 159 (1993) (noting presumption that Congress is aware of "settled judicial and administrative interpretation[s]" of terms when it enacts a statute). The regulatory history in at least two respects confirms that the term "telecommunications service" is ambiguous. First, in the Computer II Order that established the terms "basic" and "enhanced" services, the Commission defined those terms functionally, based on how the consumer interacts with the provided information, just as the Commission did in the order below. See supra, at 4-5. As we have explained, Internet service is not " 'transparent in terms of its interaction with customer-supplied information,' " Computer II Order 420, ¶96; the transmission occurs in connection with information processing. It was therefore consistent with the statute's terms for the Commission to assume that the parallel term "telecommunications service" in 47 U. S. C. §153(46) likewise describes a "pure" or "transparent" communications path not necessarily separately present, from the end user's perspective, in an integrated information-service offering. The Commission's application of the basic/enhanced service distinction to non-facilities-based ISPs also supports this conclusion. The Commission has long held that "all those who provide some form of transmission services are not necessarily common carriers." Computer II Order 431, ¶122; see also id., at 435, ¶132 ("acknowledg[ing] the existence of a communications component" in enhanced-service offerings). For example, the Commission did not subject to common-carrier regulation those service providers that offered enhanced services over telecommunications facilities, but that did not themselves own the underlying facilities — so-called "non-facilities-based" providers. See Universal Service Report 11530, ¶60. Examples of these services included database services in which a customer used telecommunications to access information, such as Dow Jones News and Lexis, as well as "value added networks," which lease wires from common carriers and provide transmission as well as protocol-processing service over those wires. See In re Amendment to Sections 64.702 of the Commission's Rules and Regulations (Third Computer Inquiry), 3 FCC Rcd. 1150, 1153, n. 23 (1988); supra, at 4 (explaining protocol conversion). These services "combin[ed] communications and computing components," yet the Commission held that they should "always be deemed enhanced" and therefore not subject to common-carrier regulation. Universal Service Report 11530, ¶60. Following this traditional distinction, the Commission in the Universal Service Report classified ISPs that leased rather than owned their transmission facilities as pure information-service providers. Id., at 11540, ¶81. Respondents' statutory arguments conflict with this regulatory history. They claim that the Communications Act unambiguously classifies as telecommunications carriers all entities that use telecommunications inputs to provide information service. As respondent MCI concedes, this argument would subject to mandatory common-carrier regulation all information-service providers that use telecommunications as an input to provide information service to the public. Brief for Respondent MCI, Inc. 30. For example, it would subject to common-carrier regulation non-facilities-based ISPs that own no transmission facilities. See Universal Service Report 11532-11533, ¶66. Those ISPs provide consumers with transmission facilities used to connect to the Internet, see supra, at 2, and so, under respondents' argument, necessarily "offer" telecommunications to consumers. Respondents' position that all such entities are necessarily "offering telecommunications" therefore entails mandatory common-carrier regulation of entities that the Commission never classified as "offerors" of basic transmission service, and therefore common carriers, under the Computer II regime.2 See Universal Service Report 11540, ¶81 (noting past Commission policy); Computer and Communications Industry Assn. v. FCC, 693 F. 2d 198, 209 (CADC 1982) (noting and upholding Commission's Computer II "finding that enhanced services ... are not common carrier services within the scope of Title II"). We doubt that the parallel term "telecommunications service" unambiguously worked this abrupt shift in Commission policy. Respondents' analogy between cable companies that provide cable modem service and facilities-based enhanced-service providers — that is, enhanced-service providers who own the transmission facilities used to provide those services — fares no better. Respondents stress that under the Computer II rules the Commission regulated such providers more heavily than non-facilities-based providers. The Commission required, for example, local telephone companies that provided enhanced services to offer their wires on a common-carrier basis to competing enhanced-service providers. See, e.g., In re Amendment of Sections 64.702 of the Commission's Rules and Regulations (Third Computer Inquiry), 104 F. C. C. 2d 958, 964, ¶4 (1986) (hereinafter Computer III Order). Respondents argue that the Communications Act unambiguously requires the same treatment for cable companies because cable companies also own the facilities they use to provide cable modem service (and therefore information service). We disagree. We think it improbable that the Communications Act unambiguously freezes in time the Computer II treatment of facilities-based information-service providers. The Act's definition of "telecommunications service" says nothing about imposing more stringent regulatory duties on facilities-based information-service providers. The definition hinges solely on whether the entity "offer[s] telecommunications for a fee directly to the public,"47 U. S. C. §153(46), though the Act elsewhere subjects facilities-based carriers to stricter regulation, see §251(c) (imposing various duties on facilities-based local telephone companies). In the Computer II rules, the Commission subjected facilities-based providers to common-carrier duties not because of the nature of the "offering" made by those carriers, but rather because of the concern that local telephone companies would abuse the monopoly power they possessed by virtue of the "bottleneck" local telephone facilities they owned. See Computer II Order 474-475, ¶¶229, 231; Computer III Order 968-969, ¶12; Verizon, 535 U. S., at 489-490 (describing the naturally monopolistic physical structure of a local telephone exchange). The differential treatment of facilities-based carriers was therefore a function not of the definitions of "enhanced-service" and "basic service," but instead of a choice by the Commission to regulate more stringently, in its discretion, certain entities that provided enhanced service. The Act's definitions, however, parallel the definitions of enhanced and basic service, not the facilities-based grounds on which that policy choice was based, and the Commission remains free to impose special regulatory duties on facilities-based ISPs under its Title I ancillary jurisdiction. In fact, it has invited comment on whether it can and should do so. See supra, at 7. In sum, if the Act fails unambiguously to classify non-facilities-based information-service providers that use telecommunications inputs to provide an information service as "offer[ors]" of "telecommunications," then it also fails unambiguously to classify facilities-based information-service providers as telecommunications-service offerors; the relevant definitions do not distinguish facilities-based and non-facilities-based carriers. That silence suggests, instead, that the Commission has the discretion to fill the consequent statutory gap.C We also conclude that the Commission's construction was "a reasonable policy choice for the [Commission] to make" at Chevron's second step. 467 U. S., at 845. Respondents argue that the Commission's construction is unreasonable because it allows any communications provider to "evade" common-carrier regulation by the expedient of bundling information service with telecommunications. Respondents argue that under the Commission's construction a telephone company could, for example, offer an information service like voice mail together with telephone service, thereby avoiding common-carrier regulation of its telephone service. We need not decide whether a construction that resulted in these consequences would be unreasonable because we do not believe that these results follow from the construction the Commission adopted. As we understand the Declaratory Ruling, the Commission did not say that any telecommunications service that is priced or bundled with an information service is automatically unregulated under Title II. The Commission said that a telecommunications input used to provide an information service that is not "separable from the data-processing capabilities of the service" and is instead "part and parcel of [the information service] and is integral to [the information service's] other capabilities" is not a telecommunications offering. Declaratory Ruling 4823, ¶39; see supra, at 16-17. This construction does not leave all information service offerings exempt from mandatory Title II regulation. "It is plain," for example, that a local telephone company "cannot escape Title II regulation of its residential local exchange service simply by packaging that service with voice mail." Universal Service Report 11530, ¶60. That is because a telephone company that packages voice mail with telephone service offers a transparent transmission path — telephone service — that transmits information independent of the information-storage capabilities provided by voice mail. For instance, when a person makes a telephone call, his ability to convey and receive information using the call is only trivially affected by the additional voice-mail capability. Equally, were a telephone company to add a time-of-day announcement that played every time the user picked up his telephone, the "transparent" information transmitted in the ensuing call would be only trivially dependent on the information service the announcement provides. By contrast, the high-speed transmission used to provide cable modem service is a functionally integrated component of that service because it transmits data only in connection with the further processing of information and is necessary to provide Internet service. The Commission's construction therefore was more limited than respondents assume. Respondents answer that cable modem service does, in fact, provide "transparent" transmission from the consumer's perspective, but this argument, too, is mistaken. Respondents characterize the "information-service" offering of Internet access as consisting only of access to a cable company's e-mail service, its Web page, and the ability it provides consumers to create a personal Web page. When a consumer goes beyond those offerings and accesses content provided by parties other than the cable company, respondents argue, the consumer uses "pure transmission" no less than a consumer who purchases phone service together with voice mail. This argument, we believe, conflicts with the Commission's understanding of the nature of cable modem service, an understanding we find to be reasonable. When an end user accesses a third-party's Web site, the Commission concluded, he is equally using the information service provided by the cable company that offers him Internet access as when he accesses the company's own Web site, its e-mail service, or his personal Web page. For example, as the Commission found below, part of the information service cable companies provide is access to DNS service. See supra, at 15-16. A user cannot reach a third-party's Web site without DNS, which (among other things) matches the Web site address the end user types into his browser (or "clicks" on with his mouse) with the IP address of the Web page's host server. See P. Albitz & C. Liu, DNS and BIND 10 (4th ed. 2001) (For an Internet user, "DNS is a must. ... [N]early all of the Internet's network services use DNS. That includes the World Wide Web, electronic mail, remote terminal access, and file transfer"). It is at least reasonable to think of DNS as a "capability for ... acquiring ... retrieving, utilizing, or making available" Web site addresses and therefore part of the information service cable companies provide. 47 U. S. C. §153(20).3 Similarly, the Internet service provided by cable companies facilitates access to third-party Web pages by offering consumers the ability to store, or "cache," popular content on local computer servers. See Declaratory Ruling 4810, ¶17, and n. 76. Cacheing obviates the need for the end user to download anew information from third-party Web sites each time the consumer attempts to access them, thereby increasing the speed of information retrieval. In other words, subscribers can reach third-party Web sites via "the World Wide Web, and browse their contents, [only] because their service provider offers the 'capability for ... acquiring, [storing] ... retrieving [and] utilizing ... information.' " Universal Service Report 11538, ¶76 (quoting 47 U. S. C. §153(20)). "The service that Internet access providers offer to members of the public is Internet access," Universal Service Report 11539, ¶79, not a transparent ability (from the end user's perspective) to transmit information. We therefore conclude that the Commission's construction was reasonable.V Respondent MCI, Inc., urges that the Commission's treatment of cable modem service is inconsistent with its treatment of DSL service, see supra, at 3 (describing DSL service), and therefore is an arbitrary and capricious deviation from agency policy. See 5 U. S. C. §706(2)(A). MCI points out that when local telephone companies began to offer Internet access through DSL technology in addition to telephone service, the Commission applied its Computer II facilities-based classification to them and required them to make the telephone lines used to transmit DSL service available to competing ISPs on nondiscriminatory, common-carrier terms. See supra, at 24 (describing Computer II facilities-based classification of enhanced-service providers); In re Deployment of Wireline Services Offering Advanced Telecommunications Capability, 13 FCC Rcd. 24011, 24030-24031, ¶¶36-37 (1998) (hereinafter Wireline Order) (classifying DSL service as a telecommunications service). MCI claims that the Commission's decision not to regulate cable companies similarly under Title II is inconsistent with its DSL policy. We conclude, however, that the Commission provided a reasoned explanation for treating cable modem service differently from DSL service. As we have already noted, see supra, at 9-10, the Commission is free within the limits of reasoned interpretation to change course if it adequately justifies the change.4 It has done so here. The traditional reason for its Computer II common-carrier treatment of facilities-based carriers (including DSL carriers), as the Commission explained, was "that the telephone network [was] the primary, if not exclusive, means through which information service providers can gain access to their customers." Declaratory Ruling 4825, ¶44 (emphasis in original; internal quotation marks omitted). The Commission applied the same treatment to DSL service based on that history, rather than on an analysis of contemporaneous market conditions. See Wireline Order 24031, ¶37 (noting DSL carriers' "continuing obligation" to offer their transmission facilities to competing ISPs on nondiscriminatory terms). The Commission in the order under review, by contrast, concluded that changed market conditions warrant different treatment of facilities-based cable companies providing Internet access. Unlike at the time of Computer II, substitute forms of Internet transmission exist today: "[R]esidential high-speed access to the Internet is evolving over multiple electronic platforms, including wireline, cable, terrestrial wireless and satellite." Declaratory Ruling 4802, ¶6; see also U. S. Telecom Assn. v. FCC, 290 F. 3d 415, 428 (CADC 2002) (noting Commission findings of "robust competition ... in the broadband market"). The Commission concluded that " 'broadband services should exist in a minimal regulatory environment that promotes investment and innovation in a competitive market.' " Declaratory Ruling 4802, ¶5. This, the Commission reasoned, warranted treating cable companies unlike the facilities-based enhanced-service providers of the past. Id., at 4825, ¶44. We find nothing arbitrary about the Commission's providing a fresh analysis of the problem as applied to the cable industry, which it has never subjected to these rules. This is adequate rational justification for the Commission's conclusions. Respondents argue, in effect, that the Commission's justification for exempting cable modem service providers from common-carrier regulation applies with similar force to DSL providers. We need not address that argument. The Commission's decision appears to be a first step in an effort to reshape the way the Commission regulates information-service providers; that may be why it has tentatively concluded that DSL service provided by facilities-based telephone companies should also be classified solely as an information service. See In re Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, 17 FCC Rcd. 3019, 3030, ¶20 (2002). The Commission need not immediately apply the policy reasoning in the Declaratory Ruling to all types of information-service providers. It apparently has decided to revisit its longstanding Computer II classification of facilities-based information-service providers incrementally. Any inconsistency between the order under review and the Commission's treatment of DSL service can be adequately addressed when the Commission fully reconsiders its treatment of DSL service and when it decides whether, pursuant to its ancillary Title I jurisdiction, to require cable companies to allow independent ISPs access to their facilities. See supra, at 7, this page. We express no view on those matters. In particular, we express no view on how the Commission should, or lawfully may, classify DSL service.*** The questions the Commission resolved in the order under review involve a "subject matter [that] is technical, complex, and dynamic." Gulf Power, 534 U. S., at 339. The Commission is in a far better position to address these questions than we are. Nothing in the Communications Act or the Administrative Procedure Act makes unlawful the Commission's use of its expert policy judgment to resolve these difficult questions. The judgment of the Court of Appeals is reversed, and the cases are remanded for further proceedings consistent with this opinion.It is so ordered.NATIONAL CABLE & TELECOMMUNICATIONSASSOCIATION, et al., PETITIONERS04-277 v.BRAND X INTERNET SERVICES et al.FEDERAL COMMUNICATIONS COMMISSION ANDUNITED STATES, PETITIONERS04-281 v.BRAND X INTERNET SERVICES et al.on writs of certiorari to the united states court ofappeals for the ninth circuit[June 27, 2005] Justice Stevens, concurring. While I join the Court's opinion in full, I add this caveat concerning Part III-B, which correctly explains why a court of appeals' interpretation of an ambiguous provision in a regulatory statute does not foreclose a contrary reading by the agency. That explanation would not necessarily be applicable to a decision by this Court that would presumably remove any pre-existing ambiguity. NATIONAL CABLE & TELECOMMUNICATIONSASSOCIATION, et al., PETITIONERS04-277 v.BRAND X INTERNET SERVICES et al.FEDERAL COMMUNICATIONS COMMISSION ANDUNITED STATES, PETITIONERS04-281 v.BRAND X INTERNET SERVICES et al.on writs of certiorari to the united states court ofappeals for the ninth circuit[June 27, 2005] Justice Breyer, concurring. I join the Court's opinion because I believe that the Federal Communications Commission's decision falls within the scope of its statutorily delegated authority — though perhaps just barely. I write separately because I believe it important to point out that Justice Scalia, in my view, has wrongly characterized the Court's opinion in United States v. Mead Corp., 533 U. S. 218 (2001). He states that the Court held in Mead that "some unspecified degree of formal process" before the agency "was required" for courts to accord the agency's decision deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). Post, at 12 (dissenting opinion); see also ibid. (formal process is "at least the only safe harbor"). Justice Scalia has correctly characterized the way in which he, in dissent, characterized the Court's Mead opinion. 533 U. S., at 245-246. But the Court said the opposite. An agency action qualifies for Chevron deference when Congress has explicitly or implicitly delegated to the agency the authority to "fill" a statutory "gap," including an interpretive gap created through an ambiguity in the language of a statute's provisions. Chevron, supra, at 843-844; Mead, supra, at 226-227. The Court said in Mead that such delegation "may be shown in a variety of ways, as by an agency's power to engage in adjudication or notice-and-comment rulemaking, or by some other indication of a comparable congressional intent." 533 U. S., at 227 (emphasis added). The Court explicitly stated that the absence of notice-and-comment rulemaking did "not decide the case," for the Court has "sometimes found reasons for Chevron deference even when no such administrative formality was required and none was afforded." Id., at 231. And the Court repeated that it "has recognized a variety of indicators that Congress would expect Chevron deference." Id., at 237 (emphasis added). It is not surprising that the Court would hold that the existence of a formal rulemaking proceeding is neither a necessary nor a sufficient condition for according Chevron deference to an agency's interpretation of a statute. It is not a necessary condition because an agency might arrive at an authoritative interpretation of a congressional enactment in other ways, including ways that Justice Scalia mentions. See, e.g., Mead, supra, at 231. It is not a sufficient condition because Congress may have intended not to leave the matter of a particular interpretation up to the agency, irrespective of the procedure the agency uses to arrive at that interpretation, say, where an unusually basic legal question is at issue. Cf. General Dynamics Land Systems, Inc. v. Cline, 540 U. S. 581, 600 (2004) (rejecting agency's answer to question whether age discrimination law forbids discrimination against the relatively young). Thus, while I believe Justice Scalia is right in emphasizing that Chevron deference may be appropriate in the absence of formal agency proceedings, Mead should not give him cause for concern.NATIONAL CABLE & TELECOMMUNICATIONSASSOCIATION, et al., PETITIONERS04-277 v.BRAND X INTERNET SERVICES et al.FEDERAL COMMUNICATIONS COMMISSION ANDUNITED STATES, PETITIONERS04-281 v.BRAND X INTERNET SERVICES et al.on writs of certiorari to the united states court ofappeals for the ninth circuit[June 27, 2005] Justice Scalia, with whom Justice Souter and Justice Ginsburg join as to Part I, dissenting. The Federal Communications Commission (FCC or Commission) has once again attempted to concoct "a whole new regime of regulation (or of free-market competition)" under the guise of statutory construction. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 234 (1994). Actually, in these cases, it might be more accurate to say the Commission has attempted to establish a whole new regime of non-regulation, which will make for more or less free-market competition, depending upon whose experts are believed. The important fact, however, is that the Commission has chosen to achieve this through an implausible reading of the statute, and has thus exceeded the authority given it by Congress.I The first sentence of the FCC ruling under review reads as follows: "Cable modem service provides high-speed access to the Internet, as well as many applications or functions that can be used with that access, over cable system facilities." In re Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities, 17 FCC Rcd. 4798, 4799, ¶1 (2002) (hereinafter Declaratory Ruling) (emphasis added, footnote omitted). Does this mean that cable companies "offer" high-speed access to the Internet? Surprisingly not, if the Commission and the Court are to be believed. It happens that cable-modem service is popular precisely because of the high-speed access it provides, and that, once connected with the Internet, cable-modem subscribers often use Internet applications and functions from providers other than the cable company. Nevertheless, for purposes of classifying what the cable company does, the Commission (with the Court's approval) puts all the emphasis on the rest of the package (the additional "applications or functions"). It does so by claiming that the cable company does not "offe[r]" its customers high-speed Internet access because it offers that access only in conjunction with particular applications and functions, rather than "separate[ly]," as a "stand-alone offering." Id., at 4802, ¶7, 4823, ¶40. The focus on the term "offer" appropriately derives from the statutory definitions at issue in these cases. Under the Telecommunications Act of 1996, 110 Stat. 56, " 'information service' " involves the capacity to generate, store, interact with, or otherwise manipulate "information via telecommunications." 47 U. S. C. §153(20). In turn, " 'telecommunications' " is defined as "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." §153(43). Finally, " 'telecommunications service' " is defined as "the offering of telecommunications for a fee directly to the public ... regardless of the facilities used." §153(46). The question here is whether cable-modem-service providers "offe[r] ... telecommunications for a fee directly to the public." If so, they are subject to Title II regulation as common carriers, like their chief competitors who provide Internet access through other technologies. The Court concludes that the word "offer" is ambiguous in the sense that it has " 'alternative dictionary definitions' " that might be relevant. Ante, at 18 (quoting National Railroad Passenger Corporation v. Boston & Maine Corp., 503 U. S. 407, 418 (1992)). It seems to me, however, that the analytic problem pertains not really to the meaning of "offer," but to the identity of what is offered. The relevant question is whether the individual components in a package being offered still possess sufficient identity to be described as separate objects of the offer, or whether they have been so changed by their combination with the other components that it is no longer reasonable to describe them in that way. Thus, I agree (to adapt the Court's example, ante, at 18) that it would be odd to say that a car dealer is in the business of selling steel or carpets because the cars he sells include both steel frames and carpeting. Nor does the water company sell hydrogen, nor the pet store water (though dogs and cats are largely water at the molecular level). But what is sometimes true is not, as the Court seems to assume, always true. There are instances in which it is ridiculous to deny that one part of a joint offering is being offered merely because it is not offered on a " 'stand-alone' " basis, ante, at 17. If, for example, I call up a pizzeria and ask whether they offer delivery, both common sense and common "usage," ante, at 18, would prevent them from answering: "No, we do not offer delivery — but if you order a pizza from us, we'll bake it for you and then bring it to your house." The logical response to this would be something on the order of, "so, you do offer delivery." But our pizza-man may continue to deny the obvious and explain, paraphrasing the FCC and the Court: "No, even though we bring the pizza to your house, we are not actually 'offering' you delivery, because the delivery that we provide to our end users is 'part and parcel' of our pizzeria-pizza-at-home service and is 'integral to its other capabilities.' " Cf. Declaratory Ruling 4823, ¶39; ante, at 16, 26.1 Any reasonable customer would conclude at that point that his interlocutor was either crazy or following some too-clever-by-half legal advice. In short, for the inputs of a finished service to qualify as the objects of an "offer" (as that term is reasonably understood), it is perhaps a sufficient, but surely not a necessary, condition that the seller offer separately "each discrete input that is necessary to providing ... a finished service," ante, at 19. The pet store may have a policy of selling puppies only with leashes, but any customer will say that it does offer puppies — because a leashed puppy is still a puppy, even though it is not offered on a "stand-alone" basis. Despite the Court's mighty labors to prove otherwise, ante, at 17-29, the telecommunications component of cable-modem service retains such ample independent identity that it must be regarded as being on offer — especially when seen from the perspective of the consumer or the end user, which the Court purports to find determinative, ante, at 18, 22, 27, 28. The Commission's ruling began by noting that cable-modem service provides both "high-speed access to the Internet" and other "applications and functions," Declaratory Ruling 4799, ¶1, because that is exactly how any reasonable consumer would perceive it: as consisting of two separate things. The consumer's view of the matter is best assessed by asking what other products cable-modem service substitutes for in the marketplace. Broadband Internet service provided by cable companies is one of the three most common forms of Internet service, the other two being dial-up access and broadband Digital Subscriber Line (DSL) service. Ante, at 2-3. In each of the other two, the physical transmission pathway to the Internet is sold — indeed, is legally required to be sold — separately from the Internet functionality. With dial-up access, the physical pathway comes from the telephone company and the Internet service provider (ISP) provides the functionality. "In the case of Internet access, the end user utilizes two different and distinct services. One is the transmission pathway, a telecommunications service that the end user purchases from the telephone company. The second is the Internet access service, which is an enhanced service provided by an ISP... . Th[e] functions [provided by the ISP] are separate from the transmission pathway over which that data travels. The pathway is a regulated telecommunications service; the enhanced service offered over it is not." Oxman, The FCC and the Unregulation of the Internet, p. 13 (FCC, Office of Plans and Policy, Working Paper No. 31, July 1999), available at http://www.fcc.gov/Bureaus/OPP/working_papers/oppwp31.pdf (as visited June 24, 2005, and available in the Clerk of Court's case file).2As the Court acknowledges, ante, at 29, DSL service has been similar to dial-up service in the respect that the physical connection to the Internet must be offered separately from Internet functionality.3 Thus, customers shopping for dial-up or DSL service will not be able to use the Internet unless they get both someone to provide them with a physical connection and someone to provide them with applications and functions such as e-mail and Web access. It is therefore inevitable that customers will regard the competing cable-modem service as giving them both computing functionality and the physical pipe by which that functionality comes to their computer — both the pizza and the delivery service that nondelivery pizzerias require to be purchased from the cab company.4 Since the delivery service provided by cable (the broad-band connection between the customer's computer and the cable company's computer-processing facilities) is downstream from the computer-processing facilities, there is no question that it merely serves as a conduit for the information services that have already been "assembled" by the cable company in its capacity as ISP. This is relevant because of the statutory distinction between an "information service" and "telecommunications." The former involves the capability of getting, processing, and manipulating information. §153(20). The latter, by contrast, involves no "change in the form or content of the information as sent and received." §153(43). When cable-company-assembled information enters the cable for delivery to the subscriber, the information service is already complete. The information has been (as the statute requires) generated, acquired, stored, transformed, processed, retrieved, utilized, or made available. All that remains is for the information in its final, unaltered form, to be delivered (via telecommunications) to the subscriber. This reveals the insubstantiality of the fear invoked by both the Commission and the Court: the fear of what will happen to ISPs that do not provide the physical pathway to Internet access, yet still use telecommunications to acquire the pieces necessary to assemble the information that they pass back to their customers. According to this reductio, ante, at 22-24, if cable-modem-service providers are deemed to provide "telecommunications service," then so must all ISPs because they all "use" telecommunications in providing Internet functionality (by connecting to other parts of the Internet, including Internet backbone providers, for example). In terms of the pizzeria analogy, this is equivalent to saying that, if the pizzeria "offers" delivery, all restaurants "offer" delivery, because the ingredients of the food they serve their customers have come from other places; no matter how their customers get the food (whether by eating it at the restaurant, or by coming to pick it up themselves), they still consume a product for which delivery was a necessary "input." This is nonsense. Concluding that delivery of the finished pizza constitutes an "offer" of delivery does not require the conclusion that the serving of prepared food includes an "offer" of delivery. And that analogy does not even do the point justice, since " 'telecommunications service' " is defined as "the offering of telecommunications for a fee directly to the public." 47 U. S. C. §153(46) (emphasis added). The ISPs' use of telecommunications in their processing of information is not offered directly to the public. The "regulatory history" on which the Court depends so much, ante, at 21-25, provides another reason why common-carrier regulation of all ISPs is not a worry. Under its Computer Inquiry rules, which foreshadowed the definitions of "information" and "telecommunications" services, ante, at 4-5, the Commission forbore from regulating as common carriers "value-added networks"--non-facilities-based providers who leased basic services from common carriers and bundled them with enhanced services; it said that they, unlike facilities-based providers, would be deemed to provide only enhanced services, ante, at 22.5 That same result can be achieved today under the Commission's statutory authority to forbear from imposing most Title II regulations. 47 U. S. C. §160. In fact, the statutory criteria for forbearance — which include what is "just and reasonable," "necessary for the protection of consumers," and "consistent with the public interest," §§160(a)(1), (2), (3)--correspond well with the kinds of policy reasons the Commission has invoked to justify its peculiar construction of "telecommunications service" to exclude cable-modem service. The Court also puts great stock in its conclusion that cable-modem subscribers cannot avoid using information services provided by the cable company in its ISP capacity, even when they only click-through to other ISPs. Ante, at 27-29. For, even if a cable-modem subscriber uses e-mail from another ISP, designates some page not provided by the cable company as his home page, and takes advantage of none of the other standard applications and functions provided by the cable company, he will still be using the cable company's Domain Name System (DNS) server and, when he goes to popular Web pages, perhaps versions of them that are stored in the cable company's cache. This argument suffers from at least two problems. First, in the context of telephone services, the Court recognizes a de minimis exception to contamination of a telecommunications service by an information service. Ante, at 26-27. A similar exception would seem to apply to the functions in question here. DNS, in particular, is scarcely more than routing information, which is expressly excluded from the definition of "information service." 47 U. S. C. §153(20).6 Second, it is apparently possible to sell a telecommunications service separately from, although in conjunction with, ISP-like services; that is precisely what happens in the DSL context, and the Commission does not contest that it could be done in the context of cable. The only impediment appears to be the Commission's failure to require from cable companies the unbundling that it required of facilities-based providers under its Computer Inquiry. Finally, I must note that, notwithstanding the Commission's self-congratulatory paean to its deregulatory largesse, e.g., Brief for Federal Petitioners 29-32, it concluded the Declaratory Ruling by asking, as the Court paraphrases, "whether under its Title I jurisdiction [the Commission] should require cable companies to offer other ISPs access to their facilities on common-carrier terms." Ante, at 7; see also Reply Brief for Federal Petitioners 9; Tr. of Oral Arg. 17. In other words, what the Commission hath given, the Commission may well take away — unless it doesn't. This is a wonderful illustration of how an experienced agency can (with some assistance from credulous courts) turn statutory constraints into bureaucratic discretions. The main source of the Commission's regulatory authority over common carriers is Title II, but the Commission has rendered that inapplicable in this instance by concluding that the definition of "telecommunications service" is ambiguous and does not (in its current view) apply to cable-modem service. It contemplates, however, altering that (unnecessary) outcome, not by changing the law (i.e., its construction of the Title II definitions), but by reserving the right to change the facts. Under its undefined and sparingly used "ancillary" powers, the Commission might conclude that it can order cable companies to "unbundle" the telecommunications component of cable-modem service.7 And presto, Title II will then apply to them, because they will finally be "offering" telecommunications service! Of course, the Commission will still have the statutory power to forbear from regulating them under §160 (which it has already tentatively concluded it would do, Declaratory Ruling 4847-4848, ¶¶94-95). Such Möbius-strip reasoning mocks the principle that the statute constrains the agency in any meaningful way. After all is said and done, after all the regulatory cant has been translated, and the smoke of agency expertise blown away, it remains perfectly clear that someone who sells cable-modem service is "offering" telecommunications. For that simple reason set forth in the statute, I would affirm the Court of Appeals.II In Part III-B of its opinion, the Court continues the administrative-law improvisation project it began four years ago in United States v. Mead Corp., 533 U. S. 218 (2001). To the extent it set forth a comprehensible rule,8 Mead drastically limited the categories of agency action that would qualify for deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). For example, the position taken by an agency before the Supreme Court, with full approval of the agency head, would not qualify. Rather, some unspecified degree of formal process was required — or was at least the only safe harbor. See Mead, supra, at 245-246 (Scalia, J., dissenting).9 This meant that many more issues appropriate for agency determination would reach the courts without benefit of an agency position entitled to Chevron deference, requiring the courts to rule on these issues de novo.10 As I pointed out in dissent, this in turn meant (under the law as it was understood until today)11 that many statutory ambiguities that might be resolved in varying fashions by successive agency administrations, would be resolved finally, conclusively, and forever, by federal judges — producing an "ossification of large portions of our statutory law," 533 U. S., at 247. The Court today moves to solve this problem of its own creation by inventing yet another breathtaking novelty: judicial decisions subject to reversal by Executive officers. Imagine the following sequence of events: FCC action is challenged as ultra vires under the governing statute; the litigation reaches all the way to the Supreme Court of the United States. The Solicitor General sets forth the FCC's official position (approved by the Commission) regarding interpretation of the statute. Applying Mead, however, the Court denies the agency position Chevron deference, finds that the best interpretation of the statute contradicts the agency's position, and holds the challenged agency action unlawful. The agency promptly conducts a rulemaking, and adopts a rule that comports with its earlier position — in effect disagreeing with the Supreme Court concerning the best interpretation of the statute. According to today's opinion, the agency is thereupon free to take the action that the Supreme Court found unlawful. This is not only bizarre. It is probably unconstitutional. As we held in Chicago & Southern Air Lines, Inc. v. Waterman S. S. Corp., 333 U. S. 103 (1948), Article III courts do not sit to render decisions that can be reversed or ignored by Executive officers. In that case, the Court of Appeals had determined it had jurisdiction to review an order of the Civil Aeronautics Board awarding an overseas air route. By statute such orders were subject to Presidential approval and the order in question had in fact been approved by the President. Id., at 110-111. In order to avoid any conflict with the President's foreign-affairs powers, the Court of Appeals concluded that it would review the board's action "as a regulatory agent of Congress," and the results of that review would remain subject to approval or disapproval by the President. Id., at 112-113. As I noted in my Mead dissent, 533 U. S., at 248, the Court bristled at the suggestion: "Judgments within the powers vested in courts by the Judiciary Article of the Constitution may not lawfully be revised, overturned or refused faith and credit by another Department of Government." Waterman, supra, at 113. That is what today's decision effectively allows. Even when the agency itself is party to the case in which the Court construes a statute, the agency will be able to disregard that construction and seek Chevron deference for its contrary construction the next time around.12 Of course, like Mead itself, today's novelty in belated remediation of Mead creates many uncertainties to bedevil the lower courts. A court's interpretation is conclusive, the Court says, only if it holds that interpretation to be "the only permissible reading of the statute," and not if it merely holds it to be "the best reading." Ante, at 13. Does this mean that in future statutory-construction cases involving agency-administered statutes courts must specify (presumably in dictum) which of the two they are holding? And what of the many cases decided in the past, before this dictum's requirement was established? Apparently, silence on the point means that the court's decision is subject to agency reversal: "Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency's, the court must hold that the statute unambiguously requires the court's construction."13 Ibid. (I have not made, and as far as I know the Court has not made, any calculation of how many hundreds of past statutory decisions are now agency-reversible because of failure to include an "unambiguous" finding. I suspect the number is very large.) How much extra work will it entail for each court confronted with an agency-administered statute to determine whether it has reached, not only the right ("best") result, but "the only permissible" result? Is the standard for "unambiguous" under the Court's new agency-reversal rule the same as the standard for "unambiguous" under step one of Chevron? (If so, of course, every case that reaches step two of Chevron will be agency-reversible.) Does the "unambiguous" dictum produce stare decisis effect even when a court is affirming, rather than reversing, agency action — so that in the future the agency must adhere to that affirmed interpretation? If so, does the victorious agency have the right to appeal a Court of Appeals judgment in its favor, on the ground that the text in question is in fact not (as the Court of Appeals held) unambiguous, so the agency should be able to change its view in the future? It is indeed a wonderful new world that the Court creates, one full of promise for administrative-law professors in need of tenure articles and, of course, for litigators.14 I would adhere to what has been the rule in the past: When a court interprets a statute without Chevron deference to agency views, its interpretation (whether or not asserted to rest upon an unambiguous text) is the law. I might add that it is a great mystery why any of this is relevant here. Whatever the stare decisis effect of AT&T Corp. v. Portland, 216 F. 3d 871 (CA9 2000), in the Ninth Circuit, it surely does not govern this Court's decision. And — despite the Court's peculiar, self-abnegating suggestion to the contrary, ante, at 14 — the Ninth Circuit would already be obliged to abandon Portland's holding in the face of this Court's decision that the Commission's construction of "telecommunications service" is entitled to deference and is reasonable. It is a sadness that the Court should go so far out of its way to make bad law. I respectfully dissent.FOOTNOTESFootnote * Together with No. 04-281, Federal Communications Commission et al. v. Brand X Internet Services et al., also on certiorari to the same court.FOOTNOTESFootnote 1 IP addresses identify computers on the Internet, enabling data packets transmitted from other computers to reach them. See Universal Service Report 11531, ¶62; Huber 985.Footnote 2 The dissent attempts to escape this consequence of respondents' position by way of an elaborate analogy between ISPs and pizzerias. Post, at 7-8 (opinion of Scalia, J.). This analogy is flawed. A pizzeria "delivers" nothing, but ISPs plainly provide transmission service directly to the public in connection with Internet service. For example, with dial-up service, ISPs process the electronic signal that travels over local telephone wires, and transmit it to the Internet. See supra, at 2; Huber 988. The dissent therefore cannot deny that its position logically would require applying presumptively mandatory Title II regulation to all ISPs. Footnote 3 The dissent claims that access to DNS does not count as use of the information-processing capabilities of Internet service because DNS is "scarcely more than routing information, which is expressly excluded from the definition of 'information service.' " Post, at 9, and n. 6 (opinion of Scalia, J.). But the definition of information service does not exclude "routing information." Instead, it excludes "any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service." 47 U. S. C. §153(20). The dissent's argument therefore begs the question because it assumes that Internet service is a "telecommunications system" or "service" that DNS manages (a point on which, contrary to the dissent's assertion, post, at 9, n. 6, we need take no view for purposes of this response).Footnote 4 Respondents vigorously argue that the Commission's purported inconsistent treatment is a reason for holding the Commission's construction impermissible under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). Any inconsistency bears on whether the Commission has given a reasoned explanation for its current position, not on whether its interpretation is consistent with the statute.FOOTNOTESFootnote 1 The myth that the pizzeria does not offer delivery becomes even more difficult to maintain when the pizzeria advertises quick delivery as one of its advantages over competitors. That, of course, is the case with cable broadband.Footnote 2 See also In re Federal-State Joint Board on Universal Service, 13 FCC Rcd. 11501, 11571-11572, ¶145 (1998) (end users "obtain telecommunications service from local exchange carriers, and then use information services provided by their Internet service provider and [Web site operators] in order to access [the Web]").Footnote 3 In the DSL context, the physical connection is generally resold to the consumer by an ISP that has taken advantage of the telephone company's offer. The consumer knows very well, however, that the physical connection is a necessary component for Internet access which, just as in the dial-up context, is not provided by the ISP. Footnote 4 The Court contends that this analogy is inapposite because one need not have a pizza delivered, ante, at 20, whereas one must purchase the cable connection in order to use cable's ISP functions. But the ISP functions provided by the cable company can be used without cable delivery — by accessing them from an Internet connection other than cable. The merger of the physical connection and Internet functions in cable's offerings has nothing to do with the " 'inextricably intertwined,' " ante, at 6, nature of the two (like a car and its carpet), but is an artificial product of the cable company's marketing decision not to offer the two separately, so that the Commission could (by the Declaratory Ruling under review here) exempt it from common-carrier status.Footnote 5 The Commission says forbearance cannot explain why value-added networks were not regulated as basic-service providers because it was not given the power to forbear until 1996. Reply Brief for Federal Petitioners 3-4, n. 1. It is true that when the Commission ruled on value-added networks, the statute did not explicitly provide for forbearance — any more than it provided for the categories of basic and enhanced services that the Computer Inquiry rules established, and through which the forbearance was applied. The D. C. Circuit, however, had long since recognized the Commission's discretionary power to "forbear from Title II regulation." Computer & Communications Industry Assn. v. FCC, 693 F. 2d 198, 212 (1982). The Commission also says its Computer Inquiry rules should not apply to cable because they were developed in the context of telephone lines. Brief for Federal Petitioners 35-36; see also ante, at 24-25. But to the extent that the statute imported the Computer Inquiry approach, there is no basis for applying it differently to cable than to telephone lines, since the definition of "telecommunications service" applies "regardless of the facilities used." 47 U. S. C. §153(46).Footnote 6 The Court says that invoking this explicit exception from the definition of information services, which applies only to the "management, control, or operation of a telecommunications system or the management of a telecommunications service," 47 U. S. C. §153(20), begs the question whether cable-modem service includes a telecommunications service, ante, at 28, n. 3. I think not, and cite the exception only to demonstrate that the incidental functions do not prevent cable from including a telecommunications service if it otherwise qualifies. It is rather the Court that begs the question, saying that the exception cannot apply because cable is not a telecommunications service. Footnote 7 Under the Commission's assumption that cable-modem-service providers are not providing "telecommunications services," there is reason to doubt whether it can use its Title I powers to impose common-carrier-like requirements, since 47 U. S. C. §153(44) specifically provides that a "telecommunications carrier shall be treated as a common carrier under this chapter only to the extent that it is engaged in providing telecommunications services" (emphasis added), and "this chapter" includes Titles I and II.Footnote 8 For a description of the confusion Mead has produced in the D. C. Circuit alone, see Vermeule, Mead in the Trenches, 71 Geo. Wash. L. Rev. 347, 361 (2003) (concluding that "the Court has inadvertently sent the lower courts stumbling into a no-man's land").Footnote 9 Justice Breyer attempts to clarify Mead by repeating its formulations that the Court has "sometimes found reasons" to give Chevron deference in a (still-unspecified) "variety of ways" or because of a (still-unspecified) "variety of indicators," ante, at 2 (concurring opinion) (internal quotation marks and emphasis omitted). He also notes that deference is sometimes inappropriate for reasons unrelated to the agency's process. Surprising those who thought the Court's decision not to defer to the agency in General Dynamics Land Systems, Inc. v. Cline, 540 U. S. 581 (2004), depended on its conclusion that there was "no serious question ... about purely textual ambiguity" in the statute, id., at 600, Justice Breyer seemingly attributes that decision to a still-underdeveloped exception to Chevron deference — one for "unusually basic legal question[s]," ante, at 2. The Court today (thankfully) does not follow this approach: It bases its decision on what it sees as statutory ambiguity, ante, at 25, without asking whether the classification of cable-modem service is an "unusually basic legal question."Footnote 10 It is true that, even under the broad basis for deference that I propose (viz., any agency position that plainly has the approval of the agency head, see United States v. Mead Corp., 533 U. S. 218, 256-257 (2001) (Scalia, J., dissenting)), some interpretive matters will be decided de novo, without deference to agency views. This would be a rare occurrence, however, at the Supreme Court level — at least with respect to matters of any significance to the agency. Seeking to achieve 100% agency control of ambiguous provisions through the complicated method the Court proposes is not worth the incremental benefit.Footnote 11 The Court's unanimous holding in Neal v. United States, 516 U. S. 284 (1996), plainly rejected the notion that any form of deference could cause the Court to revisit a prior statutory-construction holding: "Once we have determined a statute's meaning, we adhere to our ruling under the doctrine of stare decisis, and we assess an agency's later interpretation of the statute against that settled law." Id., at 295. The Court attempts to reinterpret this plain language by dissecting the cases Neal cited, noting that they referred to previous determinations of " 'a statute's clear meaning.' " Lechmere, Inc. v. NLRB, 502 U. S. 527, 537 (1992) (quoting Maislin Industries, U. S., Inc. v. Primary Steel, Inc., 497 U. S. 116, 131 (1990)). But those cases reveal that today's focus on the term "clear" is revisionist. The oldest case in the chain using that word, Maislin Industries, did not rely on a prior decision that held the statute to be clear, but on a run-of-the-mill statutory interpretation contained in a 1908 decision. Id., at 130-131. When Maislin Industries referred to the Court's prior determination of "a statute's clear meaning," it was referring to the fact that the prior decision had made the statute clear, and was not conducting a retrospective inquiry into whether the prior decision had declared the statute itself to be clear on its own terms.Footnote 12 The Court contends that no reversal of judicial holdings is involved, because "a court's opinion as to the best reading of an ambiguous statute ... is not authoritative," ante, at 11. That fails to appreciate the difference between a de novo construction of a statute and a decision whether to defer to an agency's position, which does not even "purport to give the statute a judicial interpretation." Mead, supra, at 248 (Scalia, J., dissenting). Once a court has decided upon its de novo construction of the statute, there no longer is a "different construction" that is "consistent with the court's holding," ante, at 11, and available for adoption by the agency.Footnote 13 Suggestive of the same chaotic undermining of all prior judicial decisions that do not explicitly renounce ambiguity is the Court's explanation of why agency departure from a prior judicial decision does not amount to overruling: "[T]he agency may, consistent with the court's holding, choose a different construction, since the agency remains the authoritative interpreter (within the limits of reason) of [ambiguous] statutes [it is charged with administering]." Ante, at 11.Footnote 14 Further de-ossification may already be on the way, as the Court has hinted that an agency construction unworthy of Chevron deference may be able to trump one of our statutory-construction holdings. In Edelman v. Lynchburg College, 535 U. S. 106, 114 (2002), the Court found "no need to resolve any question of deference" because the Equal Employment Opportunity Commission's rule was "the position we would adopt even if ... we were interpreting the statute from scratch." It nevertheless refused to say whether the agency's position was "the only one permissible." Id., at 114, n. 8 (quotation marks omitted). Justice O'Connor appropriately "doubt[ed] that it is possible to reserve" the question whether a regulation is entitled to Chevron deference "while simultaneously maintaining ... that the agency is free to change its interpretation" in the future. Id., at 122 (opinion concurring in judgment). In response, the Court cryptically said only that "not all deference is deference under Chevron." Id., at 114, n. 8. |
1 | [Footnote *] Together with No. 92-5618, Martin v. McDermott et al., also on motion of petitioner for leave to proceed in forma pauperis. PER CURIAM. Pro se petitioner James I,. Martin requests leave to proceed in forma pauperis under Rule 39 of this Court. We deny this request pursuant to our Rule 39.8. Martin is allowed until November 23, 1992, within which to pay the docketing fees required by Rule 38 and to submit his petitions in compliance with this Court's Rule 33. We also direct the Clerk not to accept any further petitions for certiorari from Martin in noncriminal matters unless he pays the docketing fee required by Rule 38 and submits his petition in compliance with Rule 33. Martin is a notorious abuser of this Court's certiorari process. We first invoked Rule 39.8 to deny Martin in forma pauperis status last November. See Zatko v. California, (per curiam). At that time, we noted that Martin had filed 45 petitions in the past 10 years, and 15 in the preceding 2 years alone. Although Martin was granted in forma pauperis status to file these petitions, all of these petitions were denied without recorded dissent. In invoking Rule 39.8, we observed that Martin is "unique - not merely among those who seek to file in forma pauperis, but also among those who have paid the required filing fees - because he has repeatedly made totally frivolous demands on the Court's limited resources." Id. at 18. Unfortunately, Martin has continued in his accustomed ways. Since we first denied him in forma pauperis status last year, he has filed nine petitions for certiorari with this Court. We denied Martin leave to proceed in forma pauperis under Rule 39.8 of this Court with respect to four of these petitions,1 and denied the remaining five petitions outright.2 Two additional petitions for certiorari are before us today, bringing the total number of petitions Martin has filed in the past year to 11. With the arguable exception of one of these petitions, see Martin v. Knox, (STEVENS J., joined by BLACKMUN J., respecting in denial of certiorari), all of Martin's filings, including those before us today, have been demonstrably frivolous. In Zatko, we warned that "[f]uture similar filings from [Martin] will merit additional measures." at 18. As we have recognized, "[e]very paper filed with the Clerk of this Court, no matter how repetitious or frivolous, requires some portion of the institution's limited resources. A part of the Court's responsibility is to see that these resources are allocated in a way that promotes the interests of justice." In re McDonald, (per curiam). Consideration of Martin's repetitious and frivolous petitions for certiorari does not promote this end. We have entered orders similar to the present one on two previous occasions to prevent pro se petitioners from filing repetitious and frivolous requests for extraordinary relief. See In re Sindram, (per curiam); In re McDonald, supra. Although this case does not involve abuse of an extraordinary writ, but rather the writ of certiorari, Martin's pattern of abuse has had a similarly deleterious effect on this Court's "fair allocation of judicial resources." See In re Sindram, supra, at 180. As a result, the same concerns which led us to enter the orders barring prospective filings in Sindram and McDonald require such action here. We regret the necessity of taking this step, but Martin's refusal to heed our earlier warning leaves us no choice. His abuse of the writ of certiorari has been in noncriminal cases, and so we limit our sanction accordingly. The order will therefore not prevent Martin from petitioning to challenge criminal sanctions which might be imposed on him. But it will free this Court's limited resources to consider the claims of those petitioners who have not abused our certiorari process. It is so ordered. |
7 | 1. That no interstate commerce is involved is not a barrier to a suit to enjoin violations of 3 of the Sherman Act involving purely local conduct in the District of Columbia, since Congress specifically made 3 applicable to such conduct and had power to do so under Art. I, 8, Clause 17 of the Constitution. Atlantic Cleaners & Dyers v. United States, . P. 488.2. If the business of a real estate broker is "trade" within the meaning of 3 of the Sherman Act, evidence that the Washington Real Estate Board had adopted standard rates of commissions for its members, that its code of ethics required members to maintain such standard rates, that members agreed to abide by the code, and that the prescribed rates were used in the great majority of transactions, although the Board had invoked no sanctions for departure therefrom, is sufficient to show a price-fixing scheme violative of 3. Pp. 488-489. (a) That such price-fixing may serve a worthy or honorable end is immaterial. P. 489. (b) That no penalties were imposed for deviations from the price schedules is immaterial. P. 489.3. The business of a real estate broker is "trade" within the meaning of 3 of the Sherman Act. Pp. 489-492. (a) The services of real estate brokers cannot be assimilated to those of employees, nor can the present case be compared to those involving the application of the antitrust laws to labor unions - notwithstanding 6 of the Clayton Act declaring that "the labor of a human being is not a commodity or article of commerce" and exempting labor unions and their members from the antitrust laws. Pp. 489-490. (b) The fact that the business of a real estate broker involves the sale of personal services rather than commodities does not take it out of the category of "trade" within the meaning of 3 of the Sherman Act, which is aimed at the fixing of prices and other unreasonable restraints in the case of services as well as goods. Pp. 490-491. (c) The activity of a real estate broker is commercial and carried on for profit; and the competitive standards which the Sherman Act sought to preserve in the field of trade and commerce are as relevant to the brokerage business as to other branches of commercial activity. P. 492.4. That appellees were acquitted in a criminal prosecution for conspiracy to violate 3 of the Sherman Act is no bar to this civil suit to enjoin the same conspiracy, since the doctrine of res judicata is not applicable. Helvering v. Mitchell, . Pp. 492-494.5. The finding of the District Court that the National Association of Real Estate Boards and its executive vice president did not in fact conspire with the Washington Board to fix and prescribe the rates of commission to be charged by members of the latter is sustained, since it was not "clearly erroneous" within the meaning of Rule 52 of the Federal Rules of Civil Procedure. Pp. 494-496. 84 F. Supp. 802, affirmed in part and reversed in part. In a civil suit in a federal district court to enjoin a conspiracy to fix rates of commissions of real estate brokers in the District of Columbia in violation of 3 of the Sherman Act, judgment was entered for defendants. 84 F. Supp. 802. On appeal to this Court, affirmed in part and reversed in part, p. 496.The Assistant to the Attorney General Ford and Victor H. Kramer argued the cause for the United States. With them on the brief were Solicitor General Perlman, Assistant Attorney General Bergson, Herbert N. Maletz and J. Roger Wollenberg.Roger J. Whiteford argued the cause for the National Association of Real Estate Boards et al., appellees. With him on the brief was John J. Wilson.William E. Leahy argued the cause for the Washington Real Estate Board et al., appellees. With him on the brief was William J. Hughes, Jr. MR. JUSTICE DOUGLAS delivered the opinion of the Court.This is a civil action brought by the United States to enjoin appellees1 from engaging in a price-fixing conspiracy in violation of 3 of the Sherman Act, 26 Stat. 209, 15 U.S.C. 3.2 The core of the case is the charge that the members of the Washington Real Estate Board combined and conspired to fix the commission rates for their services when acting as brokers in the sale, exchange, lease and management of real property in the District of Columbia.The same conspiracy was charged in a criminal proceeding.3 The criminal case was tried first. At the end of the Government's case the court granted the defendants' motion for a judgment of acquittal. 80 F. Supp. 350. Appellees then moved for summary judgment in this civil suit, contending that the judgment of acquittal in the criminal case is res judicata here. That motion was denied.4 The civil case was then tried. It was stipulated that the trial would be on the record in the criminal case, the United States reserving the right to offer additional exhibits. No evidence was offered by appellees. The court entered judgment for the appellees, holding that the agreement to fix the rates of brokerage commissions, which had been shown, was not a violation of the Act. 84 F. Supp. 802. The case is here on appeal. 32 Stat. 823, 62 Stat. 989, 15 U.S.C. 29.First. The fact that no interstate commerce is involved is not a barrier to this suit. Section 3 of the Sherman Act5 is not leveled at interstate activities alone. It also puts beyond the pale certain conduct purely local in character and confined to the District of Columbia. That Congress has the power so to legislate for the District by virtue of Art. I, 8, Clause 17 of the Constitution and did so by 3 was settled by Atlantic Cleaners & Dyers v. United States, .Second. The Washington Board has adopted standard rates of commissions for its members - charges which cover the wide range of services furnished by a real estate agent. The Board's code of ethics provides that "Brokers should maintain the standard rates of commission adopted by the board and no business should be solicited at lower rates." Members agree to abide by this code. The prescribed rates are used in the great majority of transactions, although in exceptional situations a lower charge is made. But departure from the prescribed rates has not caused the Washington Board to invoke any sanctions. Hence the District Court called the rate schedules "non-mandatory."Enough has been said to show that under our decisions an illegal price-fixing scheme has been proved, unless the fixing of real estate commissions is not included in the prohibitions of 3 of the Act. Price-fixing is per se an unreasonable restraint of trade. It is not for the courts to determine whether in particular settings price-fixing serves an honorable or worthy end. An agreement, shown either by adherence to a price schedule or by proof of consensual action fixing the uniform or minimum price, is itself illegal under the Sherman Act, no matter what end it was designed to serve. That is the teaching of an unbroken line of decisions. See United States v. Socony-Vacuum Oil Co., et seq.; United States v. Paramount Pictures, , 143. And the fact that no penalties are imposed for deviations from the price schedules is not material. See Eastern States Lumber Assn. v. United States, ; American Column Co. v. United States, ; Federal Trade Commission v. Pacific Paper Assn., . Subtle influences may be just as effective as the threat or use of formal sanctions to hold people in line.Third. The critical question is whether the business of a real estate agent is included in the word "trade" within the meaning of 3 of the Act. The District Court thought not. It was of the view that where personal services are involved, a combination to fix the price or compensation is legal. It seemingly was influenced by the declaration in 6 of the Clayton Act, 38 Stat. 731, 15 U.S.C. 17, that "the labor of a human being is not a commodity or article of commerce ... nor shall such [labor] organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws." But we think it a misconception to assimilate the services involved here to those of employees or to compare the present case to those involving the application of the antitrust laws to labor unions. Cf. Apex Hosiery Co. v. Leader, ; United States v. Hutcheson, . We do not have here any more than we did in American Medical Assn. v. United States, , or United States v. Women's Sportswear Mfrs. Assn., , cf. Columbia River Packers Assn. v. Hinton, , an aspect of the employee-employer relationship to which the antitrust laws have made special concessions.Members of the Washington Board are entrepreneurs. Some are individual proprietors; others are banks or corporations. Some may have no employees; others have large staffs. But each is in business on his own. The fact that the business involves the sale of personal services rather than commodities does not take it out of the category of "trade" within the meaning of 3 of the Act. The Act was aimed at combinations organized and directed to control of the market by suppression of competition "in the marketing of goods and services." See Apex Hosiery Co. v. Leader, supra, p. 493.Justice Story in The Nymph, 18 Fed. Cas. 506, while construing the word "trade" in the Coasting and Fishery Act of 1793, 1 Stat. 305, said,"The argument for the claimant insists, that `trade' is here used in its most restrictive sense, and as equivalent to traffic in goods, or buying and selling in commerce or exchange. But I am clearly of opinion, that such is not the true sense of the word, as used in the 32d section. In the first place, the word `trade' is often, and indeed generally, used in a broader sense, as equivalent to occupation, employment, or business, whether manual or mercantile. Wherever any occupation, employment, or business is carried on for the purpose of profit, or gain, or a livelihood, not in the liberal arts or in the learned professions, it is constantly called a trade. Thus, we constantly speak of the art, mystery, or trade of a housewright, a shipwright, a tailor, a blacksmith, and a shoemaker, though some of these may be, and sometimes are, carried on without buying or selling goods." It is in that broad sense that "trade" is used in the Sherman Act. That has been the consistent holding of the decisions. The fixing of prices and other unreasonable restraints have been consistently condemned in case of services as well as goods. Transportation services (United States v. Freight Assn., ; United States v. Joint Traffic Assn., ), cleaning, dyeing, and renovating wearing apparel (Atlantic Cleaners & Dyers v. United States, ), the procurement of medical and hospital services (American Medical Assn. v. United States, supra, 528), the furnishing of news or advertising services (Farmer's Guide Co. v. Prairie Co., ; Associated Press v. United States, ) - these indicate the range of business activities that have been held to be covered by the Act. In Atlantic Cleaners & Dyers v. United States, supra, 435, 437, the Court rejected the view that "trade" as used in 3 should be interpreted in the narrow sense which would exclude personal services. It held, speaking through Mr. Justice Sutherland, that 3 used the word in the broad sense in which Justice Story used it in The Nymph, supra. Chief Justice Groner made an extended analysis and summary of the problem in United States v. American Medical Assn., 72 App. D.C. 12, 16-20, 110 F.2d 703, 707-711, where the Court of Appeals for the District of Columbia held that the practice of medicine in the District was a "trade" within the meaning of 3 of the Act. Its conclusion was that the term included "all occupations in which men are engaged for a livelihood." We do not intimate an opinion on the correctness of the application of the term to the professions. We have said enough to indicate we would be contracting the scope of the concept of "trade," as used in the phrase "restraint of trade," in a precedent-breaking manner if we carved out an exemption for real estate brokers. Their activity is commercial and carried on for profit. The fact that no goods are manufactured or bought or sold in the process is as irrelevant here as it was in Atlantic Cleaners & Dyers v. United States, supra. No reason of policy has been advanced for reading 3 of the Act less literally than its terms suggest. The competitive standards which the Act sought to preserve in the field of trade and commerce seem as relevant to the brokerage business as to other branches of commercial activity.Hopkins v. United States, , and Anderson v. United States, , are not opposed to this conclusion. It was held in those cases that commission merchants and yard traders on livestock exchanges were not engaged in interstate commerce even though the livestock moved across state lines (cf. Stafford v. Wallace, ), and therefore that the rules and agreements between the merchants and traders (which included in the Hopkins case the fixing of minimum fees) did not fall under the ban of the Sherman Act. But we are not confronted with that problem here. As noted, we are concerned here not with interstate commerce but with trade or commerce in the District of Columbia.Fourth. Appellees claim that the judgment of acquittal in the criminal action is res judicata in this action. Helvering v. Mitchell, , is contra and rules this case. There Mitchell had been tried and acquitted of a criminal charge of wilfully attempting to evade payment of his income tax. Thereafter suit was brought to collect the taxes owed plus a 50 per cent penalty for fraudulent evasion. The acquittal in the criminal case was held not to be a bar to the collection of the penalty.6 "The difference in degree of the burden of proof in criminal and civil cases" was held to preclude application of the doctrine of res judicata in the civil suit. . In the present case the motions for judgment of acquittal raised the question whether the evidence overcame all reasonable doubt of the guilt of appellees.7 The ruling on them did not determine whether by the lesser degree of proof required in a civil case appellees might be found to have conspired to fix commissions. The civil action is independent of the criminal cause (Standard Sanitary Mfg. Co. v. United States, ) and is remedial in nature. It has been repeatedly held that though the civil suit is bottomed on the same facts, it is not barred by the prior judgment of acquittal in the criminal case. See Stone v. United States, ; Murphy v. United States, ; Helvering v. Mitchell, supra. The result is not altered by the circumstance that the court in ruling on the sufficiency of the evidence may have started with an erroneous construction of the law.Fifth. The District Court found that two of the appellees - National Association and Herbert U. Nelson8 - did not conspire with the Washington Board to fix and prescribe the rates of commission to be charged by the members of the latter. No more particularized findings were made. Appellant asks us to set aside that ruling. The question is whether we may do so in light of Rule 52 of the Federal Rules of Civil Procedure which provides in part:"Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." The National Association is a nationwide, incorporated trade association of which the Washington Board is a member. Active members of the Washington Board are also members of the National Association. The National Association has a code of ethics which includes an article stating that "the schedules of fees established by the various Real Estate Boards are believed to represent fair compensation for services rendered in their communities and should be observed by every Realtor." It is provided in the by-laws of the National Association (1) that each member board shall adopt the code of ethics of the National Association as a part of its rules and regulations for violation of which disciplinary action may be taken, and (2) that any member board that neglects or refuses to maintain and enforce the code of ethics with respect to the activities of its constituent members may be expelled from membership in the National Association. The appellant also points to evidence showing the activities of the National Association in developing a national schedule of commissions which, it is alleged, were influential in shaping the fees adopted by the Washington Board in 1944.Appellant relies chiefly on the code of ethics and by-laws of the National Association, as it clearly may (Associated Press v. United States, supra, pp. 8, 12), to establish the restraint of trade. But we cannot say that the District Court was "clearly erroneous" in finding that the National Association and Nelson were not laced into the conspiracy to fix the commissions in the District of Columbia. The statement in the code of ethics that the schedule of fees "should be observed" is somewhat ambiguous. It may be advisory only. The provision of the by-laws that violations of the code of ethics of the National Association should be the basis of disciplinary action against both member boards and their constituent members is aimed at thirty-five articles of the code of ethics, not selectively at the fee provision. So we are left somewhat in doubt as to the extent if any to which the National Association and Nelson were architects of the fee-fixing conspiracy or participants in it. At best their relationship to it is, on this record, a somewhat attenuated one.It is not enough that we might give the facts another construction, resolve the ambiguities differently, and find a more sinister cast to actions which the District Court apparently deemed innocent. See United States v. Yellow Cab Co., ; United States v. Gypsum Co., . We are not given those choices, because our mandate is not to set aside findings of fact "unless clearly erroneous."The judgment of the District Court is reversed except as to the National Association and Nelson; and as to them it is affirmed. So ordered.MR. JUSTICE FRANKFURTER and MR. JUSTICE CLARK took no part in the consideration or decision of this case. |
8 | After respondents, originally indicated on two federal criminal counts in the Eastern District of Kentucky, obtained a change of venue to the Central District of California, the Government secured a superseding indictment which added four new counts. The Government then obtained a voluntary dismissal of three of the counts (including one of the original counts), and respondents moved to dismiss the remaining counts on the ground that the superseding indictment manifested prosecutorial vindictiveness in retaliation for their exercising their right to a change of venue, and thus ran afoul of the rule announced in Blackledge v. Perry, . The District Court denied the motion but stayed the trial to permit an appeal. The Court of Appeals held that the denial of the motion to dismiss was immediately appealable as a "final decision" under 28 U.S.C. 1291, and that respondents had established a case of prosecutorial vindictiveness requiring dismissal of the superseding indictment.Held: The Court of Appeals was without jurisdiction under 28 U.S.C. 1291 to review the District Court's interlocutory order refusing to dismiss the indictment. The policy embodied in 1291 is inimical to piecemeal appellate review of trial court decisions that do not terminate the litigation, and this policy is at its strongest in the field of criminal law. Respondents' claim of prosecutorial vindictiveness does not fall within the narrow group of claims coming within the "collateral order" exception to 1291's rule of finality. Stack v. Boyle, ; Abney v. United States, ; and Helstoski v. Meanor, , distinguished. A claim of prosecutorial vindictiveness does not meet the test under such exception of being "effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, . Cf. United States v. MacDonald, . Certiorari granted; 646 F.2d 384, reversed.PER CURIAM.Respondents, originally indicted in the Eastern District of Kentucky on two counts for violations of 18 U.S.C. 371 and 545, succeeded in obtaining a change of venue to the Central District of California. In the latter District, the Government secured a superseding indictment charging four new substantive counts of making false statements to customs officers in violation of 18 U.S.C. 542, in addition to the two original counts. The Government then obtained a voluntary dismissal of the original conspiracy count and two of the false-statement counts. Respondents moved to dismiss the remaining counts on the ground that the superseding indictment manifested prosecutorial vindictiveness and therefore ran afoul of the rule announced in Blackledge v. Perry, . The District Court denied respondents' motion, but stayed the commencement of trial to permit an appeal. The Court of Appeals for the Ninth Circuit held "that the denial of a motion to dismiss based on the ground of vindictive prosecution is immediately appealable as a final decision under 28 U.S.C. 1291." 646 F.2d 384, 386 (1981).1 In reaching this holding the Court of Appeals relied on its prior decisions in United States v. Burt, 619 F.2d 831 (1980), and United States v. Griffin, 617 F.2d 1342, cert. denied, . Reaching the merits, the court held that respondents had established a case of prosecutorial vindictiveness requiring dismissal of the superseding indictment. The United States then sought review in this Court.We do not reach the question of prosecutorial vindictiveness, for we hold that the Court of Appeals was without jurisdiction under 28 U.S.C. 1291 to review the District Court's interlocutory order refusing to dismiss the indictment. Congress has limited the jurisdiction of the Courts of Appeals to "final decisions of the district courts." 28 U.S.C. 1291. This Court has long held that the policy of Congress embodied in this statute is inimical to piecemeal appellate review of trial court decisions which do not terminate the litigation, and that this policy is at its strongest in the field of criminal law: "The general principle of federal appellate jurisdiction, derived from the common law and enacted by the First Congress, requires that review of nisi prius proceedings await their termination by final judgment... . This insistence on finality and prohibition of piecemeal review discourage undue litigiousness and leaden-footed administration of justice, particularly damaging to the conduct of criminal cases. See Cobbledick v. United States, ." DiBella v. United States, . This Court has interpreted the jurisdictional statute to permit departures from the rule of finality in only a limited category of cases falling within the "collateral order" exception delineated in Cohen v. Beneficial Industrial Loan Corp., . Such orders "must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, . In criminal cases, we have adhered to the collateral order exception to the rule of finality on three occasions: present in each of these cases were factors noticeably lacking in the instant appeal.In Stack v. Boyle, , the Court held that an order denying a motion to reduce bail could be reviewed before trial. Writing separately, Justice Jackson (the author of Cohen) recognized that "an order fixing bail can be reviewed without halting the main trial - its issues are entirely independent of the issues to be tried - and unless it can be reviewed before sentence, it never can be reviewed at all." 342 U.S., at 12. In Abney v. United States, , we permitted interlocutory appeal of an order denying a pretrial motion to dismiss an indictment on double jeopardy grounds. Perhaps most important among the relevant factors, we recognized that "the rights conferred on a criminal accused by the Double Jeopardy Clause would be significantly undermined if appellate review of double jeopardy claims were postponed until after conviction and sentence." Id., at 660. One right guaranteed by the Double Jeopardy Clause was the right not to be tried twice for the same offense. "[I]f a criminal defendant is to avoid exposure to double jeopardy and thereby enjoy the full protection of the Clause, his double jeopardy challenge to the indictment must be reviewable before that subsequent exposure occurs." Id., at 662 (emphasis in original). Finally, in Helstoski v. Meanor, , we held that a United States Congressman could have taken an interlocutory appeal in a criminal case to assert the immunity conferred upon him by the Speech or Debate Clause of the Constitution. Crucial to the holding was our view that the Speech or Debate Clause protected Congressmen "`not only from the consequences of litigation's results but also from the burden of defending themselves.'" Id., at 508, quoting Dombrowski v. Eastland, . The right protected by the Clause would have been lost if the appeal had been postponed.Each of these cases, in addition to satisfying the other requirements of Cohen, involved "an asserted right the legal and practical value of which would be destroyed if it were not vindicated before trial." United States v. MacDonald, . Our holding in United States v. MacDonald underscores the significance of this feature. The issue in MacDonald was whether a defendant could appeal, prior to trial, a District Court's order denying his motion to dismiss the indictment because of an alleged violation of his Sixth Amendment right to a speedy trial. In concluding that such an appeal was not authorized by 28 U.S.C. 1291, we noted:"There perhaps is some superficial attraction in the argument that the right to a speedy trial ... must be vindicated before trial in order to insure that no nonspeedy trial is ever held. Both doctrinally and pragmatically, however, this argument fails. Unlike the protection afforded by the Double Jeopardy Clause, the Speedy Trial Clause does not, either on its face or according to the decisions of this Court, encompass a `right not to be tried' which must be upheld prior to trial if it is to be enjoyed at all. It is the delay before trial, not the trial itself, that offends against the constitutional guarantee of a speedy trial... . Proceeding with the trial does not cause or compound the deprivation already suffered." Id., at 860-861. Respondents assert that their claim of prosecutorial vindictiveness, based on the modification of the original indictment in retaliation for their exercise of a right to move for change of venue, is analogous to the three instances in which we have allowed appeal in criminal cases under the collateral order doctrine. But we think that their claim is more analogous to the speedy trial claim which we held unreviewable under the collateral order doctrine in United States v. MacDonald, supra. We think that it particularly fails the third part of the test for Cohen appeals articulated in Coopers & Lybrand, supra, that the claim "be effectively unreviewable on appeal from a final judgment."Blackledge v. Perry, , on which respondents base the merits of their claim of vindictive prosecution, was an application of the principles announced in North Carolina v. Pearce, , to conduct on the part of a prosecutor. In Perry the defendant had been convicted in a state court of limited jurisdiction, and had exercised his statutory right to a de novo appeal to the state court of general jurisdiction. Prior to the commencement of the latter trial, the prosecutor obtained an indictment charging the defendant with crimes more severe than those for which he was initially convicted. Because the facts suggested "a realistic likelihood of `vindictiveness,'" 417 U.S., at 27, we deemed it necessary to apply the "prophylactic rule of Pearce," id., at 26, in order to discourage retaliation by the State for the defendant's exercise of his procedural right.Although there is language in the Perry opinion suggesting that the defendant possessed a "right not to be haled into court at all" upon the more serious charge, id., at 30, it is clear that the Court was not using this language to indicate that he was entitled to be free of any retrial whatever. We stated in Perry that "[w]hile the Due Process Clause of the Fourteenth Amendment bars trial of Perry on the felony assault charges in the Superior Court, North Carolina is wholly free to conduct a trial de novo in the Superior Court on the original misdemeanor assault charge." Id., at 31, n. 8. The defendant in Perry was fully protected by postconviction relief, leading to a new trial free of the taint of vindictiveness.Obviously, it is wholly desirable to correct prior to trial any substantive errors noticed at that time. It is equally evident that when relief must await postconviction proceedings, the defendant is subjected to the burden of defending himself at trial, even though the presence of errors might require reversal of his conviction and possibly a second trial. Nevertheless, reversal of the conviction and, where the Double Jeopardy Clause does not dictate otherwise, the provision of a new trial free of prejudicial error normally are adequate means of vindicating the constitutional rights of the accused.2 As we noted in United States v. MacDonald, 435 U.S., at 860, n. 7: "Admittedly, there is value - to all but the most unusual litigant - in triumphing before trial, rather than after it, regardless of the substance of the winning claim. But this truism is not to be confused with the quite distinct proposition that certain claims (because of the substance of the rights entailed, rather than the advantage to a litigant in winning his claim sooner) should be resolved before trial." Even when the vindication of the defendant's rights requires dismissal of charges altogether, the conditions justifying an interlocutory appeal are not necessarily satisfied. In MacDonald, for example, we declined to permit a defendant whose speedy trial motion had been denied before trial to obtain interlocutory appellate review, despite our recognition that "an accused who does successfully establish a speedy trial claim before trial will not be tried." Id., at 861, n. 8. The nature of the speedy trial right was such that "[p]roceeding with the trial does not cause or compound the deprivation already suffered." Id., at 861. This holding reflects the crucial distinction between a right not to be tried and a right whose remedy requires the dismissal of charges. See id., at 860, n. 7. The former necessarily falls into the category of rights that can be enjoyed only if vindicated prior to trial. The latter does not. The right asserted by respondents is simply not one that must be upheld prior to trial if it is to be enjoyed at all.3 As noted in MacDonald, supra, there is a superficial plausibility to the contention that any claim, particularly a constitutional claim, that would be dispositive of the entire case if decided favorably to a criminal defendant, should be decided as quickly as possible in the course of the litigation. But if such a principle were to be applied, questions as to the constitutionality of the statutes authorizing the prosecution and doubtless numerous other questions would fall under such a definition, and the policy against piecemeal appeals in criminal cases would be swallowed by ever-multiplying exceptions. It is only a narrow group of claims which meet the test of being "effectively unreviewable on appeal from a final judgment," and the claim of prosecutorial vindictiveness is, we hold, not one of them.The petition for certiorari is granted, and the judgment of the Court of Appeals for the Ninth Circuit is reversed, with instructions to that court to dismiss the appeal. It is so ordered. |
4 | This is a civil action by the United States for (1) a mandatory injunction under 9 of the Federal Trade Commission Act requiring petitioner to comply with orders of the Commission to file special reports containing specified information and documents, and (2) statutory forfeiture of $100 for each day petitioner was in default of those orders. Petitioner had filed only part of the information called for by the Commission in connection with a formal investigation to determine whether petitioner's acquisitions of stock and assets of other corporations violated the antitrust laws. Among other items, it had declined to furnish its own file copies of reports filed with the Census Bureau on the ground that they were confidential. The District Court found that some of the orders were unenforceable because of vagueness and that others had been answered. It directed petitioner to answer the remaining ones, including those calling for copies of census reports; but it did not award the statutory forfeitures, because some of the orders were too vague to be enforced. The Court of Appeals affirmed insofar as the District Court ordered compliance; but it reversed that portion of the decision refusing to award the statutory forfeitures. Held: 1. The Federal Trade Commission is entitled to obtain petitioner's own file copies of reports submitted by petitioner to the Census Bureau. Pp. 215-220. (a) Section 8 (a) of the Census Act, which grants the Secretary of Commerce discretion to furnish to certain authorities data taken from information furnished the Bureau on censuses of population, agriculture and housing, but provides that such data shall not be used by the recipient "to the detriment of the persons to whom such information relates," is inapplicable here, because the Commission has not been furnished any information by the Secretary and the information here involved does not relate to the particular censuses covered by that section. P. 215. (b) Section 9 (a) of the Census Act, which forbids the use of information contained in census reports for other than statistical purposes and forbids the improper publication or disclosure of such information, applies only to the Secretary and other officers and employees of the Department of Commerce. It does not generally prohibit the use of such information per se. Pp. 215-219. (c) By voluntarily submitting like data to the Federal Trade Commission during this investigation, petitioner did not waive its claim that its file copies of reports to the Census Bureau are confidential. P. 217. (d) The assurances of confidentiality by the President and the Census Bureau are not sufficient to extend the coverage of 9 (a). Pp. 217-219. (e) The fact that petitioner furnished certain information to the Census Bureau does not relieve it from furnishing the same information to the Federal Trade Commission, since 132 of the Census Act provides that nothing therein contained "shall be deemed to revoke or impair the authority of any other Federal agency with reference to the collection or release of information." Pp. 219-220. 2. The forfeiture imposed by 10 of the Federal Trade Commission Act for failure to file "any annual or special report" is applicable, although the requested report is to include "answers in writing to specific questions." Pp. 220-223. 3. Notwithstanding the fact that the District Court held that the Commission's orders were "partially defective" and decreed only partial compliance, forfeiture occurred because petitioner failed to comply with the valid requests; and the single daily penalty under 10 began to run 30 days after notice of default on the first set of the Commission's orders, and it runs until the date of the stay granted by this Court. Pp. 223-225. (a) Partial invalidity of the Commission's orders did not prevent application of the forfeiture provision, since petitioner defied large parts of the orders instead of obtaining a separate judicial determination of the validity of the orders. P. 224. (b) Section 6 (c) of the Administrative Procedure Act authorized the procedure that the District Court followed in ordering partial compliance instead of striking the entire orders and requiring the Commission to issue new ones. Pp. 224-225. (c) In directing partial compliance, the District Court did not treat those items found enforceable as subpoenas and therefore subject solely to contempt action. P. 225. (d) Once the Court of Appeals held that the default was within the forfeiture provision of 10, its penalties accrued, and it was not necessary to remand the case to the District Court for determination of whether the forfeiture should apply. P. 225. 4. The petitioner, not having sought a judicial determination of the validity of the Commission's orders or a stay once this litigation had begun, cannot now say it was denied due process because it had no opportunity to prevent the running of the forfeitures pending a judicial test of the validity of the orders. Pp. 225-227. 285 F.2d 607, affirmed.Horace R. Lamb argued the cause and filed briefs for petitioner.Solicitor General Cox argued the cause for the United States. With him on the briefs were Assistant Attorney General Loevinger, Acting Assistant Attorney General Kirkpatrick, Daniel M. Friedman, Lionel Kestenbaum and Richard A. Solomon.MR. JUSTICE CLARK delivered the opinion of the Court.Pursuant to 6 (b) of the Federal Trade Commission Act,1 the Commission issued orders directing the petitioner and corporations acquired by it to submit various reports. Petitioner failed to furnish all of the requested information, and the United States at the request of the Commission brought the present suit in the District Court seeking (1) a mandatory injunction to compel compliance with all of the orders2 and (2) statutory forfeiture of $100 for every day petitioner was in default of those orders directed specifically to it.3 The District Court found that some of the requests were unenforceable because of vagueness and that others had been answered either specifically or by reference to materials previously furnished. Petitioner was directed to answer the remaining items, including those calling for file copies of census reports. However, because some of the requests were too vague to be enforced, the District Court did not award the statutory forfeitures. 181 F. Supp. 862. The Court of Appeals affirmed insofar as the District Court ordered compliance, but reversed that portion of the decision refusing to award the statutory forfeitures. 285 F.2d 607. We granted a limited writ of certiorari because of a conflict in the circuits on the question of compulsory production of the copies of census reports and the general importance of certain other questions in the administration of the investigatory provisions of the Federal Trade Commission Act. . On motion of petitioner, we also granted a stay tolling the further running and accumulation of forfeitures awaiting our decision. We now affirm the judgment of the Court of Appeals.Petitioner contends that it cannot lawfully be required to produce copies of statutory reports made by it to the Census Bureau because of their confidential nature. The remainder of the inquiries found enforceable by the District Court are not now contested by the petitioner. As to the forfeitures, petitioner advances several arguments: (1) The statutory forfeiture of 10 is not applicable because it applies only to a failure to furnish "reports" while the inquiries directed to petitioner called for answers to specific questions; (2) No forfeitures can be imposed because the orders were only partially enforceable; and (3) It is a denial of due process to assess penalties for failure to obey orders during a time petitioner was without remedy to test their validity.I.The controversy culminating in this litigation had its inception in September 1956. At that time the Commission requested petitioner to furnish voluntarily information concerning certain of its corporate acquisitions to enable the Commission to determine whether there had been any violations of the antitrust laws. A year later, having failed to obtain the bulk of the requests, the Commission served a subpoena duces tecum on petitioner. It covered somewhat the same information as was previously requested but, in addition, required similar data concerning three more corporate acquisitions effected in the interim. In due time petitioner fully complied with the subpoena, and the hearing before the Examiner was concluded. After reviewing the material, however, the Commission found that it needed additional information and in June 1958 requested petitioner's counsel to furnish it. A running exchange of correspondence between petitioner's counsel and the Commission's staff followed. Counsel contended, inter alia, that no additional information was needed and requested a statement of necessity therefor. Upon counsel's insistence, three separate levels of authority in the Commission, from the local attorney in New York City to the Director of the Bureau of Investigation in Washington, explained the need for the information, advised that the request therefor had been fully authorized and requested petitioner to comply therewith. This discussion continued for over six months during which time petitioner furnished only two documents of the many requested. On January 6, 1959, the Commission instigated a formal investigation of the acquisitions made by petitioner during the preceding five years. Pursuant to this investigation the Commission issued six orders requiring the filing within 30 days of "special reports" which were to contain specified information and documents. On motion of petitioner, the Commission temporarily suspended these orders while it considered petitioner's motion that they be vacated. On May 6, 1959, the motion to vacate was denied, and petitioner was directed to comply by May 28, 1959. On June 4, 1959, the Commission broadened its investigation to cover two corporate acquisitions by petitioner occurring after the instigation of the formal investigation. Accordingly three more orders requiring "special reports" were issued. Upon petitioner's failure to comply with either set of orders, notice of default were served on June 20, 1959, and July 24, 1959, respectively. This complaint was filed on September 15, 1959, three years after the inquiry was opened. The complaint sought a mandatory injunction which would compel petitioner to file with the Commission the "special reports" sought by all nine orders. However, forfeitures were claimed only for petitioner's failure to respond to orders numbered 1 and 7, which were directed specifically to petitioner. The other seven orders had been directed to corporations acquired by petitioner rather than to it.II.Among the items ordered enforced and with which the petitioner still refuses to comply are requests for file copies of certain reports previously made to the Census Bureau. The petitioner claims each of these to be confidential. There is a conflict between the Courts of Appeal on the point.4 Here both the District Court and the Court of Appeals have held these file copies not restricted, and with this conclusion we agree.Petitioner's claim is based on 8 and 9 (a) of the Census Act, 13 U.S.C. 8-9 (a), and assurances of confidentiality by the Government. It can be noted immediately that 8 does not in any way support petitioner's position. This section grants the Secretary of Commerce the discretion to furnish to named authorities data taken from information furnished the Census Bureau on censuses of population, agriculture and housing. Subsection (c) thereof provides that when the Secretary furnishes such data it shall "[i]n no case" be used by the recipient "to the detriment of the persons to whom such information relates." Not only has the Commission not been furnished any information by the Secretary, but the information involved does not relate to the particular censuses covered by the section, and so this section is clearly inapplicable here.The prohibitions of 9 (a) apply to the Secretary, and other officers and employees of the Department of Commerce. Each of them is prohibited from using the information supplied for other than statistical purposes; and from making any publication thereof wherein the name or identity of those furnishing information is revealed; and, finally, from permitting anyone outside of the employ of the Department of Commerce to "examine the individual reports" filed.5 The form of the report provided by the Census Bureau is marked "Confidential" and in addition states that "[i]t cannot be used for purposes of taxation, investigation or regulation."6 The Bureau also furnishes the reporting corporations a copy of this form, such as the one involved here. The copies are marked "Keep this copy for your files," and the Bureau is said to have advised reporting companies that they are confidential. It also appears that a Presidential Proclamation admonished reporting companies that "[t]he Census has nothing to do ... with the enforcement of any national, state, or local law or ordinance. There need be no fear that any disclosure will be made regarding any individual person or his affairs. For the due protection of the rights and interests of the persons furnishing information every employee of the Census Bureau is prohibited, under heavy penalty, from disclosing any information which may thus come to his knowledge."7 Petitioner also relies upon an opinion of the Attorney General, 36 Op. Atty. Gen. 362 (1930).Similar contentions were considered by the Court of Appeals for the Seventh Circuit in Federal Trade Comm'n v. Dilger, 276 F.2d 739 (1960), where it was held that these "assurances of confidentiality and protection constitute a pledge of good faith on the part of the Congress, the President and the Department of Commerce... . The United States has given its word and should be permitted to keep it." 276 F.2d, at 744. It concludes that since the Commission cannot obtain the original it should not be permitted "to do indirectly that which it cannot do directly." Id., at 743.The Solicitor General contends that for the purposes of this case petitioner has waived the point by voluntarily submitting like data to the Commission during its investigation herein. We cannot agree. Reaching the merits of the issue he points out that the government agencies are at loggerheads on the problem, the Department of Commerce, Census Bureau and the Bureau of the Budget believe that the copies are not subject to legal process, while the Federal Trade Commission and the Antitrust Division of the Department of Justice, which filed this suit, contend to the contrary. The Solicitor General, "fully recognizing the delicate balance of opposing considerations," has concluded "on balance" that the copies are not subject to compulsive production. As has been noted, we do not agree.As we have seen, the prohibitions against disclosure contained in 9 run only against the officials receiving such information and do not purport to generally clothe census information with secrecy. The Solicitor General admits that "literally construed" the restrictions of the statute go no further. But he insists that since the purpose of the statute is to encourage the free and full submission of statistical data to the Bureau, this can be accomplished only through the creation of a confidential relationship which will extend the privilege to the petitioner and like reporting companies. We do not believe that the language of the President, supra, gives the statute the meaning claimed for it; nor can the legend on the Census Bureau forms or its advice to reporting companies extend the coverage of the Act. Cf. United States v. California, ; United States v. Stewart, ; United States v. Socony-Vacuum Oil Co., . We fully realize the importance to the public of the submission of free and full reports to the Census Bureau, but we cannot rewrite the Census Act. It does not require petitioner to keep a copy of its report nor does it grant copies of the report not in the hands of the Census Bureau an immunity from legal process. Ours is the duty to avoid a construction that would suppress otherwise competent evidence unless the statute, strictly construed, requires such a result. That this statute does not do. Congress did not prohibit the use of the reports per se but merely restricted their use while in the hands of those persons receiving them, i. e., the government officials. Indeed, when Congress has intended like reports not to be subject to compulsory process it has said so. See 45 U.S.C. 41,8 49 U.S.C. 320 (f).9 Moreover, although tax returns, like these census reports, are made confidential within the government bureau, Internal Revenue Code of 1954, 6103, 7213 (a), copies in the hands of the taxpayer are held subject to discovery.10 Likewise the Criminal Code, 18 U.S.C. 1905,11 prohibits federal employees generally from disclosing trade secrets and other business data received in the course of their official duties, but the same information is obtainable from the reporting company's files or personnel by judicial process.This conclusion is buttressed by the fact that though petitioner furnishes the required reports to the Census Bureau it is not relieved from furnishing the same information to the Federal Trade Commission. This is made certain by an Act of Congress specifically providing that nothing in the Census Act "shall be deemed to revoke or impair the authority of any other Federal agency with respect to the collection or release of information." 13 U.S.C. 132. It appears, therefore, that through the use of special reports the Commission could require the petitioner to supply the identical information from its files. Hence by securing the retained file copy the Commission is merely obtaining in a form already prepared that information which it has the power to require petitioner to furnish from its records.III.Petitioner next claims that the orders required "answers in writing to specific questions" under 6 (b) as distinguished from the "special reports" also authorized by that section, but that the forfeiture provision of 10 penalizing the failure to file "any annual or special reports" does not include the phrase "answers in writing to specific questions" and is, therefore, inapplicable. We do not agree.The Commission contends that its orders here in fact called for information in the nature of "special reports," and it so designated each of the nine orders at the time of their issuance. Examination of the orders by no means proves the Commission to be in error, for it appears that practically all of the requests called for the furnishing of statistical or like information, details of organization and operation, specific documents, etc. As the Court of Appeals stated, "the cumulative effect of all the questions is substantially that of a request for a report." 285 F.2d ___, at 615.While this is true, it cannot be denied that in many instances specific information was requested and "answers in writing to specific questions" were contemplated. But this does not disqualify the materials from being special reports, for the statutory reference to "answers in writing to specific questions" merely elaborates the power to require special reports. The source of the Commission's power, as we have noted, is 6 (b), see note 1, supra, which authorizes the Commission to order corporations to file "annual or special, or both annual and special, reports or answers in writing to specific questions." Since the forfeiture provision of 10, see note 3, supra, only refers to "any annual or special report," petitioner argues that forfeiture is inapplicable to a corporation failing to give "answers in writing to specific questions," which it contends is a separate power quite distinct from the power to order reports. But if this is true there would be no penalty where a corporation deliberately refused to comply with a lawful Commission order to answer specific questions, for the only penalty available against corporations is the forfeiture provision. Thus a corporation that refused to file an annual or special report would be subject to a $100 per day forfeiture. An individual under subpoena who refused to appear and testify or supply documents would be subject to a fine of $1,000 to $5,000 and/or a jail sentence up to three years. But under petitioner's interpretation of the Act there would be no penalty whatsoever where a corporation deliberately failed to file answers to specific questions. The only remedy would be a mandatory injunction to force it to do so. We cannot attribute such an anomaly to Congress. Rather we would assume that in placing the phrase "answers in writing to specific questions" in 6 (b) Congress was merely explicating what the Commission might require a corporation to include in an annual or special report.Moreover, the legislative history of the Act does not support petitioner's theory that the phrase "answers in writing to specific questions" refers to a separate power of the Commission. Both the House and Senate bills dealing with the Federal Trade Commission (or Interstate Trade Commission, as it was called in the House) had provisions enabling the Commission to order annual and special reports, but neither mentioned answers to specific questions. The House Committee Report on the original House version of the Act stated:"The commission, under this section, [later 6 (b)] may also require such special reports as it may deem advisable. By this means, if the ordinary data furnished by a corporation does not adequately disclose its organization, financial condition, business practices, or relation to other corporations, there can be obtained by a special report such additional information as the commission may deem necessary." H. R. Rep. No. 533, 63d Cong., 2d Sess. 4. The phrase "answers in writing to specific questions" first appeared in the Conference Report, but the report by the House Managers explaining the modifications of the House bill did not mention it (although it discussed some other changes in the annual and special report provisions of the House bill). H. R. Rep. No. 1142, 63d Cong., 2d Sess. Similarly, the explanation of the Conference Report by the Senate Managers in debate makes it clear that the changes made in conference were of the nature of new, clarifying phraseology (with two exceptions not relevant here). 51 Cong. Rec. 14768-14769. If the conference had intended to give the Commission a separate, new power which was not included in either the House or Senate bill, surely there would be some mention of it in the reports by the managers.Finally, it should be noted that a construction of the statute which empowers the Commission to particularize its requests for annual and special reports with specific questions will tend to avoid objections of vagueness. The requests directed to petitioner which were not particularized - items 1 (h); 3 (j), (k); 5 (j), (k); 6 (j); 7 (j); 8 (j); and 11 (a)-(l) of the first order; and item 5 of the seventh order - were struck down by the District Court as unenforceable. Such general requests for reports without specificity place the reporting company in a difficult position, leading to expensive and time-consuming litigation as well as frustrating the Commission's attempt to obtain information.IV.The District Court held that since the Commission orders were "partially defective," petitioner had a valid reason for challenging them, and therefore no forfeitures accrued. Petitioner supports this holding by asserting that many of the items included in the Commission's orders were held unenforceable by the District Court, and that under Bowman Dairy Co. v. United States, , forfeiture should not be imposed for noncompliance with substantially defective orders. The Court of Appeals disagreed, holding that forfeiture had occurred and that the daily penalty began to run 30 days after the notice of default on the first set of the Commission's orders.12 We agree with the Court of Appeals and conclude that the single daily penalty runs until the date of our stay, February 7, 1961.Petitioner's figures relative to the percentage of defective inquiries are based on analysis of all nine orders. However, the suit for forfeiture was brought only in respect to the two orders directed to petitioner, and we will restrict our consideration to the 134 inquiries included therein. Prior to the judgment 63 of these items remained unanswered. The trial judge struck 10 of them as unenforceable, leaving 53 which he ordered to be answered. However, whether one takes the above figures, or those of the petitioner asserting that only 37% of the questions were enforced by the trial court, or the Government's claim that two-thirds of the questions were valid and unanswered at the time of the suit, this case need not go off on a mathematical formula. The record fully supports the conclusion of the Court of Appeals that this is not "a case involving single oversight or an honest mistake in a good faith attempt to comply with the Commission's order." 285 F.2d, at 614. Nor, as the concurring opinion found, is it a case of "such extensive invalidity that there is no longer an intelligible requirement" for a report. 285 F.2d, at 616.Petitioner asserts that even partial invalidity of the order prevents the application of the forfeiture provision, arguing that the case is controlled by the rule in Bowman Dairy Co., supra. In that case the Court concluded that "one should not be held in contempt under a subpoena that is part good and part bad." 341 U.S., at 221. But that rule cannot be considered apart from its facts. There the defendant could not appeal from the contested order, but was able to challenge it only by disobeying and appealing the contempt conviction. It was in review of that conviction - the defendant's first opportunity to review the validity of the order - that this Court held that its partial invalidity barred the punishment. Here petitioner might have delayed accrual of the forfeitures pending determination of the merits or obtained a separate judicial determination of the validity of the orders before the penalties began to accrue, as we point out infra. Rather than attempting such procedures it defied large parts of the orders. It cannot now be heard to complain because such defiance was in error.Petitioner also contends that the trial court, after finding the orders partially invalid, should have stricken them and required the Commission to issue new ones if it wished to proceed with the inquiry. We agree with the trial court and the Court of Appeals that 6 (c) of the Administrative Procedure Act, 60 Stat. 241, 5 U.S.C. 1005 (c), authorized the procedure the court followed, i. e., ordering partial compliance. That section directs the court to sustain "any such subpena or similar process or demand to the extent that it is found to be in accordance with law ..." Nor do we see any substance to the further contention that in directing partial compliance the trial judge treated those items found enforceable as subpoenas and therefore subject solely to contempt action. The various requests were severable, and the court's order was not in substitution of the Commission's orders but merely an enforcement of them, in accordance with 9 of the F. T. C. A. authorizing the court to compel obedience to lawful Commission orders. Finally, petitioner argues that the case should have been remanded to the trial court for determination of whether the forfeiture should apply. However, once the Court of Appeals held that the default was within the forfeiture provision of 10, its penalties accrued, and there was nothing remaining open for decision that required a remand to the District Court.V.Petitioner's final point is that to impose the forfeitures will deprive it of property without due process of law. This argument is based on the premise that the orders of the Commission were not judicially reviewable except at the risk of paying daily forfeitures accumulating throughout the period of noncompliance, including the period of judicial review. We need not consider this point at length for it appears that petitioner did not try to obtain judicial review prior to the commencement of this action by the Government, nor did petitioner seek a stay once the litigation had begun. This inaction was in part based upon petitioner's reliance on Federal Trade Comm'n v. Claire Furnace Co., . This reliance was misplaced. In that case an injunction was sought against the Commission restraining it from enforcing certain orders issued under the same section of the Act involved here. The Commission, however, had not issued any notice of default on the orders, as was done here, nor had the orders been forwarded to the Attorney General for enforcement. This Court properly held an injunction would not lie since the subjects of the reports could not suffer any injury or penalty at that point in the investigation. As Chief Justice Taft said, "Until the Attorney General acts, the defendants can not suffer, and when he does act, they can promptly answer and have full opportunity to contest the legality of any prejudicial proceeding against them." 274 U.S., at 174.Upon the commencement of the action by the Government, petitioner might have then sought a stay, as it did when the decision went against it in the Court of Appeals.13 Moreover, after the entry of the notices of default by the Commission, petitioner might have itself sought relief before the 10 forfeitures began to accrue instead of waiting for the Attorney General to sue for their collection. As was said in United States v. Morton Salt Co., , "we are not prepared to say that courts would be powerless" to act where such orders appear suspect and ruinous penalties would be sustained pending a good faith test of their validity. There the record did not present and the Court did not determine "whether the Declaratory Judgment Act, the Administrative Procedure Act, or general equitable powers of the courts would afford a remedy if there were shown to be a wrong, or what the consequences would be if no chance is given for a test of reasonable objections to such an order." Similarly, as this matter comes here now, the petitioner has pursued none of these remedies, and we could not therefore say that it had "no chance" to prevent the running of the forfeiture pending a test of the validity of the orders. Cf. United States v. L. A. Tucker Truck Lines, ; Natural Gas Pipeline Co. v. Slattery, . We note, however, that the Declaratory Judgment Act, 28 U.S.C. 2201, provides that "In a case of actual controversy within its jurisdiction ... any court ... may declare the rights ... of any interested party seeking such declaration ... ." This appears sufficient to meet petitioner's needs.This Court cannot forgive statutory penalties once they legally attach and, finding no grounds upon which we can strike them down, the judgment of the Court of Appeals is Affirmed. |
1 | Since 1959, California has imposed an excise tax on the distribution of cigarettes, and respondent Chemehuevi Indian Tribe originally remitted the tax to petitioner State Board of Equalization (Board) insofar as the tax was imposed on the distribution of cigarettes to non-Indians who purchased the cigarettes from the Tribe on its reservation in California. However, in 1977 the Tribe enacted its own cigarette tax and ceased collecting and remitting the state tax. When California sought to obtain the unremitted tax, the Tribe filed suit in Federal District Court for injunctive relief and a declaratory judgment that the Board could not lawfully apply the state tax to cigarettes sold by the Tribe to non-Indian purchasers. The court held that the Board's counterclaim for damages in the amount of back taxes allegedly owed by the Tribe was barred by sovereign immunity, but that California could lawfully require the Tribe to collect state taxes imposed on cigarettes that it sold to non-Indians. The Court of Appeals affirmed the first determination, but reversed the second.Held: The Court of Appeals erred insofar as it held that the Tribe could not be required to collect the tax imposed by California on non-Indian purchasers at tribal smoke shops. It is not necessary that a state cigarette tax statute contain an express statement that the tax is to be passed on to the ultimate purchaser in order for the State to require a tribe to collect the tax from non-Indian purchasers and remit the amounts of such tax to the State. If the legal incidence of the tax falls on non-Indian purchasers, the State may impose on the tribe the burden of collecting the tax. The proper test for determining the legal incidence of the tax is nothing more than a fair interpretation of the taxing statute as written and applied. The fairest reading of California's cigarette scheme as a whole is that the legal incidence of the tax falls on consuming purchasers if the vendors are untaxable, and thus the Board has the right to require the Tribe to collect the tax on the Board's behalf with regard to purchases of cigarettes by non-Indian consumers. Certiorari granted; 757 F.2d 1047, reversed in part. PER CURIAM.Since 1959 California has imposed an excise tax on the distribution of cigarettes. Respondent Chemehuevi Indian Tribe sells cigarettes on its reservation in southeastern California. The Tribe originally remitted the state tax to petitioner State Board of Equalization (petitioner) insofar as that tax was imposed on the distribution of cigarettes to non-Indian purchasers. But in 1977 the Tribe enacted a cigarette tax of its own that was the equivalent of the California tax, and then ceased collecting and remitting the state tax. When California sought to obtain the unremitted tax from the Tribe, the Tribe brought an action in the United States District Court for the Northern District of California requesting a declaratory judgment that petitioner could not lawfully apply the state tax to cigarettes sold by the Tribe to non-Indian purchasers. Respondent Tribe also sought an injunction preventing petitioner from enforcing the state cigarette tax against it. Petitioner counterclaimed for damages in the amount of back taxes claimed to be owed by respondent Tribe.The District Court held that petitioner's counterclaim was barred by sovereign immunity, 492 F. Supp. 55 (1979), but also held that California could lawfully require the Tribe to collect cigarette excise taxes imposed on cigarettes that it sold to non-Indians. On appeal, the Court of Appeals affirmed the first determination, but reversed the second. 757 F.2d 1047 (CA9 1985).The Court of Appeals observed that, unlike the Washington statute that we considered in Washington v. Confederated Tribes of Colville Indian Reservation, , California's cigarette tax statute "does not contain any ... explicit `pass-through' language," 757 F.2d, at 1056 (emphasis added), and that therefore the question of the legal incidence of the California cigarette tax was not controlled by our decision in that case. Id., at 1055-1056. It went on to observe that a "legislative intent to impose even a collection burden should be explicitly stated." Id., at 1056, n. 11 (emphasis added). The Court of Appeals concluded that the California excise tax, properly construed, did not impose liability on the ultimate purchaser of cigarettes when the vendor was not a taxable entity. Id., at 1057, and n. 13.We think that the Court of Appeals applied a mistaken standard in determining whether or not the California tax on cigarettes was sufficiently like the Washington tax involved in Colville so that the result in the latter case should be controlling here. None of our cases has suggested that an express statement that the tax is to be passed on to the ultimate purchaser is necessary before a State may require a tribe to collect cigarette taxes from non-Indian purchasers and remit the amounts of such tax to the State. Nor do our cases suggest that the only test for whether the legal incidence of such a tax falls on purchasers is whether the taxing statute contains an express "pass on and collect" provision. Indeed, the Washington statute in Colville did not contain an express pass-through provision; the conclusion of the District Court in that case, which we accepted, was that the statutory scheme required consumers to pay the tax whenever the vendor was untaxable, and thus the legal incidence of the tax fell on purchasers in such cases. 447 U.S., at 142, and n. 9. The test to be derived from cases such as Colville and Moe v. Confederated Salish and Kootenai Tribes, , is nothing more than a fair interpretation of the taxing statute as written and applied, without any requirement that pass-through provisions or collection requirements be "explicitly stated." Cf. United States v. Mississippi Tax Comm'n, .We think the fairest reading of California's cigarette scheme as a whole is that the legal incidence of the tax falls on consuming purchasers if the vendors are untaxable. California Rev. & Tax Code Ann. 30107 (West 1979) clearly seems to place on consumers the obligation to pay the tax for all previously untaxed cigarettes. The Board's implementing regulation does not restrict this obligation to the hypotheticals contained in the regulation; it merely indicates that the consumer has a duty to pay any tax directly to the Board when the vendor is the type of entity on which the State cannot impose a collection requirement. See Cal. Admin. Register 72, No. 16, Tit. 18, Art. 16, 4091. The regulation does not address itself to the question of legal incidence. And since both Colville and Moe hold that if the legal incidence of a state excise tax falls on non-Indian purchasers, the State may impose on the tribe the burden of collecting that tax from the purchasers, 447 U.S., at 159; 425 U.S., at 482-483, this particular regulation is inapplicable to purchasers from Indian tribes if the ultimate liability for the tax falls on the purchaser when the vendor is not taxable. We think that in the context of the entire California statutory scheme, interpreted without any of the restrictive requirements which the Court of Appeals employed, Cal. Rev. & Tax Code Ann. 30108(a) (West 1979) evidences an intent to impose on the Tribe such a "pass on and collect" requirement. We hold that the legal incidence of California's cigarette tax falls on the non-Indian consumers of cigarettes purchased from respondent's smoke shop, and that petitioner has the right to require respondent to collect the tax on petitioner's behalf.The petition for certiorari is granted on the first three questions it presents. Insofar as the Court of Appeals held that respondent might not be required to collect the cigarette tax imposed by California on non-Indian purchasers at tribal smoke shops, its judgment is Reversed. JUSTICE BRENNAN would deny certiorari.JUSTICE MARSHALL dissents from this summary disposition, which has been ordered without affording the parties prior notice or an opportunity to file briefs on the merits. See Maggio v. Fulford, (MARSHALL, J., dissenting); Wyrick v. Fields, (MARSHALL, J., dissenting).JUSTICE BLACKMUN would grant certiorari and give the case plenary consideration.JUSTICE STEVENS, dissenting.The courts of appeals are better qualified to decide questions of state law than is this Court. Most circuit judges formerly practiced in States within their respective circuits. As judges, they must confront state-law issues on a regular basis. For these reasons, it has long been the settled practice in this Court to show the greatest deference to opinions of the courts of appeals on questions of state law. "In 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, . See also Haring v. Prosise, , n. 8 (1983) ("a challenge to state-law determinations by the Court of Appeals will rarely constitute an appropriate subject of this Court's review"); Leroy v. Great Western United Corp., , n. 11 (1979) ("it is not our practice to re-examine state-law determinations of this kind"); Bishop v. Wood, , and cases cited therein.The outcome of this case depends entirely on an interpretation of the California Revenue and Taxation Code. I am not prepared to say that the Court of Appeals' construction of the California Code is correct or incorrect.1 I am prepared, however, to disagree with the Court's conclusion that we should undertake to decide the state-law question in a case of this kind. Even if the Court is correct in its view that the Court of Appeals applied a mistaken standard in construing the California tax,2 that premise does not justify the action of the Court today in undertaking to decide the state-law issue on its own - particularly when that issue has not been fully briefed and argued. At most, the Court should remand the case to the Court of Appeals for a reconsideration under the proper standard. Such a remand would at least demonstrate that this Court has not forgotten that "federal judges who deal regularly with questions of state law in their respective districts and circuits are in a better position than we" to interpret state law. Butner v. United States, . Because the Court's summary disposition conveys a different message, I respectfully dissent. |
7 | Per Curiam. The judgment is affirmed by an equally divided Court. Justice Kennedy took no part in the consideration or decision of this case. |
6 | Rehearing Denied June 20, 1949. See . [ National Labor Rel. Bd. v. Crompton-Highland Mills, Inc. ], 218] Mr. David P. Findling, Washington, D.C., for petitioner. Mr. Ralph Williams, Atlanta, Ga., for respondent. Mr. Justice BURTON delivered the opinion of the Court. In this case a collective bargaining representative was certified, under the National Labor Relations Act,1 to represent all employees working a certain appropriate bargaining unit. Their employer engaged in extended negotiations with this representative as to many matters, including rates of pay. December 19, 1945, the negotiations reached an impasse. The question here presented is whether this employer engaged in an unfair labor practice when, on January 1, 1946, it put into effect as of December 31, 1945, without prior consultation with the bargaining representative, a general increase in the rates of pay applicable to most of the employees who had been represented in the negotiations. This increase , 219] was substantially greater one than any which the employer had offered during the negotiations. For the reasons to be stated, we hold that, under the circumstances, this action constituted an unfair labor practice and that a decree should be entered enforcing an order prohibiting such conduct. The case also raises questions as to the nature of the impasse which was reached and as to the proper scope and terms of the enforcement decree. August 13, 1945, the Textile Workers Union of America, Congress of Industrial Organizations, following an election under the statute, was certified as the exclusive collective bargaining representative for about 800 employees of Crompton-Highland Mills, respondent herein. These employees included most of its production and maintenance employees at Griffin, Georgia, where it manufactured cotton and other goods. Much of the material entering into those goods and most of the finished goods there produced were bought, sold or transported in interstate commerce, so that the unfair labor practice, if any, concededly affected such commerce. From August 31, 1945, at least until December 19, a committee of this union engaged in collective bargaining with the respondent on numerous appropriate subjects, including rates of pay. Many tentative agreements were reached. January 1, 1946, without prior consultation with any member of the bargaining committee, the employer announced a general and substantial increase in the rates of pay of its employees, amounting to about two to six cents an hour, effective as of December 31, 1945. This increase applied to most, but not all of the employees in the bargaining unit. Simultaneously with its posting of t e announcement of this increase, the employer told the employee members of the bargaining committee about it. At the same time the employer mailed an announcement of it to one of the two nonemployee members of the bargaining committee. , 220] January 31, 1946, the National Labor Relations Board, petitioner herein, in response to charges made by the union, filed a complaint against the employer, alleging several unfair labor practices. 2 These included the above-described increase in rates of pay. After hearings before a trial examiner and consideration of that examiner's intermediate report, the employer's exceptions and brief relating to that report and the entire record and oral arguments, the Board, on August 21, 1946, issued a cease and desist order. 70 N.L.R.B. 206. The Court of Appeals for the Fifth Circuit denied a petition for enforcement. 167 F.2d 662. Because of the importance of the issue in the administration of the labor relations statutes, we granted certiorari. . The precise issue presented is what decree, if any, should be issued by the Court of Appeals for the enforcement of the order of the National Labor relations Board. 3 If a decree is to be issued, its scope and terms should be based upon such part, or all, of the Board's cease and desist order as is supported by its findings of fact. Those findings are binding upon us to the extent that they are sustained by substantial evidence. 4 We are satisfied , 221] that there is substantial evidence to support the material findings of fact made by the Board as to the issue before us and, therefore, see no need to set forth that evidence here. The primary issue for discussion is, rather, the extent to which the Board's findings of fact support its cease and desist order and justify a decree for the enforcement of that order. The controlling specific findings of the Board are as follows: 'As fully discussed in the Intermediate Report, the respondent, during the course of negotiations with the Union, refused to accede to the Union's wage demands and it was not until their last conference on December 19, 1945, that the respondent made its first and only counterproposal of approximately 1 to 1 1/2 cents an hour raise, which the Union rejected. Thereafter, the r spondent made no further effort to settle the wage dispute but, instead, on January 1, 1946, only 12 days later, granted its employees a substantially larger increase than that previously offered to the Union, without consulting the Union or affording it an opportunity to negotiate with respect thereto. In our opinion, such action taken as (so) soon after the Union was attempting through the bargaining process to reach an agreement with the respondent, among other things, on wages, clearly shows that the respondent was not acting in good faith during the negotrations, and is manifestly in- , 222] consistent with the principle of collective bargaining. Nor are we impressed with the respondent's attempted justification for its action on the ground that the Union broke off negotiations on December 19 and that the respondent was therefore relieved of the obligation to deal with it. Concededly, the respondent never proposed to the Union as a possible basis of agreement a wage increase comparable to that granted on January 1, 1946. Moreover, the record fails to support the respondent's contention that the Union's representatives assumed an unequivocal position at the last meeting which foreclosed further bargaining concerning wages or other terms or conditions of employment. Under these circumstances, we find, as did the Trial Examiner, that the respondent, by its action with respect to the wage increase, failed to perform its statutory duty to bargain collectively with the Union and thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in the Act.' (Emphasis supplied.) 70 N.L.R.B. at pages 206-207. 5 , 223] 1. The employer engaged in an unfair labor practice when, without consulting the employees' collective bargaining representative, it put into effect, for most of its employees who had been represented in the bargaining negotiations, a general increase in rates of pay which was substantially greater than any that the employer had offered. The specific findings of the Board, coupled with the findings adopted by it from the trial examiner's report, leave no room for doubt as to the adequacy of the facts upon which its cease and desist o der was based. For significant findings adopted from the examiner's report, see Appendix B, infra, . The facts so found distinguish this case from any in which no collective bargaining representative has been certified or otherwise authorized to represent the employees in an appropriate unit. 6 In the instant case, the wish of the employees to , 224] be consulted and to bargain collectively as to the terms of any general wage increase is established by the findings and the negotiations. Cf. National Labor Relations Board v. Columbian Enameling & Stamping Co., , 504. We do not have here a case where the bargaining had come to a complete termination cutting off the outstanding invitation of the certified collective bargaining representative to bargain as to any new issue on such a matter as rates of pay. Cf. National Labor Relations Board v. Sands Mfg. Co., . The opening which a raise in pay makes for the correction of existing inequities among employees and for the possible substitution of shorter hours, vacations or sick leaves, in lieu of some part of the proposed increase in pay, suggests the infinite opportunities for bargaining that are inherent in an announced readiness of an employer to increase generally the pay of its employees. The occasion is so appropriate for collective bargaining that it is difficult to infer an intent to cut off the opportunity for bargaining and yet be consistent with the purposes of the National Labor Relations Act. We do not here have a unilateral grant of an increase in pay made by an employer after the same proposal has been made by the employer in the course of collective bargaining but has been left unaccepted or even rejected in those negotiations. Such a grant might well carry no disparagement of the collective bargaining proceedings. Instead of being regarded as an unfair labor practice, it , 225] might be welcomed by the bargaining representative, without prejudice to the rest of the negotiations. See In the Matter of W. W. Cross & Co., 77 N. L.R.B. 1162; In the Matter of Exposition Cotton Mills Co., 76 N.L.R.B. 1289; In the Matter of Southern Prison Co., 46 N.L.R.B. 1268. We hold that the Board's order to cease and desist is justified, under the circumstances of this case, to the extent that the order requires the employer to cease and desist from refusing to bargain collectively by taking action, without prior consultation with the authorized collective bargaining representative of the employees, with respect to general rates of pay which are substantially different from, or greater than, any which the employer has proposed during its negotiations with such representative. The need for this order depends in part upon the Board's finding that the action by the employer, on January 1, 1946, taken so soon after the meeting of December 19, 1945, showed that 'the respondent (employer) was not acting in good faith during the negotiations, and is manifestly inconsistent with the principle of collective bargaining.' 70 N.L.R.B. at page 207. See May Dept. Stores Co. v. National Labor Relations Board, , 90 L.Ed 145; Medo Photo Supply Corp. v. National Labor Relations Board, ; National Labor Relations Board v. Newark Morning Ledger Co., 3 Cir., 120 F.2d 262, 137 A.L.R. 849; Jeffery-De Witt Insulator Co. v. National Labor Relations Board, 4 Cir., 91 F.2d 134,7 112 A.L.R. 948. , 226] II. The decree of enforcement should not extend further than necessary to prevent the taking of the prohibited action by the employer. There are no findings by the Board that establish a lack of good faith or lack of consistency with the principle of collective bargaining on the part of the employer other than in the connection above discussed. The Board declined to uphold the trial examiner in his findings and recommendations as to several alleged unfair labor practices other than this one. The Board's own finding as to the employer's interference with, and restraint and coercion of, its employees is expressly limited to this one item. It reads: 'Under these circumstances, we find, as did the Trial Examiner, that the respondent, by its action with respect to the wage increase, failed to perform its statutory duty to bargain collectively with the Union and thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in the Act.' (Emphasis supplied.) 70 N.L.R.B. at page 207. Accordingly, there appears no reason for enlarging the scope of the enforcement decree beyond that feature, and little, if any, need for orders requiring either specific affirmative action to be taken by the employer or the posting of any notices by it. 8 , 227] For these reasons, the judgment is reversed and the cause is remanded to the Court of Appeals for action consistent with this opinion. It is so ordered. Reversed and remanded. Mr. Justice DOUGLAS, Mr. Justice MURPHY and Mr. Justice RUTLEDGE join in Part I of this opinion, but think the Board's order should be enforced without modification. Appendix A. Order of National Labor Relations Board In the Mat er of Crompton- Highland Mills, Inc., and Textile Workers Union of America, CIO, Case No. 10-C1812.-Decided August 21, 1946.'Order.'Upon the entire record in the case, and pursuant to Section 10(c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondent, Crompton-Highland Mills, Inc., Griffin, Georgia, and its officers, agents, successors, and assigns, shall:'1. Cease and desist from:'(a) Refusing to bargain collectively with Textile Workers Union of America, CIO, as the exclusive representative of the respondent's production and maintenance employees at the Griffin plant, including watchmen, but excluding office, clerical, technical, and laboratory employees, section men in the spinning room, head loom , 228] fixers in the weave room, head fixers in the card room, all supervisory employees of the grade of second hand and above, and all other supervisory employees with authority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees, or effectively recommend such action, by taking action, without prior consultation with said organization, with respect to rates of pay, wages, hours of employment, and other conditions of employment.'(b) In any manner interfering with the efforts of Textile Workers Union of America, CIO, to bargain collectively with it as the representative of its employees in the appropriate unit described above.'2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act:'(a) Upon request, bargain collectively with Textile Workers Union of America, CIO, as the exclusive representative of all its employees in the appropriate unit described above with respect to rates of pay, wages, hours of employment, and other conditions of employment;'(b) Post at its plant at Griffin, Georgia, copies of the notice attached hereto, marked 'Appendix A.' Copies of such notice, to be furnished by the Regional Director for the Tenth Region, shall, after being duly signed by the respondent's representative, be posted by the respondent immediately upon receipt thereof, and maintained by it for sixty (60) consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the respondent to insure that said notices are not altered, defaced, or covered by any other material;'(c) Notify the Regional Director for the Tenth Region (Atlanta, Georgia), in writing, within ten (10) days from the date of this Order, what steps the respondent has taken to comply herewith.' 70 N.L.R.B. at pages 208-209. , 229] 'Appendix A.'Notice to All Employees.'Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that:'We will bargain collectively with Textile Workers Union of America, CIO, as the exclusive representative of all employees in the bargaining unit described below, with respect to rates of pay, wages, hours of employment, and other conditions of employment.'We will not make any changes with respect to rates of pay, wages, hours of employment, or other conditions of employment of our employees in the bargaining unit described below, without prior consultation with Textile Workers Union of America, CIO.'We will not in any manner interfere with the efforts of Textile Workers Union of America, CIO, as the exclusive representative of our employees in the unit described below, to bargain collectively with us.'The bargaining unit is: All production and maintenance employees at our Griffin plant, including watchmen, but excluding office, clerical, technical and laboratory employees, section men in the spinning room, head loom fixers in the weave room, head fixers in the card room, all supervisory employees of the grade of second hand and above, and all other supervisory employees with uthority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees, or effectively recommend such action.'Crompton-Highland Mills, Inc.'By .......... (Representative.) (Title.)'Dated ........'This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material.' 70 N.L.R. B. at pages 210-211. , 230] Appendix B. Quotations from the 'Findings of Fact' as to-'III. The Unfair Labor Practices, A. The refusal to bargain' as stated in the Intermediate Report of the Trial Examiner, adopted by the National Labor Relations Board and printed by the Board following its Decision and Order.'No further conference was held until December 19, when a meeting was held at the request of the Union.'The issues upon which the parties were still in disagreement at this time involved wages, work assignments, insurance provisions, severance pay, vacations, union security, arbitration, union activity upon company time, and the preamble of the contract, in which the respondent sought to define the parties to the agreement as the respondent and the 'employees' in the appropriate unit, as opposed to the Union's position that the Union be denominated as party to the contract. On the issue of union security, although the Union had offered to compromise for maintenance of membership, the respondent refused to grant any form of security. As to wages, although it had originally rejected the Union's proposals for any wage increase, it proposed what amounted to an increase of about one or one and one-half cents per hour at this time.'On January 1, 1946, the members of the union negotiation committee, employed at the plant, were summoned to the office of Plant Manager Pickford and informed that the respondent was granting a general wage increase to all employees,18 amounting to about 2 to 6 cents per hour. , 231] Pickford read to the committee the following letter under that date, addressed to Union Director Douty:'In the course of our extended contract negotiations we have repeatedly told you that our mill would be among the first to make wage adjustments in this locality. We have learned that certain of the mills in this locality are about to adjust their wages and we are, therefore, making comparable adjustments in our wage rates effective Monday, December 31st, 1945. A copy of the notice which has been posted in the mill today outlining the various rate adjustments is attached hereto.'Attached to the letter were nitices directed to the respective departments listing the various wage increases. The letter was received by Douty the next day. While the negotiating committee was in Pickford's office, copies of the notices announcing the wage increases were being posted on the bulletin boards in the respective departments.'It will be seen from the foregoing that neither the Union nor the negotiating committee was consulted from December 19, the date of the last conference, to January 1, 1946, the date of the granting of the wage increase. Nor was the committee consulted on the latter date. The respondent merely presented it with a fait accompli, without affording the Union an opportunity to negotiate with respect to the amount of the increase, the employees to whom the increase would be applicable,19 the effective date of the increase or any of the factors normally envisaged by the collective bargaining process. , 232] 'It cannot be disputed, nor does the respondent deny, that the granting of the wage increase at that time, constituted unilateral action . * * *'While it is evident that the Union was insistent in its demand for some form of union security during its negotiatio with the respondent, the preponderance of the credible evidence does not support the respondent's position that the Union had, in effect, presented an ultimatum that no contract would be consummated which did not afford union security. As has already been indicated, union security was only one of several matters, aside from the wage question, upon which agreement had not yet been reached. If, as the respondent contends, it had left no doubt as to its position on the issue of union security in the conferences of October 17 and 18, and it was convinced that the Union was adamant on this issue, it seems unlikely that the parties would have conferred on November 7 and 8, and again on December 19, when the Union submitted a written wage proposal.'It is clear, therefore, and the undersigned finds, that, although the parties had reached a temporary impasse on December 19 on some issues, principally wages, union security, and check-off, there is no substantial basis for concluding that the Union had abandoned negotiations at this time. Moreover, even if the parties had reached an impasse in their negotiations, this obviously could not affect the Union's status as majority representative. The principle that 'a bargaining relationship once rightly established must be permitted to exist and function for a reasonable period in which it can be given a fair chance to succeed,' is well-established. 20 Equally clear is the proposition that the granting of a unilateral wage increase , 233] or other concession by an employer to his employees while the designated union is attempting to bargain concerning the same subject matter, constitutes a violation of the employer's duty to bargain with the union. 21 It is not a question, contrary to the respondent's argument, of giving the Union credit for a wage increase which it did not obtain, but rather of the conduct of the respondent in granting the increase in derogation of the Union's status as statutory representative, by depriving the Union of its right to bargain with respect to such increase.'Upon the basis of the foregoing, and upon the entire record, the undersigned concludes and further finds that, by failing and refusing to furnish the Union with essential and pertinent information relating to the respondent's wage structure under its 'point plan,' job specifications, work assignments, and information appertaining thereto, and by granting its employees a unilateral wage increase on January 1, 1946, the respondent has from August 31, 1945, to December 19, 1945, and thereafter to date, including January 1, 1946, failed and refused to bargain with the Union as the exclusive collective bargaining representative of the employees in the appropriate unit above described, and has thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed under the Act.' (Emphasis in this paragraph is supplied.) 70 N.L.R.B. at pages 220-221, 222, 223-224. , 234] The Board left no doubt that it relied solely on the granting of the wage increase, when it issued its decision and order in this case. This appears from the following express statement in the Board's decision and order: '1. The Trial Examiner found that the respondent, in violation of Section 8(1) and (5) of the Act, failed to bargain collectively with the Union as the statutory representative of the respondent's employees by refusing to furnish the Union with certain detailed nformation relating to the incentive wage plan and by granting a wage increase to its employees without consulting the Union. Although we agree with the Trial Examiner's conclusion, we, however, rest our determination solely on the latter ground.' (Emphasis supplied.) 70 N.L.R.B. at page 206. |
10 | Kansas and Colorado negotiated the Arkansas River Compact to settle disputes and remove causes of future controversies over the river's waters and to equitably divide and apportion those waters and the benefits arising from the United States' construction, operation, and maintenance of John Martin Reservoir. Under Article IV-D, the Compact is not intended to impede or prevent future beneficial development - including construction of dams and reservoirs and the prolonged or improved functioning of existing works - provided that such development does not "materially deplet[e]" stateline flows "in usable quantity or availability for use." In this action, the Special Master recommended that the Court, among other things, find that post-Compact well pumping in Colorado has resulted in a violation of Article IV-D of the Compact; find that Kansas has failed to prove that the operation of Colorado's Winter Water Storage Program (WWSP) violates the Compact; and dismiss Kansas' claim that Colorado's failure to abide by the Trinidad Reservoir Operating Principles (Operating Principles) violates the Compact. Both Kansas and Colorado have filed exceptions.Held: The exceptions are overruled. Pp. 6-21. (a) Article IV-D permits development of projects so long as their operation does not result in a material depletion of usable flow to Kansas users. Kansas' exception to the dismissal of its Trinidad Reservoir claim fails because Kansas has not established that Colorado's failure to obey the Operating Principles resulted in such a violation. Pp. 7-10. (b) Because Kansas failed to meet its burden of proving its WWSP claim despite being given every reasonable opportunity to do so by the Special Master, there is no support for its exception to the Special Master's conclusion on that claim. Pp. 10-11. Page II (c) In selecting what method should be used to determine depletions of "usable" flow, the Special Master properly rejected the Spronk method - which Kansas' exception proposes is correct - as less compatible with Kansas' hydrological model than the method ultimately adopted by the Special Master. Pp. 11-13. (d) In ruling on Colorado's exception to the Special Master's conclusion that laches does not bar Kansas' well-pumping claim, it is not necessary to decide whether the laches doctrine applies to a case involving the enforcement of an interstate compact because Colorado has failed to prove that Kansas lacked due diligence in bringing its claim. Colorado errs in arguing that Kansas officials had sufficient evidence about increased well pumping in Colorado to determine that a Compact violation existed in 1956. The evidence available through 1985 was vague and conflicting. Pp. 13-16. (e) This Court disagrees with both the legal and factual claims Colorado raises in its exception to the Special Master's finding that the Compact limits annual pumping by pre-Compact wells to 15,000 acre feet, the highest amount actually pumped in those years. Kansas' failure to object to the replacement of pumps or increased pumping by pre-Compact wells does not support Colorado's legal argument that the limit should be the maximum amount of pumping possible using wells existing prior to the Compact. Regardless of the parties' subsequent practice, such improvements to and increased pumping by existing wells clearly fall within Article IV-D's prohibition. In making the factual determination that 15,000 acre feet per year is the appropriate limit, the Special Master properly relied on reports by the United States Geological Survey and the Colorado Legislature, reports that have since been used by the Colorado State Engineer. Pp. 16-18. (f) The Court agrees with the Special Master's conclusion that the 1980 Operating Plan for the John Martin Reservoir (Plan) was separately bargained for and thus there is no evidence to support the claim raised in Colorado's exception that the benefits to Kansas from the Plan were in settlement of its well claims. The Plan does not state that post-Compact well pumping in Colorado or Kansas was a cause of changes in the river's regime, and it expressly reserves the parties' rights under the Compact. Pp. 18-20. (g) The Special Master concluded that, regardless whether the burden of proof applied to Kansas' well-pumping claim is clear and convincing evidence or preponderance of the evidence, the post-Compact well pumping in Colorado had caused material depletions of usable river flows in violation of the Compact. Thus, this Court need not resolve the issue raised by Colorado's exception: that clear and convincing evidence is the correct standard. P. 20. Page III Exceptions overruled, and case remanded.REHNQUIST, C. J., delivered the opinion for a unanimous Court. [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 1] CHIEF JUSTICE REHNQUIST delivered the opinion of the Court.This original action involves a dispute among Kansas, Colorado, and the United States over alleged violations of the Arkansas River Compact. The Special Master has filed a report (Report) detailing his findings and recommendations concerning the liability phase of the trial. Both Kansas and Colorado have filed exceptions to those findings and recommendations. We agree with the Special Master's disposition of the liability issues. Accordingly, we overrule the parties' exceptions.IThe Continental Divide in the United States begins at the Canadian border in the mountains of northwestern Montana. From there, it angles southeast through Montana and Wyoming until it enters Colorado. It then runs roughly due south through Colorado, following first the crest of the Front Range of the Rocky Mountains, and then shifting slightly west to follow the crest of the Sawatch Range. The Arkansas River rises on the east side of the Continental Divide, between Climax and Leadville, Colorado. Thence it flows south and east through Colorado, Kansas, Oklahoma, and Arkansas, emptying into the Mississippi River, which in turn flows into the Gulf of Mexico. As if to prove that the ridge [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 2] which separates them is indeed the Continental Divide, a short distance away from the source of the Arkansas, the Colorado River rises and thence flows southwest through Colorado, Utah, and Arizona, and finally empties into the Gulf of Baja California.The Arkansas River flows at a steep gradient from its source south to Canon City, Colorado, whence it turns east and enters the Royal Gorge. As it flows through the Royal Gorge, the Arkansas River is at some points half a mile below the summit of the bordering cliffs. The Arkansas River thence descends gradually through the high plains of eastern Colorado and western Kansas; its elevation at the Colorado-Kansas border is 3,350 feet. It then makes its great bend northward through Kansas, and from there flows southeasterly through northeastern Oklahoma and across Arkansas. The Arkansas River covers about 1,450 miles from its source in the Colorado Rockies to the point in southeastern Arkansas where it flows into the Mississippi River. It is the fourth longest river in the United States, and it drains in an area of 185,000 square miles.The first Europeans to see the Arkansas River were members of the expedition of Francisco Coronado, in the course of their search for the fabled Southern Cities of Cibola. In 1541, they crossed the Arkansas River near what is now the Colorado-Kansas border. One year later, those in the expedition of Hernando DeSoto would see the Arkansas River 1,000 miles downstream at its mouth. The western borders of the Louisiana Purchase, acquired from France in 1803, included within them most, if not all, of the Arkansas River drainage basin. Zebulon Pike, in his expedition of 1805-1806, in the course of which he sighted the mountain peak named after him, traveled up the Arkansas River. John C. Freemont traversed the River in the other direction in his expedition of 1843-1844.Today, as a result of the Kerr McClellan Project, the [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 3] Arkansas River is navigable for ocean going vessels all the way from its mouth to Tulsa, Oklahoma. The Arkansas River is unique in that the pronunciation of its name changes from State to State. In Colorado, Oklahoma, and Arkansas, it is pronounced as is the name of the State of Arkansas, but in Kansas, it is pronounced Ar-KAN-sas.The reach of the Arkansas River system at issue here is a fertile agricultural region that extends from Pueblo, Colorado, to Garden City, Kansas. This region has been developed in Colorado by 23 major canal companies and in Kansas by 6 canal companies, which divert the surface flows of the Arkansas River and distribute them to individual farmers. Report 35-38. Also relevant to this dispute, the United States has constructed three large water storage projects in the Arkansas River basin. Id., at 43-48. The John Martin Reservoir, located on the Arkansas River about 60 miles west of the Kansas border, was authorized by Congress in 1936, 49 Stat. 1570, and was completed in 1948. It is the largest of the federal reservoirs, and initially it had a storage capacity of about 700,000 acre-feet.1 Report 45. The Pueblo Reservoir, located on the Arkansas River about 150 miles west of the Kansas border, was authorized by Congress in 1962, and was substantially completed in 1975. Id., at 44. In 1977, the storage capacity of the Pueblo Reservoir was estimated to be about 357,000 acre-feet. Ibid. Finally, the Trinidad Reservoir, located on the Purgatoire River (a major tributary of the Arkansas River) was approved by Congress in 1958, and was completed in 1977. Id., at 43. The total capacity of the Trinidad Reservoir is about 114,000 acre-feet. Ibid. [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 4] Twice before in this century, the States of Kansas and Colorado have litigated in this Court regarding their respective rights to the waters of the Arkansas River. See Kansas v. Colorado; Colorado v. Kansas, . In the first suit, the Court denied Kansas' request to enjoin diversions of the Arkansas River by Colorado because the depletions alleged by Kansas were insufficient to warrant injunctive relief. Kansas v. Colorado, supra, at 114-117. In the second suit, Colorado sought to enjoin lower court litigation brought against Colorado water users, while Kansas sought an equitable apportionment of the Arkansas River. Colorado v. Kansas, supra, at 388-389. The Court granted Colorado an injunction, but concluded that Kansas was not entitled to an equitable apportionment. 320 U.S., at 400. The Court suggested that the States resolve their differences by negotiation and agreement, pursuant to the Compact Clause of the Constitution. Id., at 392. See U.S. Const., Art. I, 10, cl. 3.In 1949, after three years of negotiations, Kansas and Colorado approved, and Congress ratified, the Arkansas River Compact (Compact). See 63 Stat. 145; see also Report 5-6; App. to Report 1-17 (reprinting text of Compact). Article VIII of the Compact creates the Arkansas River Compact Administration (Administration) and vests it with the power and responsibility for administering the Compact. Id., at 11-15. The Administration is composed of a nonvoting presiding officer designated by the President of the United States, and three voting representatives from each State. Each State has one vote, and every decision, authorization, or other action by the Administration requires a unanimous vote. Id., at 12-13 (Article VIII-D).The Compact's primary purposes are to "[s]ettle existing disputes and remove causes of future controversy ... concerning the waters of the Arkansas River" [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 5] and to "[e]quitably divide and apportion" the waters of the Arkansas River, "as well as the benefits arising from the construction, operation and maintenance by the United States of John Martin Reservoir." Id., at 1-2 (Articles I-A, I-B). Article IV-D, the provision of the Compact most relevant to this dispute, states: "This Compact is not intended to impede or prevent future beneficial development of the Arkansas River basin in Colorado and Kansas by Federal or State agencies, by private enterprise, or by combinations thereof, which may involve construction of dams, reservoir, and other works for the purposes of water utilization and control, as well as the improved or prolonged functioning of existing works: Provided, that the waters of the Arkansas River ... shall not be materially depleted in usable quantity or availability for use to the water users in Colorado and Kansas under this Compact by such future development or construction." Id., at 5 (emphasis added). In 1983, Kansas conducted an independent investigation of possible violations of the Compact arising from the impact of increases in post-Compact well pumping in Colorado and the operation of two of the federal reservoirs. Report 9-10. In December 1985, Kansas brought this original action against the State of Colorado to resolve disputes arising under the Arkansas River Compact. Id., at 10. The Court granted Kansas leave to file its complaint, Kansas v. Colorado, , and appointed Judge Wade H. McCree, Jr., to serve as Special Master, Kansas v. Colorado, . Upon Judge McCree's death, the Court appointed Arthur L. Littleworth as Special Master. Kansas v. Colorado, .Kansas advanced three principle claims, each involving an alleged Compact violation. See Report 58. First, [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 6] Kansas alleged that increases in groundwater well pumping in Colorado in the years following adoption of the Compact have caused a significant decline in the Arkansas River's surface flow in violation of Article IV-D of the Compact. Second, Kansas claimed that Colorado's Winter Water Storage Program (WWSP) - a program whereby the Bureau of Reclamation of the Department of the Interior (Bureau of Reclamation) and Colorado use excess capacity at the Pueblo Reservoir to store a portion of the winter flow of the Arkansas River - violates the Compact. Third, Kansas claimed that Colorado's failure to abide by the Trinidad Reservoir Operating Principles (Operating Principles) constituted a violation of the Compact. Ibid.The Special Master bifurcated the trial into a liability phase and a remedy phase. At the conclusion of the liability phase, the Special Master filed his Report, outlining his findings and recommendations. In his Report, the Special Master recommended, among other things, that the Court: (1) find that post-Compact well pumping in Colorado has "materially depleted" the "usable" flow at the Colorado-Kansas border (stateline) in violation of Article IV-D of the Compact, Report 336; (2) find that "Kansas has failed to prove that operation of the [WWSP] program has violated the [C]ompact," ibid.; and (3) "dismiss the Kansas claim arising from the operation of the Trinidad Reservoir," ibid.2 Both Kansas and Colorado have filed exceptions to the Special Master's Report. Kansas excepts to the Special Master's rejection of its (1) Trinidad Reservoir claim, see id., at 373-433; (2) WWSP claim, see id., at 306-335; [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 7] and (3) preferred method for determining the usability of depletions of stateline flows, see id., at 291-305. Colorado excepts to the Special Master's determination that: (1) Kansas was not guilty of inexcusable delay in making its post-Compact well-pumping claim and that Colorado was not prejudiced by this delay, see id., at 147-170; (2) pre-Compact wells in Colorado are limited to pumping the highest amount pumped in the years during which the Compact was negotiated and that the highest amount of such pumping was 15,000 acre-feet per year, see id., at 182-200; (3) increases in usable stateline flows resulting from the operating plan for the John Martin Reservoir adopted by the Arkansas River Compact Administration in 1980 (1980 Operating Plan) were "separately bargained for" and, therefore, should not offset depletions caused by post-Compact well pumping in Colorado, see id., at 171-181; and (4) Kansas need only meet the "preponderance of the evidence" standard to prove a breach of Article IV-D of the Compact, see id., at 65-70.We turn to the parties' exceptions. II A In 1958, Congress authorized construction of the Trinidad Project, a dam and a reservoir system on the Purgatoire River slightly upstream from the city of Trinidad, Colorado. See id., at 382-388. Recognizing that Article IV-D of the Compact prohibited any development of the Arkansas River basin that resulted in a material depletion of usable river flow, the Bureau of Reclamation conducted studies regarding the future operation of the Trinidad Project. Id., at 388-390. The Bureau of Reclamation established Operating Principles whereby the Trinidad Project could be administered "without adverse effect on downstream water users and the inflow to John Martin Reservoir." Id., at 390 [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 8] (internal quotation marks omitted). The Governor of Kansas reviewed the Bureau of Reclamation's proposed Operating Principles and indicated that if five additional conditions were accepted, then "Kansas would be in a position to approve the amended Operating Principles and to support completion of the project." Id., at 392-393. In June 1967, the Administration approved the Operating Principles as well as Kansas' five additional conditions. Id., at 395.In 1979, Colorado began storage of water at the Trinidad Reservoir. Id., at 396. Kansas immediately complained that the Operating Principles were being violated. Id., at 397. In 1988, at the request of the Administration, the Bureau of Reclamation conducted a study of the Trinidad Reservoir. It concluded that two storage practices at the Trinidad Reservoir constituted a "`departure from the intent of the operating principles.'" Ibid.At trial, Kansas argued that the Operating Principles were binding on the State of Colorado and that any departure from them constituted a violation of the Compact "regardless of injury." Id., at 408 (internal quotation marks omitted). Kansas, however, "offered no evidence, apart from the Bureau studies, to show that the actual operation of the Trinidad project caused it to receive less water than under historical, without-project conditions." Id., at 412. Instead, Kansas sought to quantify depletions by "comparing the flows into John Martin Reservoir `as they would have occurred under the Operating Principles with the flows that occurred under actual operations.'" Id., at 409. The Special Master concluded that in order to prove a violation of the Compact, Kansas was required to demonstrate that "the Trinidad operations caused a material depletion within the meaning of Article IV-D." Id., at 431. The Special Master recommends that we dismiss Kansas' Trinidad claim because "Kansas has not established, and did not [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 9] attempt to establish, such injury." Ibid.Kansas argues that "[d]eparture from the Operating Principles is ipso facto a violation of the Compact, and it [is] entirely sufficient, for purposes of quantifying the effect of the violation, to compare the actual operation with simulated operation as it should have been under the Operating Principles." Kansas' Exceptions to Special Master's Report 12. But, it must be recalled, this is an original action to enforce the terms of the Compact.3 Article IV-D provides that the Compact is not intended to prevent future beneficial development of the Arkansas River basin - including dams and reservoirs - provided that the river flow shall not be materially depleted. The Compact thus permits the development of projects such as Pueblo Reservoir so long as their operation does not result in a material depletion of usable flow to Kansas users. For Kansas to prevail in its contention, it would have to show that the Operating Principles had the effect of amending the Compact by granting either party the right to sue the other for violation of the Operating Principles even though the violation resulted in no material depletion of usable flow at stateline. Although the Administration is empowered to "[p]rescribe procedures for the administration of th[e] Compact," App. to Report 11 (Article VIII-B(2)), it must do so "consistent with the provisions of th[e] Compact," ibid. (Article VIII-B(1)) (emphasis added); see also Report 416 ("[T]he Compact Administration was not delegated power to change the Compact"). The theory advocated by Kansas is inconsistent with Article IV-D, which allows for the [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 10] development and operation of dams and reservoirs so long as there is no resultant material depletion of usable flows at stateline.Thus Kansas, in order to establish a Compact violation based upon failure to obey the Operating Principles, was required to demonstrate that this failure resulted in a material depletion under Article IV-D. Kansas "has not established, and did not attempt to establish such injury." Id., at 431. We overrule Kansas' exception to the Special Master's dismissal of its Trinidad Reservoir claim. B In 1964, the Bureau of Reclamation and Colorado began planning a program to use excess capacity at Pueblo Reservoir in order to store a portion of the winter-time flow of the Arkansas River for beneficial use at other times. Under the WWSP, winter-time flow - much of which was used previously to flood uncultivated cropland - is instead stored at the Pueblo Reservoir. Kansas contends that the Special Master erred in finding that it had failed to prove that the WWSP had "materially depleted" usable stateline flows. We disagree.In his Report, the Special Master concluded:"Kansas has not proved that the WWSP has caused material Stateline depletions. Kansas' case has not been helped by its own contradictions in quantifying impacts to usable flow ranging during this trial from 255,000 acre-feet initially, to 44,000 to 40,000; nor by the fact that depletions are essentially eliminated if accretions are taken into account." Report 335. The Special Master examined the computer models submitted by Kansas and Colorado and determined that "the depletions shown by the Kansas model are well within the model's range of error." Id., at 334-335. As [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 11] a result, "[o]ne [could not] be sure whether impact or error [was] being shown." Id., at 335.We believe that the Special Master gave Kansas every reasonable opportunity to meet its burden of proving its WWSP claim. Kansas, however, failed to prove that operation of the WWSP program resulted in material depletions of usable flows in violation of Article IV-D. See ibid. Therefore, we overrule Kansas' exception to the Special Master's conclusion that Kansas had failed to prove its WWSP claim. C Article IV-D of the Compact permits future development and construction along the Arkansas River Basin provided that it does not materially deplete stateline flows "in usable quantity or availability." App. to Report 5 (Article IV-D) (emphasis added). In order to establish a violation of Article IV-D, Kansas was required to establish that development in Colorado resulted in material depletions of "usable" river flow. The Compact does not define the term "usable." Cf. Colorado v. Kansas, 320 U.S., at 396-397 ("The critical matter is the amount of divertible flow at times when water is most needed for irrigation. Calculations of average annual flow, which include flood flows, are, therefore, not helpful in ascertaining the dependable supply of water usable for irrigation"). At trial, Kansas presented three methods for determining depletions of "usable" flow.Kansas' first expert, Timothy J. Durbin, analyzed flow data for the period between 1951 and 1985 by plotting actual river diversions in Kansas against actual stateline flows. Report 293-294. Using these data, Durbin developed criteria to determine what river flows were usable. Durbin concluded that during the summer months, April through October, (1) 78% of the stateline flows were diverted; (2) flows greater than 40,000 acre-feet [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 12] per month were not usable; and (3) flows greater than 140,000 acre-feet for the whole period were not usable. Id., at 293. With respect to the winter months, November through March, Durbin concluded that (1) 24% of the winter flow was diverted; (2) flows greater than 7,500 acre-feet per month were not usable; and (3) flows greater than 40,000 acre-feet for the whole period were not usable. Id., at 293-294.After Colorado isolated errors in Durbin's analysis, Kansas presented a replacement case. Kansas' second group of experts, led by Stephen P. Larson, adopted the same methodology but revised certain exhibits and made minor corrections in data. As a result, Larson modified Durbin's coefficients, using 72% for the summer months and 25% for the winter months. Id., at 295.Later, well after trial had begun, Kansas enlisted the aid of Brent Spronk, who proposed yet another method to quantify depletions of "usable" stateline flow. Id., at 300-305. Spronk attempted to determine the "percentage of days in each month when flows were being fully used in Kansas." Id., at 301. Instead of seasonal averages, the Spronk approach yielded coefficients that varied from month to month. Spronk then multiplied these monthly coefficients by the estimated depletions in flow predicted by Kansas' hydrological model. Id., at 301-302.The Special Master concluded that "the Durbin approach, using Larson's coefficients, is the best of the several methods presented for determining usable flow" and that it provided "a reasonable way in which to determine depletions of usable flow." Id., at 305. We agree. Each of the three [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 13] methods that Kansas proposed for calculating usable depletions required two steps: (1) a calculation of total depletions using the Kansas hydrological model, and (2) an application of "usability" criteria. See Brief for United States in Response to Exeptions [Exceptions] of Kansas and Colorado 30. Each of the three methods proposed by Kansas was dependent on the Kansas hydrological model to estimate total depletions. The Spronk method required the Kansas hydrological model to predict accurately depletions for each and every month. Report 303. But as Durbin, Kansas' first expert, testified, Kansas' hydrological model was only a "`good predictor' when `looking at long periods of time.'" Id., at 303, n. 130 (quoting Durbin's testimony). Thus, the Spronk method required the Kansas hydrologic model to do something it was not designed to do, i.e., predict accurately depletions on a monthly basis. Id., at 303 ("The Spronk analysis assumes that the H-I model can accurately predict changes of Stateline flow on a monthly basis"). Because the Spronk method for determining "usable" river flows was less compatible with Kansas' hydrological model than the other methods proposed, we conclude that the Special Master properly rejected the Spronk method in favor of the Durbin approach, as modified by the Larson coefficients. IIIAThe Special Master concluded that Kansas was not guilty of inexcusable delay in making its well-pumping claim, and that Colorado had not been prejudiced by Kansas' failure to press its claim earlier. Id., at 170. Colorado has excepted to this determination. Colorado argues that the equitable doctrine of laches should bar Kansas' claim for relief. See Colorado's Exceptions to Special Master's Report (Colorado's Exceptions) 24-64. We overrule Colorado's exception.The defense of laches "requires proof of (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense." Costello v. United States, ; see also Black's Law Dictionary 875 (6th ed. 1990) ("`Doctrine of laches,' is based upon maxim that [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 14] equity aids the vigilant and not those who slumber on their rights. It is defined as neglect to assert a right or claim which, taken together with lapse of time and other circumstances causing prejudice to the adverse party, operates as bar in court of equity"). This Court has yet to decide whether the doctrine of laches applies in a case involving the enforcement of an interstate compact. Cf. Illinois v. Kentucky, (in the context of an interstate boundary dispute, "the laches defense is generally inapplicable against a State"); Block v. North Dakota, (O'CONNOR, J., dissenting) ("The common law has long accepted the principle `nullum tempus occurrit regi' - neither laches nor statutes of limitations will bar the sovereign"); Colorado v. Kansas, 320 U.S., at 394 (in the context of a suit seeking an equitable apportionment of river flows, facts demonstrating a delay in filing a complaint "might well preclude the award of the relief [requested]. But, in any event, they gravely add to the burden [the plaintiff] would otherwise bear"). We need not, however, foreclose the applicability of laches in such cases, because we conclude that Colorado has failed to prove an element necessary to the recognition of that defense. See Costello, supra, at 282.Colorado argues that Kansas knew or should have known by 1956, or at the latest, before 1968, that both the number of post-Compact wells and the amount of post-Compact pumping in Colorado had increased substantially. Colorado's Exceptions 37, 39. Colorado argues that by 1956 Kansas had sufficient information about increased well pumping in Colorado and its potential impact on usable stateline flows to call for an investigation to determine if a Compact violation existed. Id., at 46.The Special Master concluded that prior to 1984, Kansas had made no formal complaint to the Administration regarding post-Compact well pumping in [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 15] Colorado. Report 155-156. Nevertheless, the Special Master concluded that Colorado's evidence did not "deal with the issue of impact on usable flow at the Stateline," id., at 161, and did "not demonstrate that [the Kansas officials] were aware of the number of wells, the extent of Colorado's pumping, or the impact or even potential impact of pumping on usable Stateline flows," id., at 164. The Special Master explained the difficulty of assessing the impact of increases in post-Compact well pumping on usable stateline flows because of changing conditions during the 1970's and early 1980's:"The 1970s were generally dry years and some reduction in flow was to have been expected. Pueblo Dam came on line in 1976 and began to regulate native flows. Transmountain imports increased, which to some extent provided an offset to pumping. The 1980 Operating Plan was placed into effect, which Colorado alleges offset the impacts of increased pumping downstream from John Martin Reservoir. The Winter Water Storage Program was instituted. Moreover, there was no quantitative or specific entitlement against which depletions to usable flow could be judged. Nor were there any agreed upon criteria for establishing what flows were usable." Id., at 162-163. As late as 1985, Colorado officials refused to permit an investigation by the Administration of well development in Colorado because they claimed that the evidence produced by Kansas did not "`suggest that well development in Colorado has had an impact on usable stateline flows.'" Id., at 163 (quoting memorandum of Mr. J. William McDonald, chief of the Colorado delegation to the Administration). In light of the vague and conflicting evidence available to Kansas, we conclude that Colorado has failed to demonstrate lack of diligence, i.e., inexcusable delay, on the part of Kansas. [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 16] Accordingly, we overrule Colorado's exception to the Special Master's conclusion that the defense of laches should not bar Kansas' well-pumping claim.BThe Compact prohibits "future beneficial development of the Arkansas River basin" that "materially deplete[s]" the usable flows of the Arkansas River. App. to Report 5 (Article IV-D) (emphasis added). Because some wells in Colorado were in existence prior to the Compact, both parties agree that a certain amount of post-Compact well pumping is allowable under the Compact. Report 182. Kansas and Colorado, however, dispute the extent of this allowance. The Special Master determined that the "highest annual amount shown to have been pumped during the negotiations, namely 15,000 acre-feet, should be allowed under the [C]ompact." Id., at 200. Colorado makes both a legal and a factual challenge to this determination. Colorado's Exceptions 66-73, 73-84.Colorado argues as a legal matter that the Compact does not limit the pumping by pre-Compact wells to the highest amount actually pumped in pre-Compact years; rather, Colorado claims that the limit on its pre-Compact pumping is the maximum amount that Colorado law permitted or the maximum amount of pumping possible using wells existing prior to the Compact. Id., at 69-70. In support of its position, Colorado argues that the Special Master failed to consider the subsequent practice of the parties, i.e., Kansas' failure to object to replacement of centrifugal pumps with turbine pumps or increased pumping by pre-Compact wells, and that Article VI-A(2) of the Compact supports its position.4 [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 17] We conclude that the clear language of Article IV-D refutes Colorado's legal challenge. Article IV-D permits "future beneficial development of the Arkansas River basin ... which may involve construction of dams, reservoir, and other works for the purposes of water utilization and control, as well as the improved or prolonged functioning of existing works: Provided, that the waters of the Arkansas River ... shall not be depleted in usable quantity or availability ... ." App. to Report 5 (emphasis added). Regardless of subsequent practice by the parties, improved and increased pumping by existing wells clearly falls within Article IV-D's prohibition against "improved or prolonged functioning of existing works," if such action results in "materia[l] deplet[ions] in usable" river flows. Ibid.; see Texas v. New Mexico, ("[U]nless the compact to which Congress has consented is somehow unconstitutional, no court may order relief inconsistent with its express terms"). Article VI-A(2) of the Compact, which begins with the phrase, "Except as otherwise provided," App. to Report 10, must be read in conjunction with and as limited by Article IV-D. We agree with the Special Master that "new wells, the replacement of centrifugal with turbine pumps, and increased pumping from [pre-Compact] wells all come within [Article IV-D]." Report 194.Second, Colorado argues as a factual matter that the Special Master unreasonably relied upon faulty reports by the United States Geological Survey (USGS) and the Colorado Legislature to conclude that the greatest amount of annual pre-Compact pumping in Colorado was 15,000 acre-feet. Colorado's Exceptions 73-74. The [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 18] Special Master concluded: "There is no precise answer to the amount of [pre-Compact] pumping... . That amount must simply remain as an estimate of water use that affected the general allocation of water between the states when the [C]ompact was being negotiated. Two responsible reports, one published by the USGS and one prepared by the Colorado legislature, reached similar conclusions as to the amounts of Colorado pumping during the 1940s... . They have since been used by the Colorado State Engineer. I have relied on these reports and recommend that the highest annual amount shown to have been pumped during the negotiations, namely 15,000 acre-feet, should be allowed under the [C]ompact." Report 199-200. Although the ultimate responsibility for deciding what are correct findings of fact remains with the Court, Colorado v. New Mexico, , in this instance, we are in full agreement with the Special Master. Accordingly, we overrule Colorado's exception.CIn April 1980, the Administration adopted a resolution concerning the method for operating John Martin Reservoir (1980 Operating Plan). Report 47. The 1980 Operating Plan divides the water conserved in John Martin Reservoir into separate accounts. Kansas is allocated 40% of the conservation storage, with the remaining 60% being divided in specified percentages among the nine canal companies in Colorado Water District 67. Id., at 173. The Special Master concluded that the 1980 Operating Plan for the John Martin Reservoir was "separately bargained for" and therefore should not offset depletions caused by post-Compact well pumping in Colorado. Id., at 180-181. Colorado takes exception to this ruling.Colorado argues that increases in usable stateline [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 19] flows resulting from the 1980 Operating Plan should offset depletions to usable stateline flows. Colorado's Exceptions 85. Colorado maintains that the Administration adopted the 1980 Operating Plan "for more efficient utilization of water under its control because of changes in the regime of the Arkansas River," id., at 91, "including [post-Compact] well pumping in Colorado and Kansas," ibid.; see also App. to Report 107 (Resolution Concerning an Operating Plan for John Martin Reservoir) ("WHEREAS, the Arkansas River Compact Administration ... recognizes that, because of changes in the regime of the Arkansas River, the present operation of the conservation features of John Martin Reservoir does not result in the most efficient utilization possible of the water under its control"). We disagree.As Colorado acknowledges, the resolution adopting the 1980 Operating Plan "does not state that [post-Compact] well pumping in Colorado or Kansas was a cause of changes in the regime of the Arkansas River." Colorado's Exceptions 88. In fact, Colorado argues in a separate part of its brief that "Kansas had made no complaint about well pumping in Colorado to the Compact Administration ... before 1984." Id., at 32. The 1980 Operating Plan expressly reserves the parties' rights under the Compact, stating that "[a]doption of this resolution does not prejudice the ability of Kansas or of any Colorado ditch to object or to otherwise represent its interest in present or future cases or controversies before the Administration or in a court of competent jurisdiction." App. to Report 116. The Special Master concluded: "The 1980 Operating Plan provided benefits to both Kansas and Colorado which were separately bargained for. There is no evidence to support the claim that benefits to Kansas were in settlement of its well claims. Colorado received ample consideration under the agreement for the 1980 plan without [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 20] a waiver of Kansas' well claims. The benefits received by Kansas under the plan should not be offset against compact violations, and should not be a bar to any of the Kansas claims in this case." Report 180-181. We agree with the Special Master's resolution of Colorado's claim. Accordingly, we overrule Colorado's exception.DFinally, Colorado argues that Kansas is required to prove its well-pumping claim by clear and convincing evidence. Colorado's Exceptions 91. The Special Master, relying upon Nebraska v. Wyoming___ (1993), concluded that the proper burden of proof for enforcing an interstate compact is the preponderance of the evidence standard. Report 70. The Special Master noted that the Nebraska Court had drawn a distinction between actions seeking to "modify" a judicial decree and actions seeking to "enforce" a judicial decree. See Nebraska, supra, at ___ (slip op., at 6). ("[W]e find merit in [the] contention that, to the extent that Nebraska seeks modification of the decree rather than enforcement, a higher standard of proof applies"). The Special Master concluded that an action seeking to enforce an interstate compact stood on the same footing as an action enforcing a judicial decree, and therefore was subject to the "preponderance of the evidence" standard. Report 70.We need not, however, resolve this issue. The Special Master concluded that "regardless of which burden of proof applies" he had "no difficulty in concluding that [post-Compact] pumping in Colorado ha[d] caused material depletions of the usable Stateline flows of the Arkansas River, in violation of the Arkansas River Compact." Id., at 263. We agree with this determination, and thus overrule Colorado's exception. [ KANSAS v. COLORADO, ___ U.S. ___ (1995), 21] IV For these reasons, we overrule the exceptions filed by the States of Kansas and Colorado. We remand the case to the Special Master for determination of the unresolved issues in a manner not inconsistent with this opinion. It is so ordered. |
9 | Section 4 of the Federal Cigarette Labeling and Advertising Act (1965 Act) required a conspicuous label warning of smoking's health hazards to be placed on every package of cigarettes sold in this country, while 5 of that Act, captioned "Preemption," provided: "(a) No statement relating to smoking and health, other than the [ 4] statement ..., shall be required on any cigarette package," and (b) No [such] statement ... shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with 4. Section 5(b) was amended by the Public Health Cigarette Smoking Act of 1969 (1969 Act) to specify: No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are [lawfully] labeled." Petitioner's complaint in his action for damages invoked the District Court's diversity jurisdiction and alleged, inter alia, that respondent cigarette manufacturers were responsible for the 1984 death of his mother, a smoker since 1942, because they breached express warranties contained in their advertising, failed to warn consumers about smoking's hazards, fraudulently misrepresented those hazards to consumers, and conspired to deprive the public of medical and scientific information about smoking, all in derogation of duties created by New Jersey law. The District Court ultimately ruled, among other things, that these claims were preempted by the 1965 and 1969 Acts to the extent that the claims relied on respondents' advertising, promotional, and public relations activities after the effective date of the 1965 Act. The Court of Appeals affirmed on this point.Held: The judgment is reversed in part and affirmed in part, and the case is remanded. 893 F.2d 541, reversed in part, affirmed in part, and remanded. JUSTICE STEVENS delivered the opinion of the Court with respect to Parts I, II, III, and IV, concluding that 5 of the 1965 Act did not preempt state-law damages actions, but superseded only positive enactments by state and federal rulemaking bodies mandating particular warnings on cigarette labels or in cigarette advertisements. This conclusion is required by the section's precise and narrow prohibition of required cautionary "statement[s]"; by the strong presumption against preemption of state police power regulations; by the fact that the required 4 warning does not, by its own effect, foreclose additional obligations imposed under state law; by the fact that there is no general, inherent conflict between federal preemption of state warning requirements and the continued vitality of common-law damages actions; and by the Act's stated purpose and regulatory context, which establish that 5 was passed to prevent a multiplicity of pending and diverse "regulations," a word that most naturally refers to positive enactments, rather than common-law actions. Pp. 517-520. JUSTICE STEVENS, joined by THE CHIEF JUSTICE, JUSTICE WHITE, and JUSTICE O'CONNOR, concluded in Parts V and VI that 5(b) of the 1969 Act preempts certain of petitioner's failure-to-warn and fraudulent misrepresentation claims, but does not preempt other such claims or the claims based on express warranty or conspiracy. Pp. 520-530. (a) The broad language of amended 6 5(b) extends the section's preemptive reach beyond positive enactments to include some common-law damages actions. The statutory phrase "requirement or prohibition" suggests no distinction between positive enactments and common law, but, in fact, easily encompasses obligations that take the form of common-law rules, while the phrase "imposed under State law" clearly contemplates common law as well as statutes and regulations. This does not mean, however, that 5(b) preempts all common-law claims, nor does the statute indicate that any familiar subdivision of common law is or is not preempted. Instead, the precise language of 5(b) must be fairly but - in light of the presumption against preemption - narrowly construed, and each of petitioner's common-law claims must be examined to determine whether it is in fact preempted. The central inquiry in each case is straightforward: whether the legal duty that is the predicate of the common-law damages action satisfies 5(b)'s express terms, giving those terms a fair but narrow reading. Each phrase within the section limits the universe of common-law claims preempted by the statute. Pp. 517-524. (b) Insofar as claims under either of petitioner's failure-to-warn theories - i.e., that respondents were negligent in the manner that they tested, researched, sold, promoted, and advertised their cigarettes, and that they failed to provide adequate warnings of smoking's consequences - require a showing that respondents' post-1969 advertising or promotions should have included additional, or more clearly stated, warnings, those claims rely on a state-law "requirement or prohibition ... with respect to ... advertising or promotion" within 5(b)'s meaning and are preempted. P. 525-527. (c) To the extent that petitioner has a viable claim for breach of express warranties, that claim is not preempted. While the general duty not to breach such warranties arises under state law, a manufacturer's liability for the breach derives from, and is measured by, the terms of the warranty. A common-law remedy for a contractual commitment voluntarily undertaken should not be regarded as a "requirement ... imposed under State law" under 5(b). Pp. 525-527. (d) Because 5(b) preempts "prohibition[s]" as well as "requirement[s]," it supersedes petitioner's first fraudulent misrepresentation theory, which is predicated on a state-law prohibition against advertising and promotional statements tending to minimize smoking's health hazards, and which alleges that respondents' advertising neutralized the effect of the federally mandated warning labels. However, the claims based on petitioner's second fraudulent misrepresentation theory - which alleges intentional fraud both by false representation and concealment of material facts - are not preempted. The concealment allegations, insofar as they rely on a state-law duty to disclose material facts through channels of communication other than advertising and promotions, do not involve an obligation "with respect to" those activities within 5(b)'s meaning. Moreover, those fraudulent misrepresentation claims that do arise with respect to advertising and promotions are not predicated on a duty "based on smoking and health," but rather on a more general obligation - the duty not to deceive. Pp. 527-529. (e) Petitioner's claim alleging a conspiracy among respondents to misrepresent or conceal material facts concerning smoking's health hazards is not preempted, since the predicate duty not to conspire to commit fraud that underlies that claim is not a prohibition "based on smoking and health" as that 5(b) phrase is properly construed. P. 530. JUSTICE BLACKMUN, joined by JUSTICE KENNEDY and JUSTICE SOUTER, concluded that the modified language of 5(b) in the 1969 Act does not clearly exhibit the necessary congressional intent to preempt state common law damages actions, and therefore concurred in the judgment that certain of petitioners failure to warn and fraudulent misrepresentation claims, as well as his express warranty and conspiracy claims, are not preempted by Act. P. 533-534. JUSTICE SCALIA, joined by JUSTICE THOMAS, concluded that all of petitioner's common law claims are preempted by the 1969 Act under ordinary principles of statutory construction, and therefore concurred in the judgment that certain of his post-1969 failure-to-warn claims and certain of his fraudulent misrepresentation claims are preempted. P. 548. STEVENS, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, III, and IV, in which REHNQUIST, C.J., and WHITE, BLACKMUN, O'CONNOR, KENNEDY, and SOUTER, JJ., joined, and an opinion with respect to Parts V and VI, in which REHNQUIST, C.J., and WHITE and O'CONNOR, JJ., joined. BLACKMUN, J., filed an opinion concurring in part, concurring in the judgment in part, and dissenting in part, in which KENNEDY and SOUTER, JJ., joined, post, p. 531. SCALIA, J., filed an opinion concurring in the judgment in part and dissenting in part, in which THOMAS, J., joined, post, p. 544.Laurence H. Tribe reargued the cause for petitioner. Marc Z. Edell argued the cause for petitioner on the original argument. with them on the briefs was Alan M. Darnell.H. Bartow Farr III reargued the cause for respondents. With him on the briefs was Richard G. Taranto.* [Footnote *] Briefs of amici curiae urging reversal were filed for the State of Minnesota et al. by Hubert H. Humphrey III, Attorney General of Minnesota, and Peter M. Ackerberg, Special Assistant Attorney General, and by the Attorneys General for their respective State as follows: James H. Evans of Alabama, Grant Woods of Arizona, Richard Blumenthal of Connecticut, Larry EchoHawk of Idaho, Michael E. Carpenter of Maine, Frankie Sue Del Papa of Nevada, Robert J. Del Tufo of New Jersey, Tom Udall of New Mexico, Nicholas J. Spaeth of North Dakota, Lee Fisher of Ohio, and Kenneth O. Eikenberry of Washington; for the American Cancer Society et al. by Alan B. Morrison, David C. Vladeck, and Cornish F. Hitchcock; for the American College of Chest Physicians by Raymond D. Cotton and Sherman S. Poland; for the American Medical Association by Kirk B. Johnson; for the Association of Trial Lawyers of America by Jeffrey Robert White and Michael C. Maher; for the National League of Cities et al. by Richard Ruda; for Six Former Surgeons General of the United States et al. by S. Stephen Rosenfeld and Richard A. Daynard; and for Trial lawyers for Public Justice, P.C., by Charles S. Siegel and Arthur Bryant.Briefs of amici curiae urging affirmance were filed for the Association of National Advertisers, Inc., by Burt Neuborne and Gilbert H. Weil; for the National Association of Manufacturers by Diane L. Zimmerman, Jan S. Amundson, and Quentin Riegel; and for the Product Liability Advisory Council, Inc., by Kenneth S. Geller and Mark I. Levy. JUSTICE STEVENS delivered the opinion of the Court, except as to Parts V and VI."WARNING: THE SURGEON GENERAL HAS DETERMINED THAT CIGARETTE SMOKING IS DANGEROUS TO YOUR HEALTH." A federal statute enacted in 1969 requires that warning (or a variation thereof) to appear in a conspicuous place on every package of cigarettes sold in the United States.1 The questions presented to us by this case are whether that statute, or its 1965 predecessor which required a less alarming label, preempted petitioner's common-law claims against respondent cigarette manufacturers. Petitioner is the son of Rose Cipollone, who began smoking in 1942 and who died of lung cancer in 1984. He claims that respondents are responsible for Rose Cipollone's death because they breached express warranties contained in their advertising, because they failed to warn consumers about the hazards of smoking, because they fraudulently misrepresented those hazards to consumers, and because they conspired to deprive the public of medical and scientific information about smoking. The Court of Appeals held that petitioner's state-law claims were preempted by federal statutes, 893 F.2d 541 (CA3 1990), and other courts have agreed with that analysis.2 The highest court of the State New Jersey, however, has held that the federal statutes did not preempt similar common-law claims.3 Because of the manifest importance of the issue, we granted certiorari to resolve the conflict, . We now reverse in part and affirm in part.IOn August 1, 1983, Rose Cipollone and her husband filed a complaint invoking the diversity jurisdiction of the Federal District Court. Their complaint alleged that Rose Cipollone developed lung cancer because she smoked cigarettes manufactured and sold by the three respondents. After her death in 1984, her husband filed an amended complaint. After trial, he also died; their son, executor of both estates, now maintains this action.Petitioner's third amended complaint alleges several different bases of recovery, relying on theories of strict liability, negligence, express warranty, and intentional tort. These claims, all based on New Jersey law, divide into five categories. The "design defect claims" allege that respondents' cigarettes were defective because respondents failed to use a safer alternative design for their products and because the social value of their product was outweighed by the dangers it created (Count 2, App. 83-84). The "failure to warn claims" allege both that the product was "defective as a result of [respondents'] failure to provide adequate warnings of the health consequences of cigarette smoking" (Count 3, App. 85) and that respondents "were negligent in the manner [that] they tested, researched, sold, promoted and advertised" their cigarettes (Count 4, App. 86). The "express warranty claims" allege that respondents had "expressly warranted that smoking the cigarettes which they manufactured and sold did not present any significant health consequences" (Count 7, App. 88). The "fraudulent misrepresentation claims" allege that respondents had willfully, "through their advertising, attempted to neutralize the [federally mandated] warnin[g]" labels (Count 6, App. 87-88), and that they had possessed, but had "ignored and failed to act upon," medical and scientific data indicating that "cigarettes were hazardous to the health of consumers" (Count 8, App. 89). Finally, the "conspiracy to defraud claims" allege that respondents conspired to deprive the public of such medical and scientific data (ibid.).As one of their defenses, respondents contended that the Federal Cigarette Labeling and Advertising Act, enacted in 1965, and its successor, the Public Health Cigarette Smoking Act of 1969, protected them from any liability based on their conduct after 1965. In a pretrial ruling, the District Court concluded that the federal statutes were intended to establish a uniform warning that would prevail throughout the country, and that would protect cigarette manufacturers from being "subjected to varying requirements from state to state," Cipollone v. Liggett Group, Inc., 593 F.Supp. 1146, 1148 (N.J. 1984), but that the statutes did not preempt common-law actions. Id., at 1153-1170.4 Accordingly, the court granted a motion to strike the preemption defense entirely. The Court of Appeals accepted an interlocutory appeal pursuant to 28 U.S.C. 1292(b), and reversed. Cipollone v. Liggett Group, Inc., 789 F.2d 181 (CA3 1986). The court rejected respondents' contention that the federal Acts expressly preempted common-law actions, but accepted their contention that such actions would conflict with federal law. Relying on the statement of purpose in the statutes,5 the court concluded that Congress' "carefully drawn balance between the purposes of warning the public of the hazards of cigarette smoking and protecting the interests of national economy" would be upset by state-law damages actions based on noncompliance with "warning, advertisement, and promotion obligations other than those prescribed in the [federal] Act." Id., at 187. Accordingly, the court held:"[T]he Act pre-empts those state law damage[s] actions relating to smoking and health that challenge either the adequacy of the warning on cigarette packages or the propriety of a party's actions with respect to the advertising and promotion of cigarettes. [W]here the success of a state law damage[s] claim necessarily depends on the assertion that a party bore the duty to provide a warning to consumers in addition to the warning Congress has required on cigarette packages, such claims are preempted as conflicting with the Act." Ibid. (footnote omitted). The court did not, however, identify the specific claims asserted by petitioner that were preempted by the Act.This Court denied a petition for certiorari, , and the case returned to the District Court for trial. Complying with the Court of Appeals, mandate, the District Court held that the failure-to-warn, express warranty, fraudulent-misrepresentation, and conspiracy-to-defraud claims were barred to the extent that they relied on respondents' advertising, promotional, and public relations activities after January 1, 1966 (the effective date of the 1965 Act). 649 F.Supp. 664, 669, 673-675 (N.J. 1986). The court also ruled that, while the design defect claims were not preempted by federal law, those claims were barred on other grounds.6 Id., at 669-672. Following extensive discovery and a 4-month trial, the jury answered a series of special interrogatories and awarded $400,000 in damages to Rose Cipollone's husband. In brief, it rejected all of the fraudulent misrepresentation and conspiracy claims, but found that respondent Liggett had breached its duty to warn and its express warranties before 1966. It found, however, that Rose Cipollone had "`voluntarily and unreasonably encounter[ed] a known danger by smoking cigarettes,'" and that 80% of the responsibility for her injuries was attributable to her. See 893 F.2d, at 554 (summarizing jury findings). For that reason, no damages were awarded to her estate. However, the jury awarded damages to compensate her husband for losses caused by respondents' breach of express warranty.On cross-appeals from the final judgment, the Court of Appeals affirmed the District Court's preemption rulings, but remanded for a new trial on several issues not relevant to our decision. We granted the petition for certiorari to consider the preemptive effect of the federal statutes. IIAlthough physicians had suspected a link between smoking and illness for centuries, the first medical studies of that connection did not appear until the 1920's. See U.S. Dept. of Health and Human Services, Report of the Surgeon General, Reducing the Health Consequences of Smoking: 25 Years of Progress 5 (1989). The ensuing decades saw a wide range of epidemiologic and laboratory studies on the health hazards of smoking. Thus, by the time the Surgeon General convened an advisory committee to examine the issue in 1962, there were more than 7,000 publications examining the relationship between smoking and health. Id., at 5-7.In 1964, the advisory committee issued its report, which stated as its central conclusion: "Cigarette smoking is a health hazard of sufficient importance in the United States to warrant appropriate remedial action." U.S. Dept. of Health, Education, and Welfare, U.S. Surgeon General's Advisory Committee, Smoking and Health 33 (1964). Relying in part on that report, the Federal Trade Commission (FTC), which had long regulated unfair and deceptive advertising practices in the cigarette industry,7 promulgated a new trade regulation rule. That rule, which was to take effect January 1, 1965, established that it would be a violation of the Federal Trade Commission Act "to fail to disclose, clearly and prominently, in all advertising and on every pack, box, carton, or container [of cigarettes] that cigarette smoking is dangerous to health and may cause death from cancer and other diseases." 29 Fed.Reg. 8325 (1964). Several States also moved to regulate the advertising and labeling of cigarettes. See, e.g., 1965 N.Y.Laws, ch. 470; see also 111 Cong.Rec. 13900-13902 (1965) (statement of Sen. Moss). Upon a congressional request, the FTC postponed enforcement of its new regulation for six months. In July, 1965, Congress enacted the Federal Cigarette Labeling and Advertising Act (1965 Act or Act).8 The 1965 Act effectively adopted half of the FTC's regulation: the Act mandated warnings on cigarette packages ( 5(a)), but barred the requirement of such warnings in cigarette advertising ( 5(b)).9 Section 2 of the Act declares the statute's two purposes: (1) adequately informing the public that cigarette smoking may be hazardous to health, and (2) protecting the national economy from the burden imposed by diverse, nonuniform, and confusing cigarette labeling and advertising regulations.10 In furtherance of the first purpose, 4 of the Act made it unlawful to sell or distribute any cigarettes in the United States unless the package bore a conspicuous label stating: "CAUTION: CIGARETTE SMOKING MAY BE HAZARDOUS TO YOUR HEALTH." In furtherance of the second purpose, 5, captioned "Preemption," provided in part: "(a) No statement relating to smoking and health, other than the statement required by section 4 of this Act, shall be required on any cigarette package. "(b) No statement relating to smoking and health shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with the provisions of this Act." Although the Act took effect January 1, 1966, 10 of the Act provided that its provisions affecting the regulation of advertising would terminate on July 1, 1969.As that termination date approached, federal authorities prepared to issue further regulations on cigarette advertising. The FTC announced the reinstitution of its 1964 proceedings concerning a warning requirement for cigarette advertisements. 34 Fed.Reg. 7917 (1969). The Federal Communications Commission (FCC) announced that it would consider "a proposed rule which would ban the broadcast of cigarette commercials by radio and television stations." Id., at 1959. State authorities also prepared to take actions regulating cigarette advertisements.11 It was in this context that Congress enacted the Public Health Cigarette Smoking Act of 1969 (1969 Act or Act),12 which amended the 1965 Act in several ways. First, the 1969 Act strengthened the warning label, in part by requiring a statement that cigarette smoking "is dangerous," rather than that it "may be hazardous." Second, the 1969 Act banned cigarette advertising in "any medium of electronic communication subject to [FCC] jurisdiction." Third, and related, the 1969 Act modified the preemption provision by replacing the original 5(b) with a provision that reads: "(b) No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this Act. Although the Act also directed the FTC not to take any action before July 1, 1971, with respect to its pending trade regulation rule proceeding relating to cigarette advertising, the narrowing of the preemption provision to prohibit only restrictions "imposed under State law" cleared the way for the FTC to extend the warning label requirement to print advertisements for cigarettes. The FTC did so in 1972. See In re Lorillard, 80 F.T.C. 455 (1972). IIIArticle VI of the Constitution provides that the laws of the United States shall be the supreme Law of the Land; ... any Thing in the Constitution or Laws of any state to the Contrary notwithstanding. Art. VI, cl. 2. Thus, since our decision in M'Culloch v. Maryland, 4 Wheat. 316, 427 (1819), it has been settled that state law that conflicts with federal law is "without effect." Maryland v. Louisiana, . Consideration of issues arising under the Supremacy Clause "start[s] with the assumption that the historic police powers of the States [are] not to be superseded by ... Federal Act unless that [is] the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., . Accordingly, "`[t]he purpose of Congress is the ultimate touchstone'" of preemption analysis. Malone v. White Motor Corp., (quoting Retail Clerks v. Schermerhorn, ).Congress' intent may be "explicitly stated in the statute's language or implicitly contained in its structure and purpose." Jones v. Rath Packing Co., . In the absence of an express congressional command, state law is preempted if that law actually conflicts with federal law, see Pacific Gas & Elec. Co. v. State Energy Resources Conservation and Development Comm'n, , or if federal law so thoroughly occupies a legislative field "`as to make reasonable the inference that Congress left no room for the States to supplement it.'" Fidelity Fed. Sav. & Loan Assn. v. De la Cuesta, (quoting Rice v. Santa Fe Elevator Corp., 331 U.S., at 230).The Court of Appeals was not persuaded that the preemption provision in the 1969 Act encompassed state common-law claims.13 789 F.2d, at 185-186. It was also not persuaded that the labeling obligation imposed by both the 1965 and 1969 Acts revealed a congressional intent to exert exclusive federal control over every aspect of the relationship between cigarettes and health. Id., at 186. Nevertheless, reading the statute as a whole in the light of the statement of purpose in 2, and considering the potential regulatory effect of state common-law actions on the federal interest in uniformity, the Court of Appeals concluded that Congress had impliedly preempted petitioner's claims challenging the adequacy of the warnings on labels or in advertising or the propriety of respondents' advertising and promotional activities. Id., at 187.In our opinion, the preemptive scope of the 1965 Act and the 1969 Act is governed entirely by the express language in 5 of each Act. When Congress has considered the issue of preemption and has included in the enacted legislation a provision explicitly addressing that issue, and when that provision provides a "reliable indicium of congressional intent with respect to state authority," Malone v. White Motor Corp., 435 U.S., at 505, "there is no need to infer congressional intent to preempt state laws from the substantive provisions" of the legislation. California Federal Savings & Loan Assn. v. Guerra, (opinion of Marshall, J.). Such reasoning is a variant of the familiar principle of expression unius est exclusio alterius: Congress' enactment of a provision defining the preemptive reach of a statute implies that matters beyond that reach are not preempted. In this case, the other provisions of the 1965 and 1969 Acts offer no cause to look beyond 5 of each Act. Therefore, we need only identify the domain expressly preempted by each of those sections. As the 1965 and 1969 provisions differ substantially, we consider each in turn. IVIn the 1965 preemption provision regarding advertising ( 5(b)), Congress spoke precisely and narrowly: "No statement relating to smoking and health shall be required in the advertising of [properly labeled] cigarettes." Section 5(a) used the same phrase ("No statement relating to smoking and health") with regard to cigarette labeling. As 5(a) made clear, that phrase referred to the sort of warning provided for in 4, which set forth verbatim the warning Congress determined to be appropriate. Thus, on their face, these provisions merely prohibited state and federal rulemaking bodies from mandating particular cautionary statements on cigarette labels ( 5(a)) or in cigarette advertisements ( 5(b)).Beyond the precise words of these provisions, this reading is appropriate for several reasons. First, as discussed above, we must construe these provisions in light of the presumption against the preemption of state police power regulations. This presumption reinforces the appropriateness of a narrow reading of 5. Second, the warning required in 4 does not, by its own effect, foreclose additional obligations imposed under state law. That Congress requires a particular warning label does not automatically preempt a regulatory field. See McDermott v. Wisconsin, . Third, there is no general, inherent conflict between federal preemption of state warning requirements and the continued vitality of state common-law damages actions. For example, in the Comprehensive Smokeless Tobacco Health Education Act of 1986,14 Congress expressly preempted state or local imposition of a "statement relating to the use of smokeless tobacco products and health" but, at the same time, preserved state-law damages actions based on those products. See 15 U.S.C. 4406. All of these considerations indicate that 5 is best read as having superseded only positive enactments by legislatures or administrative agencies that mandate particular warning labels.15 This reading comports with the 1965 Act's statement of purpose, which expressed an intent to avoid "diverse, nonuniform, and confusing cigarette labeling and advertising regulations with respect to any relationship between smoking and health." Read against the backdrop of regulatory activity undertaken by state legislatures and federal agencies in response to the Surgeon General's report, the term "regulation" most naturally refers to positive enactments by those bodies, not to common-law damages actions.The regulatory context of the 1965 Act also supports such a reading. As noted above, a warning requirement promulgated by the FTC and other requirements under consideration by the States were the catalyst for passage of the 1965 Act. These regulatory actions animated the passage of 5, which reflected Congress' efforts to prevent "a multiplicity of State and local regulations pertaining to labeling of cigarette packages," H.R.Rep. No. 449, 89th Cong., 1st Sess., 4 (1965), and to preemp[t] all Federal, State, and local authorities from requiring any statement relating to smoking and health in the advertising of cigarettes. Id., at 5 (emphasis supplied).16 For these reasons, we conclude that 5 of the 1965 Act only preempted state and federal rulemaking bodies from mandating particular cautionary statements, and did not preempt state-law damages actions.17 VCompared to its predecessor in the 1965 Act, the plain language of the preemption provision in the 1969 Act is much broader. First, the later Act bars not simply "statement[s]," but rather "requirement[s] or prohibition[s] ... imposed under State law." Second, the later Act reaches beyond statements "in the advertising" to obligations "with respect to the advertising or promotion" of cigarettes.Notwithstanding these substantial differences in language, both petitioner and respondents contend that the 1969 Act did not materially alter the preemptive scope of federal law.18 Their primary support for this contention is a sentence in a Committee Report which states that the 1969 amendment "clarified" the 1965 version of 5(b). S.Rep. No. 91-566, p. 12 (1969). We reject the parties' reading as incompatible with the language and origins of the amendments. As we noted in another context, "[i]nferences from legislative history cannot rest on so slender a reed. Moreover, the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one." United States v. Price, . The 1969 Act worked substantial changes in the law: rewriting the label warning, banning broadcast advertising, and allowing the FTC to regulate print advertising. In the context of such revisions and in light of the substantial changes in wording, we cannot accept the parties' claim that the 1969 Act did not alter the reach of 5(b).19 Petitioner next contends that 5(b), however broadened by the 1969 Act, does not preempt common-law actions. He offers two theories forlimiting the reach of the amended 5(b). First, he argues that common-law damages actions do not impose "requirement[s] or prohibition[s],"and that Congress intended only to trump "state statute[s], injunction[s], or executive pronouncement[s]."20 We disagree; such an analysis is at odds both with the plain words of the 1969 Act and with the general understanding of common-law damages actions. The phrase "[n]o requirement or prohibition" sweeps broadly, and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common-law rules. As we noted in another context, "[state] regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy." San Diego Building Trades Council v. Garmon, .Although portions of the legislative history of the 1969 Act suggest that Congress was primarily concerned with positive enactments by States and localities, see S.Rep. No. 91-566, p. 12, the language of the Act plainly reaches beyond such enactments. "We must give effect to this plain language unless there is good reason to believe Congress intended the language to have some more restrictive meaning." Shaw v. Delta Air Lines, Inc., . In this case, there is no "good reason to believe" that Congress meant less than what it said; indeed, in light of the narrowness of the 1965 Act, there is "good reason to believe" that Congress meant precisely what it said in amending that Act.Moreover, common-law damages actions of the sort raised by petitioner are premised on the existence of a legal duty, and it is difficult to say that such actions do not impose "requirements or prohibitions." See W. Prosser, Law of Torts 4 (4th ed. 1971); Black's Law Dictionary 1489 (6th ed. 1990) (defining "tort" as "always [involving] a violation of some duty owing to plaintiff"). It is in this way that the 1969 version of 5(b) differs from its predecessor: whereas the common law would not normally require a vendor to use any specific statement on its packages or in its advertisements, it is the essence of the common law to enforce duties that are either affirmative requirements or negative prohibitions. We therefore reject petitioner's argument that the phrase "requirement or prohibition" limits the 1969 Act's preemptive scope to positive enactments by legislatures and agencies.Petitioner's second argument for excluding common-law rules from the reach of 5(b) hinges on the phrase "imposed under State law." This argument fails as well. At least since Erie R. Co. v. Tompkins, , we have recognized the phrase "state law" to include common law as well as statutes and regulations. Indeed just last Term, the Court stated that the phrase "`all other law, including State and municipal law'" "does not admit of [a] distinction ... between positive enactments and common law rules of liability." Norfolk & Western R. Co. v. Train Dispatchers, . Although the presumption against preemption might give good reason to construe the phrase "state law" in a preemption provision more narrowly than an identical phrase in another context, in this case such a construction is not appropriate. As explained above, the 1965 version of 5 was precise and narrow on its face; the obviously broader language of the 1969 version extended that section's preemptive reach. Moreover, while the version of the 1969 Act passed by the Senate preempted "any State statute or regulation with respect to ... advertising or promotion," S.Rep. No. 91-566, p. 16 (1969), the Conference Committee replaced this language with "State law with respect to advertising or promotion." In such a situation, 5(b)'s preemption of "state law" cannot fairly be limited to positive enactments.That the preemptive scope of 5(b) cannot be limited to positive enactments does not mean that that section preempts all common-law claims. For example, as respondents concede, 5(b) does not generally preempt "state law obligations to avoid marketing cigarettes with manufacturing defects or to use a demonstrably safer alternative design for cigarettes."21 For purposes of 5(b), the common law is not of a piece.Nor does the statute indicate that any familiar subdivision of common-law claims is or is not preempted. We therefore cannot follow petitioner's passing suggestion that 5(b) preempts liability for omissions, but not for acts, or that 5(b) preempts liability for unintentional torts, but not for intentional torts. Instead, we must fairly but - in light of the strong presumption against preemption - narrowly construe the precise language of 5(b), and we must look to each of petitioner's common-law claims to determine whether it is in fact preempted.22 The central inquiry in each case is straightforward: we ask whether the legal duty that is the predicate of the common-law damages action constitutes a requirement or prohibition based on smoking and health ... imposed under State law with respect to ... advertising or promotion, giving that clause a fair but narrow reading. As discussed below, each phrase within that clause limits the universe of common-law claims preempted by the statute.We consider each category of damages actions in turn. In doing so, we express no opinion on whether these actions are viable claims as a matter of state law; we assume, arguendo, that they are. Failure to WarnTo establish liability for a failure to warn, petitioner must show that "a warning is necessary to make a product ... reasonably safe, suitable and fit for its intended use," that respondents failed to provide such a warning, and that that failure was a proximate cause of petitioner's injury. Tr. 12738. In this case, petitioner offered two closely related theories concerning the failure to warn: first, that respondents "were negligent in the manner [that] they tested, researched, sold, promoted, and advertised" their cigarettes; and second, that respondents failed to provide "adequate warnings of the health consequences of cigarette smoking." App. 85-86.Petitioner's claims are preempted to the extent that they rely on a state-law "requirement or prohibition ... with respect to ... advertising or promotion." Thus, insofar as claims under either failure-to-warn theory require a showing that respondents' post-1969 advertising or promotions should have included additional, or more clearly stated, warnings, those claims are preempted. The Act does not, however, preempt petitioner's claims that rely solely on respondents' testing or research practices or other actions unrelated to advertising or promotion. Breach of Express WarrantyPetitioner's claim for breach of an express warranty arises under N.J.Stat.Ann. 12A:2-313(1)(a) (West 1962), which provides: "Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise." Petitioner's evidence of an express warranty consists largely of statements made in respondents' advertising. See 893 F.2d, at 574, 576; 683 F.Supp. 1487, 1497 (N.J. 1988). Applying the Court of Appeals' ruling that Congress preempted "damage[s] actions ... that challenge ... the propriety of a party's actions with respect to the advertising and promotion of cigarettes," 789 F.2d, at 187, the District Court ruled that this claim "inevitably brings into question [respondents'] advertising and promotional activities, and is therefore preempted" after 1965. 649 F.Supp., at 675. As demonstrated above, however, the 1969 Act does not sweep so broadly: The appropriate inquiry is not whether a claim challenges the "propriety" of advertising and promotion, but whether the claim would require the imposition under state law of a requirement or prohibition based on smoking and health with respect to advertising or promotion.A manufacturer's liability for breach of an express warranty derives from, and is measured by, the terms of that warranty. Accordingly, the "requirement[s]" imposed by an express warranty claim are not "imposed under State law," but rather imposed by the warrantor.23 If, for example, a manufacturer expressly promised to pay a smoker's medical bills if she contracted emphysema, the duty to honor that promise could not fairly be said to be "imposed under state law," but rather is best understood as undertaken by the manufacturer itself. While the general duty not to breach warranties arises under state law, the particular "requirement ... based on smoking and health ... with respect to the advertising or promotion [of] cigarettes" in an express warranty claim arises from the manufacturer's statements in its advertisements. In short, a common-law remedy for a contractual commitment voluntarily undertaken should not be regarded as a "requirement ... imposed under State law" within the meaning of 5(b).24 That the terms of the warranty may have been set forth in advertisements, rather than in separate documents, is irrelevant to the preemption issue (though possibly not to the state-law issue of whether the alleged warranty is valid and enforceable), because, although the breach of warranty claim is made "with respect to ... advertising," it does not rest on a duty imposed under state law. Accordingly, to the extent that petitioner has a viable claim for breach of express warranties made by respondents, that claim is not preempted by the 1969 Act. Fraudulent MisrepresentationPetitioner alleges two theories of fraudulent misrepresentation. First, petitioner alleges that respondents, through their advertising, neutralized the effect of federally mandated warning labels. Such a claim is predicated on a state-law prohibition against statements in advertising and promotional materials that tend to minimize the health hazards associated with smoking. Such a prohibition, however, is merely the converse of a state-law requirement that warnings be included in advertising and promotional materials. Section 5(b) of the 1969 Act preempts both requirements and prohibitions; it therefore supersedes petitioner's first fraudulent misrepresentation theory.Regulators have long recognized the relationship between prohibitions on advertising that downplays the dangers of smoking and requirements for warnings in advertisements. For example, the FTC, in promulgating its initial trade regulation rule in 1964, criticized advertising that "associated cigarette smoking with such positive attributes as contentment, glamour, romance, youth, happiness ... at the same time suggesting that smoking is an activity at least consistent with physical health and well-being." The Commission concluded:"To avoid giving a false impression that smoking [is] innocuous, the cigarette manufacturer who represents the alleged pleasures or satisfactions of cigarette smoking in his advertising must also disclose the serious risks to life that smoking involves." 29 Fed. Reg. 8356 (1964). Longstanding regulations of the Food and Drug Administration express a similar understanding of the relationship between required warnings and advertising that "negates or disclaims" those warnings: "A hazardous substance shall not be deemed to have met [federal labeling] requirements if there appears in or on the label ... statements, designs, or other graphic material that in any manner negates or disclaims [the required warning]." 21 CFR 191.102 (1965). In this light, it seems quite clear that petitioner's first theory of fraudulent misrepresentation is inextricably related to petitioner's first failure-to-warn theory, a theory that we have already concluded is largely preempted by 5(b).Petitioner's second theory, as construed by the District Court, alleges intentional fraud and misrepresentation both by "false representation of a material fact [and by] conceal[ment of] a material fact." Tr. 12727.25 The predicate of this claim is a state-law duty not to make false statements of material fact or to conceal such facts. Our preemption analysis requires us to determine whether such a duty is the sort of requirement or prohibition proscribed by 5(b).Section 5(b) preempts only the imposition of state-law obligations "with respect to the advertising or promotion" of cigarettes. Petitioner's claims that respondents concealed material facts are therefore not preempted insofar as those claims rely on a state-law duty to disclose such facts through channels of communication other than advertising or promotion. Thus, for example, if state law obliged respondents to disclose material facts about smoking and health to an administrative agency, 5(b) would not preempt a state law-claim based on a failure to fulfill that obligation.Moreover, petitioner's fraudulent misrepresentation claims that do arise with respect to advertising and promotions (most notably claims based on allegedly false statements of material fact made in advertisements) are not preempted by 5(b). Such claims are predicated not on a duty "based on smoking and health," but rather on a more general obligation - the duty not to deceive. This understanding of fraud by intentional misstatement is appropriate for several reasons. First, in the 1969 Act, Congress offered no sign that it wished to insulate cigarette manufacturers from longstanding rules governing fraud. To the contrary, both the 1965 and the 1969 Acts explicitly reserved the FTC's authority to identify and punish deceptive advertising practices - an authority that the FTC had long exercised and continues to exercise. See 5(c) of the 1965 Act; 7(b) of the 1969 Act; see also nn. 7, 9, supra. This indicates that Congress intended the phrase "relating to smoking and health" (which was essentially unchanged by the 1969 Act) to be construed narrowly, so as not to proscribe the regulation of deceptive advertising.26 Moreover, this reading of "based on smoking and health" is wholly consistent with the purposes of the 1969 Act. State-law prohibitions on false statements of material fact do not create "diverse, nonuniform, and confusing" standards. Unlike state-law obligations concerning the warning necessary to render a product "reasonably safe," state-law proscriptions on intentional fraud rely only on a single, uniform standard: falsity. Thus, we conclude that the phrase "based on smoking and health," fairly but narrowly construed, does not encompass the more general duty not to make fraudulent statements. Accordingly, petitioner's claim based on allegedly fraudulent statements made in respondents' advertisements is not preempted by 5(b) of the 1969 Act.27 Conspiracy to Misrepresent or Conceal Material FactsPetitioner's final claim alleges a conspiracy among respondents to misrepresent or conceal material facts concerning the health hazards of smoking.28 The predicate duty underlying this claim is a duty not to conspire to commit fraud. For the reasons stated in our analysis of petitioner's intentional fraud claim, this duty is not preempted by 5(b), for it is not a prohibition "based on smoking and health" as that phrase is properly construed. Accordingly, we conclude that the 1969 Act does not preempt petitioner's conspiracy claim.VITo summarize our holding: the 1965 Act did not preempt state-law damages actions; the 1969 Act preempts petitioner's claims based on a failure to warn and the neutralization of federally mandated warnings to the extent that those claims rely on omissions or inclusions in respondents' advertising or promotions; the 1969 Act does not preempt petitioner's claims based on express warranty, intentional fraud and misrepresentation, or conspiracy.The judgment of the Court of Appeals is accordingly reversed in part and affirmed in part, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. |
2 | [Footnote *] Together with No. 463, Morgan v. Ohio, also on appeal from the same Court, argued April 23, 1959. The four appellants were convicted in state courts for refusing to answer questions about Communistic or subversive activities put to them at sessions of the "Un-American Activities Commission" established in the legislative branch of the Ohio Government. Each was led by the Commission to believe that the privilege against self-incrimination afforded by the Ohio Constitution was generally available to him, and each relied on that privilege; but the Ohio Supreme Court sustained their convictions on the ground that the privilege was not available to them, because a state immunity statute deprived them of the protection of that privilege. Held: 1. The appeals are dismissed for want of jurisdiction under 28 U.S.C. 1257 (2), since appellants have not demonstrated that an attack was made by them in the state courts on the validity of a state statute under the Federal Constitution; but certiorari is granted, since various rights, privileges and immunities under the Federal Constitution were claimed in the state courts, as required by 28 U.S.C. 1257 (3). Pp. 434-437. 2. The convictions of three of the appellants violated the Due Process Clause of the Fourteenth Amendment, since they were entrapped by being convicted for exercising a privilege which the Commission had led them to believe was available to them. Pp. 437-440. 3. The conviction of the other appellant for refusing to state where he lived after being directed by the Commission to do so is affirmed by an equally divided Court. Pp. 440-442, 442-445. 167 Ohio St. 295, 147 N. E. 2d 847, affirmed in part and reversed in part.Morse Johnson argued the cause and filed a brief for appellants in No. 175.Thelma C. Furry and Ann Fagan Ginger argued the cause and filed a brief for appellant in No. 463. C. Watson Hover and Carl B. Rubin argued the cause and filed a brief for appellee in No. 175.Earl W. Allison argued the cause and filed a brief for appellee in No. 463.MR. JUSTICE BRENNAN delivered the opinion of the Court.These two appeals involve convictions of four appellants for refusal to answer certain questions put to them at sessions of the "Un-American Activities Commission" of the State of Ohio, established in the legislative branch of the Ohio Government.1 The appellants had claimed the privilege against self-incrimination in refusing to answer each of the questions. The cases are before us for the second time; on prior appeals the judgments below were vacated and the causes remanded for reconsideration in the light of Sweezy v. New Hampshire, , and Watkins v. United States, . See . The remand resulted in a reaffirmance of the prior judgment without discussion, 167 Ohio St. 295, 147 N. E. 2d 847, and on the present appeals we postponed further consideration of the jurisdictional questions presented until the arguments on the merits. .The issues tendered by the parties range broadly and involve the power of the Ohio Legislature, in view of existing federal legislation, to investigate activities deemed subversive of the forms of government within the Nation, cf. Pennsylvania v. Nelson, ; the power of the State to compel disclosure of matters interconnected with the protected freedoms of speech and assembly, cf. NAACP v. Alabama, ; Sweezy v. New Hampshire, supra; the existence of an expressed legislative interest for such an inquiry, and its definition and articulation to the person summoned, cf. Watkins v. United States, supra; Sweezy v. New Hampshire, supra; Scull v. Virginia, ; and the effect on testimonial compulsion of state immunity statutes not affording immunity from federal prosecution, cf. Knapp v. Schweitzer, . But our disposition of these cases makes it unnecessary to consider the application of the principles of the cases just cited. The appellants were informed by the Commission that they had a right to rely on the privilege against self-incrimination afforded by Art. I, 10, of the Ohio Constitution. The Ohio Supreme Court, however, held that the appellants were presumed to know the law of Ohio - that an Ohio immunity statute deprived them of the protection of the privilege - and that they therefore had committed an offense by not answering the questions as to which they asserted the privilege. We hold that in the circumstances of these cases, the judgments of the Ohio Supreme Court affirming the convictions violated the Due Process Clause of the Fourteenth Amendment and must be reversed, except as to one conviction, as to which we are equally divided. After the Commission, speaking for the State, acted as it did, to sustain the Ohio Supreme Court's judgment would be to sanction an indefensible sort of entrapment by the State - convicting a citizen for exercising a privilege which the State had clearly told him was available to him. We agree with that part of Judge Stewart's dissenting opinion in the Ohio Supreme Court in which he said: "since the defendants were apprised by the commission at the time they were testifying that they had a right to refuse to answer questions which might incriminate them, they could not possibly in following the admonition of the commission be in contempt of it ... ." 164 Ohio St., at 563, 133 N. E. 2d, at 125. A rather detailed description of the proceedings below must be made to illuminate the basis of decision below and the turning point of our review of it here.Mrs. Morgan, appellant in No. 463, was summoned before the Commission and interrogated mainly in regard to Communist Party activities. She appeared without counsel. To each question put she answered, "I regret that I cannot answer your question under the Fifth Amendment of the Constitution, because to do so would give your Committee an opportunity to incriminate me," or some more abbreviated form of words to the same effect. Such responses were given to virtually all the questions and in almost every case the Commission proceeded directly to ask its next question after receiving the response. In no case did the Commission direct that she answer its question. In one or two cases Commission members expressed surprise that she might consider an answer incriminating, and on such an occasion the Chairman asked her, "Mrs. Morgan, are you aware of the fact that your failure to answer questions - some questions of this Commission, might also tend to put you in an embarrassing situation?" At another point, the Chairman positively informed her, "I should like to advise you under the Fifth Amendment, you are permitted to refuse to answer questions that might tend to incriminate you... . But you are not permitted to refuse to answer questions simply for your own convenience."Raley, Stern, and Brown, appellants in No. 175, appeared before the Commission successively on another occasion, about six months later. They were interrogated about subversive activities in the labor movement. Raley answered some questions, but to most of them asserted the privilege against self-incrimination of the Federal and Ohio Constitutions. Most of his assertions of the privilege, including his initial ones, were not made the subject of comment or question by the Commission, the next question in the inquiry being put at once. On some few occasions, when Raley claimed the privilege, the Commission members indicated their doubts whether any answer to a specific question put could be incriminating. On one occasion, the Commission asked Raley as to whether he recollected a certain interview. Raley claimed the privilege. The Chairman took the view that Raley was required to speak as to whether he recalled the interview, but assured him that the privilege existed as to the details of the interview: "If you recall it, and we ask you as to your recollection, then you are privileged to claim your rights under the Constitution ... ." This and one other occasion were the only ones in which the Commission even approached directing an answer to a question by Raley; but in one case the Chairman finally asked Raley to confer with his counsel to determine whether in his opinion the privilege applied, and in another Raley did so of his own accord; then, upon an affirmative reply by Raley's counsel, the Commission passed at once to the next question.2 Stern was the next person to appear at the inquiry. After giving his name, he claimed the privilege against self-incrimination at the very next question, which called for his address. Commission counsel asked him, "Is there something about the nature or character of the home in which you live that to admit you live there would make you subject to criminal prosecution?" On Stern's continued refusal to answer, the Chairman directed an answer to the question, which was refused. To most subsequent questions, Stern again claimed the privilege against self-incrimination, and on the great majority of questions, the Commission simply passed on to the next question. The Chairman and Stern worked out a short form of words whereby he would be understood to be claiming the privilege as to a particular question.3 At one point Stern asked the Commission if the Commission had the right to go into his opinions and to require him to speak as to them. The Chairman informed him, "Not if in your opinion by so doing, you might tend to incriminate yourself." On a few occasions the Chairman requested that Stern answer a question, but except for the question as to his residence, the occasions were those in which Stern had neither given a direct answer nor invoked the privilege, and upon assertion of the privilege in these cases the request was not renewed.4 Brown then was subjected to inquiry. He claimed the privilege as to self-incrimination to most of the questions put to him. While the Chairman never told him in so many words (as he had told the other three appellants) that the privilege was available, Brown and the Chairman engaged in long colloquies in an attempt by the Chairman to clarify that by using a certain form of words Brown was claiming the privilege.5 The Chairman's concern is inexplicable on any other basis than that he deemed the privilege available at the inquiry, and his statements would tend to create such an impression in one appearing at the inquiry. When once he made it clear that he was claiming the privilege as to a question, Brown was never directed to answer. He was on a couple of occasions directed to answer a question when he was engaging in a colloquy with the Commission without either having answered it directly or having claimed the privilege; upon his claim of the privilege, the next question was at once put.6 The Ohio immunity statute extends, so far as is here relevant, to any person appearing before a legislative committee and grants immunity from state prosecutions or penalties "on account of a transaction, matter, or thing, concerning which he testifies"; the statute declares that the testimony given on such an appearance "shall not be used as evidence in a criminal proceeding" against the person testifying. Ohio Rev. Code 101.44. For reasons unexplained, the existence of this immunity was never suggested by the Commission to any of the appellants, and in fact, as the above statement makes evident, the Commission's actions were totally inconsistent with a view on its part that the privilege against self-incrimination was not available. The Commission thought the privilege available, and it gave positive advice that it could be used. As the Chairman testified in the proceedings below: "It was the policy of the commission not [to] press questions which we felt would be of an incriminating nature. For instance, whenever a witness was asked a question - I believe every witness before the commission was asked the question - Are you or have you ever been a member of the communist party, and if the witness refused to answer that question, we did not press it. Frequently I made statements which indicated the policy of the commission."Indictments were found against the four appellants for failure to answer various of the questions put to them at the inquiry. In the cases of Raley, Stern, and Brown - who were indicted at the same time and tried together, but in a different court from Mrs. Morgan - only a few of the questions were made the subject of the indictment.7 There appears to have been some effort to restrict their indictments to those questions to which the prosecution thought no answer could have been incriminating. On the other hand, virtually every question asked Mrs. Morgan was made the subject of her indictment.8 A jury was waived by Raley, Stern, and Brown, and they were found guilty on each of the relatively few counts found against them, the trial court filing no opinion or conclusions of law. The Court of Appeals affirmed the convictions on some of the counts as to Raley, on one of the two counts as to Stern, and on all the counts as to Brown, and reversed the convictions on some of the counts as to Raley and on one count as to Stern.9 100 Ohio App. 75, 99-100, 136 N. E. 2d 295, 315-316. It held that there was sufficient direction to the witnesses to answer the questions involved, so that their refusal was willful. The touchstone by which it affirmed some of the counts of the convictions and reversed others was whether, in the court's view, an answer to the question might have in fact been incriminating. While the court indicated that the immunity statute applied, it did not rely upon it in its judgment - as it expressly stated, 100 Ohio App., at 99, 136 N. E. 2d, at 315, and as its reversals of certain of the counts indicated.A jury was also waived by Mrs. Morgan and she too was found guilty by a trial judge. The judge acquitted her on a few counts as to questions found not pertinent to the inquiry or duplicative of other questions. But as to the remaining counts, he ruled that her plea of self-incrimination was not valid, because she had referred solely to the Fifth Amendment and not to the appropriate provision of the Ohio Constitution guaranteeing freedom from compulsory self-incrimination. Ohio Const., Art. I, 10. Because of this, he held that it was unnecessary to have directed Mrs. Morgan to answer the questions or to have advised her at the inquiry that her plea of the privilege against self-incrimination was rejected. Further constitutional claims were summarily rejected. The Court of Appeals - a different one from that which passed on the appeal of Raley, Stern, and Brown - affirmed the judgment for the reasons stated in the trial court's opinion.On appeal, the Supreme Court of Ohio, though affirming the convictions, abandoned reliance on the theories under which the appellants were found guilty by the courts below. It ruled that a fair reference to the privilege against self-incrimination of the United States Constitution was adequate to invoke the privilege under the Ohio Constitution, finding such reference made. 164 Ohio St., at 538-539, 133 N. E. 2d, at 111-112. And it did not discuss the theory on which the Court of Appeals relied in the case of Raley, Stern, and Brown; its basis for affirming the judgment was entirely independent of that of the Court of Appeals. The Supreme Court placed its reliance entirely on the immunity statute. It held that the immunity under the statute was automatically available to the appellants, that even though it did not preclude federal prosecution it was adequate to make answers compellable, and that since "the immunity granted ... precluded the possibility of justifying a refusal" to answer on the grounds of self-incrimination, 164 Ohio St., at 553, 133 N. E. 2d, at 120, a direction by the Commission to the appellants to answer was not necessary. Various objections to the convictions under state law were also passed on and rejected. As we have noted, on remand from this Court, the Ohio Supreme Court passed on contentions made under Sweezy v. New Hampshire, supra, and Watkins v. United States, supra, and adhered to its former judgments.First. We must examine our jurisdiction over these appeals. Appellants assert jurisdiction under 28 U.S.C. 1257 (2), a grant of jurisdiction on 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." In their notices of appeal to this Court, appellants have phrased some of their federal constitutional claims as attacks on the constitutionality of the Ohio statute authorizing the Commission and the statute providing for immunity. But this does not suffice: "It is essential to our jurisdiction on appeal ... that there be an explicit and timely insistence in the state courts that a state statute, as applied, is repugnant to the federal Constitution, treaties or laws." Charleston Federal Savings & Loan Assn. v. Alderson, . Despite the import of our order postponing the consideration of jurisdiction till the hearing on the merits, see Rule 16 (4) of this Court,10 appellants have made no effort to support their burden of demonstrating an attack made by them on the validity of a state statute in the state courts, and we have found none. Accordingly the appeals are dismissed. See Sweezy v. New Hampshire, supra, at 236. But since various rights, privileges and immunities under the Federal Constitution were claimed below, 28 U.S.C. 1257 (3), we consider the appeal papers as petitions for certiorari, and in view of the public importance of the questions presented, grant certiorari. 28 U.S.C. 2103.The view we take of the merits of the case requires us to examine whether the appellants made a proper challenge to their convictions below, on federal constitutional grounds, on the theory that they were being convicted for claiming the privilege against self-incrimination after not being given to understand at the time of the inquiry that such a privilege was unavailable. In the lower Ohio courts, federal constitutional questions as to the adequacy of the insistence of the Commission on an answer to its questions were involved in the lower courts' discussion of the cases. In the appeal of Raley, Stern and Brown, the Court of Appeals discussed the extent to which the Commission gave the defendants to understand that answers were in fact desired to particular questions, and this as part of its consideration of constitutional claims under both the Federal and Ohio Constitutions. 100 Ohio App., at 87-90, 136 N. E. 2d, at 308-310. The trial court's opinion in Mrs. Morgan's case refers to the contention that a direction to answer was not given to the defendant, and also recites that a due process claim under the Federal Constitution was made.The assignments of error made by Mrs. Morgan in the State Supreme Court show that she claimed in that court that the judgment of conviction was violative of due process, as guaranteed by the Federal Constitution, in that while she claimed the privilege, she was not "charged with refusal to answer any questions asked by members of the Commission and that she was not notified that her claim of the privilege was rejected by the Commission." The State Supreme Court passed on this claim,11 holding that a direction to answer was unnecessary because of the immunity statute, and stated generally that its reasoning and conclusions in her case "apply with equal force to the appeal of Raley, Stern and Brown." 164 Ohio St., at 532, 133 N. E. 2d, at 108. There can be no question as to the proper presentation of a federal claim when the highest state court passes on it. See Manhattan Life Ins. Co. v. Cohen, . We think this sufficient here to satisfy the statutory requirement that the federal right sought to be vindicated in this Court be one claimed below. 28 U.S.C. 1257 (3).12 Second. We conclude that the judgments of conviction rendered below violate the Due Process Clause of the Fourteenth Amendment, with an exception to be later noted. We need not decide whether there is demanded of state investigating bodies as explicit a rejection of a claimed privilege against self-incrimination as has been held to be necessary under the statute punishing contempts of Congress. Quinn v. United States, ; Emspak v. United States, ; Bart v. United States, . Nor need we decide whether it would be a sufficient basis for reversal here simply that the appellants were not given notice of the immunity law at the inquiry, though in analogous contexts we have insisted that state investigators make clear to those before them the basis on which an answer is required. Scull v. Virginia, . This case is more than that; here the Chairman of the Commission, who clearly appeared to be the agent of the State in a position to give such assurances, apprised three of the appellants that the privilege in fact existed, and by his behavior toward the fourth obviously gave the same impression. Other members of the Commission and its counsel made statements which were totally inconsistent with any belief in the applicability of the immunity statute, and it is fair to characterize the whole conduct of the inquiry as to the four as identical with what it would have been if Ohio had had no immunity statute at all. Yet here the crime said to have been committed by the appellants, as defined by the State Supreme Court, was simply that of declining to answer any relevant question on the ground of possible self-incrimination. This was because the Court held that the Ohio immunity statute automatically removed any basis for a valid claim of the privilege, which generally exists under Ohio law.13 Ohio Const., Art. I, 10. Accordingly, any refusal to answer, based on a claim of the privilege, was said to constitute the offense. While there is no suggestion that the Commission had any intent to deceive the appellants, we repeat that to sustain the judgment of the Ohio Supreme Court on such a basis after the Commission had acted as it did would be to sanction the most indefensible sort of entrapment by the State - convicting a citizen for exercising a privilege which the State clearly had told him was available to him. Cf. Sorrells v. United States, . A State may not issue commands to its citizens, under criminal sanctions, in language so vague and undefined as to afford no fair warning of what conduct might transgress them. Lanzetta v. New Jersey, . Inexplicably contradictory commands in statutes ordaining criminal penalties have, in the same fashion, judicially been denied the force of criminal sanctions. United States v. Cardiff, . Here there were more than commands simply vague or even contradictory. There was active misleading. Cf. Johnson v. United States, . The State Supreme Court dismissed the statements of the Commission as legally erroneous, but the fact remains that at the inquiry they were the voice of the State most presently speaking to the appellants.14 We cannot hold that the Due Process Clause permits convictions to be obtained under such circumstances.We cannot reach a contrary conclusion by joining with the speculation of the court below that some of appellants might have behaved the same way regardless of what the Commission told them. We think it impermissible in a criminal case to excuse fatal defects by assuming that a person summoned to an inquiry, simply because he expresses defiance beforehand, will continue to be defiant even if a proper explanation is made of what the inquiry wants of him and the basis on which it is wanted. See Flaxer v. United States, . It is alleged that the personal attitudes of the appellants toward the Commission were defective in various ways, but of course the indictments and convictions were had simply for refusing to answer questions. Neither can we find any ground for affirmance in the fact that certain refusals to answer occurred before the Chairman's assurances to the various appellants that the privilege existed became explicit. Certainly such assurances removed any reason for the appellants to reconsider their prior assertions of the privilege. And the positive assurances given only made explicit an attitude that the Commission had manifested throughout its interviews with these appellants. We cannot carve the inquiry into segments; the record does not suggest any picture of the Commission's negation of the privilege followed by an acquiescence in its use.Finally, it is argued that the convictions may be supportable here as to those questions which an appellant was directed to answer after claiming the privilege. As the statement of the case we have made indicates, it is not shown that there was such a direction as to any question except one put to Stern,15 which stands as the basis for the sole count on which his conviction rests. As to the conviction based on this question, the Court is equally divided. To four of us, the matter is plain. Under the circumstances of the inquiry, the direction to answer given Stern was obviously not given because of the immunity statute, but because the Commission took the position that a generally available privilege did not exist as to a particular question, since no answer to it could possibly incriminate. Stern made his decision not to answer, it must be assumed, in the light of the Commission's attitude that the privilege generally applied, and on the basis of his own determination that the answer would tend to incriminate him. The Ohio Supreme Court has not disagreed with him on the issue on which he was directed to answer; it made no finding that the Commission was correct on the basis on which it ordered the answer - that no response to the question possibly could incriminate.16 Four of us think that the same affront to the Due Process Clause as is generally presented in this case is presented by a judgment ignoring the grounds on which the Commission's direction to answer was given, and affirming the conviction by reason of an immunity statute whose existence the Commission negated. To four of us, it is obvious that Stern was as much "entrapped" as the others. It is hardly an answer, in our view, to say he was directed to answer the question. In effect, the Commission said to Stern: "We recognize your privilege against self-incrimination in this inquiry, but you must take care that you claim it only where your answer might really tend to be incriminating. We do not see how saying where you live might incriminate you, so as to this question we reject your claim of privilege and order you to answer." Stern's refusal to answer after the direction opened him to the risk that a court might hold that he was wrong and that the Commission properly ruled that no answer could be incriminatory. But the Ohio Supreme Court has not held this; it has not held that Stern's decision that the answer would tend to incriminate him was wrong, but only that the Commission was wrong in telling him that the privilege applied at all. It may have been at his peril that Stern made his decision that the answer was incriminatory, but four of us cannot see how consistently with the Due Process Clause it can be said that he thereby also assumed the very different peril that the basic premise of what the Commission was telling him - that the privilege existed - was one hundred percent in error. We four regret that our Brethren remain unpersuaded on this score, and that accordingly as to Stern the judgment must be affirmed by an equally divided Court. Appeals dismissed. On writs of certiorari, judgments reversed as to Raley, Brown and Morgan; judgment affirmed as to Stern by an equally divided Court.MR. JUSTICE STEWART took no part in the consideration or decision of these cases. |
4 | Mr.Abraham E. Freedman, of Philadelphia, Pa., for petitioner. Messrs. William I. Radner, of Washington, D.C., and Samuel B. Fortenbaugh, Jr., of Philadelphia, Pa., for respondents. Mr. Justice MURPHY delivered the opinion of the Court. This case presents an important problem under the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, as to the extent to which a party may inquire into oral and written statements of witnesses, or other information, secured by an adverse party's counsel in the course of preparation for possible litigation after a claim has arisen. Examination into a person's files and records, including those resulting from the professional activities of an attorney, must be judged with care. It is not without reason that various safeguards have been established to preclude unwarranted excursions into the privacy of a man's work. At the same time, public policy supports reasonable and necessary inquiries. Properly to balance these competing interests is a delicate and difficult task. On February 7, 1943, the tug 'J. M. Taylor' sank while engaged in helping to tow a car float of the Baltimore & Ohio Railroad across the Delaware River at Philadelphia. The accident was apparently unusual in nature, the cause of it still being unknown. Five of the nine crew members were drowned. Three days later the tug owners and the underwriters employed a law firm, of which responden Fortenbaugh is a member, to defend them against potential suits by representatives of the deceased crew members and to sue the railroad for damages to the tug. A public hearing was held on March 4, 1943, before the United States Steamboat Inspectors, at which the four survivors were examined. This testimony was recorded and made available to all interested parties. Shortly thereafter, Fortenbaugh privately interviewed the survivors and took statements from them with an eye toward the anticipated litigation; the survivors signed these statements on March 29. Fortenbaugh also interviewed other persons believed to have some information relating to the accident and in some cases he made memoranda of what they told him. At the time when Fortenbaugh secured the statements of the survivors, representatives of two of the deceased crew members had been in communication with him. Ultimately claims were presented by representatives of all five of the deceased; four of the claims, however, were settled without litigation. The fifth claimant, petitioner herein, brought suit in a federal court under the Jones Act on November 26, 1943, naming as defendants the two tug owners, individually and as partners, and the railroad. One year later, petitioner filed 39 interrogatories directed to the tug owners. The 38th interrogatory read: 'State whether any statements of the members of the crews of the Tugs 'J. M. Taylor' and 'Philadelphia' or of any other vessel were taken in connection with the towing of the car float and the sinking of the Tug 'John M. Tay- lor'. Attach hereto exact copies of all such statements if in writing, and if oral, set forth in detail the exact provisions of any such oral statements or reports.' Supplemental interrogatories asked whether any oral or written statements, records, reports or other memoranda had been made concerning any matter relative to the towing operation, the sinking of the tug, the salvaging and repair of the tug, and the death of the deceased. If the answer was in the affirmative, the tug owners were then requested to set forth the nature of all such records, reports, statements or other memoranda. The tug owners, through Fortenbaugh, answered all of the interrogatories except No. 38 and the supplemental ones just described. While admitting that statements of the survivors had been taken, they declined to summarize or set forth the contents. They did so on the ground that such requests called 'for privileged matter obtained in preparation for litigation' and constituted 'an attempt to obtain indirectly counsel's private files.' It was claimed that answering these requests 'would involve practically turning over not only the complete files, but also the telephone records and, almost, the thoughts of counsel.' In connection with the hearing on these objections, Fortenbaugh made a written statement and gave an informal oral deposition explaining the circumstances under which he had taken the statements. But he was not expressly asked in the deposition to produce the statements. The District Court for the Eastern District of Pennsylvania, sitting en banc, held that the requested matters were not privileged. 4 F.R.D. 479. The court then decreed that the tug owners and Fortenbaugh, as counsel and agent for the tug owners forthwith 'Answer Plaintiff's 38th interrogatory and supplemental interrogatories; produce all written statements of witnesses obtained by Mr. Fortenbaugh, as counsel and agent for Defendants; state in substance any fact concerning this case which Defendants learned through oral statements made by witnesses to Mr. Fortenbaugh whether or not included in his private memoranda and produce Mr. Fortenbaugh's memoranda containing statements of fact by witnesses or to submit these memoranda to the Court for determination of those portions which should be revealed to Plaintiff.' Upon their refusal, the court adjudged them in contempt and ordered them imprisoned until they complied. The Third Circuit Court of Appeals, also sitting en banc, reversed the judgment of the District Court. 153 F.2d 212. It held that the information here sought was part of the 'work product of the lawyer' and hence privileged from discovery under the Federal Rules of Civil Procedure. The importance of the problem, which has engendered a great divergence of views among district courts,1 led us to grant certiorari. The pre-trial deposition-discovery mechanism established by Rules 26 to 37 is one of the most significant innovations of the Federal Rules of Civil Procedure. Under the prior federal practice, the pre-trial functions of notice-giving issue-formulation and fact-revelation were performed primarily and inadequately by the pleadings. 2 Inquiry into the issues and the facts before trial was narrowly confined and was often cumbersome in method. 3 The new rules, however, restrict the pleadings to the task of general notice-giving and invest the deposition-discovery process with a vital role in the preparation for trial. The various instruments of discovery now serve (1) as a device, along with the pre-trial hearing under Rule 16, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts, or information as to the existence or whereabouts of facts, relative to those issues. Thus civil trials in the federal courts no longer need be carried on in the dark. The way is now clear, consistent with recognized privileges, for the parties to obtain the fullest possible knowledge of the issues and facts before trial. 4 There is an initial question as to which of the deposition-discovery rules is involved in this case. Petitioner, in filing his interrogatories, thought that he was proceeding under Rule 33. That rule provides that a party may serve upon any adverse party written interrogatories to be answered by the party served. 5 The District Court pro- ceeded on the same assumption in its opinion, although its order to produce and its contempt order stated that both Rules 33 and 34 were involved. Rule 34 establishes a procedure whereby, upon motion of any party showing good cause therefor and upon notice to all other parties, the court may order any party to produce and permit the inspection and copying or photographing of any designated documents, etc., not privileged, which constitute or contain evidence material to any matter involved in the action and which are in his possession, custody or control. 6 The Circuit Court of Appeals, however, felt that Rule 26 was the crucial one. Petitioner, it said, was proceeding by interrogatories and, in connection with those interrogatories, wanted copies of memoranda and statements secured from witnesses. While the court believed that Rule 33 was involved, at least as to the defending tug owners, it stated that this rule could not be used as the basis for condemning Fortenbaugh's failure to disclose or produce the memoranda and statements, since the rule applies only to interrogatories addressed to adverse parties, not to their agents or counsel. And Rule 34 was said to be inapplicable since petitioner was not trying to see an original document and to copy or photograph it, within the scope of that rule. The court then concluded that Rule 26 must be the one really involved. That provides that the testimony of any person, whether a party or not, may be taken by any party by deposition upon oral examination or written interrogatories for the purpose of discovery or for use as evidence; and that the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether relating to the claim or defense of the examining party or of any other party, including the existence, description, nature, custody, condition and location of any books, documents or other tangible things. 7 The matter is not without difficulty in light of the events that transpired below. We believe, however, that petitioner was proceeding primarily under Rule 33. He addressed simple interrogatories solely to the individual tug owners, the adverse parties, as contemplated by that rule. He did not, and could not under Rule 33, address such interrogatories to their counsel, Fortenbaugh. Nor did he direct these interrogatories either to the tug owners or to Fortenbaugh by way of deposition; Rule 26 thus could not come into operation. And it does not appear from the record that petitioner filed a motion under Rule 34 for a court order directing the producetion of the documents in question. Indeed, such an order could not have been entered as to Fortenbaugh since Rule 34, like Rule 33, is limited to parties to the proceeding, thereby excluding their counsel or agents. Thus to the extent that petitioner was seeking the production of the memoranda and statements gathered by Fortenbaugh in the course of his activities as counsel, petitioner misconceived his remedy. Rule 33 did not permit him to obtain such memoranda and statements as dejuncts to the interrogatories addressed to the individual tug owners. A party clearly cannot refuse to answer interrogatories on the ground that the information sought is solely within the knowledge of his attorney. But that is not this case. Here production was sought of documents prepared by a party's attorney after the claim has arisen. Rule 33 does not make provision for such production, even when sought in connection with permissible interrogatories. Moreover, since petitioner was also foreclosed from securing them through an order under Rule 34, his only recourse was to take Fortenbaugh's deposition under Rule 26 and to attempt to force Fortenbaugh to produce the materials by use of a subpoena duces tecum in accordance with Rule 45. Holtzoff, 'Instruments of Discovery under the Federal Rules of Civil Procedure,' 41 Mich.L.Rev. 205, 220. But despite petitioner's faulty choice of action, the District Court entered an order, apparently under Rule 34, commanding the tug owners and Fortenbaugh, as their agent and counsel, to produce the materials in question. Their refusal led to the anomalous result of holding the tug owners in contempt for failure to produce that which was in the possession of their counsel and of holding Fortenbaugh in contempt for failure to produce that which he could not be compelled to produce under either Rule 33 or Rule 34. But under the circumstances we deem it unnecessary and unwise to rest our decision upon this procedural irregularity, an irregularity which is not strongly urged upon us and which was disregarded in the two courts below. It matters little at this later stage whether Fortenbaugh fails to answer interrogatories filed under Rule 26 or under Rule 33 or whether he refuses to produce the memoranda and statements pursuant to a subpoena under Rule 45 or a court order under Rule 34. The deposition-discovery rules create integrated procedural devices. And the basic question at stake is whether any of those devices may be used to inquire into materials collected by an adverse party's counsel in the course of preparation for possible litigation. The fact that the petitioner may have used the wrong method does not destroy the main thrust of his attempt. Nor does it relieve us of the responsibility of dealing with the problem raised by that attempt. It would be inconsistent with the liberal atmosphere surrounding these rules to insist that petitioner now go through the empty formality of pursuing the right procedural device only to reestablish precisely the same basic problem now confronting us. We do not mean to say, however, that there may not be situations in which the failure to proceed in accordance with a specific rule would be important or decisive. But in the present circumstances, for the purposes of this decision, the procedural irregularity is not material. Having noted the proper procedure, we may accordingly turn our attention to the substance of the underlying problem. In urging that he has a right to inquire into the materials secured and prepared by Fortenbaugh, petitioner emphasizes that the deposition- discovery portions of the Federal Rules of Civil Procedure are designed to enable the parties to discover the true facts and to compel their disclosure wherever they may be found. It is said that inquiry may be made under these rules, epitomized by Rule 26, as to any relevant matter which is not privileged; and since the discovery provisions are to be applied as broadly and liberally as possible, the privilege limitation must be restricted to its narrowest bounds. On the premise that the attorney- client privilege is the one involved in this case, petitioner argues that it must be strictly confined to confidential communications made by a client to his attorney. And since the materials here in issue were secured by Fortenbaugh from third persons rather than from his clients, the tug owners, the conclusion is reached that these materials are proper subjects for discovery under Rule 26. As additional support for this result, petitioner claims that to prohibit discovery under these circumstances would give a corporate defendant a tremendous advantage in a suit by an individual plaintiff. Thus in a suit by an injured employee against a railroad or in a suit by an insured person against an insurance company the corporate defendant could pull a dark veil of secrecy over all the petinent facts it can collect after the claim arises merely on the assertion that such facts were gathered by its large staff of attorneys and claim agents. At the same time, the individual plaintiff, who often has direct knowledge of the matter in issue and has no counsel until some time after his claim arises could be compelled to disclose all the intimate details of his case. By endowing with immunity from disclosure all that a lawyer discovers in the course of his duties, it is said, the rights of individual litigants in such cases are drained of vitality and the lawsuit becomes more of a battle of deception than a search for truth. But framing the problem in terms of assisting individual plaintiffs in their suits against corporate defendants is unsatisfactory. Discovery concededly may work to the disadvantage as well as to the advantage of individual plaintiffs. Discovery, in other words, is not a one-way proposition. It is available in all types of cases at the behest of any party, individual or corporate, plaintiff or defendant. The problem thus far transcends the situation confronting this petitioner. And we must view that problem in light of the limitless situations where the particular kind of discovery sought by petitioner might be used. We agree, of course, that the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the time-honored cry of 'fishing expedition' serve to preclude a party from inquiring into the facts underlying his opponent's case. 8 Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility of surprise. But discovery, like all matters of procedure, has ultimate and necessary boundaries. As indicated by Rules 30(b) and (d) and 31(d), limitations inevitably arise when it can be shown that the examination is being conducted in bad aith or in such a manner as to annoy, embarrass or oppress the person subject to the inquiry. And as Rule 26(b) provides, further limitations come into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege. We also agree that the memoranda, statements and mental impressions in issue in this case fall outside the scope of the attorney-client privilege and hence are not protected from discovery on that basis. It is unnecessary here to delineate the content and scope of that privilege as recognized in the federal courts. For present purposes, it suffices to note that the protective cloak of this privilege does not extend to information which an attorney secures from a witness while acting for his client in anticipation of litigation. Nor does this privilege concern the memoranda, briefs, communications and other writings prepared by counsel for his own use in prosecuting his client's case; and it is equally unrelated to writings which reflect an attorney's mental impressions, conclusions, opinions or legal theories. But the impropriety of invoking that privilege does not provide an answer to the problem before us. Petitioner has made more than an ordinary request for relevant, non-privileged facts in the possession of his adversaries or their counsel. He has sought discovery as of right of oral and written statements of witnesses whose identity is well known and whose availability to petitioner appears unimpaired. He has sought production of these matters after making the most searching inquiries of his opponents as to the circumstances surrounding the fatal accident, which inquiries were sworn to have been answered to the best of their information and belief. Interrogatories were directed toward all the events prior to, during and subsequent to the sinking of the tug. Full and honest answers to such broad inquiries would necessarily have included all pertinent information gleaned by Fortenbaugh through his interviews with the witnesses. Petitioner makes no suggestion, and we cannot assume, that the tug owners or Fortenbaugh were incomplete or dishonest in the framing of their answers. In addition, petitioner was free to examine the public testimony of the witnesses taken before the United States Steamboat Inspectors. We are thus dealing with an attempt to secure the production of written statements and mental impressions contained in the files and the mind of the attorney Fortenbaugh without any showing of necessity or any indication or claim that denial of such production would unduly prejudice the preparation of petitioner's case or cause him any hardship or injustice. For aught that appears, the essence of what petitioner seeks either has been revealed to him already through the interrogatories or is readily available to him direct from the witnesses for the asking. The District Court, after hearing objections to petitioner's request, commanded Fortenbaugh to produce all written statements of witnesses and to state in substance any facts learned through oral statements of witnesses to him. Fortenbaugh was to submit any memoranda he had made of the oral statements so that the court might determine what portions should be revealed to petitioner. All of this was ordered without any showing by petitioner, or any requirement that he make a proper showing, of the necessity for the production of any of this material or any demonstration that denial of production would cause hardship or injustice. The court simply ordered production on the theory that the facts sought were material and were not privileged as constituting attorney-client communications. In our opinion, neither Rule 26 nor any oth r rule dealing with discovery contemplates production under such circumstances. That is not because the subject matter is privileged or irrelevant, as those concepts are used in these rules. 9 Here is simply an attempt, without purported necessity or justification, to secure written statements, private memoranda and personal recollections prepared or formed by an adverse party's counsel in the course of his legal duties. As such, it falls outside the arena of discovery and contravenes the public policy underlying the orderly prosecution and defense of legal claims. Not even the most liberal of discovery theories can justify unwarranted inquiries into the files and the mental impressions of an attorney. Historically, a lawyer is an officer of the court and is bound to work for the advancement of justice while faithfully protecting the rightful interests of his clients. In performing his various duties, however, it is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their coun- sel. Proper preparation of a client's case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference. That is the historical and the necessary way in which lawyers act within the framework of our system of jurisprudence to promote justice and to protect their clients' interests. This work is reflected, of course, in interviews, statements, memoranda, correspondence, briefs, mental impressions, personal beliefs, and countless other tangible and intangible ways-aptly though roughly termed by the Circuit Court of Appeals in this case (153 F.2d 212, 223) as the 'Work product of the lawyer.' Were such materials open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten. An attorney's thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served. We do not mean to say that all written materials obtained or prepared by an adversary's counsel with an eye toward litigation are necessarily free from discovery in all cases. Where relevant and non-privileged facts remain hidden in an attorney's file and where production of those facts is essentia to the preparation of one's case, discovery may properly be had. Such written statements and documents might, under certain circumstances, be admissible in evidence or give clues as to the existence or location of relevant facts. Or they might be useful for purposes of impeachment or corroboration. And production might be justified where the witnesses are no longer available or can be reached only with difficulty. Were production of written statements and documents to be precluded under such circumstances, the liberal ideals of the deposition-discovery portions of the Federal Rules of Civil Procedure would be stripped of much of their meaning. But the general policy against invading the privacy of an attorney's course of preparation is so well recognized and so essential to an orderly working of our system of legal procedure that a burden rests on the one who would invade that privacy to establish adequate reasons to justify production through a subpoena or court order. That burden, we believe, is necessarily implicit in the rules as now constituted. 10 Rule 30(b), as presently written, gives the trial judge the requisite discretion to make a judgment as to whether discovery should be allowed as to written statements secured from witnesses. But in the instant case there was no room for that discretion to operate in favor of the petitioner. No attempt was made to establish any reason why Fortenbaugh should be forced to produce the written statements. There was only a naked, general demand for these materials as of right and a finding by the District Court that no recognizable privilege was involved. That was insufficient to justify discovery under these circumstances and the court should have sustained the refusal of the tug owners and Fortenbaugh to produce. But as to oral statements made by witnesses to Fortenbaugh, whether presently in the form of his mental impressions or memoranda, we do not believe that any showing of necessity can be made under the circumstances of this case so as to justify production. Under ordinary conditions, forcing an attorney to repeat or write out all that witnesses have told him and to deliver the account to his adversary gives rise to grave dangers of inaccuracy and untrustworthiness. No legitimate purpose is served by such production. The practice forces the attorney to testify as to what he remembers or what he saw fit to write down regarding witnesses' remarks. Such testimony could not qualify as evidence; and to use it for impeachment or corroborative purposes would make the attorney much less an officer of the court and much more an ordinary witness. The standards of the profession would thereby suffer. Denial of production of this nature does not mean that any material, non-privileged facts can be hidden from the petitioner in this case. He need not be unduly hindered in the preparation of his case, in the discovery of facts or in his anticipation of his opponents' position. Searching interrogatories directed to Fortenbaugh and the tug owners, production of written documents and statements upon a proper showing and direct interviews with the witnesses themselves all serve to reveal the facts in Fortenbaugh's possession to the fullest possible extent consistent with public policy. Petitioner's counsel frankly admits that he wants the oral statements only to help prepare himself to examine witnesses and to make sure that he has overlooked nothing. That is insufficient under the circumstances to permit him an exception to the policy underlying the privacy of Fortenbaugh's professional activities. If there should be a rare situation justifying production of these matters, petitioner's case is not of that type. We fully appreciate the w de-spread controversy among the members of the legal profession over the problem raised by this case. 11 It is a problem that rests on what has been one of the most hazy frontiers of the discovery process. But until some rule or statute definitely prescribes otherwise, we are not justified in permitting discovery in a situation of this nature as a matter of unqualified right. When Rule 26 and the other discovery rules were adopted, this Court and the members of the bar in general certainly did not believe or contemplate that all the files and mental processes of lawyers were thereby opened to the free scrutiny of their adversaries. And we refuse to interpret the rules at this time so as to reach so harsh and unwarranted a result. We therefore affirm the judgment of the Circuit Court of Appeals.AFFIRMED. Mr. Justice JACKSON, concurring. The narrow question in this case concerns only one of thirty-nine interrogatories which defendants and their counsel refused to answer. As there was persistence in refusal after the court ordered them to answer it, counsel and clients were committed to jail by the district court until they should purge themselves of contempt. The interrogatory asked whether statements were taken from the crews of the tugs involved in the accident, or of any other vessel, and demanded 'Attach hereto exact copies of all such statements if in writing, and if oral, set forth in detail the exact provisions of any such oral statements or reports.' The question is simply whether such a demand is authorized by the rules relating to various aspects of 'discovery'. The primary effect of the practice advocated here would be on the legal profession itself. But it too often is over- looked that the lawyer and the law office are indispensable parts of our administration of justice. Law-abiding people can go nowhere else to learn the ever changing and constantly multiplying rules by which they must behave and to obtain redress for their wrongs. The welfare and tone of the legal profession is therefore of prime consequence to society, which would feel the consequences of such a practice as petitioner urges secondarily but certainly.'Discovery' is one of the working tools of the legal profession. It traces back to the equity bill of discovery in English Chancery practice and seems to have had a forerunner in Continental practice. See Ragland, Discovery Before Trial (1932) 13-16. Since 1848 when the draftsmen of New York's Code of Procedure recognized the importance of a better system of discovery, the impetus to extend and expand discovery, as well as the opposition to it, has come from within the Bar itself. It happens in this case that it is the plaintiff's attorney who demands such unprecedented latitude of discovery and, strangely enough, amicus briefs in his support have been filed by several labor unions representing plaintiffs as a class. It is the history of the movement for broader discovery, however, that in actual experience the chief opposition to its extension has come from lawyers who specialize in representing plaintiffs because defendants have made liberal use of it to force plaintiffs to disclose their cases in advance. See Report of the Commission on the Administration of Justice in New York State (1934) 330, 331; Ragland, Discovery Before Trial (1932) 35, 36. Discovery is a two-edged sword and we cannot decide this problem on any doctrine of extending help to one class of litigants. It seems clear and long has been recognized that discovery should provide a party access to anything that is evidence in his case. Cf. Report of Commission on the Administration of Justice in New York State ( 1934) 41, 42. It seems equally clear that discovery should not nullify the privilege of confidential communication between attorney and client. But those principles give us no real assistance here because what is being sought is neither evidence nor is it a privileged communication between attorney and client. To consider first the most extreme aspect of the requirement in litigation here, we find it calls upon counsel, if he has had any conversations with any of the crews of the vessels in question or of any other, to 'set forth in detail the exact provision of any such oral statements or reports.' Thus the demand is not for the production of a transcript in existence but calls for the creation of a written statement not in being. But the statement by counsel of what a witness told him is not evidence when written plaintiff could not introduce it to prove his case. What, then, is the purpose sought to be served by demanding this of adverse counsel? Counsel for the petitioner candidly said on argument that he wanted this information to help prepare himself to examine witnesses, to make sure he overlooked nothing. He bases his claim to it in his brief on the view that the Rules were to do away with the old situation where a law suit developed into 'a battle of wits between counsel.' But a common law trial is and always should be an adversary proceeding. Discovery was hardly intended to enable a learned profession to perform its functions either without wits or on wits borrowed from the adversary. The real purpose and the probable effect of the practice ordered by the district court would be to put trials on a level even lower than a 'battle of wits.' I can conceive of no practice more demoralizing to the Bar than to require a lawyer to write out and deliver to his adversary an account of what witnesses have told him. Even if his recollection were perfect, the statement would be his lan- guage permeated with his inferences. Every one who has tried it knows that it is almost impossible so fairly to record the expressions and emphasis of a witness that when he testifies in the environment of the court and under the influence of the leading question there will not be departures in some respects. Whenever the testimony of the witness would differ from the 'exact' statement the lawyer had delivered, the lawyer's statement would be whipped out to impeach the witness. Counsel producing his adversary's 'inexact' statement could lose nothing by saying, 'Here is a contradiction, gentlemen of the jury. I do not know whether it is my adversary or his witness who is not telling the truth, but one is not.' Of course, if this practice were adopted, that scene would be repeated over and over again. The lawyer who delivers such statements often would find himself branded a deceiver afraid to take the stand to support his own version of the witness's conversation with him, or else he will have to go on the stand to defend his own credibility-perhaps against that of his chief witness, or possibly even his client. Every lawyer dislikes to take the witness stand and will do so only for grave reasons. This is partly because it is not his role; he is almost invariably a poor witness. But he steps out of professional character to do it. He regrets it; the profession discourages it. But the practice advocated here is one which would force him to be a witness, not as to what he has seen or done but as to other witnesses' stories, and not because he wants to do so but in self-defense. And what is the lawyer to do who has interviewed one whom he believes to be a biased, lying or hostile witness to get his unfavorable statements and know what to meet? He must record and deliver such statements even though he would not vouch for the credibility of the witness by calling him. Perhaps the other side would not want to call him either, but the attorney is open to the charge of suppressi g evidence at the trial if he fails to call such a hostile witness even though he never regarded him as reliable or truthful. Having been supplied the names of the witnesses, petitioner's lawyer gives no reason why he cannot interview them himself. If an employee- witness refuses to tell his story, he, too, may be examined under the Rules. He may be compelled on discovery as fully as on the trial to disclose his version of the facts. But that is his own disclosure-it can be used to impeach him if he contradicts it and such a deposition is not useful to promote an unseemly disagreement between the witness and the counsel in the case. It is true that the literal language of the Rules would admit of an interpretation that would sustain the district court's order. So the literal language of the Act of Congress which makes 'Any writing or record ... made as a memorandum or record of any ... occurrence, or event,' 28 U.S.C.A. 695, admissible as evidence, would have allowed the railroad company to put its engineer's accident statements in evidence. Cf. Palmer v. Hoffman, A.L.R. 719. But all such procedural measures have a background of custom and practice which was assumed by those who wrote and should be by those who apply them. We reviewed the background of the Act and the consequences on the trial of negligence cases of allowing railroads and others to put in their statements and thus to shield the crew from cross-examination. We said, 'Such a major change which opens wide the door to avoidance of cross- examination should not be left to implication.' at page 114, 63 S. Ct. at page 481. We pointed out that there, as here, the 'several hundred years of history behind the Act ... indicate the nature of the reforms which it was designed to effect.' at page 115, 63 S.Ct. at page 481. We refused to apply it beyond that point. We should follow the same course of reasoning here. Certainly nothing in the tradition or practice of discovery up to the time of these Rules would have suggested that they would authorize such a practice as here proposed. The question remains as to signed statements or those written by witnesses. Such statements are not evidence for the defendant. Palmer v. Hoffman, . Nor should I think they ordinarily could be evidence for the plaintiff. But such a statement might be useful for impeachment of the witness who signed it, if he is called and if he departs from the statement. There might be circumstances, too, where impossibility or difficulty of access to the witness or his refusal to respond to requests for information or other facts would show that the interests of justice require that such statements be made available. Production of such statements are governed by Rule 34 and on 'Showing good cause therefor' the court may order their inspection, copying or photographing. No such application has here been made; the demand is made on the basis of right, not on showing of cause. I agree to the affirmance of the judgment of the Circuit Court of Appeals which reversed the district court. Mr. Justice FRANKFURTER joins in this opinion. |
1 | A federal statute forbidding "[a]ggravated identity theft" imposes a mandatory consecutive 2-year prison term on an individual convicted of certain predicate crimes if, during (or in relation to) the commission of those other crimes, the offender "knowingly ... uses, without lawful authority, a means of identification of another person." 18 U. S. C. §1028A(a)(1) (emphasis added). After petitioner Flores-Figueroa, a Mexican citizen, gave his employer counterfeit Social Security and alien registration cards containing his name but other people's identification numbers, he was arrested and charged with two immigration offenses and aggravated identity theft. Flores moved for acquittal on the latter charge, claiming that the Government could not prove that he knew that the documents' numbers were assigned to other people. The District Court agreed with the Government that the word "knowingly" in §1028A(a)(1) does not modify the statute's last three words, "of another person," and, after trial, found Flores guilty on all counts. The Eighth Circuit affirmed.Held: Section §1028(a)(1) requires the Government to show that the defendant knew that the means of identification at issue belonged to another person. As a matter of ordinary English grammar, "knowingly" is naturally read as applying to all the subsequently listed elements of the crime. Where a transitive verb has an object, listeners in most contexts assume that an adverb (such as "knowingly") that modifies the verb tells the listener how the subject performed the entire action, including the object. The Government does not provide a single example of a sentence that, when used in typical fashion, would lead the hearer to a contrary understanding. And courts ordinarily interpret criminal statutes consistently with the ordinary English usage. See, e.g., Liparota v. United States, 471 U. S. 419. The Government argues that this position is incorrect because it would either require the same language to be interpreted differently in a neighboring provision or would render the language in that provision superfluous. This argument fails for two reasons. Finally, the Government's arguments based on the statute's purpose and on the practical problems of enforcing it are not sufficient to overcome the ordinary meaning, in English or through ordinary interpretive practice, of Congress' words. Pp. 4-11.274 Fed. Appx. 501, reversed and remanded. Breyer, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Kennedy, Souter, and Ginsburg, JJ., joined. Scalia, J., filed an opinion concurring in part and concurring in the judgment, in which Thomas, J., joined. Alito, J., filed an opinion concurring in part and concurring in the judgment.IGNACIO CARLOS FLORES-FIGUEROA,PETITIONER v. UNITED STATESon writ of certiorari to the united states court of appeals for the eighth circuit[May 4, 2009] Justice Breyer delivered the opinion of the Court. A federal criminal statute forbidding "[a]ggravated identity theft" imposes a mandatory consecutive 2-year prison term upon individuals convicted of certain other crimes if, during (or in relation to) the commission of those other crimes, the offender "knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person." 18 U. S. C. §1028A(a)(1) (emphasis added). The question is whether the statute requires the Government to show that the defendant knew that the "means of identification" he or she unlawfully transferred, possessed, or used, in fact, belonged to "another person." We conclude that it does.IA The statutory provision in question references a set of predicate crimes, including, for example, theft of government property, fraud, or engaging in various unlawful activities related to passports, visas, and immigration. §1028A(c). It then provides that if any person who commits any of those other crimes (in doing so) "knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person," the judge must add two years' imprisonment to the offender's underlying sentence. §1028A(a)(1). All parties agree that the provision applies only where the offender knows that he is transferring, possessing, or using something. And the Government reluctantly concedes that the offender likely must know that he is transferring, possessing, or using that something without lawful authority. But they do not agree whether the provision requires that a defendant also know that the something he has unlawfully transferred is, for example, a real ID belonging to another person rather than, say, a fake ID (i.e., a group of numbers that does not correspond to any real Social Security number). Petitioner Ignacio Flores-Figueroa argues that the statute requires that the Government prove that he knew that the "means of identification" belonged to someone else, i.e., was "a means of identification of another person." The Government argues that the statute does not impose this particular knowledge requirement. The Government concedes that the statute uses the word "knowingly," but that word, the Government claims, does not modify the statute's last phrase ("a means of identification of another person") or, at the least, it does not modify the last three words of that phrase ("of another person").B The facts of this case illustrate the legal problem. Ignacio Flores-Figueroa is a citizen of Mexico. In 2000, to secure employment, Flores gave his employer a false name, birth date, and Social Security number, along with a counterfeit alien registration card. The Social Security number and the number on the alien registration card were not those of a real person. In 2006, Flores presented his employer with new counterfeit Social Security and alien registration cards; these cards (unlike Flores' old alien registration card) used his real name. But this time the numbers on both cards were in fact numbers assigned to other people. Flores' employer reported his request to U. S. Immigration and Customs Enforcement. Customs discovered that the numbers on Flores' new documents belonged to other people. The United States then charged Flores with two predicate crimes, namely, entering the United States without inspection, 8 U. S. C. §1325(a), and misusing immigration documents, 18 U. S. C. §1546(a). And it charged him with aggravated identity theft, 18 U. S. C. §1028A(a)(1), the crime at issue here. Flores moved for a judgment of acquittal on the "aggravated identity theft" counts. He claimed that the Government could not prove that he knew that the numbers on the counterfeit documents were numbers assigned to other people. The Government replied that it need not prove that knowledge, and the District Court accepted the Government's argument. After a bench trial, the court found Flores guilty of the predicate crimes and aggravated identity theft. The Court of Appeals upheld the District Court's determination. 274 Fed. Appx. 501 (CA8 2008) (per curiam). And we granted certiorari to consider the "knowledge" issue — a matter about which the Circuits have disagreed. Compare United States v. Godin, 534 F. 3d 51 (CA1 2008) (knowledge requirement applies to "of another person"); United States v. Miranda-Lopez, 532 F. 3d 1034 (CA9 2008) (same); United States v. Villanueva-Sotelo, 515 F. 3d 1234 (CADC 2008) (same), with United States v. Mendoza-Gonzalez, 520 F. 3d 912 (CA8 2008) (knowledge requirement does not apply to "of another person"); United States v. Hurtado, 508 F. 3d 603 (CA11 2007) (per curiam) (same); United States v. Montejo, 442 F. 3d 213 (CA4 2006) (same).II There are strong textual reasons for rejecting the Government's position. As a matter of ordinary English grammar, it seems natural to read the statute's word "knowingly" as applying to all the subsequently listed elements of the crime. The Government cannot easily claim that the word "knowingly" applies only to the statutes first four words, or even its first seven. It makes little sense to read the provision's language as heavily penalizing a person who "transfers, possesses, or uses, without lawful authority" a something, but does not know, at the very least, that the "something" (perhaps inside a box) is a "means of identification." Would we apply a statute that makes it unlawful "knowingly to possess drugs" to a person who steals a passenger's bag without knowing that the bag has drugs inside? The Government claims more forcefully that the word "knowingly" applies to all but the statute's last three words, i.e., "of another person." The statute, the Government says, does not require a prosecutor to show that the defendant knows that the means of identification the defendant has unlawfully used in fact belongs to another person. But how are we to square this reading with the statute's language? In ordinary English, where a transitive verb has an object, listeners in most contexts assume that an adverb (such as knowingly) that modifies the transitive verb tells the listener how the subject performed the entire action, including the object as set forth in the sentence. Thus, if a bank official says, "Smith knowingly transferred the funds to his brother's account," we would normally understand the bank official's statement as telling us that Smith knew the account was his brother's. Nor would it matter if the bank official said "Smith knowingly transferred the funds to the account of his brother." In either instance, if the bank official later told us that Smith did not know the account belonged to Smith's brother, we should be surprised. Of course, a statement that does not use the word "knowingly" may be unclear about just what Smith knows. Suppose Smith mails his bank draft to Tegucigalpa, which (perhaps unbeknownst to Smith) is the capital of Honduras. If the bank official says, "Smith sent a bank draft to the capital of Honduras," he has expressed next to nothing about Smith's knowledge of that geographic identity. But if the official were to say, "Smith knowingly sent a bank draft to the capital of Honduras," then the official has suggested that Smith knows his geography. Similar examples abound. If a child knowingly takes a toy that belongs to his sibling, we assume that the child not only knows that he is taking something, but that he also knows that what he is taking is a toy and that the toy belongs to his sibling. If we say that someone knowingly ate a sandwich with cheese, we normally assume that the person knew both that he was eating a sandwich and that it contained cheese. Or consider the Government's own example, " 'John knowingly discarded the homework of his sister.' " Brief for United States 9. The Government rightly points out that this sentence "does not necessarily" imply that John knew whom the homework belonged to. Ibid. (emphasis added). But that is what the sentence, as ordinarily used, does imply. At the same time, dissimilar examples are not easy to find. The Government says that "knowingly" modifies only the verbs in the statute, while remaining indifferent to the subject's knowledge of at least part of the transitive verb's object. In certain contexts, a listener might understand the word "knowingly" to be used in that way. But the Government has not provided us with a single example of a sentence that, when used in typical fashion, would lead the hearer to believe that the word "knowingly" modifies only a transitive verb without the full object, i.e., that it leaves the hearer gravely uncertain about the subject's state of mind in respect to the full object of the transitive verb in the sentence. The likely reason is that such sentences typically involve special contexts or themselves provide a more detailed explanation of background circumstances that call for such a reading. As Justice Alito notes, the inquiry into a sentence's meaning is a contextual one. See post, at 3 (opinion concurring in part and concurring in judgment). No special context is present here. See infra, at 8-10. The manner in which the courts ordinarily interpret criminal statutes is fully consistent with this ordinary English usage. That is to say courts ordinarily read a phrase in a criminal statute that introduces the elements of a crime with the word "knowingly" as applying that word to each element. United States v. X-Citement Video, Inc., 513 U. S. 64, 79 (1994) (Stevens, J., concurring). For example, in Liparota v. United States, 471 U. S. 419 (1985), this Court interpreted a federal food stamp statute that said, " 'whoever knowingly uses, transfers, acquires, alters, or possesses coupons or authorization cards in any manner not authorized by [law]' " is subject to imprisonment. Id., at 420, n. 1. The question was whether the word "knowingly" applied to the phrase "in any manner not authorized by [law]." Id., at 423. The Court held that it did, id., at 433, despite the legal cliche "ignorance of the law is no excuse." More recently, we had to interpret a statute that penalizes "[a]ny person who--(1) knowingly transports or ships using any means or facility of interstate or foreign commerce by any means including by computer or mails, any visual depiction, if--(A) the producing of such visual depiction involves the use of a minor engaging in sexually explicit conduct." 18 U. S. C. §2252(a)(1)(A); X-Citement Video, supra. In issue was whether the term "knowingly" in paragraph (1) modified the phrase "the use of a minor" in subparagraph (A). Id., at 69. The language in issue in X-Citement Video (like the language in Liparota) was more ambiguous than the language here not only because the phrase "the use of a minor" was not the direct object of the verbs modified by "knowingly," but also because it appeared in a different subsection. 513 U. S., at 68-69. Moreover, the fact that many sex crimes involving minors do not ordinarily require that a perpetrator know that his victim is a minor supported the Government's position. Nonetheless, we again found that the intent element applied to "the use of a minor." Id., at 72, and n. 2. Again the Government, while pointing to what it believes are special features of each of these cases, provides us with no convincing counterexample, although there may be such statutory instances. The Government correctly points out that in these cases more was at issue than proper use of the English language. But if more is at issue here, what is it? The Government makes a further textual argument, a complex argument based upon a related provision of the statute. That provision applies "[a]ggravated identity theft" where the predicate crime is terrorism. See §1028A(a)(2). The provision uses the same language as the provision before us up to the end, where it adds the words "or a false identification document." Thus, it penalizes anyone who "knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person or a false identification document." §1028A(a)(2). The Government's argument has four steps. Step One: We should not interpret a statute in a manner that makes some of its language superfluous. See, e.g., TRW Inc. v. Andrews, 534 U. S. 19, 31 (2001). Step Two: A person who knows that he is transferring, possessing, or using a " 'means of identification' " " 'without lawful authority,' " must know that the document either (a) belongs " 'to another person' " or (b) is a " 'false identification document' " because " 'there are no other choices.' " Brief for United States 14 (emphasis added). Step Three: Requiring the offender to know that the "means of identification" belongs to another person would consequently be superfluous in this terrorism provision. Step Four: We should not interpret the same phrase ("of another person") in the two related sections differently. If we understand the argument correctly, it seems to suffer two serious flaws. If the two listed circumstances (where the ID belongs to another person; where the ID is false) are the only two circumstances possibly present when a defendant (in this particular context) unlawfully uses a "means of identification," then why list them at all? Why not just stop after criminalizing the knowing unlawful use of a "means of identification"? (Why specify that Congress does not mean the statute to cover, say, the use of dog tags?) The fact is, however, that the Government's reasoning at Step Two is faulty. The two listed circumstances are not the only two circumstances possibly present when a defendant unlawfully uses a "means of identification." One could, for example, verbally provide a seller or an employer with a made-up Social Security number, not an "identification document," and the number verbally transmitted to the seller or employer might, or might not, turn out to belong to another person. The word "knowingly" applied to the "other person" requirement (even in a statute that similarly penalizes use of a "false identification document") would not be surplus. The Government also considers the statute's purpose to be a circumstance showing that the linguistic context here is special. It describes that purpose as "provid[ing] enhanced protection for individuals whose identifying information is used to facilitate the commission of crimes." Id., at 5. And it points out that without the knowledge requirement, potential offenders will take great care to avoid wrongly using IDs that belong to others, thereby enhancing the protection that the statute offers. The question, however, is whether Congress intended to achieve this enhanced protection by permitting conviction of those who do not know the ID they unlawfully use refers to a real person, i.e., those who do not intend to cause this further harm. And, in respect to this latter point, the statute's history (outside of the statute's language) is inconclusive. On the one hand, some statements in the legislative history offer the Government a degree of support. The relevant House Report refers, for example, both to "identity theft" (use of an ID belonging to someone else) and to "identity fraud" (use of a false ID), often without distinguishing between the two. See, e.g., H. R. Rep. No. 108-528, p. 25 (2004) (statement of Rep. Coble). And, in equating fraud and theft, Congress might have meant the statute to cover both — at least where the fraud takes the form of using an ID that (without the offender's knowledge) belongs to someone else. On the other hand, Congress separated the fraud crime from the theft crime in the statute itself. The title of one provision (not here at issue) is "Fraud and related activity in connection with identification documents, authentication features, and information." 18 U. S. C. §1028. The title of another provision (the provision here at issue) uses the words "identity theft." §1028A (emphasis added). Moreover, the examples of theft that Congress gives in the legislative history all involve instances where the offender would know that what he has taken identifies a different real person. H. R. Rep. No. 108-528, at 4-5 (identifying as examples of "identity theft" " 'dumpster diving,' " "accessing information that was originally collected for an authorized purpose," "hack[ing] into computers," and "steal[ing] paperwork likely to contain personal information"). Finally, and perhaps of greatest practical importance, there is the difficulty in many circumstances of proving beyond a reasonable doubt that a defendant has the necessary knowledge. Take an instance in which an alien who unlawfully entered the United States gives an employer identification documents that in fact belong to others. How is the Government to prove that the defendant knew that this was so? The Government may be able to show that such a defendant knew the papers were not his. But perhaps the defendant did not care whether the papers (1) were real papers belonging to another person or (2) were simply counterfeit papers. The difficulties of proof along with the defendant's necessary guilt of a predicate crime and the defendant's necessary knowledge that he has acted "without lawful authority," make it reasonable, in the Government's view, to read the statute's language as dispensing with the knowledge requirement. We do not find this argument sufficient, however, to turn the tide in the Government's favor. For one thing, in the classic case of identity theft, intent is generally not difficult to prove. For example, where a defendant has used another person's identification information to get access to that person's bank account, the Government can prove knowledge with little difficulty. The same is true when the defendant has gone through someone else's trash to find discarded credit card and bank statements, or pretends to be from the victim's bank and requests personal identifying information. Indeed, the examples of identity theft in the legislative history (dumpster diving, computer hacking, and the like) are all examples of the types of classic identity theft where intent should be relatively easy to prove, and there will be no practical enforcement problem. For another thing, to the extent that Congress may have been concerned about criminalizing the conduct of a broader class of individuals, the concerns about practical enforceability are insufficient to outweigh the clarity of the text. Similar interpretations that we have given other similarly phrased statutes also created practical enforcement problems. See, e.g., X-Citement Video, 513 U. S. 64; Liparota, 471 U. S. 419. But had Congress placed conclusive weight upon practical enforcement, the statute would likely not read the way it now reads. Instead, Congress used the word "knowingly" followed by a list of offense elements. And we cannot find indications in statements of its purpose or in the practical problems of enforcement sufficient to overcome the ordinary meaning, in English or through ordinary interpretive practice, of the words that it wrote. We conclude that §1028A(a)(1) requires the Government to show that the defendant knew that the means of identification at issue belonged to another person. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.It is so ordered.IGNACIO CARLOS FLORES-FIGUEROA, PETITIONER v. UNITED STATESon writ of certiorari to the united states court of appeals for the eighth circuit[May 4, 2009] Justice Scalia, with whom Justice Thomas joins, concurring in part and concurring in the judgment. I agree with the Court that to convict petitioner for "knowingly transfer[ring], possess[ing], or us[ing], without lawful authority, a means of identification of another person," 18 U. S. C. §1028A(a)(1), the Government must prove that he "knew that the 'means of identification' he ... unlawfully transferred, possessed, or used, in fact, belonged to 'another person.' " Ante, at 1. "Knowingly" is not limited to the statute's verbs, ante, at 4. Even the Government must concede that. See United States v. Villanueva-Sotelo, 515 F. 3d 1234, 1237 (CADC 2008) ("According to the government, this text is unambiguous: the statute's knowledge requirement extends only so far as 'means of identification' "). But once it is understood to modify the object of those verbs, there is no reason to believe it does not extend to the phrase which limits that object ("of another person"). Ordinary English usage supports this reading, as the Court's numerous sample sentences amply demonstrate. See ante, at 4-5. But the Court is not content to stop at the statute's text, and I do not join that further portion of the Court's opinion. First, the Court relies in part on the principle that "courts ordinarily read a phrase in a criminal statute that introduces the elements of a crime with the word 'knowingly' as applying that word to each element." Ante, at 6. If that is meant purely as a description of what most cases do, it is perhaps true, and perhaps not. I have not canvassed all the cases and am hence agnostic. If it is meant, however, as a normative description of what courts should ordinarily do when interpreting such statutes — and the reference to Justice Stevens' concurring opinion in United States v. X-Citement Video, Inc., 513 U. S. 64, 79 (1994), suggests as much — then I surely do not agree. The structure of the text in X-Citement Video plainly separated the "use of a minor" element from the "knowingly" requirement, wherefore I thought (and think) that case was wrongly decided. See id., at 80-81 (Scalia, J., dissenting). It is one thing to infer the common-law tradition of a mens rea requirement where Congress has not addressed the mental element of a crime. See Staples v. United States, 511 U. S. 600, 605 (1994); United States v. United States Gypsum Co., 438 U. S. 422, 437-438 (1978). It is something else to expand a mens rea requirement that the statutory text has carefully limited. I likewise cannot join the Court's discussion of the (as usual, inconclusive) legislative history. Ante, at 9. Relying on the statement of a single Member of Congress or an unvoted-upon (and for all we know unread) Committee Report to expand a statute beyond the limits its text suggests is always a dubious enterprise. And consulting those incunabula with an eye to making criminal what the text would otherwise permit is even more suspect. See United States v. R. L. C., 503 U. S. 291, 307-309 (1992) (Scalia, J., concurring in part and concurring in judgment). Indeed, it is not unlike the practice of Caligula, who reportedly "wrote his laws in a very small character, and hung them up upon high pillars, the more effectually to ensnare the people," 1 W. Blackstone, Commentaries on the Laws of England 46 (1765). The statute's text is clear, and I would reverse the judgment of the Court of Appeals on that ground alone.IGNACIO CARLOS FLORES-FIGUEROA, PETITIONER v. UNITED STATESon writ of certiorari to the united states court of appeals for the eighth circuit[May 4, 2009] Justice Alito, concurring in part and concurring in the judgment. While I am in general agreement with the opinion of the Court, I write separately because I am concerned that the Court's opinion may be read by some as adopting an overly rigid rule of statutory construction. The Court says that "[i]n ordinary English, where a transitive verb has an object, listeners in most contexts assume that an adverb (such as knowingly) that modifies the transitive verb tells the listener how the subject performed the entire action, including the object as set forth in the sentence." Ante, at 4. The Court adds that counterexamples are "not easy to find," ante, at 5, and I suspect that the Court's opinion will be cited for the proposition that the mens rea of a federal criminal statute nearly always applies to every element of the offense. I think that the Court's point about ordinary English usage is overstated. Examples of sentences that do not conform to the Court's rule are not hard to imagine. For example: "The mugger knowingly assaulted two people in the park — an employee of company X and a jogger from town Y." A person hearing this sentence would not likely assume that the mugger knew about the first victim's employer or the second victim's home town. What matters in this example, and the Court's, is context. More to the point, ordinary writers do not often construct the particular kind of sentence at issue here, i.e., a complex sentence in which it is important to determine from the sentence itself whether the adverb denoting the actor's intent applies to every characteristic of the sentence's direct object. Such sentences are a staple of criminal codes, but in ordinary speech, a different formulation is almost always used when the speaker wants to be clear on the point. For example, a speaker might say: "Flores-Figueroa used a Social Security number that he knew belonged to someone else" or "Flores-Figueroa used a Social Security number that just happened to belong to a real person." But it is difficult to say with the confidence the Court conveys that there is an "ordinary" understanding of the usage of the phrase at issue in this case. In interpreting a criminal statute such as the one before us, I think it is fair to begin with a general presumption that the specified mens rea applies to all the elements of an offense, but it must be recognized that there are instances in which context may well rebut that presumption. For example, 18 U. S. C. §2423(a) makes it unlawful to "knowingly transpor[t] an individual who has not attained the age of 18 years in interstate or foreign commerce ... with intent that the individual engage in prostitution, or in any sexual activity for which any person can be charged with a criminal offense." The Courts of Appeals have uniformly held that a defendant need not know the victim's age to be guilty under this statute. See, e.g., United States v. Griffith, 284 F. 3d 338, 350-351 (CA2 2002); United States v. Taylor, 239 F. 3d 994, 997 (CA9 2001); cf. United States v. Chin, 981 F. 2d 1275, 1280 (CADC 1992) (Ginsburg, J.) (holding that 21 U. S. C. §861(a)(1), which makes it unlawful to "knowingly and intentionally ... employ, hire, use, persuade, induce, entice, or coerce, a person under eighteen years of age to violate" drug laws, does not require the defendant to have knowledge of the minor's age). Similarly, 8 U. S. C. §1327 makes it unlawful to "knowingly ai[d] or assis[t] any alien inadmissible under section 1182(a)(2) (insofar as an alien inadmissible under such section has been convicted of an aggravated felony) ... to enter the United States." The Courts of Appeals have held that the term "knowingly" in this context does not require the defendant to know that the alien had been convicted of an aggravated felony. See, e.g., United States v. Flores-Garcia, 198 F. 3d 1119, 1121-1123 (CA9 2000); United States v. Figueroa, 165 F. 3d 111, 118-119 (CA2 1998). In the present case, however, the Government has not pointed to contextual features that warrant interpreting 18 U. S. C. §1028A(a)(1) in a similar way. Indeed, the Government's interpretation leads to exceedingly odd results. Under that interpretation, if a defendant uses a made-up Social Security number without having any reason to know whether it belongs to a real person, the defendant's liability under §1028A(a)(1) depends on chance: If it turns out that the number belongs to a real person, two years will be added to the defendant's sentence, but if the defendant is lucky and the number does not belong to another person, the statute is not violated. I therefore concur in the judgment and join the opinion of the Court except insofar as it may be read to adopt an inflexible rule of construction that can rarely be overcome by contextual features pointing to a contrary reading. |
11 | An employer's unpaid contributions to an employees' annuity plan established by a collective bargaining contract are not entitled to a priority under 64a (2) of the Bankruptcy Act, which grants priority, limited to $600 and to wages earned within three months before commencement of bankruptcy proceedings, to "wages ... due to workmen." United States v. Embassy Restaurant, Inc., , followed. Pp. 225-229. 379 F.2d 211, affirmed.Harold Stern argued the cause for petitioners. With him on the brief for petitioner Joint Industry Board of the Electrical Industry was Norman Rothfeld. Max Schwartz filed a brief for petitioner Trustee in Bankruptcy of A & S Electric Corp.Lawrence G. Wallace argued the cause for the United States. On the brief were Solicitor General Griswold, Assistant Attorney General Rogovin, Harris Weinstein, and Crombie J. D. Garrett.J. Albert Woll, Laurence Gold, and Thomas E. Harris filed a brief for the American Federation of Labor and Congress of Industrial Organizations, as amicus curiae, urging reversal.MR. JUSTICE WHITE delivered the opinion of the Court.Section 64a (2) of the Bankruptcy Act, 30 Stat. 563, 11 U.S.C. 104 (a) (2), grants priority over the claims of other creditors to "wages ... due to workmen, ..." the priority being limited to $600 and to wages earned within three months before the commencement of the proceedings.1 The question before us is whether priority under 64a (2) must be accorded to an employer's unpaid contributions to an employees' annuity plan established by a collective bargaining contract. The referee and the District Court denied the priority and the Court of Appeals affirmed. In re A & S Electric Corp., 379 F.2d 211 (C. A. 2d Cir. 1967). We granted certiorari, sub nom. Joint Industry Board of the Electrical Industry v. United States, . We affirm the judgment.The Annuity Plan of the Electrical Industry in New York City was established by a collective bargaining agreement between Local Union No. 3, International Brotherhood of Electrical Workers, AFL-CIO, and four associations of electrical contractors. The plan covers all employees in the bargaining unit represented by the union and is funded by employer contributions of "Four Dollars ($4.00) per day for each day worked or each holiday for which payment is received by his employees ... ." Payments are made to trustees who are empowered to collect and administer the contributions under the provisions of the plan. These trustees are the petitioners here. Contributions received by the trustees are credited to the account of the individual employees but are "payable to him only as hereinafter provided," namely, upon death, retirement from the industry at age 60, permanent disability, entry into the Armed Forces, or ceasing to be a participant under the plan. Death benefits are paid only out of income, if available, and other benefits, though they may be payable in installments, will at a minimum return to the employee the total of the contributions credited to his name, without interest.A & S Electric Corporation, an employer liable for contributions to the annuity plan, was adjudicated a bankrupt in 1963. The Joint Industry Board filed a claim which included $5,114 representing payments under the plan which fell due but were unpaid during the three months prior to the commencement of the proceedings. Priority for this amount was asserted under 64a (2). The United States, with a fourth-class priority claim for unpaid taxes, objected to the allowance of the Joint Board's priority claim. The referee and the courts agreed with the United States, holding that payments due to the Joint Board were not wages due to workmen, relying for this conclusion principally upon United States v. Embassy Restaurant, Inc., .We agree that Embassy Restaurant controls this case. There the claim was for unpaid employer contributions to a welfare fund, the contributions being $8 per month for each full-time employee; the fund provided life insurance, weekly sick benefits, hospital and surgical payments, and other advantages for covered employees. That claim, the Court held, was not entitled to 64a (2) priority because payments to such a welfare fund did not satisfy the manifest purpose of the priority, which was "to enable employees displaced by bankruptcy to secure, with some promptness, the money directly due to them in back wages, and thus to alleviate in some degree the hardship that unemployment usually brings to workers and their families." 359 U.S., at 32.2 The contributions involved there were payable to trustees, not to employees, and were disbursable to employees only on the occurrence of certain events, not including the bankruptcy of the employer. Neither the contributions nor the plan provided any immediate support for workmen during the period of financial distress.The case before us concerns employer contributions to the welfare fund which are similarly not due the employees and never were; they were payable only to the trustees, who had the exclusive right to hold and manage the fund. Though the contributions were credited to individual employee accounts, nothing was payable to employees except upon the occurrence of certain events. Until death, retirement after age 60, permanent disability, entry into military service, or cessation of participation under the plan, no benefits were payable. Further, as the referee pointed out, the employee could not assign, pledge, or borrow against the contributions, or otherwise use them as his own.3 Quite obviously the annuity fund was not intended to relieve the distress of temporary unemployment, whether arising from the bankruptcy of the employer or for some other reason. Hence, if Embassy Restaurant is to be followed, the unpaid contributions in this case do not satisfy the fundamental purpose of the 64a (2) priority for wages due to workmen.Nor are we inclined to overrule Embassy Restaurant's construction of 64a (2). This is a matter more appropriately left to the Congress, which has not infrequently given attention to 64a of the Bankruptcy Act and to the priorities it creates.4 The latest amendments to 64a occurred in 1966, in the Acts of July 5, 1966, 80 Stat. 268 and 80 Stat. 271. Although the section was completely re-enacted in 1967,5 64a (2) was left unchanged despite the fact that in every Congress since Embassy Restaurant bills have been introduced to overrule or modify the result reached in that case.6 Despite the general policy of the Bankruptcy Act to distribute assets of the estate equally to creditors, the priorities established in 64a give priority to wages due workmen up to $600 if earned within three months prior to bankruptcy. Other unpaid wages are allowable as general claims but are not entitled to priority. If delinquent contributions to welfare and annuity funds providing deferred benefits to employees were to have equal priority with wages payable directly to employees, the maximum payable immediately and directly to employees would be reduced whenever individual wage claims approached $600 or whenever the assets of the estate would not permit all wage claims to be paid in full. Also, increasing the amounts payable to second priority creditors would reduce the assets available for distribution to lower priority claimants and general creditors, including wage claimants not entitled to priority.7 Embassy Restaurant was decided nine years ago. If there is still any question as to whether claims for unpaid contributions to provide deferred benefits to employees should share the assets of bankrupts with general creditors or should be entitled to the limited priority granted wages due to workmen, any new resolution of that question should come from Congress. Affirmed. |
9 | [Footnote *] Together with United States et al. v. County of Tuolumne, also on appeal from the same court (see this Court's Rule 15 (3)). Pursuant to California statutes authorizing counties to impose an annual use or property tax on possessory interests in improvements on tax-exempt land, appellee counties imposed a tax on the possessory interests of appellant United States Forest Service employees in housing located in national forests within the counties and owned and supplied to appellants by the Forest Service as part of their compensation. Held: The tax is not barred by the Supremacy Clause as a state tax on the Federal Government or federal property. Pp. 457-468. (a) A State may, in effect, raise revenues on the basis of property owned by the United States as long as that property is being used by a private citizen and as long as it is the possession or use by the private citizen that is being taxed. City of Detroit v. Murray Corp., ; United States v. City of Detroit, ; United States v. Township of Muskegon, . P. 462. (b) The economic burden on a federal function of a state tax imposed on those who deal with the Federal Government does not render the tax unconstitutional as long as the tax is imposed equally on the other similarly situated constituents of the State. Pp. 462-464. (c) The "legal incidence" of the tax in question falls neither on the Federal Government nor on federal property but is imposed solely on private citizens who work for the Federal Government and threatens to interfere with federal laws relating to the Forest Service's functions only insofar as it may impose an economic burden on the Forest Service to reimburse its employees for the taxes owed or, failing reimbursement, to remove an advantage otherwise enjoyed by the Government in the employment market. P. 464. (d) The tax does not discriminate against Forest Service or other federal employees, and the fact that it is imposed on real property renters only if the owner is exempt from taxation does not make it discriminatory, United States v. City of Detroit, supra. Since the state property tax imposed on owners of nonexempt property is passed on to their lessees, appellants are no worse off than those who work for private employers and rent houses in the private sector. Pp. 464-465. (e) It cannot be properly contended that appellants are required to occupy their houses for the Forest Service's sole benefit and not for their own personal benefit, since the occupancy of the houses constitutes part of appellants' "compensation" for services performed and thus concededly is of personal benefit to the employee, and since moreover the Forest Service itself purports to measure the personal benefit of the occupancy to the employee and collects rent in such an amount through deductions from the employee's paycheck. Pp. 465-467. 50 Cal. App. 3d 633, 123 Cal. Rptr. 548 (County of Fresno judgment) and County of Tuolumne judgment affirmed.WHITE J., delivered the opinion of the Court, in which BURGER, C. J., and BRENNAN, STEWART, MARSHALL, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. STEVENS, J., filed a dissenting opinion, post, p. 468.Howard E. Shapiro argued the cause for the United States et al. On the brief were Solicitor General Bork, Assistant Attorney General Crampton, Stuart A. Smith, Crombie J. D. Garrett, and David English Carmack.James B. Waterman argued the cause for appellee County of Fresno. With him on the brief was Robert M. Wash. Stephen Dietrich, Jr., argued the cause and filed a brief for appellee County of Tuolumne.MR. JUSTICE WHITE delivered the opinion of the Court.The issue in this case is whether, consistent with the Federal Government's immunity from state taxation inherent in the Supremacy Clause of the United States Constitution, see M`Culloch v. Maryland, 4 Wheat. 316 (1819), the State of California may tax federal employees on their possessory interests in housing owned and supplied to them by the Federal Government as part of their compensation. We hold that it may.IThe individual appellants in this case are employees of the Forest Service, a branch of the United States Department of Agriculture responsible for administering the national forests. These appellants work in the Sierra, Sequoia, and Stanislaus National Forests which are located in Fresno and Tuolumne Counties in California. During the year 1967 each appellant lived with his family in a house which was built and owned by the Forest Service in one of these national forests. Appellants were required by the Forest Service to live in these houses1 so that they would be nearer to the place where they performed their duties and so that they would be better able to perform those duties. Structurally, the houses were very similar to residential houses of the same size available in the private sector. The Forest Service viewed the occupancy of these houses as partial compensation for the services of its employees, and made a deduction from the salary of the employee for each two-week pay period in which the employee occupied such a house. The Forest Service fixed the amount of the deduction by estimating the fair rental value of a similar house in the private sector and then discounting that figure to take account of the distance between the Forest Service house and the nearest established community and the absence, if any, of any customary amenities in or near the house.2 Adjustment was also made for the fact that the Forest Service reserved the right to remove employees from their houses at any time, to enter the houses with or without notice for inspection purposes, and to use part or all of the houses for official purposes in an emergency.Pursuant to 16 U.S.C. 480, the States retain civil and criminal jurisdiction over the national forests notwithstanding the fact that the national forests are owned by the Federal Government. Under the California Revenue and Taxation Code, 104, 107 (West 1970), and 21 (b) of Title 18 of the California Administrative Code (1971), counties in California are authorized to impose an annual use or property tax on possessory interests in improvements on tax-exempt land.3 The Counties of Fresno and Tuolumne imposed such a tax on the appellants - Forest Service employees who live in the federally owned houses in the national forests located in those counties. In computing the value of the possessory interests on which the tax is imposed, the counties used the annual estimated fair rental value of the houses, discounted to take into account essentially the same factors considered by the Forest Service in computing the amount that it deducted from the salaries of employees who used the houses.4 Appellants paid the taxes under protest and they, together with the United States, sued for a refund in California courts in Fresno and Tuolumne Counties. They claimed, inter alia, that the tax interfered with a federal function - i. e., the running of the Forest Service - that it discriminated against employees of the Federal Government, and that it was therefore forbidden by the Supremacy Clause of the United States Constitution. E. g., M`Culloch v. Maryland, supra. The trial courts each sustained appellants' claims, holding, inter alia, that appellants had no taxable possessory interest under state law. The California Court of Appeal, Fifth Appellate District, reversed, 50 Cal. App. 3d 633, 123 Cal. Rptr. 548 (1975) (County of Fresno case, followed in County of Tuolumne case (unreported)). It held that each appellant had a possessory interest in the houses owned by the Forest Service that was subject to taxation under state law. The court then held that the tax on such possessory interests is not a tax on the Federal Government, on Government property, or on a "federal function." Rather, it is a tax imposed on "the private citizen, and it is the private citizen's usufructuary interest in the government land and improvements alone that is being taxed. (City of Detroit v. Murray Corp., ...; United States v. Township of Muskegon, ...; United States v. City of Detroit, ... .)" Id., at 640, 123 Cal. Rptr., at 552. Consequently, the court held, the tax is not barred by the Supremacy Clause of the Federal Constitution. The California Court of Appeal also rejected appellants' contention that the tax operates to discriminate against the Federal Government and its employees. The Supreme Court of California denied review. We noted probable jurisdiction to review the decision of the California Court of Appeal, .Appellants argue that the tax is "a levy upon the activities of the United States" because the occupancy of the houses by the Forest Service employees was "for the sole purpose of discharging their governmental function of running the national forests." Brief for Appellants 11. Consequently, the Government argues, the tax is forbidden by the doctrine announced in M`Culloch v. Maryland, that under the Supremacy Clause of the Federal Constitution the States may not tax the properties, functions, or instrumentalities of the Federal Government. We disagree with the Government, and affirm the judgment below.IIThe Government relies principally on the landmark case of M`Culloch v. Maryland. There the State of Maryland imposed a tax on notes issued by "any Bank ... established without authority from the State."5 The only such bank in Maryland was the Bank of the United States, created and incorporated by Act of Congress in order to carry out Congress' enumerated powers. No similar tax was imposed on the issuance of notes by any other bank in Maryland. The Court held the tax to violate that part of the Federal Constitution which declares that the laws of the United States are the "supreme law of the land." An Act of Congress had created the bank in order to carry out functions of the National Government enumerated in the United States Constitution. The Court noted that the power to tax the bank "by the States may be exercised so as to destroy it," 4 Wheat., at 427, and consequently that the power to tax, if admitted, could be exercised so as effectively to repeal the Act of Congress which created the bank. If the State's power to tax the bank were recognized in principle, the Court doubted the ability of federal courts to review each exercise of such power to determine whether the tax would or would not destroy a federal function. Finally, the Court rejected the State's argument that the power to tax involves the power to destroy only where the taxing power is abused, and that the Court should simply trust the States not to abuse their power to tax a federal function just as it must trust a State not to abuse its power to tax its own citizens. The Court rejected the argument because the political check against abuse of the power to tax a State's constituents is absent when the State taxes only a federal function.6 A State's constituents can be relied on to vote out of office any legislature that imposes an abusively high tax on them. They cannot be relied upon to be similarly motivated when the tax is instead solely on a federal function.The Court was careful to limit the reach of its decision. It stated that its opinion does not "extend to a tax ... imposed on the interest which the citizens of Maryland may hold in this institution [the bank], in common with other property of the same description throughout the State." Id., at 436. (Emphasis added.) Since M`Culloch, this Court has adhered to the rule that States may not impose taxes directly on the Federal Government, nor may they impose taxes the legal incidence of which falls on the Federal Government.7 The decisions of this Court since M`Culloch have been less uniform on the question whether taxes, the economic but not the legal incidence of which falls in part or in full on the Federal Government, are invalid.For many years the Court read the decision in M`Culloch as forbidding taxes on those who had contractual relationships with the Federal Government or with its instrumentalities whenever the effect of the tax was or might be to increase the cost to the Federal Government of performing its functions.8 In later years, however, the Court departed from this interpretation of M`Culloch. In James v. Dravo Contracting Co., , a contractor sought immunity from a state occupation tax measured by the gross receipts, insofar as those receipts had been received under a contract with the Federal Government. The Court declared the tax valid even if "the gross receipts tax may increase the cost to the Government" under the contract. Id., at 160. So long as the tax is not directly laid on the Federal Government, it is valid if nondiscriminatory, id., at 150, or until Congress declares otherwise. Id., at 161. Similarly, in Graves v. New York ex rel. O'Keefe, , the Court sustained a nondiscriminatory tax on the income of a federal employee, thereby overruling Dobbins v. Commissioners of Erie County, 16 Pet. 435 (1842).9 See also Alabama v. King & Boozer, , overruling Panhandle Oil Co. v. Mississippi ex rel. Knox, . Finally, and for the purposes of this case dispositively, in City of Detroit v. Murray Corp., , United States v. City of Detroit, , and United States v. Township of Muskegon, , this Court sustained state use taxes on the use by private companies of machinery and other property owned by the United States and leased to them for use in their businesses - even though in two of these cases the companies had cost-plus contracts with the Government requiring the Government to reimburse them for state taxes paid by them. These cases make clear that a State may, in effect, raise revenues on the basis of property owned by the United States as long as that property is being used by a private citizen or corporation and so long as it is the possession or use by the private citizen that is being taxed. See also Esso Standard Oil Co. v. Evans, .The rule to be derived from the Court's more recent decisions, then, is that the economic burden on a federal function of a state tax imposed on those who deal with the Federal Government does not render the tax unconstitutional so long as the tax is imposed equally on the other similarly situated constituents of the State.10 This rule returns to the original intent of M`Culloch v. Maryland. The political check against abuse of the taxing power found lacking in M`Culloch, where the tax was imposed solely on the Bank of the United States, is present where the State imposes a nondiscriminatory tax only on its constituents or their artificially owned entities;11 and M`Culloch foresaw the unfairness in forcing a State to exempt private individuals with beneficial interests in federal property from taxes imposed on similar interests held by others in private property. Accordingly, M`Culloch expressly excluded from its rule a tax on "the interest which the citizens of Maryland may hold [in a federal instrumentality] in common with other property of the same description throughout the State." 4 Wheat., at 436.IIIApplying the rule set forth above, decision of this case is relatively simple. The "legal incidence" of the tax involved in this case falls neither on the Federal Government nor on federal property. The tax is imposed solely on private citizens who work for the Federal Government. The tax threatens to interfere with federal laws relating to the functions of the Forest Service only insofar as it may impose an economic burden on the Forest Service - causing it to reimburse its employees for the taxes legally owed by them or, failing reimbursement, removing an advantage otherwise enjoyed by the Federal Government in the employment market.12 There is no other respect in which the tax involved in this case threatens to obstruct or burden a federal function. The tax can be invalidated, then, only if it discriminates against the Forest Service or other federal employees, which it does not do.13 Although the tax is imposed by the appellee counties on renters of real property only if the owner is exempt from taxation - and consequently is not imposed on the vast majority of renters of real property in California - the tax is not for that reason discriminatory. In this respect this case is governed by United States v. City of Detroit, . There the city of Detroit imposed a use tax on those who used tax-exempt property owned by the United States. The tax was measured by the value of the property. With respect to nonexempt property, a similar tax was imposed on the owner and none on the user. In answering an argument that the tax discriminated against those dealing with the Federal Government, the Court said: "As suggested before the legislature apparently was trying to equate the tax burden imposed on private enterprise using exempt property with that carried by similar businesses using taxed property. Those using exempt property are required to pay no greater tax than that placed on private owners or passed on by them to their business lessees." Id., at 473-474. (Emphasis added.) Similarly, here the State of California imposes a property tax on owners of nonexempt property which is "passed on by them to their ... lessees." Consequently, the appellants who rent from the Forest Service are no worse off under California tax laws than those who work for private employers and rent houses in the private sector.The Government argues nonetheless that the appellants are required to occupy the houses owned by the Forest Service not for their own personal benefit but for the sole benefit of the Forest Service and that "[t]here is accordingly no constitutionally permissible way to isolate any `personal residence' portion of these possessory interests that could be deemed to be unrelated to the official duties of these Forest Service employees." Brief for United States 18.14 The argument is at odds with the Government's own concessions during this lawsuit, with its treatment of its employees apart from this lawsuit, and with common sense. The Government's complaint in this case alleges that the occupancy of the Forest Service houses constitutes part of appellants' "compensation" for services performed - thus conceding that the occupancy is of personal benefit to the employee. At oral argument the Government conceded that a state income tax could be imposed on the employees for the value of the occupancy - thus conceding that its value to the employee is capable of being severed from its value to the Forest Service and of being accurately measured. The Forest Service itself purports to measure the personal benefit of the occupancy to the employee and collects rent in such an amount through deductions from the employee's paycheck. Since virtually everyone in this country pays for housing for himself or herself and family, common sense compels the conclusion that the occupancy of a house provided by an employer for an employee's family is of personal financial benefit to the employee - relieving him of the expense of paying for housing elsewhere.15 The disadvantages attendant on living in Forest Service housing may affect the amount of the value of the house to the employee, but it is unquestionably of some value to him. Here both appellees have sought to take account of these disadvantages and to tax the employees only on the portion of the total value of the houses which may be properly attributed to their possessory interest. In this respect, the taxes are valid even under United States v. Allegheny County, , see n. 10, supra, so heavily relied on by the Government. There the Court invalidated a tax on use by a private corporation of Government-owned property because "the State has made no effort to segregate [the corporation's] interest and tax it." Id., at 187. The Court stated, however: "Actual possession and custody of Government property nearly always are in someone who is not himself the Government but acts in its behalf and for its purposes... . His personal advantages from the relationship by way of salary, profit or beneficial personal use of the property may be taxed as we have held." Id., at 187-188. (Emphasis added.) This statement ripened into holdings in United States v. City of Detroit, supra, at 472, and United States v. Township of Muskegon, . The only difference between Township of Muskegon - where Government-owned property was being used by a private corporation in complying with a Government contract - and this case is that there the property was being used by business for "profit" and here the property is being put to "beneficial personal use." Under the rule of United States v. Allegheny County and United States v. City of Detroit, this difference is inconsequential. The two types of interests are equally taxable.In conclusion, as the Court said in City of Detroit v. Murray Corp., 355 U.S., at 495: "There was no discrimination against the Federal Government, its property or those with whom it does business. There was no crippling obstruction of any of the Government's functions, no sinister effort to hamstring its power, not even the slightest interference with its property. Cf. M`Culloch v. Maryland, 4 Wheat. 316. In such circumstances the Congress is the proper agency, as we pointed out in United States v. City of Detroit, to make the difficult policy decisions necessarily involved in determining whether and to what extent private parties who do business with the Government should be given immunity from states taxes." Affirmed. |
0 | At a jury in a Federal District Court in which petitioner was convicted of unlawfully dispensing certain drugs without a prescription from a licensed physician, in violation of 21 U.S.C. 331 (k), the judge refused to permit the Government to introduce evidence that petitioner had previously practiced medicine without a license; but some of the jurors saw and read newspaper articles alleging that he had a record of two previous felony convictions and reciting other defamatory matters about him. Upon being questioned, each of these jurors assured the judge that he would not be influenced by the news articles and that he could decide the case only on the evidence of record. Held: The harm to petitioner that resulted when prejudicial information denied admission into evidence was brought before jurors through newspapers requires that a new trial be granted. Pp. 310-313. 258 F.2d 94, reversed.George J. Francis argued the cause for petitioner. With him on the brief were Omer Griffin and Frances De Lost.James W. Knapp argued the cause for the United States. On the brief were Solicitor General Rankin, Assistant Attorney General Anderson and Beatrice Rosenberg.PER CURIAM.Petitioner was convicted of unlawfully dispensing a number of dextro amphetamine sulfate tablets, a drug within the scope of 21 U.S.C. 353 (b) (1) (B), without a prescription from a licensed physician, which resulted in misbranding and violation of 21 U.S.C. 331 (k). The Court of Appeals affirmed, one judge dissenting, 258 F.2d 94. The case is here on a petition for certiorari, 28 U.S.C. 1254 (1), which we granted because of doubts whether exposure of some of the jurors to newspaper articles about petitioner was so prejudicial in the setting of the case as to warrant the exercise of our supervisory power to order a new trial. .Petitioner never took the stand; nor did he offer any evidence. A government agent testified that he was introduced to petitioner as a salesman who had difficulty staying awake on long automobile trips and that on two occasions he obtained these tablets from petitioner. Petitioner asked the trial judge to rule there was entrapment as a matter of law. The judge refused so to hold and submitted the issue of entrapment with appropriate instructions to the jury. Cf. Masciale v. United States, . The Government asked to be allowed to prove that petitioner had previously practiced medicine without a license, as tending to refute the defense of entrapment. The trial judge refused this offer saying, "It would be just like offering evidence that he picked pockets or was a petty thief or something of that sort which would have no bearing on the issue and would tend to raise a collateral issue and I think would be prejudicial to the defendant."Yet during the trial two newspapers containing such information got before a substantial number of jurors. One news account said: "Marshall has a record of two previous felony convictions. "In 1953, while serving a forgery sentence in the State Penitentiary at McAlester, Okla., Marshall testified before a state legislative committee studying new drug laws for Oklahoma. "At that time, he told the committee that although he had only a high school education, he practiced medicine with a $25 diploma he received through the mails. He told in detail of the ease in which he wrote and passed prescriptions for dangerous drugs." The other news account said: "The defendant was Howard R. (Tobey) Marshall, once identified before a committee of the Oklahoma Legislature as a man who acted as a physician and prescribed restricted drugs for Hank Williams before the country singer's death in December, 1953. ... . . "Marshall was arrested with his wife, Edith Every Marshall, 56, in June, 1956. She was convicted on the drug charges in Federal District Court here in November and was sentenced to 60 days in jail. "Records show that Marshall once served a term in the Oklahoma penitentiary for forgery. There is no evidence he is a doctor, court attaches said." The trial judge on learning that these news accounts had reached the jurors summoned them into his chamber one by one and inquired if they had seen the articles. Three had read the first of the two we have listed above and one had read both. Three others had scanned the first article and one of those had also seen the second. Each of the seven told the trial judge that he would not be influenced by the news articles, that he could decide the case only on the evidence of record, and that he felt no prejudice against petitioner as a result of the articles. The trial judge, stating he felt there was no prejudice to petitioner, denied the motion for mistrial.The trial judge has a large discretion in ruling on the issue of prejudice resulting from the reading by jurors of news articles concerning the trial. Holt v. United States, . Generalizations beyond that statement are not profitable, because each case must turn on its special facts. We have here the exposure of jurors to information of a character which the trial judge ruled was so prejudicial it could not be directly offered as evidence. The prejudice to the defendant is almost certain to be as great when that evidence reaches the jury through news accounts as when it is a part of the prosecution's evidence. Cf. Michelson v. United States, . It may indeed be greater for it is then not tempered by protective procedures.In the exercise of our supervisory power to formulate and apply proper standards for enforcement of the criminal law in the federal courts (Bruno v. United States, ; McNabb v. United States, ) we think a new trial should be granted. Reversed.MR. JUSTICE BLACK dissents. |
9 | The Age Discrimination in Employment Act of 1967 (ADEA or Act), as amended, makes it unlawful for an employer, including a State, "to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual ... because of such individual's age." 29 U. S. C. §623(a)(1). Petitioners, three sets of plaintiffs, filed suit under the ADEA against respondents, their state employers. Petitioners' suits sought money damages for respondents' alleged discrimination on the basis of age. Respondents in all three cases moved to dismiss the suits on the basis of the Eleventh Amendment. The District Court in one case granted the motion to dismiss, while in each of the remaining cases the District Court denied the motion. All three decisions were appealed and consolidated before the Eleventh Circuit. Petitioner United States intervened on appeal to defend the constitutionality of the ADEA's abrogation of the States' Eleventh Amendment immunity. In a divided panel opinion, the Eleventh Circuit held that the ADEA does not abrogate the States' Eleventh Amendment immunity.Held: Although the ADEA does contain a clear statement of Congress' intent to abrogate the States' immunity, that abrogation exceeded Congress' authority under §5 of the Fourteenth Amendment. Pp. 7-28. (a) The ADEA satisfies the simple but stringent test this Court uses to determine whether a federal statute properly subjects States to suits by individuals: Congress made its intention to abrogate the States' immunity unmistakably clear in the language of the statute. Dellmuth v. Muth,491 U. S. 223, 228. The ADEA states that its provisions "shall be enforced in accordance with the powers, remedies, and procedures provided in sections 211(b), 216 (except for subsection (a) thereof), and 217 of this title, and subsection (c) of this section." 29 U. S. C. §626(b). Section 216(b), in turn, authorizes employees to maintain actions for backpay "against any employer (including a public agency) in any Federal or State court of competent jurisdiction ... ." Section 203(x) defines "public agency" to include "the government of a State or political subdivision thereof," and "any agency of ... a State, or a political subdivision of a State." The text of §626(b) forecloses respondents' claim that the existence of an enforcement provision in the ADEA itself renders Congress' intent to incorporate §216(b)'s clear statement of abrogation ambiguous. Congress' use of the phrase "court of competent jurisdiction" in §216(b) also does not render its intent to abrogate less than clear. Finally, because the clear statement inquiry focuses on what Congress did enact, not when it did so, the Court will not infer ambiguity from the sequence in which a clear textual statement is added to a statute. Pp. 8-13. (b) This Court held in EEOC v. Wyoming,460 U. S. 226, 243, that the ADEA constitutes a valid exercise of Congress' Article I Commerce Clause power. Congress' powers under Article I, however, do not include the power to subject States to suit at the hands of private individuals. Seminole Tribe of Fla. v. Florida,517 U. S. 44, 72-73. Section 5 of the Fourteenth Amendment does grant Congress the authority to abrogate the States' sovereign immunity. Fitzpatrick v. Bitzer,427 U. S. 445, 456. Pp. 13-16. (c) Section 5 of the Fourteenth Amendment is an affirmative grant of power to Congress. City of Boerne v. Flores,521 U. S. 507, 517. That power includes the authority both to remedy and to deter the violation of rights guaranteed thereunder by prohibiting a somewhat broader swath of conduct, including that which is not itself forbidden by the Amendment's text. Congress cannot, however, decree the substance of the Fourteenth Amendment's restrictions on the States. Id., at 519. The ultimate interpretation and determination of the Amendment's substantive meaning remains the province of the Judicial Branch. This Court has held that for remedial legislation to be appropriate under §5, "[t]here must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end." Id., at 520. Pp. 16-18. (d) The ADEA is not "appropriate legislation" under §5 of the Fourteenth Amendment. The ADEA's purported abrogation of the States' sovereign immunity is accordingly invalid. Pp. 18-27. (1) The substantive requirements the ADEA imposes on state and local governments are disproportionate to any unconstitutional conduct that conceivably could be targeted by the Act. Age is not a suspect classification under the Equal Protection Clause. See, e.g., Gregory v. Ashcroft,501 U. S. 452, 470. States therefore may discriminate on the basis of age without offending the Fourteenth Amendment if the age classification in question is rationally related to a legitimate state interest. The rationality commanded by the Equal Protection Clause does not require States to match age distinctions and the legitimate interests they serve with razorlike precision. Rather, a State may rely on age as a proxy for other qualities, abilities, or characteristics that are relevant to the State's legitimate interests. That age proves to be an inaccurate proxy in any individual case is irrelevant. Judged against the backdrop of this Court's equal protection jurisprudence, it is clear that the ADEA is "so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or designed to prevent, unconstitutional behavior." City of Boerne,supra, at 532. The Act, through its broad restriction on the use of age as a discriminating factor, prohibits substantially more state employment decisions and practices than would likely be held unconstitutional under the applicable equal protection, rational basis standard. Petitioners' reliance on the "bona fide occupational qualification" defense of §623(f)(1) is misplaced. This Court's decision in Western Air Lines, Inc. v. Criswell,472 U. S. 400, conclusively demonstrates that the defense is a far cry from the rational basis standard the Court applies to age discrimination under the Equal Protection Clause. Although it is true that the existence of the defense makes the ADEA's prohibition of age discrimination less than absolute, the Act's substantive requirements nevertheless remain at a level akin to the Court's heightened scrutiny cases under the Equal Protection Clause. The exception in §623(f)(1) that permits employers to engage in conduct otherwise prohibited by the Act "where the differentiation is based on reasonable factors other than age" confirms, rather than disproves, the conclusion that the ADEA extends beyond the requirements of the Equal Protection Clause. That exception makes clear that the employer cannot rely on age as a proxy for an employee's characteristics, Hazen Paper Co. v. Biggins,507 U. S. 604, 611, whereas the Constitution permits such reliance, see, e.g., Gregory, supra, at 473. Pp. 18-24. (2) That the ADEA prohibits very little conduct likely to be held unconstitutional, while significant, does not alone provide the answer to the §5 inquiry. Difficult and intractable problems often require powerful remedies, and this Court has never held that §5 precludes Congress from enacting reasonably prophylactic legislation. One means by which the Court has determined the difference between a statute that constitutes an appropriate remedy and one that attempts to substantively redefine the States' legal obligations is by examining the legislative record containing the reasons for Congress' action. See, e.g., City of Boerne, supra, at 530-531. A review of the ADEA's legislative record as a whole reveals that Congress had virtually no reason to believe that state and local governments were unconstitutionally discriminating against their employees on the basis of age. Congress never identified any pattern of age discrimination by the States, much less any discrimination whatsoever that rose to the level of constitutional violation. That failure confirms that Congress had no reason to believe that broad prophylactic legislation was necessary in this field. Pp. 24-27. (e) Today's decision does not signal the end of the line for employees who find themselves subject to age discrimination at the hands of their state employers. Those employees are protected by state age discrimination statutes, and may recover money damages from their state employers, in almost every State of the Union. Pp. 27-28.139 F. 3d 1426, affirmed. O'Connor, J., delivered the opinion of the Court, Parts I, II, and IV of which were joined by Rehnquist, C. J., and Scalia, Kennedy, and Thomas, JJ., and Part III of which was joined by Rehnquist, C. J., and Stevens, Scalia, Souter, Ginsburg, and Breyer, JJ.Stevens, J., filed an opinion dissenting in part and concurring in part, in which Souter, Ginsburg, and Breyer, JJ., joined. Thomas, J., filed an opinion concurring in part and dissenting in part, in which Kennedy, J., joined. J. DANIEL KIMEL, Jr., et al., PETITIONERS98-791 v.FLORIDA BOARD OF REGENTS et al.UNITED STATES, PETITIONER98-796 v.FLORIDA BOARD OF REGENTS et al.on writs of certiorari to the united states court ofappeals for the eleventh circuit[January 11, 2000] Justice O'Connor delivered the opinion of the Court. The Age Discrimination in Employment Act of 1967 (ADEA or Act), 81 Stat. 602, as amended, 29 U. S. C. §621 et seq. (1994 ed. and Supp. III), makes it unlawful for an employer, including a State, "to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual ... because of such individual's age." 29 U. S. C. §623(a)(1). In these cases, three sets of plaintiffs filed suit under the Act, seeking money damages for their state employers' alleged discrimination on the basis of age. In each case, the state employer moved to dismiss the suit on the basis of its Eleventh Amendment immunity. The District Court in one case granted the motion to dismiss, while in each of the remaining cases the District Court denied the motion. Appeals in the three cases were consolidated before the Court of Appeals for the Eleventh Circuit, which held that the ADEA does not validly abrogate the States' Eleventh Amendment immunity. In these cases, we are asked to consider whether the ADEA contains a clear statement of Congress' intent to abrogate the States' Eleventh Amendment immunity and, if so, whether the ADEA is a proper exercise of Congress'constitutional authority. We conclude that the ADEAdoes contain a clear statement of Congress' intent to abrogate the States' immunity, but that the abrogation exceeded Congress' authority under §5 of the Fourteenth Amendment.IA The ADEA makes it unlawful for an employer "to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." 29 U. S. C. §623(a)(1). The Act also provides several exceptions to this broad prohibition. For example, an employer may rely on age where it "is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business." §623(f)(1). The Act also permits an employer to engage in conduct otherwise prohibited by §623(a)(1) if the employer's action "is based on reasonable factors other than age," §623(f)(1), or if the employer "discharge[s] or otherwise discipline[s] an individual for good cause," §623(f)(3). Although the Act's prohibitions originally applied only to individuals "at least forty years of age but less than sixty-five years of age," 81 Stat. 607, 29 U. S. C. §631 (1964 ed., Supp. III), Congress subsequently removed the upper age limit, and the Act now covers individuals age 40 and over, 29 U. S. C. §631(a). Any person aggrieved by an employer's violation of the Act "may bring a civil action in any court of competent jurisdiction" for legal or equitable relief. §626(c)(1). Section 626(b) also permits aggrieved employees to enforce the Act through certain provisions of the Fair Labor Standards Act of 1938 (FLSA), and the ADEA specifically incorporates §16(b) of the FLSA, 29 U. S. C. §216(b). Since its enactment, the ADEA's scope of coverage has been expanded by amendment. Of particular importance to these cases is the Act's treatment of state employers and employees. When first passed in 1967, the ADEA applied only to private employers. See 29 U. S. C. §630(b) (1964 ed., Supp. III) (defining term "employer" to exclude "the United States, a corporation wholly owned by the Government of the United States, or a State or political subdivision thereof "). In 1974, in a statute consisting primarily of amendments to the FLSA, Congress extended application of the ADEA's substantive requirements to the States. Fair Labor Standards Amendments of 1974 (1974 Act), §28, 88 Stat. 74. Congress accomplished that expansion in scope by a simple amendment to the definition of "employer" contained in 29 U. S. C. §630(b): "The term [employer] also means ... a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State ... ." Congress also amended the ADEA's definition of "employee," still defining the term to mean "an individual employed by any employer," but excluding elected officials and appointed policymakers at the state and local levels. §630(f). In the same 1974 Act, Congress amended 29 U. S. C. §216(b), the FLSA enforcement provision incorporated by reference into the ADEA. 88 Stat. 61. Section 216(b) now permits an individual to bring a civil action "against any employer (including a public agency) in any Federal or State court of competent jurisdiction." Section 203(x) defines "[p]ublic agency" to include "the Government of a State or political subdivision thereof," and "any agency of ... a State, or a political subdivision of a State." Finally, in the 1974 Act, Congress added a provision prohibiting age discrimination generally in employment at the Federal Government. 88 Stat. 74, 29 U. S. C. §633a (1994 ed. and Supp. III). Under the current ADEA, mandatory age limits for law enforcement officers and firefighters — at federal, state, and local levels — are exempted from the statute's coverage. 5 U. S. C. §§3307(d), (e); 29 U. S. C. §623(j) (1994 ed., Supp. III).B In December 1994, Roderick MacPherson and Marvin Narz, ages 57 and 58 at the time, filed suit under the ADEA against their employer, the University of Montevallo, in the United States District Court for the Northern District of Alabama. In their complaint, they alleged that the university had discriminated against them on the basis of their age, that it had retaliated against them for filing discrimination charges with the Equal Employment Opportunity Commission (EEOC), and that its College of Business, at which they were associate professors, employed an evaluation system that had a disparate impact on older faculty members. MacPherson and Narz sought declaratory and injunctive relief, backpay, promotions to full professor, and compensatory and punitive damages. App. 21-25. The University of Montevallo moved to dismiss the suit for lack of subject matter jurisdiction, contending it was barred by the Eleventh Amendment. No party disputes the District Court's holding that the University is an instrumentality of the State of Alabama. On September 9, 1996, the District Court granted the University's motion. MacPherson v. University of Montevallo, Civ. Action No. 94-AR-2962-S (ND Ala., Sept. 9, 1996), App. to Pet. for Cert. in No. 98-796, pp. 63a-71a. The court determined that, although the ADEA contains a clear statement of Congress' intent to abrogate the States' Eleventh Amendment immunity, Congress did not enact or extend the ADEA under its Fourteenth Amendment §5 enforcement power. Id., at 67a, 69a-70a. The District Court therefore held that the ADEA did not abrogate the States' Eleventh Amendment immunity. Id., at 71a. In April 1995, a group of current and former faculty and librarians of Florida State University, including J. Daniel Kimel, Jr., the named petitioner in one of today's cases, filed suit against the Florida Board of Regents in the United States District Court for the Northern District of Florida. Complaint and Demand for Jury Trial in No. 95-CV-40194, 1 Record, Doc. No. 2. The complaint was subsequently amended to add as plaintiffs current and former faculty and librarians of Florida International University. App. 41. The plaintiffs, all over age 40, alleged that the Florida Board of Regents refused to require the two state universities to allocate funds to provide previously agreed upon market adjustments to the salaries of eligible university employees. The plaintiffs contended that the failure to allocate the funds violated both the ADEA and the Florida Civil Rights Act of 1992, Fla. Stat. §760.01 et seq. (1997 and Supp. 1998), because it had a disparate impact on the base pay of employees with a longer record of service, most of whom were older employees. App. 42-45. The plaintiffs sought backpay, liquidated damages, and permanent salary adjustments as relief. Id., at 46. The Florida Board of Regents moved to dismiss the suit on the grounds of Eleventh Amendment immunity. On May 17, 1996, the District Court denied the motion, holding that Congress expressed its intent to abrogate the States' Eleventh Amendment immunity in the ADEA, and that the ADEA is a proper exercise of congressional authority under the Fourteenth Amendment. No. TCA 95-40194-MMP (ND Fla., May 17, 1996), App. to Pet. for Cert. in No. 98-796, pp. 57a-62a. In May 1996, Wellington Dickson filed suit against his employer, the Florida Department of Corrections, in the United States District Court for the Northern District of Florida. Dickson alleged that the state employer failed to promote him because of his age and because he had filed grievances with respect to the alleged acts of age discrimination. Dickson sought injunctive relief, backpay, and compensatory and punitive damages. App. 83-109. The Florida Department of Corrections moved to dismiss the suit on the grounds that it was barred by the Eleventh Amendment. The District Court denied that motion on November 5, 1996, holding that Congress unequivocally expressed its intent to abrogate the States' Eleventh Amendment immunity in the ADEA, and that Congress had authority to do so under §5 of the Fourteenth Amendment. Dickson v. Florida Dept. of Corrections, No. 5:9cv207-RH (ND Fla., Nov. 5, 1996), App. to Pet. for Cert. in No. 98-796, pp. 72a-76a. The plaintiffs in the MacPherson case, and the state defendants in the Kimel and Dickson cases, appealed to the Court of Appeals for the Eleventh Circuit. The United States also intervened in all three cases to defend the ADEA's abrogation of the States' Eleventh Amendment immunity. The Court of Appeals consolidated the appeals and, in a divided panel opinion, held that the ADEA does not abrogate the States' Eleventh Amendment immunity. 139 F. 3d 1426, 1433 (1998). Judge Edmondson, although stating that he believed "good reason exists to doubt that the ADEA was (or could have been properly) enacted pursuant to the Fourteenth Amendment," id., at 1430, rested his opinion on the ADEA's lack of unmistakably clear language evidencing Congress' intent to abrogate the States' sovereign immunity. Ibid. He noted that the ADEA lacks any reference to the Eleventh Amendment or to the States' sovereign immunity and does not contain, in one place, a plain statement that States can be sued by individuals in federal court. Id., at 1430-1431. Judge Cox concurred in Judge Edmondson's ultimate conclusion that the States are immune from ADEA suits brought by individuals in federal court. Id., at 1444. Judge Cox, however, chose not to address "the thorny issue of Congress's intent," id., at 1445, but instead found that Congress lacks the power under §5 of the Fourteenth Amendment to abrogate the States' Eleventh Amendment immunity under the ADEA. Ibid. He concluded that "the ADEA confers rights far more extensive than those the Fourteenth Amendment provides," id., at 1446, and that "Congress did not enact the ADEA as a proportional response to any widespread violation of the elderly's constitutional rights." Id., at 1447. Chief Judge Hatchett dissented from both grounds. Id., at 1434. We granted certiorari, 525 U. S. 1121 (1999), to resolve a conflict among the Federal Courts of Appeals on the question whether the ADEA validly abrogates the States' Eleventh Amendment immunity. Compare Cooper v. New York State Office of Mental Health, 162 F. 3d 770 (CA2 1998) (holding that the ADEA does validly abrogate the States' Eleventh Amendment immunity), cert. pending, No. 98-1524; Migneault v. Peck, 158 F. 3d 1131 (CA10 1998) (same), cert. pending, No. 98-1178; Coger v. Board of Regents of the State of Tenn., 154 F. 3d 296 (CA6 1998) (same), cert. pending, No. 98-821; Keeton v. University of Nev. System, 150 F. 3d 1055 (CA9 1998) (same); Scott v. University of Miss., 148 F. 3d 493 (CA5 1998) (same); and Goshtasby v. Board of Trustees of the Univ. of Ill., 141 F. 3d 761 (CA7 1998) (same), with Humenansky v. Regents of Univ. of Minn., 152 F. 3d 822 (CA8 1998) (holding that the ADEA does not validly abrogate the States' Eleventh Amendment immunity), cert. pending, No. 98-1235; and 139 F. 3d 1426 (CA11 1998) (case below).II The Eleventh Amendment states: "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."Although today's cases concern suits brought by citizens against their own States, this Court has long " `understood the Eleventh Amendment to stand not so much for what it says, but for the presupposition ... which it confirms.' " Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 54 (1996) (quoting Blatchford v. Native Village of Noatak, 501 U. S. 775, 779 (1991)). Accordingly, for over a century now, we have made clear that the Constitution does not provide for federal jurisdiction over suits against nonconsenting States. College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. ____, ____ (1999) (slip op., at 2-3); Seminole Tribe, supra, at 54; see Hans v. Louisiana, 134 U. S. 1, 15 (1890). Petitioners nevertheless contend that the States of Alabama and Florida must defend the present suits on the merits because Congress abrogated their Eleventh Amendment immunity in the ADEA. To determine whether petitioners are correct, we must resolve two predicate questions: first, whether Congress unequivocally expressed its intent to abrogate that immunity; and second, if it did, whether Congress acted pursuant to a valid grant of constitutional authority. Seminole Tribe, supra, at 55.III To determine whether a federal statute properly subjects States to suits by individuals, we apply a "simple but stringent test: `Congress may abrogate the States' constitutionally secured immunity from suit in federal court only by making its intention unmistakably clear in the language of the statute.' " Dellmuth v. Muth,491 U. S. 223, 228 (1989) (quoting Atascadero State Hospital v. Scanlon,473 U. S. 234, 242 (1985)). We agree with petitioners that the ADEA satisfies that test. The ADEA states that its provisions "shall be enforced in accordance with the powers, remedies, and procedures provided in sections 211(b), 216 (except for subsection (a) thereof), and 217 of this title, and subsection (c) of this section." 29 U. S. C. §626(b). Section 216(b), in turn, clearly provides for suits by individuals against States. That provision authorizes employees to maintain actions for backpay "against any employer (including a public agency) in any Federal or State court of competent jurisdiction ... ." Any doubt concerning the identity of the "public agency" defendant named in §216(b) is dispelled by looking to §203(x), which defines the term to include "the government of a State or political subdivision thereof," and "any agency of ... a State, or a political subdivision of a State." Read as a whole, the plain language of these provisions clearly demonstrates Congress' intent to subject the States to suit for money damages at the hands of individual employees. Respondents maintain that these statutory sections are less than "unmistakably clear" for two reasons. Brief for Respondents 15. First, they note that the ADEA already contains its own enforcement provision, §626(c)(1), which provides in relevant part that "[a]ny person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter." Respondents claim that the existence of §626(c)(1) renders Congress' intent to incorporate the clear statement of abrogation in §216(b), the FLSA's enforcement provision, ambiguous. The text of the ADEA forecloses respondents' argument. Section 626(b) clearly states that the ADEA "shall be enforced in accordance with the powers, remedies, and procedures provided in [section 216(b)] and subsection (c) of this section." §626(b) (emphasis added). In accord with that statutory language, we have explained repeatedly that §626(b) incorporates the FLSA's enforcement provisions, and that those remedial options operate together with §626(c)(1). See McKennon v. Nashville Banner Publishing Co.,513 U. S. 352, 357 (1995) ("[The ADEA's] remedial provisions incorporate by reference the provisions of the Fair Labor Standards Act of 1938"); Hoffman-La Roche Inc. v. Sperling,493 U. S. 165, 167 (1989) ("[T]he ADEA incorporates enforcement provisions of the Fair Labor Standards Act of 1938, and provides that the ADEA shall be enforced using certain of the powers, remedies, and procedures of the FLSA" (citation omitted)); Lorillard v. Pons,434 U. S. 575, 582 (1978) ("[B]ut for those changes Congress expressly made [in the ADEA], it intended to incorporate fully the remedies and procedures of the FLSA"). Respondents' argument attempts to create ambiguity where, according to the statute's text and this Court's repeated interpretations thereof, there is none. Respondents next point to the phrase "court of competent jurisdiction" in §216(b), and contend that it makes Congress' intent to abrogate less than clear. Relying on our decision in the distinct context of a state waiver of sovereign immunity, Kennecott Copper Corp. v. State Tax Comm'n,327 U. S. 573 (1946), respondents maintain that perhaps Congress simply intended to permit an ADEA suit against a State only in those cases where the State previously has waived its Eleventh Amendment immunity to suit. We disagree. Our decision in Kennecott Copper must be read in context. The petitioner there contended that Utah had waived its Eleventh Amendment immunity to suit in federal court through a state statute that authorized taxpayers to pay their taxes under protest and " `thereafter bring an action in any court of competent jurisdiction for the return thereof ... .' " Id., at 575, n. 1 (quoting Utah Code Ann. §80-5-76 (1943)). Although the statute undoubtedly provided for suit against the State of Utah in its own courts, we held that the statute fell short of the required "clear declaration by a State of its consent to be sued in the federal courts." 327 U. S., at 579-580 (emphasis added). Section 216(b) contains no such ambiguity. The statute authorizes employee suits against States "in any Federal or State court of competent jurisdiction." §216(b) (emphasis added). That language eliminates the ambiguity identified in Kennecott Copper--whether Utah intended to permit suits against the sovereign in state court only, or in state and federal court. Under §216(b), the answer to that question is clear — actions may be maintained in federal and state court. That choice of language sufficiently indicates Congress' intent, in the ADEA, to abrogate the States' Eleventh Amendment immunity to suits by individuals. Although Justice Thomas concedes in his opinion that our cases have never required that Congress make its clear statement in a single section or in statutory provisions enacted at the same time, post, at 7, he concludes that the ADEA lacks the requisite clarity because of the "sequence of events" surrounding the enactment and amendment of §§216(b) and 626(b), post, at 4. Justice Thomas states that he is unwilling to assume that when Congress amended §216(b) in 1974, it recognized the consequences that amendment would have for the ADEA. Post, at 5. We respectfully disagree. The fact that Congress amended the ADEA itself in the same 1974 Act makes it more than clear that Congress understood the consequences of its actions. Indeed, Congress amended §216(b) to provide for suits against States in precisely the same Act in which it extended the ADEA's substantive requirements to the States. See 1974 Act, §6(d)(1), 88 Stat. 61 (amending §216(b)); §28(a), 88 Stat. 74 (extending ADEA to the States). Those provisions confirm for us that the effect on the ADEA of the §216(b) amendment was not mere happenstance. In any event, we have never held that Congress must speak with different gradations of clarity depending on the specific circumstances of the relevant legislation (e.g., amending incorporated provisions as opposed to enacting a statute for the first time). The clear statement inquiry focuses on what Congress did enact, not when it did so. We will not infer ambiguity from the sequence in which a clear textual statement is added to a statute. We also disagree with Justice Thomas' remaining points, see post, at 7-12. Although the ADEA does contain its own enforcement provision in §626(c)(1), the text of §626(b) acknowledges §626(c)(1)'s existence and makes clear that the ADEA also incorporates §216(b), save as indicated otherwise in §626(b)'s proviso. See §626(b) ("The provisions of this chapter shall be enforced in accordance with the powers, remedies, and procedures provided in sectio[n] ... 216 (except for subsection (a) thereof) ... and subsection (c) of this section" (emphasis added)). We fail to see how the interpretation suggested by Justice Thomas, under which §626(b) would carry over only those §216(b) "embellishments" not already provided for in §626(c)(1) except for the authorization of suits against States, see post, at 9, could be a permissible one. To accept that interpretation, for example, one would have to conclude that Congress intended to incorporate only the portion of §216(b)'s third sentence that provides for collective actions, but not the part of the very same sentence that authorizes suits against States. See §216(b) ("An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated"). Justice Thomas also concludes that §216(b) itself fails the clear statement test. Post, at 10-12. As we have already explained, the presence of the word "competent" in §216(b) does not render that provision less than "unmistakably clear." See supra, at 10-11. Justice Thomas' reliance on a single phrase from our decision in Employees of Dept. of Public Health and Welfare of Mo. v. Department of Public Health and Welfare of Mo.,411 U. S. 279 (1973), see post, at 11, as support for the contrary proposition is puzzling, given his separate argument with respect to §6(d)(2)(A) of the 1974 Act. Crucial to Justice Thomas' argument on that front is his acknowledgement that Congress did intend in the 1974 amendments to permit "FLSA plaintiffs who had been frustrated by state defendants' invocation of Eleventh Amendment immunity under Employees to avail themselves of the newly amended §216(b)." Post, at 5; see also post, at 11-12. We agree with the implication of that statement: In response to Employees, Congress clearly intended through "the newly amended §216(b)" to abrogate the States' sovereign immunity. In light of our conclusion that Congress unequivocally expressed its intent to abrogate the States' Eleventh Amendment immunity, we now must determine whether Congress effectuated that abrogation pursuant to a valid exercise of constitutional authority.IVA This is not the first time we have considered the constitutional validity of the 1974 extension of the ADEA to state and local governments. In EEOC v. Wyoming, 460 U. S. 226, 243 (1983), we held that the ADEA constitutes a valid exercise of Congress' power "[t]o regulate Commerce ... among the several States," Art. I, §8, cl. 3, and that the Act did not transgress any external restraints imposed on the commerce power by the Tenth Amendment. Because we found the ADEA valid under Congress' Commerce Clause power, we concluded that it was unnecessary to determine whether the Act also could be supported by Congress' power under §5 of the Fourteenth Amendment. Wyoming, 460 U. S., at 243. But see id., at 259-263 (Burger, C. J., dissenting). Resolution of today's cases requires us to decide that question. In Seminole Tribe, we held that Congress lacks power under Article I to abrogate the States' sovereign immunity. 517 U. S., at 72-73. "Even when the Constitution vests in Congress complete lawmaking authority over a particular area, the Eleventh Amendment prevents congressional authorization of suits by private parties against unconsenting States." Id., at 72. Last Term, in a series of three decisions, we reaffirmed that central holding of Seminole Tribe. See College Savings Bank, 527 U. S., at ____ (slip op., at 4); Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. ____, ____ (1999) (slip op., at 6-7); Alden v. Maine, 527 U. S. ____, ____ (1999) (slip op., at 1-2). Indeed, in College Savings Bank, we rested our decision to overrule the constructive waiver rule of Parden v. Terminal R. Co. of Ala. Docks Dept.,377 U. S. 184 (1964), in part, on our Seminole Tribe holding. See College Savings Bank, supra, at ____ (slip op., at 16) ("Recognizing a congressional power to exact constructive waivers of sovereign immunity through the exercise of Article I powers would also, as a practical matter, permit Congress to circumvent the antiabrogation holding of Seminole Tribe"). Under our firmly established precedent then, if the ADEA rests solely on Congress' Article I commerce power, the private petitioners in today's cases cannot maintain their suits against their state employers. Justice Stevens disputes that well-established precedent again. Compare post, at 1-7, with Alden, supra, at ____ (slip op., at 1-58) (Souter, J., dissenting); College Savings Bank, 527 U. S., at ____ (slip op., at 2, n. 2) (Stevens, J., dissenting); id., at ____ (slip op., at 7-13) (Breyer, J., dissenting); Florida Prepaid, supra, at ____ (slip op., at 18-19) (Stevens, J., dissenting); Seminole Tribe, 517 U. S., at 76-100 (Stevens, J., dissenting); id., at 100-185 (Souter, J., dissenting). In Alden, we explained that, "[a]lthough the sovereign immunity of the States derives at least in part from the common-law tradition, the structure and history of the Constitution make clear that the immunity exists today by constitutional design." 527 U. S., at ____ (slip op., at 23-24). For purposes of today's decision, it is sufficient to note that we have on more than one occasion explained the substantial reasons for adhering to that constitutional design. See id., at ____ (slip op., at 2-45); College Savings Bank, supra, at ____ (slip op., at 1-2, 20-24); Seminole Tribe, supra, at 54-55, 59-73; Pennsylvania v. Union Gas Co.,491 U. S. 1, 30-42 (1989) (Scalia, J., concurring in part and dissenting in part). Indeed, the present dissenters' refusal to accept the validity and natural import of decisions like Hans, rendered over a full century ago by this Court, makes it difficult to engage in additional meaningful debate on the place of state sovereign immunity in the Constitution. Compare Hans, 134 U. S., at 10, 14-16, with post, at 5-6. Today we adhere to our holding in Seminole Tribe: Congress' powers under Article I of the Constitution do not include the power to subject States to suit at the hands of private individuals. Section 5 of the Fourteenth Amendment, however, does grant Congress the authority to abrogate the States' sovereign immunity. In Fitzpatrick v. Bitzer, 427 U. S. 445 (1976), we recognized that "the Eleventh Amendment, and the principle of state sovereignty which it embodies, are necessarily limited by the enforcement provisions of §5 of the Fourteenth Amendment." Id., at 456 (citation omitted). Since our decision in Fitzpatrick, we have reaffirmed the validity of that congressional power on numerous occasions. See, e.g., College Savings Bank, supra, at ____ (slip op., at 2); Florida Prepaid, supra, at ____ (slip op., at 7-8); Alden, supra, at ____ (slip op., at 46-48); Seminole Tribe, supra, at 59. Accordingly, the private petitioners in these cases may maintain their ADEA suits against the States of Alabama and Florida if, and only if, the ADEA is appropriate legislation under §5.B The Fourteenth Amendment provides, in relevant part:"Section 1. ... No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."... . ."Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article."As we recognized most recently in City of Boerne v. Flores, 521 U. S. 507, 517 (1997), §5 is an affirmative grant of power to Congress. "It is for Congress in the first instance to `determin[e] whether and what legislation is needed to secure the guarantees of the Fourteenth Amendment,' and its conclusions are entitled to much deference." Id., at 536 (quoting Katzenbach v. Morgan, 384 U. S. 641, 651 (1966)). Congress' §5 power is not confined to the enactment of legislation that merely parrots the precise wording of the Fourteenth Amendment. Rather, Congress' power "to enforce" the Amendment includes the authority both to remedy and to deter violation of rights guaranteed thereunder by prohibiting a somewhat broader swath of conduct, including that which is not itself forbidden by the Amendment's text. 521 U. S., at 518. Nevertheless, we have also recognized that the same language that serves as the basis for the affirmative grant of congressional power also serves to limit that power. For example, Congress cannot "decree the substance of the Fourteenth Amendment's restrictions on the States. ... It has been given the power `to enforce,' not the power to determine what constitutes a constitutional violation." Id., at 519 (emphases added). The ultimate interpretation and determination of the Fourteenth Amendment's substantive meaning remains the province of the Judicial Branch. Id., at 536. In City of Boerne, we noted that the determination whether purportedly prophylactic legislation constitutes appropriate remedial legislation, or instead effects a substantive redefinition of the Fourteenth Amendment right at issue, is often difficult. Id., at 519-520. The line between the two is a fine one. Accordingly, recognizing that "Congress must have wide latitude in determining where [that line] lies," we held that "[t]here must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end." Id., at 520. In City of Boerne, we applied that "congruence and proportionality" test and held that the Religious Freedom Restoration Act of 1993 (RFRA) was not appropriate legislation under §5. We first noted that the legislative record contained very little evidence of the unconstitutional conduct purportedly targeted by RFRA's substantive provisions. Rather, Congress had uncovered only "anecdotal evidence" that, standing alone, did not reveal a "widespread pattern of religious discrimination in this country." Id., at 531. Second, we found that RFRA is "so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or designed to prevent, unconstitutional behavior." Id., at 532. Last Term, we again had occasion to apply the "congruence and proportionality" test. In Florida Prepaid, we considered the validity of the Eleventh Amendment abrogation provision in the Patent and Plant Variety Protection Remedy Clarification Act (Patent Remedy Act). We held that the statute, which subjected States to patent infringement suits, was not appropriate legislation under §5 of the Fourteenth Amendment. The Patent Remedy Act failed to meet our congruence and proportionality test first because "Congress identified no pattern of patent infringement by the States, let alone a pattern of constitutional violations." 527 U. S., at ____ (slip op., at 11) (emphasis added). Moreover, because it was unlikely that many of the acts of patent infringement affected by the statute had any likelihood of being unconstitutional, we concluded that the scope of the Act was out of proportion to its supposed remedial or preventive objectives. Id., at ____ (slip op., at 18-19). Instead, "[t]he statute's apparent and more basic aims were to provide a uniform remedy for patent infringement and to place States on the same footing as private parties under that regime." Id., at ____ (slip op., at 19). While we acknowledged that such aims may be proper congressional concerns under Article I, we found them insufficient to support an abrogation of the States' Eleventh Amendment immunity after Seminole Tribe. Florida Prepaid, supra, at ____ (slip op., at 19-20).C Applying the same "congruence and proportionality" test in these cases, we conclude that the ADEA is not "appropriate legislation" under §5 of the Fourteenth Amendment. Initially, the substantive requirements the ADEA imposes on state and local governments are disproportionate to any unconstitutional conduct that conceivably could be targeted by the Act. We have considered claims of unconstitutional age discrimination under the Equal Protection Clause three times. See Gregory v. Ashcroft, 501 U. S. 452 (1991); Vance v. Bradley, 440 U. S. 93 (1979); Massachusetts Bd. of Retirement v. Murgia,427 U. S. 307 (1976) (per curiam). In all three cases, we held that the age classifications at issue did not violate the Equal Protection Clause. See Gregory, supra, at 473; Bradley, supra, at 102-103, n. 20, 108-112; Murgia, supra, at 317. Age classifications, unlike governmental conduct based on race or gender, cannot be characterized as "so seldom relevant to the achievement of any legitimate state interest that laws grounded in such considerations are deemed to reflect prejudice and antipathy." Cleburne v. Cleburne Living Center, Inc.,473 U. S. 432, 440 (1985). Older persons, again, unlike those who suffer discrimination on the basis of race or gender, have not been subjected to a " `history of purposeful unequal treatment.' " Murgia, supra, at 313 (quoting San Antonio Independent School Dist. v. Rodriguez,411 U. S. 1, 28 (1973)). Old age also does not define a discrete and insular minority because all persons, if they live out their normal life spans, will experience it. 427 U. S., at 313-314. Accordingly, as we recognized in Murgia, Bradley, and Gregory, age is not a suspect classification under the Equal Protection Clause. See, e.g., Gregory, supra, at 470; Bradley, supra, at 97; Murgia, supra, at 313-314. States may discriminate on the basis of age without offending the Fourteenth Amendment if the age classification in question is rationally related to a legitimate state interest. The rationality commanded by the Equal Protection Clause does not require States to match age distinctions and the legitimate interests they serve with razorlike precision. As we have explained, when conducting rational basis review "we will not overturn such [government action] unless the varying treatment of different groups or persons is so unrelated to the achievement of any combination of legitimate purposes that we can only conclude that the [government's] actions were irrational." Bradley, supra, at 97. In contrast, when a State discriminates on the basis of race or gender, we require a tighter fit between the discriminatory means and the legitimate ends they serve. See, e.g., Adarand Constructors, Inc. v. Peña,515 U. S. 200, 227 (1995) ("[Racial] classifications are constitutional only if they are narrowly tailored measures that further compelling governmental interests"); Mississippi Univ. for Women v. Hogan,458 U. S. 718, 724 (1982) (holding that gender classifications are constitutional only if they serve " `important governmental objectives and ... the discriminatory means employed' are `substantially related to the achievement of those objectives' " (citation omitted)). Under the Fourteenth Amendment, a State may rely on age as a proxy for other qualities, abilities, or characteristics that are relevant to the State's legitimate interests. The Constitution does not preclude reliance on such generalizations. That age proves to be an inaccurate proxy in any individual case is irrelevant. "[W]here rationality is the test, a State `does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect.' " Murgia, supra, at 316 (quoting Dandridge v. Williams, 397 U. S. 471, 485 (1970)). Finally, because an age classification is presumptively rational, the individual challenging its constitutionality bears the burden of proving that the "facts on which the classification is apparently based could not reasonably be conceived to be true by the governmental decisionmaker." Bradley, supra, at 111; see Gregory, supra, at 473. Our decisions in Murgia, Bradley, and Gregory illustrate these principles. In all three cases, we held that the States' reliance on broad generalizations with respect to age did not violate the Equal Protection Clause. In Murgia, we upheld against an equal protection challenge a Massachusetts statute requiring state police officers to retire at age 50. The State justified the provision on the ground that the age classification assured the State of the physical preparedness of its officers. 427 U. S., at 314-315. Although we acknowledged that Officer Murgia himself was in excellent physical health and could still perform the duties of a state police officer, we found that the statute clearly met the requirements of the EqualProtection Clause. Id., at 311, 314-317. "That the State chooses not to determine fitness more precisely through individualized testing after age 50 [does not prove] that the objective of assuring physical fitness is not rationally furthered by a maximum-age limitation." Id., at 316. In Bradley, we considered an equal protection challenge to a federal statute requiring Foreign Service officers to retire at age 60. We explained: "If increasing age brings with it increasing susceptibility to physical difficulties, ... the fact that individual Foreign Service employees may be able to perform past age 60 does not invalidate [the statute] any more than did the similar truth undercut compulsory retirement at age 50 for uniformed state police in Murgia." 440 U. S., at 108. Finally, in Gregory, we upheld a provision of the Missouri Constitution that required judges to retire at age 70. Noting that the Missouri provision was based on a generalization about the effect of old age on the ability of individuals to serve as judges, we acknowledged that "[i]t is far from true that all judges suffer significant deterioration in performance at age 70," "[i]t is probably not true that most do," and "[i]t may not be true at all." 501 U. S., at 473. Nevertheless, because Missouri's age classification was subject only to rational basis review, we held that the State's reliance on such imperfect generalizations was entirely proper under the Equal Protection Clause. Ibid. These decisions thus demonstrate that the constitutionality of state classifications on the basis of age cannot be determined on a person-by-person basis. Our Constitution permits States to draw lines on the basis of age when they have a rational basis for doing so at a class-based level, even if it "is probably not true" that those reasons are valid in the majority of cases. Judged against the backdrop of our equal protection jurisprudence, it is clear that the ADEA is "so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or designed to prevent, unconstitutional behavior." City of Boerne, 521 U. S., at 532. The Act, through its broad restriction on the use of age as a discriminating factor, prohibits substantially more state employment decisions and practices than would likely be held unconstitutional under the applicable equal protection, rational basis standard. The ADEA makes unlawful, in the employment context, all "discriminat[ion] against any individual ... because of such individual's age." 29 U. S. C. §623(a)(1). Petitioners, relying on the Act's exceptions, dispute the extent to which the ADEA erects protections beyond the Constitution's requirements. They contend that the Act's prohibition, considered together with its exceptions, applies only to arbitrary age discrimination, which in the majority of cases corresponds to conduct that violates the Equal Protection Clause. We disagree. Petitioners stake their claim on §623(f)(1). That section permits employers to rely on age when it "is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business." Petitioners' reliance on the "bona fide occupational qualification" (BFOQ) defense is misplaced. Our interpretation of §623(f)(1) in Western Air Lines, Inc. v. Criswell,472 U. S. 400 (1985), conclusively demonstrates that the defense is a far cry from the rational basis standard we apply to age discrimination under the Equal Protection Clause. The petitioner in that case maintained that, pursuant to the BFOQ defense, employers must be permitted to rely on age when such reliance has a "rational basis in fact." Id., at 417. We rejected that argument, explaining that "[t]he BFOQ standard adopted in the statute is one of `reasonable necessity,' not reasonableness," id., at 419, and that the ADEA standard and the rational basis test are "significantly different," id., at 421. Under the ADEA, even with its BFOQ defense, the State's use of age is prima facie unlawful. See 29 U. S. C. §623(a)(1); Western Air Lines, 472 U. S., at 422 ("Under the Act, employers are to evaluate employees ... on their merits and not their age"). Application of the Act therefore starts with a presumption in favor of requiring the employer to make an individualized determination. See ibid. In Western Air Lines, we concluded that the BFOQ defense, which shifts the focus from the merits of the individual employee to the necessity for the age classification as a whole, is " `meant to be an extremely narrow exception to the general prohibition' of age discrimination contained in the ADEA." Id., at 412 (citation omitted). We based that conclusion on both the restrictive language of the statutory BFOQ provision itself and the EEOC's regulation interpreting that exception. See 29 CFR §1625.6(a) (1998) ("It is anticipated that this concept of a [BFOQ] will have limited scope and application. Further, as this is an exception to the Act it must be narrowly construed"). To succeed under the BFOQ defense, we held that an employer must demonstrate either "a substantial basis for believing that all or nearly all employees above an age lack the qualifications required for the position," or that reliance on the age classification is necessary because "it is highly impractical for the employer to insure by individual testing that its employees will have the necessary qualifications for the job." 472 U. S., at 422-423 (emphases added). Measured against the rational basis standard of our equal protection jurisprudence, the ADEA plainly imposes substantially higher burdens on state employers. Thus, although it is true that the existence of the BFOQ defense makes the ADEA's prohibition of age discrimination less than absolute, the Act's substantive requirements nevertheless remain at a level akin to our heightened scrutiny cases under the Equal Protection Clause. Petitioners also place some reliance on the next clause in §623(f)(1), which permits employers to engage in conduct otherwise prohibited by the Act "where the differentiation is based on reasonable factors other than age." This exception confirms, however, rather than disproves, the conclusion that the ADEA's protection extends beyond the requirements of the Equal Protection Clause. The exception simply makes clear that "[t]he employer cannot rely on age as a proxy for an employee's remaining characteristics, such as productivity, but must instead focus on those factors directly." Hazen Paper Co. v. Biggins,507 U. S. 604, 611 (1993). Under the Constitution, in contrast, States may rely on age as a proxy for other characteristics. See Gregory, 501 U. S., at 473 (generalization about ability to serve as judges at age 70); Bradley, 440 U. S., at 108-109, 112 (generalization about ability to serve as Foreign Service officer at age 60); Murgia, 427 U. S., at 314-317 (generalization about ability to serve as state police officer at age 50). Section 623(f)(1), then, merely confirms that Congress, through the ADEA, has effectively elevated the standard for analyzing age discrimination to heightened scrutiny. That the ADEA prohibits very little conduct likely to be held unconstitutional, while significant, does not alone provide the answer to our §5 inquiry. Difficult and intractable problems often require powerful remedies, and we have never held that §5 precludes Congress from enacting reasonably prophylactic legislation. Our task is to determine whether the ADEA is in fact just such an appropriate remedy or, instead, merely an attempt to substantively redefine the States' legal obligations with respect to age discrimination. One means by which we have made such a determination in the past is by examining the legislative record containing the reasons for Congress' action. See, e.g., Florida Prepaid, 527 U. S., at ____-____ (slip op., at 11-18); City of Boerne, 521 U. S., at 530-531. "The appropriateness of remedial measures must be considered in light of the evil presented. Strong measures appropriate to address one harm may be an unwarranted response to another, lesser one." Id., at 530 (citing South Carolina v. Katzenbach,383 U. S. 301, 308 (1966)). Our examination of the ADEA's legislative record confirms that Congress' 1974 extension of the Act to the States was an unwarranted response to a perhaps inconsequential problem. Congress never identified any pattern of age discrimination by the States, much less any discrimination whatsoever that rose to the level of constitutional violation. The evidence compiled by petitioners to demonstrate such attention by Congress to age discrimination by the States falls well short of the mark. That evidence consists almost entirely of isolated sentences clipped from floor debates and legislative reports. See, e.g., S. Rep. No. 93-846, p. 112 (1974); S. Rep. No. 93-690, p. 56 (1974); H. R. Rep. No. 93-913, pp. 40-41 (1974); S. Rep. No. 93-300, p. 57 (1973); Senate Special Committee on Aging, Improving the Age Discrimination Law, 93d Cong., 1st Sess., 14 (Comm. Print 1973); 113 Cong. Rec. 34742 (1967) (remarks of Sen. Steiger); id., at 34749 (remarks of Rep. Donohue); 110 Cong. Rec. 13490 (1964) (remarks of Sen. Smathers); id., at 9912 (remarks of Sen. Sparkman); id., at 2596 (remarks of Rep. Beckworth). The statements of Senator Bentsen on the floor of the Senate are indicative of the strength of the evidence relied on by petitioners. See, e.g., 118 Cong. Rec. 24397 (1972) (stating that "there is ample evidence that age discrimination is broadly practiced in government employment," but relying on newspaper articles about federal employees); id., at 7745 ("Letters from my own State have revealed that State and local governments have also been guilty of discrimination toward older employees"); ibid. ("[T]here are strong indications that the hiring and firing practices of governmental units discriminate against the elderly ..."). Petitioners place additional reliance on Congress' consideration of a 1966 report prepared by the State of California on age discrimination in its public agencies. See Hearings on H. R. 3651 et al. before the Subcommittee on Labor of the House of Representatives Committee on Education and Labor, 90th Cong., 1st Sess., pp. 161-201 (1967) (Hearings) (reprinting State of California, Citizens' Advisory Committee on Aging, Age Discrimination in Public Agencies (1966)). Like the assorted sentences petitioners cobble together from a decade's worth of congressional reports and floor debates, the California study does not indicate that the State had engaged in any unconstitutional age discrimination. In fact, the report stated that the majority of the age limits uncovered in the state survey applied in the law enforcement and firefighting occupations. Hearings 168. Those age limits were not only permitted under California law at the time, see ibid., but are also currently permitted under the ADEA. See 5 U. S. C. §§3307(d), (e); 29 U. S. C. §623(j) (1994 ed., Supp. III). Even if the California report had uncovered a pattern of unconstitutional age discrimination in the State's public agencies at the time, it nevertheless would have been insufficient to support Congress' 1974 extension of the ADEA to every State of the Union. The report simply does not constitute "evidence that [unconstitutional age discrimination] had become a problem of national import." Florida Prepaid, supra, at ____ (slip op., at 13). Finally, the United States' argument that Congress found substantial age discrimination in the private sector, see Brief for United States 38, is beside the point. Congress made no such findings with respect to the States. Although we also have doubts whether the findings Congress did make with respect to the private sector could be extrapolated to support a finding of unconstitutional age discrimination in the public sector, it is sufficient for these cases to note that Congress failed to identify a widespread pattern of age discrimination by the States. See Florida Prepaid, 527 U. S., at ___ (slip op., at 11). A review of the ADEA's legislative record as a whole, then, reveals that Congress had virtually no reason to believe that state and local governments were unconstitutionally discriminating against their employees on the basis of age. Although that lack of support is not determinative of the §5 inquiry, id., at ____ (slip op., at 17-18); City of Boerne, 521 U. S., at 531-532, Congress' failure to uncover any significant pattern of unconstitutional discrimination here confirms that Congress had no reason to believe that broad prophylactic legislation was necessary in this field. In light of the indiscriminate scope of the Act's substantive requirements, and the lack of evidence of widespread and unconstitutional age discrimination by the States, we hold that the ADEA is not a valid exercise of Congress' power under §5 of the Fourteenth Amendment. The ADEA's purported abrogation of the States' sovereign immunity is accordingly invalid.D Our decision today does not signal the end of the line for employees who find themselves subject to age discrimination at the hands of their state employers. We hold only that, in the ADEA, Congress did not validly abrogate the States' sovereign immunity to suits by private individuals. State employees are protected by state age discrimination statutes, and may recover money damages from their state employers, in almost every State of the Union.1 Those avenues of relief remain available today, just as they were before this decision. Because the ADEA does not validly abrogate the States' sovereign immunity, however, the present suits must be dismissed. Accordingly, the judgment of the Court of Appeals is affirmed.It is so ordered. J. DANIEL KIMEL, Jr., et al., PETITIONERS98-791 v.FLORIDA BOARD OF REGENTS et al.UNITED STATES, PETITIONER98-796 v.FLORIDA BOARD OF REGENTS et al.on writs of certiorari to the united states court ofappeals for the eleventh circuit[January 11, 2000] Justice Stevens, with whom Justice Souter, Justice Ginsburg, and JusticeBreyer join, dissenting in part and concurring in part. Congress' power to regulate the American economy includes the power to regulate both the public and the private sectors of the labor market. Federal rules outlawing discrimination in the workplace, like the regulation of wages and hours or health and safety standards, may be enforced against public as well as private employers. In my opinion, Congress' power to authorize federal remedies against state agencies that violate federal statutory obligations is coextensive with its power to impose those obligations on the States in the first place. Neither the Eleventh Amendment nor the doctrine of sovereign immunity places any limit on that power. See Seminole Tribe of Fla. v. Florida,517 U. S. 44, 165-168 (1996) (Souter, J., dissenting); EEOC v. Wyoming,460 U. S. 226, 247-248 (1983) (Stevens, J., concurring). The application of the ancient judge-made doctrine of sovereign immunity in cases like these is supposedly justified as a freestanding limit on congressional authority, a limit necessary to protect States' "dignity and respect" from impairment by the National Government. The Framers did not, however, select the Judicial Branch as the constitutional guardian of those state interests. Rather, the Framers designed important structural safeguards to ensure that when the National Government enacted substantive law (and provided for its enforcement), the normal operation of the legislative process itself would adequately defend state interests from undue infringement. See generally Wechsler, The Political Safeguards of Federalism: The Role of the States in the Composition and Selection of the National Government, 54 Colum. L. Rev. 543 (1954). It is the Framers' compromise giving each State equal representation in the Senate that provides the principal structural protection for the sovereignty of the several States. The composition of the Senate was originally determined by the legislatures of the States, which would guarantee that their interests could not be ignored by Congress.1 The Framers also directed that the House be composed of Representatives selected by voters in the several States, the consequence of which is that "the states are the strategic yardsticks for the measurement of interest and opinion, the special centers of political activity, the separate geographical determinants of national as well as local politics." Id., at 546. Whenever Congress passes a statute, it does so against the background of state law already in place; the propriety of taking national action is thus measured by the metric of the existing state norms that Congress seeks to supplement or supplant.2 The persuasiveness of any justification for overcoming legislative inertia and taking national action, either creating new federal obligations or providing for their enforcement, must necessarily be judged in reference to state interests, as expressed in existing state laws. The precise scope of federal laws, of course, can be shaped with nuanced attention to state interests. The Congress also has the authority to grant or withhold jurisdiction in lower federal courts. The burden of being haled into a federal forum for the enforcement of federal law, thus, can be expanded or contracted as Congress deems proper, which decision, like all other legislative acts, necessarily contemplates state interests. Thus, Congress can use its broad range of flexible legislative tools to approach the delicate issue of how to balance local and national interests in the most responsive and careful manner.3 It is quite evident, therefore, that the Framers did not view this Court as the ultimate guardian of the States' interest in protecting their own sovereignty from impairment by "burdensome" federal laws.4 Federalism concerns do make it appropriate for Congress to speak clearly when it regulates state action. But when it does so, as it has in these cases,5 we can safely presume that the burdens the statute imposes on the sovereignty of the several States were taken into account during the deliberative process leading to the enactment of the measure. Those burdens necessarily include the cost of defending against enforcement proceedings and paying whatever penalties might be incurred for violating the statute. In my judgment, the question whether those enforcement proceedings should be conducted exclusively by federal agencies, or may be brought by private parties as well, is a matter of policy for Congress to decide. In either event, once Congress has made its policy choice, the sovereignty concerns of the several States are satisfied, and the federal interest in evenhanded enforcement of federal law, explicitly endorsed in Article VI of the Constitution, does not countenance further limitations. There is not a word in the text of the Constitution supporting the Court's conclusion that the judge-made doctrine of sovereign immunity limits Congress' power to authorize private parties, as well as federal agencies, to enforce federal law against the States. The importance of respecting the Framers' decision to assign the business of lawmaking to the Congress dictates firm resistance to the present majority's repeated substitution of its own views of federalism for those expressed in statutes enacted by the Congress and signed by the President. The Eleventh Amendment simply does not support the Court's view. As has been stated before, the Amendment only places a textual limitation on the diversity jurisdiction of the federal courts. See Atascadero State Hospital v. Scanlon,473 U. S. 234, 286-289 (1985) (Brennan, J., dissenting). Because the Amendment is a part of the Constitution, I have never understood how its limitation on the diversity jurisdiction of federal courts defined in Article III could be "abrogated" by an Act of Congress. Seminole Tribe,517 U. S., at 93 (Stevens, J., dissenting). Here, however, private petitioners did not invoke the federal courts' diversity jurisdiction; they are citizens of the same State as the defendants and they are asserting claims that arise under federal law. Thus, today's decision (relying as it does on Seminole Tribe) rests entirely on a novel judicial interpretation of the doctrine of sovereign immunity,6 which the Court treats as though it were a constitutional precept. It is nevertheless clear to me that if Congress has the power to create the federal rights that these petitioners are asserting, it must also have the power to give the federal courts jurisdiction to remedy violations of those rights, even if it is necessary to "abrogate" the Court's "Eleventh Amendment" version of the common-law defense of sovereign immunity to do so. That is the essence of the Court's holding in Pennsylvania v. Union Gas Co.,491 U. S. 1, 13-23 (1989). I remain convinced that Union Gas was correctly decided and that the decision of five Justices in Seminole Tribe to overrule that case was profoundly misguided. Despite my respect for stare decisis, I am unwilling to accept Seminole Tribe as controlling precedent. First and foremost, the reasoning of that opinion is so profoundly mistaken and so fundamentally inconsistent with the Framers' conception of the constitutional order that it has forsaken any claim to the usual deference or respect owed to decisions of this Court. Stare decisis, furthermore, has less force in the area of constitutional law. See, e.g.,Burnet v. Coronado Oil & Gas Co.,285 U. S. 393, 406-410 (1932) (Brandeis, J., dissenting). And in this instance, it is but a hollow pretense for any State to seek refuge in stare decisis' protection of reliance interests. It cannot be credibly maintained that a State's ordering of its affairs with respect to potential liability under federal law requires adherence to Seminole Tribe, as that decision leaves open a State's liability upon enforcement of federal law by federal agencies. Nor can a State find solace in the stare decisis interest of promoting "the evenhanded ... and consistent development of legal principles." Payne v. Tennessee,501 U. S. 808, 827 (1991). That principle is perverted when invoked to rely on sovereign immunity as a defense to deliberate violations of settled federal law. Further, Seminole Tribe is a case that will unquestionably have serious ramifications in future cases; indeed, it has already had such an effect, as in the Court's decision today and in the equally misguided opinion of Alden v. Maine, 527 U. S. ___ (1999). Further still, the Seminole Tribe decision unnecessarily forces the Court to resolve vexing questions of constitutional law respecting Congress' §5 authority. Finally, by its own repeated overruling of earlier precedent, the majority has itself discounted the importance of stare decisis in this area of the law.7 The kind of judicial activism manifested in cases like Seminole Tribe, Alden v. Maine, Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. ___ (1999), and College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. ___ (1999), represents such a radical departure from the proper role of this Court that it should be opposed whenever the opportunity arises. Accordingly, I respectfully dissent. J. DANIEL KIMEL, Jr., et al., PETITIONERS98-791 v.FLORIDA BOARD OF REGENTS et al.UNITED STATES, PETITIONER98-796 v.FLORIDA BOARD OF REGENTS et al.on writs of certiorari to the united states court ofappeals for the eleventh circuit[January 11, 2000] Justice Thomas, with whom Justice Kennedy joins, concurring in part and dissenting in part. In Atascadero State Hospital v. Scanlon,473 U. S. 234 (1985), this Court, cognizant of the impact of an abrogation of the States' Eleventh Amendment immunity from suit in federal court on "the usual constitutional balance between the States and the Federal Government," reaffirmed that "Congress may abrogate ... only by making its intention unmistakably clear in the language of the statute." Id., at 242. This rule " `assures that the legislature has in fact faced, and intended to bring into issue, the critical matters involved in the judicial decision.' " Will v. Michigan Dept. of State Police,491 U. S. 58, 65 (1989) (quoting United States v. Bass, 404 U. S. 336, 349 (1971)). And it is especially applicable when this Court deals with a statute like the Age Discrimination in Employment Act of 1967 (ADEA), whose substantive mandates extend to "elevator operators, janitors, charwomen, security guards, secretaries, and the like in every office building in a State's governmental hierarchy." Employees of Dept. of Public Health and Welfare of Mo. v. Department of Public Health and Welfare of Mo.,411 U. S. 279, 285 (1973). Because I think that Congress has not made its intention to abrogate "unmistakably clear" in the text of the ADEA, I respectfully dissent from Part III of the Court's opinion.1 I It is natural to begin the clear statement inquiry by examining those provisions that reside within the four corners of the Act in question. Private petitioners and the government correctly observe that the ADEA's substantive provisions extend to the States as employers, see 29 U. S. C. §623(a) (providing that "[i]t shall be unlawful for an employer" to engage in certain age discriminatory practices); §630(b) (defining "employer" to include "a State or a political subdivision of a State"); §630(f) (defining "employee" as "an individual employed by any employer"), and that the ADEA establishes an individual right-of-action provision for "aggrieved" persons, see §626(c)(1) ("Any person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter"). Since, in the case of a state employee, the only possible defendant is the State, it is submitted that Congress clearly expressed its intent that a state employee may qualify as a "person aggrieved" under §626(c)(1) and bring suit against his state employer in federal court. While the argument may have some logical appeal, it is squarely foreclosed by precedent — which explains the Court's decision to employ different reasoning in finding a clear statement, see ante, at 9. In Employees, we confronted the pre-1974 version of the Fair Labor Standards Act (FLSA), which clearly extended as a substantive matter to state employers, and included the following private right-of-action provision: " `Action to recover such liability may be maintained in any court of competent jurisdiction.' " Employees, supra, at 283 (quoting 29 U. S. C. §216(b) (1970 ed.). We held that this language fell short of a clear statement of Congress' intent to abrogate. The FLSA's substantive coverage of state employers could be given meaning through enforcement by the Secretary of Labor, which would raise no Eleventh Amendment issue, 411 U. S.,at 285-286, and we were "reluctant to believe that Congress in pursuit of a harmonious federalism desired to treat the States so harshly" by abrogating their Eleventh Amendment immunity, id., at 286. See also, e.g.,Dellmuth v. Muth, 491 U. S. 223, 228 (1989) (holding that Congress had not clearly stated its intent to abrogate in a statute that authorized "parties aggrieved ... to `bring a civil action ... in any State court of competent jurisdiction or in a district court of the United States without regard to the amount in controversy' ") (quoting 20 U. S. C. §1415(e)(2) (1982 ed.)). The ADEA is no different from the version of the FLSA we examined in Employees. It unquestionably extends as a substantive matter to state employers, but does not mention States in its right-of-action provision: "Any person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter." 29 U. S. C. §626(c)(1). This provision simply does not reveal Congress' attention to the augmented liability and diminished sovereignty concomitant to an abrogation of Eleventh Amendment immunity. "Congress, acting responsibly, would not be presumed to take such action silently." Employees, supra, at 284-285.II Perhaps recognizing the obstacle posed by Employees, private petitioners and the government contend that the ADEA incorporates a clear statement from the FLSA. The ADEA's incorporating reference, which has remained constant since the enactment of the ADEA in 1967, provides: "The provisions of this chapter shall be enforced in accordance with the powers, remedies, and procedures provided in sections 211(b), 216 (except for subsection (a) thereof), and 217 of this title, and subsection (c) of this section." 29 U. S. C. §626(b). It is argued that §216(b)--one of the incorporated provisions from the FLSA — unequivocally abrogates the States' immunity from suit in federal court. That section states in relevant part that "[a]n action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction." 29 U. S. C. §216(b). But, as noted in the above discussion of Employees, §216(b) was not always so worded. At the time the ADEA was enacted in 1967, a relatively sparse version of §216(b)--which Employees held insufficient to abrogate the States' immunity — provided that an "[a]ction to recover such liability may be maintained in any court of competent jurisdiction." 29 U. S. C. §216(b) (1964 ed.). It was not until 1974 that Congress modified §216(b) to its current formulation. Fair Labor Standards Amendments of 1974 (1974 Amendments), §6(d)(1), 88 Stat. 61. This sequence of events suggests, in my view, that we should approach with circumspection any theory of "clear statement by incorporation." Where Congress amends an Act whose provisions are incorporated by other Acts, the bill under consideration does not necessarily mention the incorporating references in those other Acts, and so fails to inspire confidence that Congress has deliberated on the consequences of the amendment for the other Acts. That is the case here. The legislation that amended §216(b), §6(d)(1) of the 1974 Amendments, did not even acknowledge §626(b). And, given the purpose of the clear statement rule to " `assur[e] that the legislature has in fact faced' " the issue of abrogation, Will, 491 U. S., at 65 (quoting Bass, 404 U. S., at 349), I am unwilling to indulge the fiction that Congress, when it amended §216(b), recognized the consequences for a separate Act (the ADEA) that incorporates the amended provision. To be sure, §28 of the 1974 Amendments, 88 Stat. 74, did modify certain provisions of the ADEA, which might suggest that Congress understood the impact of §6(d)(1) on the ADEA. See ante, at 11. But §6(d)(2)(A), another of the 1974 Amendments, suggests just the opposite. Section 6(d)(2)(A) added to the statute of limitations provision of the FLSA, 29 U. S. C. §255, a new subsection (d), which suspended the running of the statutory periods of limitation on "any cause of action brought under section 16(b) of the [FLSA, 29 U. S. C. §216(b)] ... on or before April 18, 1973," the date Employees was decided, until "one hundred and eighty days after the effective date of [the 1974 Amendments]." The purpose of this new subsection — revealed not only by its reference to the date Employees was decided, but also by its exception for actions in which "judgment has been entered for the defendant on the grounds other than State immunity from Federal jurisdiction"--was to allow FLSA plaintiffs who had been frustrated by state defendants' invocation of Eleventh Amendment immunity under Employees to avail themselves of the newly amended §216(b).2 It appears, however, that Congress was oblivious to the impact of §6(d)(2)(A) on the ADEA. The new §255(d), by operation of §7(e) of the ADEA, 29 U. S. C. §626(e) (1988 ed.) ("Sectio[n] 255 ... of this title shall apply to actions under this chapter"),3 automatically became part of the ADEA in 1974. And yet the new §255(d) could have no possible application to the ADEA because, as the Court observes, ante, at 11 (citing §28(a) of the 1974 Amendments), the ADEA's substantive mandates did not even apply to the States until the 1974 Amendments. Thus, before 1974, there were no ADEA suits against States that could be affected by §255(d)'s tolling provision. If Congress had recognized this "overinclusiveness" problem, it likely would have amended §626(e) to incorporate only §§255(a)-(c). Cf. §626(b) (incorporating "the powers, remedies, and procedures provided in sectio[n] ... 216 (except for subsection (a) thereof") (emphasis added)). But since Congress did not do so, we are left to conclude that Congress did not clearly focus on the impact of §6(d)(2)(A) on the ADEA. And Congress' insouciance with respect to the impact of §6(d)(2)(A) suggests that Congress was similarly inattentive to the impact of §6(d)(1). Insofar as §6(d)(2)(A) is closer to §6(d)(1) in terms of space and purpose than is §28, the implication I would draw from §6(d)(2)(A) almost certainly outweighs the inference the Court would draw from §28. In any event, the notion that §28 of the 1974 Amendments evidences Congress' awareness of every last ripple those amendments might cause in the ADEA is at best a permissible inference, not "the unequivocal declaration which ... is necessary before we will determine that Congress intended to exercise its powers of abrogation." Dellmuth, 491 U. S., at 232. The Court advances a more general critique of my approach, explaining that "we have never held that Congress must speak with different gradations of clarity depending on the specific circumstances of the relevant legislation ... ." Ante, at 11-12. But that descriptive observation, with which I agree, is hardly probative in light of the fact that a "clear statement by incorporation" argument has not to date been presented to this Court. I acknowledge that our previous cases have not required a clear statement to appear within a single section or subsection of an Act. Pennsylvania v. Union Gas Co.,491 U. S. 1, 7-10 (1989), overruled on other grounds, Seminole Tribe of Fla. v. Florida,517 U. S. 44 (1996); see also id., at 56-57 (confirming clear statement in one statutory subsection by looking to provisions in other subsection). Nor have our cases required that such separate sections or subsections of an Act be passed at the same time. Union Gas, supra, at 7-13, and n. 2 (consulting original provisions of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and 1986 amendments to that Act). But, even accepting Union Gas to be correctly decided, I do not think the situation where Congress amends an incorporated provision is analogous to Union Gas. In the Union Gas setting, where the later Congress actually amends the earlier-enacted Act, it is reasonable to assume that the later Congress focused on each of the various provisions, whether new or old, that combine to express an intent to abrogate.III Even if a clarifying amendment to an incorporated provision might sometimes provide a clear statement to abrogate for purposes of the Act into which the provision is incorporated, this is not such a case for two reasons. First, §626(b) does not clearly incorporate the part of §216(b) that establishes a private right-of-action against employers. Second, even assuming §626(b) incorporates §216(b) in its entirety, §216(b) itself falls short of an "unmistakably clear" expression of Congress' intent to abrogate the States' Eleventh Amendment immunity from suit in federal court.A I do not dispute that §626(b) incorporates into the ADEA some provisions of §216(b). But it seems to me at least open to debate whether §626(b) incorporates the portion of §216(b) that creates an individual private right of action, for the ADEA already contains its own private right-of-action provision--§626(c)(1). See McKennon v. Nashville Banner Publishing Co.,513 U. S. 352, 358 (1995) ("The ADEA ... contains a vital element found in both Title VII and the Fair Labor Standards Act: It grants an injured employee a right of action to obtain the authorized relief. 29 U. S. C. §626(c)"); 1 B. Lindemann & P. Grossman, Employment Discrimination Law 573-574 (3d ed. 1996) ("The ADEA grants any aggrieved person the right to sue for legal or equitable relief that will effectuate the purposes of the Act" (citing §626(c)(1)) (footnote omitted)). While the right-of-action provisions in §626(c) and §216(b) are not identically phrased, compare §626(c)(1) ("Any person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter"), with §216(b) ("An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction ... "), they are certainly similar in function. Indeed, if §216(b)'s private right-of-action provision were incorporated by §626(b) and hence available to ADEA plaintiffs, the analogous right of action established by §626(c)(1) would be wholly superfluous — an interpretive problem the Court does not even pause to acknowledge. To avoid the overlap, one might read the ADEA to create an exclusive private right-of-action in §626(c)(1), and then to add various embellishments, whether from elsewhere in the ADEA, see §626(c)(2) (trial by jury), or from the incorporated parts of the FLSA, see, e.g., §216(b) (collective actions); ibid. (attorney's fees); ibid. (liquidated damages).4 Of course the Court's interpretation — that an ADEA plaintiff may choose §626(c)(1) or §216(b) as the basis for his private right of action — is also plausible. "But such a permissible inference, whatever its logical force, would remain just that: a permissible inference. It would not be the unequivocal declaration which ... is necessary before we will determine that Congress intended to exercise its powers of abrogation." Dellmuth, 491 U. S., at 232. Apparently cognizant of this rule, the Court resorts to extrinsic evidence: our prior decisions. See, e.g.,ante, at 10 (" `[T]he ADEA incorporates enforcement provisions of the Fair Labor Standards Act of 1938, and provides that the ADEA shall be enforced using certain of the powers, remedies, and procedures of the FLSA' " (alteration in original)) (quoting Hoffmann-La Roche Inc. v. Sperling, 493 U. S. 165, 167 (1989) (citation omitted)). But judicial opinions, especially those issued subsequent to the enactments in question, have no bearing on whether Congress has clearly stated its intent to abrogate in the text of the statute. How could they, given that legislative history — which at least antedates the enactments under review — is "irrelevant to a judicial inquiry into whether Congress intended to abrogate the Eleventh Amendment"? Dellmuth, supra, at 230. In any event, Hoffmann-La Roche, which did not present the question of a State's Eleventh Amendment immunity,5 is perfectly consistent with the view that the ADEA incorporates only "extras" from the FLSA, not overlapping provisions. Hoffmann-La Roche involved the ADEA's incorporation of FLSA's authorization of collective actions, which follows §216(b)'s individual private right-of-action provision, see §216(b) ("An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated" (emphasis added)), and so may be viewed as falling outside the overlap described above.6 B Even if §626(b) incorporates §216(b)'s individual right-of-action provision, that provision itself falls short of "unmistakable" clarity insofar as it describes the forum for suit as "any Federal or State court of competent jurisdiction." §216(b) (emphasis added). For it may be that a federal court is not "competent" under the Eleventh Amendment to adjudicate a suit by a private citizen against a State unless the State consents to the suit. As we explained in Employees, "[t]he history and tradition of the Eleventh Amendment indicate that by reason of that barrier a federal court is not competent to render judgment against a nonconsenting State." 411 U. S., at 284 (emphasis added). The Court suggests, ante, at 12, that its ability to distinguish a single precedent, ante, at 10 (discussing Kennecott Copper Corp. v. State Tax Comm'n, 327 U. S. 573 (1946)), illuminates this aspect of §216(b). But the Court neither acknowledges what Employees had to say on this point nor explains why it follows from the modern §216(b)'s clarity relative to the old §216(b) that the modern §216(b) is clear enough as an absolute matter to satisfy the Atascadero rule, which requires "unmistakable" clarity. That is not to say that the FLSAas a whole lacks a clear statement of Congress' intent to abrogate. Section 255(d) elucidates the ambiguity within §216(b). Section 255(d), it will be recalled, suspended the running of the statute of limitations on actions under §216(b) brought against a State or political subdivision on or before April 18, 1973 (the date Employees was decided) until "one hundred and eighty days after the effective date of the [1974 Amendments], except that such suspension shall not be applicable if in such action judgment has been entered for the defendant on the grounds other than State immunity from Federal jurisdiction." §255(d) (emphasis added). As I explained in Part II,7 however, not only does §255(d) on its face apply only to the FLSA, but Congress' failure to amend the ADEA's general incorporation of §255, 29 U. S. C. §626(e) (1988 ed.), strongly suggests that Congress paid scant attention to the impact of §255(d) upon the ADEA. Accordingly, I cannot accept the notion that §255(d) furnishes clarifying guidance in interpreting §216(b) for ADEA purposes, whatever assistance it might provide to a construction of §216(b) for FLSA purposes.8 * * * For these reasons, I respectfully dissent from Part III of the Court's opinion.FOOTNOTESFootnote 1 Together with No. 98-796, United States v. Florida Board of Regents et al., also on certiorari to the same court.FOOTNOTESFootnote 1 See Alaska Stat. Ann. §18.80.010 et seq. (1998); Ariz. Rev. Stat. Ann. §41-1401 et seq. (1999); Ark. Code Ann. §§21-3-201, 21-3-203 (1996); Cal. Govt. Code Ann. §12900 et seq. (West 1992 and Supp. 1999); Colo. Rev. Stat. §24-34-301 et seq. (1998); Conn. Gen. Stat. §46a-51 et seq. (1999); Del. Code Ann., Tit. 19, §710 et seq. (Supp. 1998); Fla. Stat. Ann. §§112.044, 760.01 et seq. (1997 and Supp. 1998); Ga. Code Ann. §45-19-21 et seq. (1990 and Supp. 1996); Haw. Rev. Stat. §378-1 et seq. (1993 and Cum. Supp. 1998); Idaho Code §67-5901 et seq. (1995 and Supp. 1999); Ill. Comp. Stat., ch. 775, §5/1-101 et seq. (1998); Ind. Code §22-9-2-1 et seq. (1993); Iowa Code §216.1 et seq. (1994 and Supp. 1999); Kan. Stat. Ann. §44-1111 et seq. (1993 and Cum. Supp. 1998); Ky. Rev. Stat. Ann. §344.010 et seq. (Michie 1997 and Supp. 1998); La. Rev. Stat. Ann. §23:311 et seq. (West 1998); id., §51:2231 et seq. (West Supp. 1999); Me. Rev. Stat. Ann., Tit. 5, §4551 et seq. (1998-1999 Supp.); Md. Ann. Code, Art. 49B, §1 et seq. (1998 and Supp. 1999); Mass. Gen. Laws §151:1 et seq. (West 1997 and Supp. 1998); Mich. Comp. Laws §37.2101 et seq. (West 1985 and Supp. 1999); Minn. Stat. §363.01 et seq. (1991 and Supp. 1999); Miss. Code Ann. §25-9-149 (1991); Mo. Rev. Stat. §213.010 et seq. (1994 and Cum. Supp. 1998); Mont. Code Ann. §49-1-101 et seq. (1997); Neb. Rev. Stat. §48-1001 et seq. (1998); Nev. Rev. Stat. §613.310 et seq. (1995); N. H. Rev. Stat. Ann. §354-A:1 et seq. (1995 and Supp. 1998); N. J. Stat. Ann. §§10:3-1, 10:5-1 et seq. (West 1993 and Supp. 1999); N. M. Stat. Ann. §28-1-1 et seq. (1996); N. Y. Exec. Law §290 et seq. (McKinney 1993 and Supp. 1999); N. C. Gen. Stat. §126-16 et seq. (1999); N. D. Cent. Code §14-02.4-01 et seq. (1997 and Supp. 1999); Ohio Rev. Code Ann. §4112.01 et seq. (1998); Okla. Stat., Tit. 25, §1101 et seq. (1991 and Supp. 1999); Ore. Rev. Stat. §659.010 et seq. (1997); 43 Pa. Cons. Stat. §951 et seq. (1991 and Supp. 1999); R. I. Gen. Laws §28-5-1 et seq. (1995 and Supp. 1997); S. C. Code Ann. §1-13-10 et seq. (1986 and Cum. Supp. 1998); Tenn. Code Ann. §4-21-101 et seq. (1998); Tex. Lab. Code Ann. §21.001 et seq. (1996 and Supp. 1999); Utah Code Ann. §34A-5-101 et seq. (Supp. 1999); Vt. Stat. Ann., Tit. 21, §495 et seq. (1987 and Supp. 1999); Va. Code Ann. §2.1-116.10 et seq. (1995 and Supp. 1999); Wash. Rev. Code §49.60.010 et seq. (1994); W. Va. Code §5-11-1 et seq. (1999); Wis. Stat. Ann. §111.01 et seq. (West 1997 and Supp. 1998); Wyo. Stat. Ann. §27-9-101 et seq. (1999).FOOTNOTESFootnote 1 The Federalist No. 45, p. 291 (C. Rossiter ed. 1961 (J. Madison)) ("The State governments may be regarded as constituent and essential parts of the federal government ... . The Senate will be elected absolutely and exclusively by the State legislatures... . Thus, [it] will owe its existence more or less to the favor of the State governments, and must consequently feel a dependence, which is much more likely to beget a disposition too obsequious than too overbearing towards them").Footnote 2 When Congress expanded the ADEA in 1974 to apply to public employers, all 50 States had some form of age discrimination law, but 24 of them did not extend their own laws to public employers. See App. to Brief for Respondents 1a-25a.Footnote 3 Thus, the present majority's view does more than simply aggrandize the power of the Judicial Branch. It also limits Congress' options for responding with precise attention to state interests when it takes national action. The majority's view, therefore, does not bolster the Framers' plan of structural safeguards for state interests. Rather, it is fundamentally at odds with that plan. Indeed, as JusticeBreyer has explained, forbidding private remedies may necessitate the enlargement of the federal bureaucracy and make it more difficult "to decentralize governmental decisionmaking and to provide individual citizens, or local communities, with a variety of enforcement powers." College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. ___, ___ (1999) (slip op., at 13) (dissenting opinion); see also Printz v. United States, 521 U. S 898, 976-978 (1997) (Breyer, J., dissenting).Footnote 4 The President also plays a role in the enactment of federal law, and the Framers likewise provided structural safeguards to protect state interests in the selection of the President. The electors who choose the President are appointed in a manner directed by the state legislatures. Art. II, §1, cl. 2. And if a majority of electors do not cast their vote for one person, then the President is chosen by the House of Representatives. "But in chusing the President" by this manner, the Constitution directs that "the Votes shall be taken by States, the Representatives from each State having one Vote." Art. II, §1, cl. 3 (emphasis added); see also Amdt. 12.Moreover, the Constitution certainly protects state interests in other ways as well, as in the provisions of Articles IV, V, and VII. My concern here, however, is with the respect for state interests safeguarded by the ordinary legislative process. The balance between national and local interests reflected in other constitutional provisions may vary, see, e.g.,U. S. Term Limits, Inc. v. Thornton,514 U. S. 779 (1995), but insofar as Congress' legislative authority is concerned, the relevant constitutional provisions were crafted to ensure that the process itself adequately accounted for local interests. I also recognize that the Judicial Branch sometimes plays a role in limiting the product of the legislative process. It may do so, for example, when the exercise of legislative authority runs up against some other constitutional command. See Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 166-167 (1996) (Souter, J., dissenting). But in those instances, courts are not crafting wholly judge-made doctrines unrelated to any constitutional text, nor are they doing so solely under the guise of the necessity of safeguarding state interests.Footnote 5 Because Congress has clearly expressed its intention to subject States to suits by private parties under the ADEA, I join Part III of the Opinion of the Court.Footnote 6 Under the traditional view, the sovereign immunity defense was recognized only as a matter of comity when asserted in the courts of another sovereign, rather than as a limitation on the jurisdiction of that forum. See Schooner Exchange v. McFaddon, 7 Cranch 116, 136 (1812) (Marshall, C. J.); Nevada v. Hall, 440 U. S. 410, 414-418 (1979).Footnote 7 See, e.g., College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S., at ___ (slip op., at 8-14) (overruling Parden v. Terminal R. Co. of Ala. Docks Dept.,377 U. S. 184 (1964)); Seminole Tribe, 517 U. S., at 63-73 (overruling Pennsylvania v. Union Gas Co., 491 U. S. 1 (1989)); Pennhurst State School and Hospital v. Halderman,465 U. S. 89, 127, 132-137 (1984) (Stevens, J., dissenting) ("[T]he Court repudiates at least 28 cases, spanning well over a century of this Court's jurisprudence").FOOTNOTESFootnote 1 I concur in Parts I, II, and IV of the Court's opinion because I agree that the purported abrogation of the States' Eleventh Amendment immunity in the ADEA falls outside Congress' §5 enforcement power.Footnote 2 That Congress had this purpose in mind as to the FLSA does not mean that the product of Congress' efforts — the amended §216(b)--qualifies as a clear statement. The amended §216(b)'s description of the forum as "any Federal ... court of competent jurisdiction," 29 U. S. C. §216(b) (emphasis added), is ambiguous insofar as a Federal court might not be "competent" unless the State defendant consents to suit. See infra, at 10-12. My present point is simply that, even assuming the amended §216(b) qualifies as a clear statement, the 1974 Congress likely did not contemplate the impact of the new §216(b) on the ADEA.Footnote 3 The ADEA was amended in 1991 to remove the incorporating reference. See Civil Rights Act of 1991, §115, 105 Stat. 1079, 29 U. S. C. §626(e).Footnote 4 The ADEA expressly limits this last remedy to "cases of willful violations." 29 U. S. C. §626(b); see Lorillard v. Pons, 434 U. S. 575, 581 (1978).Footnote 5 That the Hoffmann-La Roche Court did not consider §216(b)'s implications for the Eleventh Amendment clear statement rule is apparent from its selective quotation of §216(b)--omitting the words "(including a public agency)." See Hoffmann-La Roche, Inc. v. Sperling, 493 U. S., at 167-168 ("This controversy centers around one of the provisions the ADEA incorporates, which states, in pertinent part, that an action `may be maintained against any employer ... in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated' " (alteration in original)) (quoting 29 U. S. C. §216(b) (1982 ed.)).Footnote 6 The other two cases upon which the Court relies, see ante, at 10 (citing McKennon v. Nashville Banner Publishing Co.,513 U. S. 352, 357 (1995), and Lorillard v. Pons, supra, at 582), are also consistent with the view that the ADEA incorporates only "extras" from the FLSA, not overlapping provisions. In neither case did we consider whether the ADEA incorporates the part of §216(b) that creates a private action "against any employer (including a public agency) in any Federal or State court of competent jurisdiction."Footnote 7 Supra, at 5-6.Footnote 8 While §255 once was incorporated by the ADEA, see §7(e), 81 Stat. 605, 29 U. S. C. §626(e) (1988 ed.), the ADEA was amended in 1991 to remove the incorporating reference, see Civil Rights Act of 1991, §115, 105 Stat. 1079, 29 U. S. C. §626(e). The current "unavailability" of §255(d) for ADEA purposes perhaps explains why the Court, which purports to examine only the statute in its current form, ante, at 12, does not rely on §255(d). But, as I have explained, without the light §255(d) sheds on §216(b), §216(b) falls short of a clear statement of Congress' intent to abrogate. |
7 | Respondent, the owner of more than 10% of Dodge Mfg. Co.'s stock, within six months of the purchase thereof sold enough shares to a broker to reduce its holding to 9.96%, for the purpose of immunizing the disposal of the remainder from liability under 16 (b) of the Securities Exchange Act of 1934. Under that provision a corporation may recover for itself the profits realized by an owner of more than 10% of its shares from a purchase and sale of its stock within any six-month period, provided the owner held more than 10% "both at the time of purchase and sale." Held: Under the terms of 16 (b) respondent is not liable to petitioner (Dodge's successor) for profits derived from the sale of the 9.96% to Dodge within six months of purchase. Pp. 422-427. 434 F.2d 918, affirmed.STEWART, J., delivered the opinion of the Court, in which BURGER, C. J., and MARSHALL and BLACKMUN, JJ., joined. DOUGLAS, J., filed a dissenting opinion, in which BRENNAN and WHITE, JJ., joined, post, p. 427. POWELL and REHNQUIST, JJ., took no part in the consideration or decision of the case.Thomas P. Mulligan argued the cause for petitioner. With him on the briefs were Patrick J. Amer, Stephen J. Burns, and Kenneth S. Teasdale.Albert E. Jenner, Jr., argued the cause for respondent. With him on the brief were Wesley G. Hall, R. H. McRoberts, and Thomas C. Walsh.Walter P. North argued the cause for the Securities and Exchange Commission as amicus curiae. With him on the briefs were Solicitor General Griswold, Samuel Huntington, Philip A. Loomis, Jr., and Jacob H. Stillman. Whitney North Seymour and John A. Guzzetta filed a brief for Gulf & Western Industries, Inc., as amicus curiae.MR. JUSTICE STEWART delivered the opinion of the Court.Section 16 (b) of the Securities Exchange Act of 1934, 48 Stat. 896, 15 U.S.C. 78p (b), provides, among other things, that a corporation may recover for itself the profits realized by an owner of more than 10% of its shares from a purchase and sale of its stock within any six-month period, provided that the owner held more than 10% "both at the time of the purchase and sale."1 In this case, the respondent, the owner of 13.2% of a corporation's shares, disposed of its entire holdings in two sales, both of them within six months of purchase. The first sale reduced the respondent's holdings to 9.96%, and the second disposed of the remainder. The question presented is whether the profits derived from the second sale are recoverable by the Corporation under 16 (b). We hold that they are not.IOn June 16, 1967, the respondent, Emerson Electric Co., acquired 13.2% of the outstanding common stock of Dodge Manufacturing Co., pursuant to a tender offer made in an unsuccessful attempt to take over Dodge. The purchase price for this stock was $63 per share. Shortly thereafter, the shareholders of Dodge approved a merger with the petitioner, Reliance Electric Co. Faced with the certain failure of any further attempt to take over Dodge, and with the prospect of being forced to exchange its Dodge shares for stock in the merged corporation in the near future,2 Emerson, following a plan outlined by its general counsel, decided to dispose of enough shares to bring its holdings below 10%, in order to immunize the disposal of the remainder of its shares from liability under 16 (b). Pursuant to counsel's recommendation, Emerson on August 28 sold 37,000 shares of Dodge common stock to a brokerage house at $68 per share. This sale reduced Emerson's holdings in Dodge to 9.96% of the outstanding common stock. The remaining shares were then sold to Dodge at $69 per share on September 11.After a demand on it by Reliance for the profits realized on both sales, Emerson filed this action seeking a declaratory judgment as to its liability under 16 (b). Emerson first claimed that it was not liable at all, because it was not a 10% owner at the time of the purchase of the Dodge shares. The District Court disagreed, holding that a purchase of stock falls within 16 (b) where the purchaser becomes a 10% owner by virtue of the purchase. The Court of Appeals affirmed this holding, and Emerson did not cross-petition for certiorari. Thus that question is not before us.Emerson alternatively argued to the District Court that, assuming it was a 10% stockholder at the time of the purchase, it was liable only for the profits on the August 28 sale of 37,000 shares, because after that time it was no longer a 10% owner within the meaning of 16 (b). After trial on the issue of liability alone, the District Court held Emerson liable for the entire amount of its profits. The court found that Emerson's sales of Dodge stock were "effected pursuant to a single predetermined plan of disposition with the overall intent and purpose of avoiding Section 16 (b) liability," and construed the term "time of ... sale" to include "the entire period during which a series of related transactions take place pursuant to a plan by which a 10% beneficial owner disposes of his stock holdings" 306 F. Supp. 588, 592.On an interlocutory appeal under 28 U.S.C. 1292 (b), the Court of Appeals upheld the finding that Emerson "split" its sale of Dodge stock simply in order to avoid most of its potential liability under 16 (b), but it held this fact irrelevant under the statute so long as the two sales are "not legally tied to each other and [are] made at different times to different buyers ... ." 434 F.2d 918, 926. Accordingly, the Court of Appeals reversed the District Court's judgment as to Emerson's liability for its profits on the September 11 sale, and remanded for a determination of the amount of Emerson's liability on the August 28 sale. Reliance filed a petition for certiorari, which we granted in order to consider an unresolved question under an important federal statute. .IIThe history and purpose of 16 (b) have been exhaustively reviewed by federal courts on several occasions since its enactment in 1934. See, e. g., Smolowe v. Delendo Corp., 136 F.2d 231; Adler v. Klawans, 267 F.2d 840; Blau v. Max Factor & Co., 342 F.2d 304. Those courts have recognized that the only method Congress deemed effective to curb the evils of insider trading was a flat rule taking the profits out of a class of transactions in which the possibility of abuse was believed to be intolerably great. As one court observed: "In order to achieve its goals, Congress chose a relatively arbitrary rule capable of easy administration. The objective standard of Section 16 (b) imposes strict liability upon substantially all transactions occurring within the statutory time period, regardless of the intent of the insider or the existence of actual speculation. This approach maximized the ability of the rule to eradicate speculative abuses by reducing difficulties in proof. Such arbitrary and sweeping coverage was deemed necessary to insure the optimum prophylactic effect." Bershad v. McDonough, 428 F.2d 693, 696. Thus Congress did not reach every transaction in which an investor actually relies on inside information. A person avoids liability if he does not meet the statutory definition of an "insider," or if he sells more than six months after purchase. Liability cannot be imposed simply because the investor structured his transaction with the intent of avoiding liability under 16 (b). The question is, rather, whether the method used to "avoid" liability is one permitted by the statute. Among the "objective standards" contained in 16 (b) is the requirement that a 10% owner be such "both at the time of the purchase and sale ... of the security involved." Read literally, this language clearly contemplates that a statutory insider might sell enough shares to bring his holdings below 10%, and later - but still within six months - sell additional shares free from liability under the statute. Indeed, commentators on the securities laws have recommended this exact procedure for a 10% owner who, like Emerson, wishes to dispose of his holdings within six months of their purchase.3 Under the approach urged by Reliance, and adopted by the District Court, the apparent immunity of profits derived from Emerson's second sale is lost where the two sales, though independent in every other respect, are "interrelated parts of a single plan." 306 F. Supp., at 592. But a "plan" to sell that is conceived within six months of purchase clearly would not fall within 16 (b) if the sale were made after the six months had expired, and we see no basis in the statute for a different result where the 10% requirement is involved rather than the six-month limitation.The dissenting opinion, post, at 442, reasons that "the 10% rule is based upon a conclusive statutory presumption that ownership of this quantity of stock suffices to provide access to inside information," and that it thus "follows that all sales by a more-than-10% owner within the six-month period carry the presumption of a taint, even if a prior transaction within the period has reduced the beneficial ownership to 10% or below." While there may be logic in this position, it was clearly rejected as a basis for liability when Congress included the proviso that a 10% owner must be such both at the time of the purchase and of the sale. Although the legislative history affords no explanation of the purpose of the proviso, it may be that Congress regarded one with a long-term investment of more than 10% as more likely to have access to inside information than one who moves in and out of the 10% category. But whatever the rationale of the proviso, it cannot be disregarded simply on the ground that it may be inconsistent with our assessment of the "wholesome purpose" of the Act.To be sure, where alternative constructions of the terms of 16 (b) are possible, those terms are to be given the construction that best serves the congressional purpose of curbing short-swing speculation by corporate insiders.4 But a construction of the term "at the time of ... sale" that treats two sales as one upon proof of a pre-existing intent by the seller is scarcely in harmony with the congressional design of predicating liability upon an "objective measure of proof." Smolowe v. Delendo Corp., supra, at 235. Were we to adopt the approach urged by Reliance, we could be sure that investors would not in the future provide such convenient proof of their intent as Emerson did in this case. If a "two-step" sale of a 10% owner's holdings within six months of purchase is thought to give rise to the kind of evil that Congress sought to correct through 16 (b), those transactions can be more effectively deterred by an amendment to the statute that preserves its mechanical quality than by a judicial search for the will-o'-the-wisp of an investor's "intent" in each litigated case.IIIThe Securities and Exchange Commission, participating as amicus curiae, argues for an interpretation of the statute that both covers Emerson's transaction and preserves the mechanical quality of the statute. Seizing upon a fragment of legislative history - a brief exchange between one of the principal authors of the bill and two members of the Senate Committee during hearings on the bill5 - the Commission suggests that the sole purpose of the requirement of 10% ownership at the time of both purchase and sale was to exclude from the statute's coverage those persons who became 10% shareholders "involuntarily," as, for example, by legal succession or by a reduction in the total number of outstanding shares of the corporation. The effect of such an interpretation would be to bring within 16 (b) all sales within six months by one who has gained the position of a 10% owner through voluntary purchase, regardless of the amount of his holdings at the time of the sale. We cannot accept such a construction of the Act.In the first place, we note that the SEC's own rules undercut such an interpretation. Recognizing the inter-relatedness of 16 (a) and 16 (b) of the Act, the Commission has used its power to grant exemptions under 16 (b) to exclude from liability any transaction that does not fall within the reporting requirements of 16 (a).6 A 10% owner is required by that section to report at the end of each month any changes in his holdings in the corporation during that month. The Commission has interpreted this provision to require a report only if the stockholder held more than 10% of the corporation's shares at some time during the month.7 Thus, a 10% owner who, like Emerson, sells down to 9.96% one month and disposes of the remainder the following month, would presumably be exempt from the reporting requirement and hence from 16 (b) under the SEC's own rules, without regard to whether he acquired the stock "voluntarily."But the SEC's argument would fail even if it were not contradicted by the Commission's own previous construction of the Act. As we said in Blau v. Lehman, , one "may agree that ... the Commission present[s] persuasive policy arguments that the Act should be broadened ... to prevent `the unfair use of information' more effectively than can be accomplished by leaving the Act so as to require forfeiture of profits only by those specifically designated by Congress to suffer those losses." But we are not free to adopt a construction that not only strains, but flatly contradicts, the words of the statute.The judgment is Affirmed.MR. JUSTICE POWELL and MR. JUSTICE REHNQUIST took no part in the consideration or decision of this case. |
8 | Under the Renegotiation Act of 1942 as amended, the Maritime Commission determined that a steamship company should repay $164,000 as "excessive profits." The company took the matter to the Tax Court under 403 (e) (1) of the Act, which authorizes that Court "to finally determine the amount, if any, of excessive profits" and provides that "such determination shall not be reviewed or redetermined by any court or agency." The Tax Court, without making any finding or determination as to profits, held that the only contract in the case was one between the company and a foreign government, and that the Commission had made no renegotiable contract within 403 (e) (1) of the Act. Held: The decision of the Tax Court was reviewable by the Court of Appeals under 26 U.S.C. 1141. Pp. 352-355. (a) That 26 U.S.C. 1141 was originally enacted primarily to authorize review of decisions on revenue matters does not render it inapplicable to decisions on other justiciable matters entrusted to the Tax Court by Congress. Pp. 353-354. (b) Macauley v. Waterman S. S. Co., , distinguished. Pp. 354-355. (c) The decision of the Tax Court in this case is not the kind of determination that 403 (e) (1) of the Renegotiation Act makes final, and it is therefore subject to the normal type of review authorized by 26 U.S.C. 1141. P. 355. App. D.C. 289, 211 F.2d 635, reversed.Oscar H. Davis argued the cause for petitioners. With him on the brief were Solicitor General Sobeloff, Assistant Attorney General Burger and Melvin Richter.Harold B. Finn argued the cause for respondent. With him on the brief were Cletus Keating and Robert E. Kline, Jr. MR. JUSTICE BLACK delivered the opinion of the Court.The Renegotiation Act of 1942 as amended sets up departmental and Tax Court procedures to save the United States from the burden of "excessive profits" made by private contractors under war contracts with Government "Departments."1 The question in this case is whether an order entered by the Tax Court under that Act is reviewable by the United States Court of Appeals for the District of Columbia Circuit.In 1941 the Maritime Commission, defined as a "Department" in the Act, was charged with responsibility for aiding the British Government in the transport of war equipment and supplies for use in World War II. Respondent, California Eastern Line, Inc., among others, was asked by the Commission to carry supplies to the Red Sea area for the African campaign. After extensive negotiations respondent agreed with the Commission on detailed contractual terms for the carriage. And it was agreed that respondent would be paid by the Commission out of funds appropriated by Congress under the so-called Lend-Lease Act.2 It was also understood that a written contract embodying only the terms previously agreed on would be executed between the respondent and the British Ministry of Transport. The charter was executed after respondent's boat had already sailed with its war cargo. In accordance with its agreement, the Commission paid the respondent about $351,000 for the carriage. Later the Commission chairman, after conforming with required procedure, determined that respondent should repay $164,000 as "excessive profits." Respondent took the matter to the Tax Court under 403 (e) (1) of the Act which authorizes that court "to finally determine the amount, if any, of excessive profits" and provides that "such determination shall not be reviewed or redetermined by any court or agency." But that court made no finding or determination at all about profits. It disposed of the whole case by finding as a fact and holding as a matter of law that the only contract was in the written charter with the British Ministry in which the Commission was not named as a party and that consequently the Commission had made no renegotiable contract within 403 (e) (1) of the Renegotiation Act. 17 T. C. 1325.The United States sought review in the Court of Appeals for the District of Columbia Circuit under the broad grant of jurisdiction in 26 U.S.C. 1141 which vests Courts of Appeals with "exclusive jurisdiction to review the decisions of the Tax Court ... ."3 The Court of Appeals held that 1141 does authorize review of Tax Court renegotiation orders with the exception of determinations as to profits which 403 (e) (1) of the Renegotiation Act states shall not be reviewed by any court or agency. Viewing the issue decided by the Tax Court as coming within the nonreviewable category, the Court of Appeals dismissed. App. D.C. 289, 211 F.2d 635. The Ninth Circuit has construed 1141 differently, however, holding that it gives Courts of Appeals no power whatever to review Tax Court renegotiation orders. French v. War Contracts Price Adjustment Board, 182 F.2d 560. Never having passed on this jurisdictional question, we granted certiorari to decide it. .The language of 1141 is broad enough to justify review of Tax Court renegotiation orders. And we cannot say that because the section was originally passed primarily to authorize review of decisions on revenue matters it should be held inapplicable to decisions on other justiciable matters entrusted to the Tax Court by Congress. As long ago as 1946 the Court of Appeals for the District of Columbia interpreted 1141 as authorizing review of renegotiation orders.4 It has followed that interpretation in a number of later cases, including this one.5 All of these cases, however, have recognized that the scope of 1141 review over renegotiation orders is narrowed by that part of the Renegotiation Act that makes nonreviewable Tax Court determinations of amounts of excess profits, if any. This reconciliation of 1141 with the Renegotiation Act has a permissible basis, and accordingly we see no reason to upset the review practice that has grown up under it. Under this practice, the particular order here is reviewable under 1141 unless it is a determination of "the amount, if any, of excessive profits" within the meaning of 403 (e) (1) of the Act. The Court of Appeals, relying on Macauley v. Waterman S. S. Co., , held that it was. On this point we disagree.In making determinations as to excess profits the Tax Court must decide at least two separate but interrelated questions: (1) whether a renegotiable contract is involved and (2) the amount if any of excessive profits. We held in the Waterman case that the Tax Court has primary, exclusive jurisdiction to decide whether a contract is renegotiable. That result was reached because the Act gives the Tax Court exclusive jurisdiction to determine the amount of profits and the existence of a renegotiable contract is essential to such a determination. In Waterman, however, we did not decide any question concerning the reviewability of Tax Court orders entered under the Renegotiation Act.The language and history of the Renegotiation Act make it pretty clear that the Tax Court was selected to handle excess profits cases because of that Court's special familiarity with all kinds of business and accounting practices in regard to profits, losses, etc. Thus it is easy to understand why Congress in 403 (e) (1) spelled out with meticulous clarity that Tax Court determinations of the amount of excessive profits, if any, should be final and nonreviewable. We agree that a 1141 Court of Appeals review should not upset such determinations. But we do not agree that the Tax Court's determination here is in that category. The question of the amount of profits was not even reached by the Tax Court. It simply held, relying largely on common law principles of contract law, that there was no government contract to renegotiate. The existence or nonexistence of profits was wholly irrelevant to the holding. Consequently this is not the kind of determination that 403 (e) (1) makes final and the Tax Court's decision in this case is therefore subject to the normal type of review authorized by 1141. Reversed.MR. JUSTICE DOUGLAS dissents. |
7 | For each deferred-payment transaction respondents entered into with Buckeye Check Cashing, they signed an Agreement containing provisions that required binding arbitration to resolve disputes arising out of the Agreement. Respondents sued in Florida state court, alleging that Buckeye charged usurious interest rates and that the Agreement violated various Florida laws, rendering it criminal on its face. The trial court denied Buckeye's motion to compel arbitration, holding that a court rather than an arbitrator should resolve a claim that a contract is illegal and void ab initio. A state appellate court reversed, but was in turn reversed by the Florida Supreme Court, which reasoned that enforcing an arbitration agreement in a contract challenged as unlawful would violate state public policy and contract law.Held: Regardless of whether it is brought in federal or state court, a challenge to the validity of a contract as a whole, and not specifically to the arbitration clause within it, must go to the arbitrator, not the court. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, and Southland Corp. v. Keating, 465 U. S. 1, answer the question presented here by establishing three propositions. First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract. See Prima Paint, 388 U. S., at 400, 402-404. Second, unless the challenge is to the arbitration clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance. See id., at 403-404. Third, this arbitration law applies in state as well as federal courts. See Southland, supra, at 12. The crux of respondents' claim is that the Agreement as a whole (including its arbitration provision) is rendered invalid by the usurious finance charge. Because this challenges the Agreement, and not specifically its arbitration provisions, the latter are enforceable apart from the remainder of the contract, and the challenge should be considered by an arbitrator, not a court. The Florida Supreme Court erred in declining to apply Prima Paint's severability rule, and respondents' assertion that that rule does not apply in state court runs contrary to Prima Paint and Southland. Pp. 3-8.894 So. 2d 860, reversed and remanded. Scalia, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Kennedy, Souter, Ginsburg, and Breyer, JJ., joined. Thomas, J., filed a dissenting opinion. Alito, J., took no part in the consideration or decision of the case.BUCKEYE CHECK CASHING, INC., PETITIONER v.JOHN CARDEGNA et al.on writ of certiorari to the supreme court of florida[February 21, 2006] Justice Scalia delivered the opinion of the Court. We decide whether a court or an arbitrator should consider the claim that a contract containing an arbitration provision is void for illegality.I Respondents John Cardegna and Donna Reuter entered into various deferred-payment transactions with petitioner Buckeye Check Cashing (Buckeye), in which they received cash in exchange for a personal check in the amount of the cash plus a finance charge. For each separate transaction they signed a "Deferred Deposit and Disclosure Agreement" (Agreement), which included the following arbitration provisions:"1. Arbitration Disclosure By signing this Agreement, you agree that i[f] a dispute of any kind arises out of this Agreement or your application therefore or any instrument relating thereto, th[e]n either you or we or third-parties involved can choose to have that dispute resolved by binding arbitration as set forth in Paragraph 2 below ... .2. Arbitration Provisions Any claim, dispute, or controversy ... arising from or relating to this Agreement ... or the validity, enforceability, or scope of this Arbitration Provision or the entire Agreement (collectively 'Claim'), shall be resolved, upon the election of you or us or said third-parties, by binding arbitration ... . This arbitration Agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act ('FAA'), 9 U. S. C. Sections 1-16. The arbitrator shall apply applicable substantive law constraint [sic] with the FAA and applicable statu[t]es of limitations and shall honor claims of privilege recognized by law ... ." Respondents brought this putative class action in Florida state court, alleging that Buckeye charged usurious interest rates and that the Agreement violated various Florida lending and consumer-protection laws, rendering it criminal on its face. Buckeye moved to compel arbitration. The trial court denied the motion, holding that a court rather than an arbitrator should resolve a claim that a contract is illegal and void ab initio. The District Court of Appeal of Florida for the Fourth District reversed, holding that because respondents did not challenge the arbitration provision itself, but instead claimed that the entire contract was void, the agreement to arbitrate was enforceable, and the question of the contract's legality should go to the arbitrator. Respondents appealed, and the Florida Supreme Court reversed, reasoning that to enforce an agreement to arbitrate in a contract challenged as unlawful " 'could breathe life into a contract that not only violates state law, but also is criminal in nature ... .' " 894 So. 2d 860, 862 (2005) (quoting Party Yards, Inc. v. Templeton, 751 So. 2d 121, 123 (Fla. App. 2000)). We granted certiorari. 545 U. S. ___ (2005).IIA To overcome judicial resistance to arbitration, Congress enacted the Federal Arbitration Act (FAA), 9 U. S. C. §§1-16. Section 2 embodies the national policy favoring arbitration and places arbitration agreements on equal footing with all other contracts: "A written provision in ... a contract ... to settle by arbitration a controversy thereafter arising out of such contract ... or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."Challenges to the validity of arbitration agreements "upon such grounds as exist at law or in equity for the revocation of any contract" can be divided into two types. One type challenges specifically the validity of the agreement to arbitrate. See, e.g., Southland Corp. v. Keating, 465 U. S. 1, 4-5 (1984) (challenging the agreement to arbitrate as void under California law insofar as it purported to cover claims brought under the state Franchise Investment Law). The other challenges the contract as a whole, either on a ground that directly affects the entire agreement (e.g., the agreement was fraudulently induced), or on the ground that the illegality of one of the contract's provisions renders the whole contract invalid.1 Respondents' claim is of this second type. The crux of the complaint is that the contract as a whole (including its arbitration provision) is rendered invalid by the usurious finance charge. In Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395 (1967), we addressed the question of who — court or arbitrator — decides these two types of challenges. The issue in the case was "whether a claim of fraud in the inducement of the entire contract is to be resolved by the federal court, or whether the matter is to be referred to the arbitrators." Id., at 402. Guided by §4 of the FAA,2 we held that "if the claim is fraud in the inducement of the arbitration clause itself — an issue which goes to the making of the agreement to arbitrate — the federal court may proceed to adjudicate it. But the statutory language does not permit the federal court to consider claims of fraud in the inducement of the contract generally." Id., at 403-404 (internal quotation marks and footnote omitted). We rejected the view that the question of "severability" was one of state law, so that if state law held the arbitration provision not to be severable a challenge to the contract as a whole would be decided by the court. See id., at 400, 402-403. Subsequently, in Southland Corp., we held that the FAA "create[d] a body of federal substantive law," which was "applicable in state and federal court." 513 U. S. 265, 270-273 (1995).B Prima Paint and Southland answer the question presented here by establishing three propositions. First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract. Second, unless the challenge is to the arbitration clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance. Third, this arbitration law applies in state as well as federal courts. The parties have not requested, and we do not undertake, reconsideration of those holdings. Applying them to this case, we conclude that because respondents challenge the Agreement, but not specifically its arbitration provisions, those provisions are enforceable apart from the remainder of the contract. The challenge should therefore be considered by an arbitrator, not a court. In declining to apply Prima Paint's rule of severability, the Florida Supreme Court relied on the distinction between void and voidable contracts. "Florida public policy and contract law," it concluded, permit "no severable, or salvageable, parts of a contract found illegal and void under Florida law." 894 So. 2d, at 864. Prima Paint makes this conclusion irrelevant. That case rejected application of state severability rules to the arbitration agreement without discussing whether the challenge at issue would have rendered the contract void or voidable. See 388 U. S., at 400-404. Indeed, the opinion expressly disclaimed any need to decide what state-law remedy was available, id., at 400, n. 3, (though Justice Black's dissent asserted that state law rendered the contract void, id., at 407). Likewise in Southland, which arose in state court, we did not ask whether the several challenges made there — fraud, misrepresentation, breach of contract, breach of fiduciary duty, and violation of the California Franchise Investment Law — would render the contract void or voidable. We simply rejected the proposition that the enforceability of the arbitration agreement turned on the state legislature's judgment concerning the forum for enforcement of the state-law cause of action. See 465 U. S., at 10. So also here, we cannot accept the Florida Supreme Court's conclusion that enforceability of the arbitration agreement should turn on "Florida public policy and contract law," 894 So. 2d, at 864.C Respondents assert that Prima Paint's rule of severability does not apply in state court. They argue that Prima Paint interpreted only §§3 and 4 — two of the FAA's procedural provisions, which appear to apply by their terms only in federal court — but not §2, the only provision that we have applied in state court. This does not accurately describe Prima Paint. Although §4, in particular, had much to do with Prima Paint's understanding of the rule of severability, see 388 U. S., at 403-404, this rule ultimately arises out of §2, the FAA's substantive command that arbitration agreements be treated like all other contracts. The rule of severability establishes how this equal-footing guarantee for "a written [arbitration] provision" is to be implemented. Respondents' reading of Prima Paint as establishing nothing more than a federal-court rule of procedure also runs contrary to Southland's understanding of that case. One of the bases for Southland's application of §2 in state court was precisely Prima Paint's "reli[ance] for [its] holding on Congress' broad power to fashion substantive rules under the Commerce Clause." 465 U. S., at 11; see also Prima Paint, supra, at 407 (Black, J., dissenting) ("[t]he Court here holds that the [FAA], as a matter of federal substantive law ..." (emphasis added)). Southland itself refused to "believe Congress intended to limit the Arbitration Act to disputes subject only to federal-court jurisdiction." 465 U. S., at 15. Respondents point to the language of §2, which renders "valid, irrevocable, and enforceable" "a written provision in" or "an agreement in writing to submit to arbitration an existing controversy arising out of" a "contract." Since, respondents argue, the only arbitration agreements to which §2 applies are those involving a "contract," and since an agreement void ab initio under state law is not a "contract," there is no "written provision" in or "controversy arising out of" a "contract," to which §2 can apply. This argument echoes Justice Black's dissent in Prima Paint: "Sections 2 and 3 of the Act assume the existence of a valid contract. They merely provide for enforcement where such a valid contract exists." 388 U. S., at 412-413. We do not read "contract" so narrowly. The word appears four times in §2. Its last appearance is in the final clause, which allows a challenge to an arbitration provision "upon such grounds as exist at law or in equity for the revocation of any contract." (Emphasis added.) There can be no doubt that "contract" as used this last time must include contracts that later prove to be void. Otherwise, the grounds for revocation would be limited to those that rendered a contract voidable — which would mean (implausibly) that an arbitration agreement could be challenged as voidable but not as void. Because the sentence's final use of "contract" so obviously includes putative contracts, we will not read the same word earlier in the same sentence to have a more narrow meaning.3 We note that neither Prima Paint nor Southland lends support to respondents' reading; as we have discussed, neither case turned on whether the challenge at issue would render the contract voidable or void. * * * It is true, as respondents assert, that the Prima Paint rule permits a court to enforce an arbitration agreement in a contract that the arbitrator later finds to be void. But it is equally true that respondents' approach permits a court to deny effect to an arbitration provision in a contract that the court later finds to be perfectly enforceable. Prima Paint resolved this conundrum — and resolved it in favor of the separate enforceability of arbitration provisions. We reaffirm today that, regardless of whether the challenge is brought in federal or state court, a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator. The judgment of the Florida Supreme Court is reversed, and the case is remanded for further proceedings not inconsistent with this opinion. It is so ordered. Justice Alito took no part in the consideration or decision of this case.BUCKEYE CHECK CASHING, INC., PETITIONER v.JOHN CARDEGNA et al.on writ of certiorari to the supreme court of florida[February 21, 2006] Justice Thomas, dissenting. I remain of the view that the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq., does not apply to proceedings in state courts. See Allied-Bruce Terminix Cos. v. Dobson, 513 U. S. 265, 285-297 (1995) (Thomas, J., dissenting); Doctor's Associates, Inc. v. Casarotto, 517 U. S. 681, 689 (1996) (same); Green Tree Financial Corp. v. Bazzle, 539 U. S. 444, 460 (2003) (same). Thus, in state-court proceedings, the FAA cannot be the basis for displacing a state law that prohibits enforcement of an arbitration clause contained in a contract that is unenforceable under state law. Accordingly, I would leave undisturbed the judgment of the Florida Supreme Court.FOOTNOTESFootnote 1 The issue of the contract's validity is different from the issue of whether any agreement between the alleged obligor and obligee was ever concluded. Our opinion today addresses only the former, and does not speak to the issue decided in the cases cited by respondents (and by the Florida Supreme Court), which hold that it is for courts to decide whether the alleged obligor ever signed the contract, Chastain v. Robinson-Humphrey Co., 957 F. 2d 851 (CA11 1992), whether the signor lacked authority to commit the alleged principal, Sandvik AB v. Advent Int'l Corp., 220 F. 3d 99 (CA3 2000); Sphere Drake Ins. Ltd. v. All American Ins. Co., 256 F. 3d 587 (CA7 2001), and whether the signor lacked the mental capacity to assent, Spahr v. Secco, 330 F. 3d 1266 (CA10 2003).Footnote 2 In pertinent part, §4 reads: "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court [with jurisdiction] ... for an order directing that such arbitration proceed in a manner provided for in such agreement ... . [U]pon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement ... ."Footnote 3 Our more natural reading is confirmed by the use of the word "contract" elsewhere in the United States Code to refer to putative agreements, regardless of whether they are legal. For instance, the Sherman Act, 26 Stat. 209, as amended, states that "[e]very contract, combination ... , or conspiracy in restraint of trade ... is hereby declared to be illegal." 15 U. S. C. §1. Under respondents' reading of "contract," a bewildering circularity would result: A contract illegal because it was in restraint of trade would not be a "contract" at all, and thus the statutory prohibition would not apply. |
0 | Several weeks after respondent's indictment for robbery of a federally insured bank and for conspiracy, respondent, without notice to his appointed counsel, was placed in a lineup in which each person wore strips of tape on his face, as the robber allegedly had done, and on direction repeated words like those the robber allegedly had used. Two bank employees identified respondent as the robber. At the trial when asked if the robber was in the courtroom, they identified respondent. The prior lineup identifications were elicited on cross-examination. Urging that the conduct of the lineup violated his Fifth Amendment privilege against self-incrimination and his Sixth Amendment right to counsel, respondent filed a motion for judgment of acquittal or, alternatively, to strike the courtroom identifications. The trial court denied the motions and respondent was convicted. The Court of Appeals reversed, holding that though there was no Fifth Amendment deprivation the absence of counsel at the lineup denied respondent his right to counsel under the Sixth Amendment and required the grant of a new trial at which the in-court identifications of those who had made lineup identifications would be excluded. Held: 1. Neither the lineup itself nor anything required therein violated respondent's Fifth Amendment privilege against self-incrimination since merely exhibiting his person for observation by witnesses and using his voice as an identifying physical characteristic involved no compulsion of the accused to give evidence of a testimonial nature against himself which is prohibited by that Amendment. Pp. 221-223. 2. The Sixth Amendment guarantees an accused the right to counsel not only at his trial but at any critical confrontation by the prosecution at pretrial proceedings where the results might well determine his fate and where the absence of counsel might derogate from his right to a fair trial. Pp. 223-227. 3. The post-indictment lineup (unlike such preparatory steps as analyzing fingerprints and blood samples) was a critical prosecutive stage at which respondent was entitled to the aid of counsel. Pp. 227-239. (a) There is a great possibility of unfairness to the accused at that point, (1) because of the manner in which confrontations for identification are frequently conducted, (2) because of dangers inherent in eyewitness identification and suggestibility inherent in the context of the confrontations, and (3) because of the likelihood that the accused will often be precluded from reconstructing what occurred and thereby obtaining a full hearing on the identification issue at trial. Pp. 229-235. (b) This case illustrates the potential for improper influence on witnesses through the lineup procedure, since the bank employees were allowed to see respondent in the custody of FBI agents before the lineup began. Pp. 233-234. (c) The presence of counsel at the lineup will significantly promote fairness at the confrontation and a full hearing at trial on the issue of identification. Pp. 236-238. 4. In-court identification by a witness to whom the accused was exhibited before trial in the absence of counsel must be excluded unless it can be established that such evidence had an independent origin or that error in its admission was harmless. Since it is not clear that the Court of Appeals applied the prescribed rule of exclusion, and since the nature of the in-court identifications here was not an issue in the trial and cannot be determined on the record, the case must be remanded to the District Court for resolution of these issues. Pp. 239-243. 358 F.2d 557, vacated and remanded.Beatrice Rosenberg argued the cause for the United States. With her on the brief were Acting Solicitor General Spritzer, Assistant Attorney General Vinson, Nathan Lewin and Ronald L. Gainer.Weldon Holcomb argued the cause and filed a brief for respondent.MR. JUSTICE BRENNAN delivered the opinion of the Court.The question here is whether courtroom identifications of an accused at trial are to be excluded from evidence because the accused was exhibited to the witnesses before trial at a post-indictment lineup conducted for identification purposes without notice to and in the absence of the accused's appointed counsel.The federally insured bank in Eustace, Texas, was robbed on September 21, 1964. A man with a small strip of tape on each side of his face entered the bank, pointed a pistol at the female cashier and the vice president, the only persons in the bank at the time, and forced them to fill a pillowcase with the bank's money. The man then drove away with an accomplice who had been waiting in a stolen car outside the bank. On March 23, 1965, an indictment was returned against respondent, Wade, and two others for conspiring to rob the bank, and against Wade and the accomplice for the robbery itself. Wade was arrested on April 2, and counsel was appointed to represent him on April 26. Fifteen days later an FBI agent, without notice to Wade's lawyer, arranged to have the two bank employees observe a lineup made up of Wade and five or six other prisoners and conducted in a courtroom of the local county courthouse. Each person in the line wore strips of tape such as allegedly worn by the robber and upon direction each said something like "put the money in the bag," the words allegedly uttered by the robber. Both bank employees identified Wade in the lineup as the bank robber.At trial, the two employees, when asked on direct examination if the robber was in the courtroom, pointed to Wade. The prior lineup identification was then elicited from both employees on cross-examination. At the close of testimony, Wade's counsel moved for a judgment of acquittal or, alternatively, to strike the bank officials' courtroom identifications on the ground that conduct of the lineup, without notice to and in the absence of his appointed counsel, violated his Fifth Amendment privilege against self-incrimination and his Sixth Amendment right to the assistance of counsel. The motion was denied, and Wade was convicted. The Court of Appeals for the Fifth Circuit reversed the conviction and ordered a new trial at which the in-court identification evidence was to be excluded, holding that, though the lineup did not violate Wade's Fifth Amendment rights, "the lineup, held as it was, in the absence of counsel, already chosen to represent appellant, was a violation of his Sixth Amendment rights ... ." 358 F.2d 557, 560. We granted certiorari, , and set the case for oral argument with No. 223, Gilbert v. California, post, p. 263, and No. 254, Stovall v. Denno, post, p. 293, which present similar questions. We reverse the judgment of the Court of Appeals and remand to that court with direction to enter a new judgment vacating the conviction and remanding the case to the District Court for further proceedings consistent with this opinion. I. Neither the lineup itself nor anything shown by this record that Wade was required to do in the lineup violated his privilege against self-incrimination. We have only recently reaffirmed that the privilege "protects an accused only from being compelled to testify against himself, or otherwise provide the State with evidence of a testimonial or communicative nature ... ." Schmerber v. California, . We there held that compelling a suspect to submit to a withdrawal of a sample of his blood for analysis for alcohol content and the admission in evidence of the analysis report were not compulsion to those ends. That holding was supported by the opinion in Holt v. United States, , in which case a question arose as to whether a blouse belonged to the defendant. A witness testified at trial that the defendant put on the blouse and it had fit him. The defendant argued that the admission of the testimony was error because compelling him to put on the blouse was a violation of his privilege. The Court rejected the claim as "an extravagant extension of the Fifth Amendment," Mr. Justice Holmes saying for the Court:"[T]he prohibition of compelling a man in a criminal court to be witness against himself is a prohibition of the use of physical or moral compulsion to extort communications from him, not an exclusion of his body as evidence when it may be material." 218 U.S., at 252-253. The Court in Holt, however, put aside any constitutional questions which might be involved in compelling an accused, as here, to exhibit himself before victims of or witnesses to an alleged crime; the Court stated, "we need not consider how far a court would go in compelling a man to exhibit himself." Id., at 253.1 We have no doubt that compelling the accused merely to exhibit his person for observation by a prosecution witness prior to trial involves no compulsion of the accused to give evidence having testimonial significance. It is compulsion of the accused to exhibit his physical characteristics, not compulsion to disclose any knowledge he might have. It is no different from compelling Schmerber to provide a blood sample or Holt to wear the blouse, and, as in those instances, is not within the cover of the privilege. Similarly, compelling Wade to speak within hearing distance of the witnesses, even to utter words purportedly uttered by the robber, was not compulsion to utter statements of a "testimonial" nature; he was required to use his voice as an identifying physical characteristic, not to speak his guilt. We held in Schmerber, supra, at 761, that the distinction to be drawn under the Fifth Amendment privilege against self-incrimination is one between an accused's "communications" in whatever form, vocal or physical, and "compulsion which makes a suspect or accused the source of `real or physical evidence,'" Schmerber, supra, at 764. We recognized that "both federal and state courts have usually held that ... [the privilege] offers no protection against compulsion to submit to fingerprinting, photography, or measurements, to write or speak for identification, to appear in court, to stand, to assume a stance, to walk, or to make a particular gesture." Id., at 764. None of these activities becomes testimonial within the scope of the privilege because required of the accused in a pretrial lineup.Moreover, it deserves emphasis that this case presents no question of the admissibility in evidence of anything Wade said or did at the lineup which implicates his privilege. The Government offered no such evidence as part of its case, and what came out about the lineup proceedings on Wade's cross-examination of the bank employees involved no violation of Wade's privilege. II. The fact that the lineup involved no violation of Wade's privilege against self-incrimination does not, however, dispose of his contention that the courtroom identifications should have been excluded because the lineup was conducted without notice to and in the absence of his counsel. Our rejection of the right to counsel claim in Schmerber rested on our conclusion in that case that "[n]o issue of counsel's ability to assist petitioner in respect of any rights he did possess is presented." 384 U.S., at 766. In contrast, in this case it is urged that the assistance of counsel at the lineup was indispensable to protect Wade's most basic right as a criminal defendant his right to a fair trial at which the witnesses against him might be meaningfully cross-examined.The Framers of the Bill of Rights envisaged a broader role for counsel than under the practice then prevailing in England of merely advising his client in "matters of law," and eschewing any responsibility for "matters of fact."2 The constitutions in at least 11 of the 13 States expressly or impliedly abolished this distinction. Powell v. Alabama, ; Note, 73 Yale L. J. 1000, 1030-1033 (1964). "Though the colonial provisions about counsel were in accord on few things, they agreed on the necessity of abolishing the facts-law distinction; the colonists appreciated that if a defendant were forced to stand alone against the state, his case was foredoomed." 73 Yale L. J., supra, at 1033-1034. This background is reflected in the scope given by our decisions to the Sixth Amendment's guarantee to an accused of the assistance of counsel for his defense. When the Bill of Rights was adopted, there were no organized police forces as we know them today.3 The accused confronted the prosecutor and the witnesses against him, and the evidence was marshalled, largely at the trial itself. In contrast, today's law enforcement machinery involves critical confrontations of the accused by the prosecution at pretrial proceedings where the results might well settle the accused's fate and reduce the trial itself to a mere formality. In recognition of these realities of modern criminal prosecution, our cases have construed the Sixth Amendment guarantee to apply to "critical" stages of the proceedings. The guarantee reads: "In all criminal prosecutions, the accused shall enjoy the right ... to have the Assistance of Counsel for his defence." (Emphasis supplied.) The plain wording of this guarantee thus encompasses counsel's assistance whenever necessary to assure a meaningful "defence."As early as Powell v. Alabama, supra, we recognized that the period from arraignment to trial was "perhaps the most critical period of the proceedings ...," id., at 57, during which the accused "requires the guiding hand of counsel ...," id., at 69, if the guarantee is not to prove an empty right. That principle has since been applied to require the assistance of counsel at the type of arraignment for example, that provided by Alabama where certain rights might be sacrificed or lost: "What happens there may affect the whole trial. Available defenses may be irretrievably lost, if not then and there asserted ... ." Hamilton v. Alabama, . See White v. Maryland, . The principle was also applied in Massiah v. United States, , where we held that incriminating statements of the defendant should have been excluded from evidence when it appeared that they were overheard by federal agents who, without notice to the defendant's lawyer, arranged a meeting between the defendant and an accomplice turned informant. We said, quoting a concurring opinion in Spano v. New York, , that "[a]nything less ... might deny a defendant `effective representation by counsel at the only stage when legal aid and advice would help him.'" 377 U.S., at 204.In Escobedo v. Illinois, , we drew upon the rationale of Hamilton and Massiah in holding that the right to counsel was guaranteed at the point where the accused, prior to arraignment, was subjected to secret interrogation despite repeated requests to see his lawyer. We again noted the necessity of counsel's presence if the accused was to have a fair opportunity to present a defense at the trial itself:"The rule sought by the State here, however, would make the trial no more than an appeal from the interrogation; and the `right to use counsel at the formal trial [would be] a very hollow thing [if], for all practical purposes, the conviction is already assured by pretrial examination' ... . `One can imagine a cynical prosecutor saying: "Let them have the most illustrious counsel, now. They can't escape the noose. There is nothing that counsel can do for them at the trial."'" 378 U.S., at 487-488. Finally in Miranda v. Arizona, , the rules established for custodial interrogation included the right to the presence of counsel. The result was rested on our finding that this and the other rules were necessary to safeguard the privilege against self-incrimination from being jeopardized by such interrogation.Of course, nothing decided or said in the opinions in the cited cases links the right to counsel only to protection of Fifth Amendment rights. Rather those decisions "no more than reflect a constitutional principle established as long ago as Powell v. Alabama ... ." Massiah v. United States, supra, at 205. It is central to that principle that in addition to counsel's presence at trial,4 the accused is guaranteed that he need not stand alone against the State at any stage of the prosecution, formal or informal, in court or out, where counsel's absence might derogate from the accused's right to a fair trial.5 The security of that right is as much the aim of the right to counsel as it is of the other guarantees of the Sixth Amendment the right of the accused to a speedy and public trial by an impartial jury, his right to be informed of the nature and cause of the accusation, and his right to be confronted with the witnesses against him and to have compulsory process for obtaining witnesses in his favor. The presence of counsel at such critical confrontations, as at the trial itself, operates to assure that the accused's interests will be protected consistently with out adversary theory of criminal prosecution. Cf. Pointer v. Texas, .In sum, the principle of Powell v. Alabama and succeeding cases requires that we scrutinize any pretrial confrontation of the accused to determine whether the presence of his counsel is necessary to preserve the defendant's basic right to a fair trial as affected by his right meaningfully to cross-examine the witnesses against him and to have effective assistance of counsel at the trial itself. It calls upon us to analyze whether potential substantial prejudice to defendant's rights inheres in the particular confrontation and the ability of counsel to help avoid that prejudice. III. The Government characterizes the lineup as a mere preparatory step in the gathering of the prosecution's evidence, not different for Sixth Amendment purposes from various other preparatory steps, such as systematized or scientific analyzing of the accused's fingerprints, blood sample, clothing, hair, and the like. We think there are differences which preclude such stages being characterized as critical stages at which the accused has the right to the presence of his counsel. Knowledge of the techniques of science and technology is sufficiently available, and the variables in techniques few enough, that the accused has the opportunity for a meaningful confrontation of the Government's case at trial through the ordinary processes of cross-examination of the Government's expert witnesses and the presentation of the evidence of his own experts. The denial of a right to have his counsel present at such analyses does not therefore violate the Sixth Amendment; they are not critical stages since there is minimal risk that his counsel's absence at such stages might derogate from his right to a fair trial. IV. But the confrontation compelled by the State between the accused and the victim or witnesses to a crime to elicit identification evidence is peculiarly riddled with innumerable dangers and variable factors which might seriously, even crucially, derogate from a fair trial. The vagaries of eyewitness identification are well-known; the annals of criminal law are rife with instances of mistaken identification.6 Mr. Justice Frankfurter once said: "What is the worth of identification testimony even when uncontradicted? The identification of strangers is proverbially untrustworthy. The hazards of such testimony are established by a formidable number of instances in the records of English and American trials. These instances are recent not due to the brutalities of ancient criminal procedure." The Case of Sacco and Vanzetti 30 (1927). A major factor contributing to the high incidence of miscarriage of justice from mistaken identification has been the degree of suggestion inherent in the manner in which the prosecution presents the suspect to witnesses for pretrial identification. A commentator has observed that "[t]he influence of improper suggestion upon identifying witnesses probably accounts for more miscarriages of justice than any other single factor perhaps it is responsible for more such errors than all other factors combined." Wall, Eye-Witness Identification in Criminal Cases 26. Suggestion can be created intentionally or unintentionally in many subtle ways.7 And the dangers for the suspect are particularly grave when the witness' opportunity for observation was insubstantial, and thus his susceptibility to suggestion the greatest.Moreover, "[i]t is a matter of common experience that, once a witness has picked out the accused at the line-up, he is not likely to go back on his word later on, so that in practice the issue of identity may (in the absence of other relevant evidence) for all practical purposes be determined there and then, before the trial."8 The pretrial confrontation for purpose of identification may take the form of a lineup, also known as an "identification parade" or "showup," as in the present case, or presentation of the suspect alone to the witness, as in Stovall v. Denno, supra. It is obvious that risks of suggestion attend either form of confrontation and increase the dangers inhering in eyewitness identification.9 But as is the case with secret interrogations, there is serious difficulty in depicting what transpires at lineups and other forms of identification confrontations. "Privacy results in secrecy and this in turn results in a gap in our knowledge as to what in fact goes on ... ." Miranda v. Arizona, supra, at 448. For the same reasons, the defense can seldom reconstruct the manner and mode of lineup identification for judge or jury at trial. Those participating in a lineup with the accused may often be police officers;10 in any event, the participants' names are rarely recorded or divulged at trial.11 The impediments to an objective observation are increased when the victim is the witness. Lineups are prevalent in rape and robbery prosecutions and present a particular hazard that a victim's understandable outrage may excite vengeful or spiteful motives.12 In any event, neither witnesses nor lineup participants are apt to be alert for conditions prejudicial to the suspect. And if they were, it would likely be of scant benefit to the suspect since neither witnesses nor lineup participants are likely to be schooled in the detection of suggestive influences.13 Improper influences may go undetected by a suspect, guilty or not, who experiences the emotional tension which we might expect in one being confronted with potential accusers.14 Even when he does observe abuse, if he has a criminal record he may be reluctant to take the stand and open up the admission of prior convictions. Moreover, any protestations by the suspect of the fairness of the lineup made at trial are likely to be in vain;15 the jury's choice is between the accused's unsupported version and that of the police officers present.16 In short, the accused's inability effectively to reconstruct at trial any unfairness that occurred at the lineup may deprive him of his only opportunity meaningfully to attack the credibility of the witness' courtroom identification.What facts have been disclosed in specific cases about the conduct of pretrial confrontations for identification illustrate both the potential for substantial prejudice to the accused at that stage and the need for its revelation at trial. A commentator provides some striking examples:"In a Canadian case ... the defendant had been picked out of a line-up of six men, of which he was the only Oriental. In other cases, a black-haired suspect was placed among a group of light-haired persons, tall suspects have been made to stand with short non-suspects, and, in a case where the perpetrator of the crime was known to be a youth, a suspect under twenty was placed in a line-up with five other persons, all of whom were forty or over."17 Similarly state reports, in the course of describing prior identifications admitted as evidence of guilt, reveal numerous instances of suggestive procedures, for example, that all in the lineup but the suspect were known to the identifying witness,18 that the other participants in a lineup were grossly dissimilar in appearance to the suspect,19 that only the suspect was required to wear distinctive clothing which the culprit allegedly wore,20 that the witness is told by the police that they have caught the culprit after which the defendant is brought before the witness alone or is viewed in jail,21 that the suspect is pointed out before or during a lineup,22 and that the participants in the lineup are asked to try on an article of clothing which fits only the suspect.23 The potential for improper influence is illustrated by the circumstances, insofar as they appear, surrounding the prior identifications in the three cases we decide today. In the present case, the testimony of the identifying witnesses elicited on cross-examination revealed that those witnesses were taken to the courthouse and seated in the courtroom to await assembly of the lineup. The courtroom faced on a hallway observable to the witnesses through an open door. The cashier testified that she saw Wade "standing in the hall" within sight of an FBI agent. Five or six other prisoners later appeared in the hall. The vice president testified that he saw a person in the hall in the custody of the agent who "resembled the person that we identified as the one that had entered the bank."24 The lineup in Gilbert, supra, was conducted in an auditorium in which some 100 witnesses to several alleged state and federal robberies charged to Gilbert made wholesale identifications of Gilbert as the robber in each other's presence, a procedure said to be fraught with dangers of suggestion.25 And the vice of suggestion created by the identification in Stovall, supra, was the presentation to the witness of the suspect alone handcuffed to police officers. It is hard to imagine a situation more clearly conveying the suggestion to the witness that the one presented is believed guilty by the police. See Frankfurter, The Case of Sacco and Vanzetti 31-32.The few cases that have surfaced therefore reveal the existence of a process attended with hazards of serious unfairness to the criminal accused and strongly suggest the plight of the more numerous defendants who are unable to ferret out suggestive influences in the secrecy of the confrontation. We do not assume that these risks are the result of police procedures intentionally designed to prejudice an accused. Rather we assume they derive from the dangers inherent in eyewitness identification and the suggestibility inherent in the context of the pretrial identification. Williams & Hammelmann, in one of the most comprehensive studies of such forms of identification, said, "[T]he fact that the police themselves have, in a given case, little or no doubt that the man put up for identification has committed the offense, and that their chief pre-occupation is with the problem of getting sufficient proof, because he has not `come clean,' involves a danger that this persuasion may communicate itself even in a doubtful case to the witness in some way ... ." Identification Parades, Part I, 1963. Crim. L. Rev. 479, 483.Insofar as the accused's conviction may rest on a courtroom identification in fact the fruit of a suspect pretrial identification which the accused is helpless to subject to effective scrutiny at trial, the accused is deprived of that right of cross-examination which is an essential safeguard to his right to confront the witnesses against him. Pointer v. Texas, . And even though cross-examination is a precious safeguard to a fair trial, it cannot be viewed as an absolute assurance of accuracy and reliability. Thus in the present context, where so many variables and pitfalls exist, the first line of defense must be the prevention of unfairness and the lessening of the hazards of eyewitness identification at the lineup itself. The trial which might determine the accused's fate may well not be that in the courtroom but that at the pretrial confrontation, with the State aligned against the accused, the witness the sole jury, and the accused unprotected against the overreaching, intentional or unintentional, and with little or no effective appeal from the judgment there rendered by the witness "that's the man."Since it appears that there is grave potential for prejudice, intentional or not, in the pretrial lineup, which may not be capable of reconstruction at trial, and since presence of counsel itself can often avert prejudice and assure a meaningful confrontation at trial,26 there can be little doubt that for Wade the post-indictment lineup was a critical stage of the prosecution at which he was "as much entitled to such aid [of counsel] ... as at the trial itself." Powell v. Alabama, . Thus both Wade and his counsel should have been notified of the impending lineup, and counsel's presence should have been a requisite to conduct of the lineup, absent an "intelligent waiver." See Carnley v. Cochran, . No substantial countervailing policy considerations have been advanced against the requirement of the presence of counsel. Concern is expressed that the requirement will forestall prompt identifications and result in obstruction of the confrontations. As for the first, we note that in the two cases in which the right to counsel is today held to apply, counsel had already been appointed and no argument is made in either case that notice to counsel would have prejudicially delayed the confrontations. Moreover, we leave open the question whether the presence of substitute counsel might not suffice where notification and presence of the suspect's own counsel would result in prejudicial delay.27 And to refuse to recognize the right to counsel for fear that counsel will obstruct the course of justice is contrary to the basic assumptions upon which this Court has operated in Sixth Amendment cases. We rejected similar logic in Miranda v. Arizona concerning presence of counsel during custodial interrogation, 384 U.S., at 480-481:"[A]n attorney is merely exercising the good professional judgment he has been taught. This is not cause for considering the attorney a menace to law enforcement. He is merely carrying out what he is sworn to do under his oath to protect to the extent of his ability the rights of his client. In fulfilling this responsibility the attorney plays a vital role in the administration of criminal justice under our Constitution." In our view counsel can hardly impede legitimate law enforcement; on the contrary, for the reasons expressed, law enforcement may be assisted by preventing the infiltration of taint in the prosecution's identification evidence.28 That result cannot help the guilty avoid conviction but can only help assure that the right man has been brought to justice.29 Legislative or other regulations, such as those of local police departments, which eliminate the risks of abuse and unintentional suggestion at lineup proceedings and the impediments to meaningful confrontation at trial may also remove the basis for regarding the stage as "critical."30 But neither Congress nor the federal authorities have seen fit to provide a solution. What we hold today "in no way creates a constitutional strait-jacket which will handicap sound efforts at reform, nor is it intended to have this effect." Miranda v. Arizona, supra, at 467. V. We come now to the question whether the denial of Wade's motion to strike the courtroom identification by the bank witnesses at trial because of the absence of his counsel at the lineup required, as the Court of Appeals held, the grant of a new trial at which such evidence is to be excluded. We do not think this disposition can be justified without first giving the Government the opportunity to establish by clear and convincing evidence that the in-court identifications were based upon observations of the suspect other than the lineup identification. See Murphy v. Waterfront Commission, , n. 18.31 Where, as here, the admissibility of evidence of the lineup identification itself is not involved, a per se rule of exclusion of courtroom identification would be unjustified.32 See Nardone v. United States, . A rule limited solely to the exclusion of testimony concerning identification at the lineup itself, without regard to admissibility of the courtroom identification, would render the right to counsel an empty one. The lineup is most often used, as in the present case, to crystallize the witnesses' identification of the defendant for future reference. We have already noted that the lineup identification will have that effect. The State may then rest upon the witnesses' unequivocal courtroom identification, and not mention the pretrial identification as part of the State's case at trial. Counsel is then in the predicament in which Wade's counsel found himself realizing that possible unfairness at the lineup may be the sole means of attack upon the unequivocal courtroom identification, and having to probe in the dark in an attempt to discover and reveal unfairness, while bolstering the government witness' courtroom identification by bringing out and dwelling upon his prior identification. Since counsel's presence at the lineup would equip him to attack not only the lineup identification but the courtroom identification as well, limiting the impact of violation of the right to counsel to exclusion of evidence only of identification at the lineup itself disregards a critical element of that right.We think it follows that the proper test to be applied in these situations is that quoted in Wong Sun v. United States, , "`[W]hether, granting establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint.' Maguire, Evidence of Guilt 221 (1959)." See also Hoffa v. United States, . Application of this test in the present context requires consideration of various factors; for example, the prior opportunity to observe the alleged criminal act, the existence of any discrepancy between any pre-lineup description and the defendant's actual description, any identification prior to lineup of another person, the identification by picture of the defendant prior to the lineup, failure to identify the defendant on a prior occasion, and the lapse of time between the alleged act and the lineup identification. It is also relevant to consider those facts which, despite the absence of counsel, are disclosed concerning the conduct of the lineup.33 We doubt that the Court of Appeals applied the proper test for exclusion of the in-court identification of the two witnesses. The court stated that "it cannot be said with any certainty that they would have recognized appellant at the time of trial if this intervening lineup had not occurred," and that the testimony of the two witnesses "may well have been colored by the illegal procedure [and] was prejudicial." 358 F.2d, at 560. Moreover, the court was persuaded, in part, by the "compulsory verbal responses made by Wade at the instance of the Special Agent." Ibid. This implies the erroneous holding that Wade's privilege against self-incrimination was violated so that the denial of counsel required exclusion.On the record now before us we cannot make the determination whether the in-court identifications had an independent origin. This was not an issue at trial, although there is some evidence relevant to a determination. That inquiry is most properly made in the District Court. We therefore think the appropriate procedure to be followed is to vacate the conviction pending a hearing to determine whether the in-court identifications had an independent source, or whether, in any event, the introduction of the evidence was harmless error, Chapman v. California, , and for the District Court to reinstate the conviction or order a new trial, as may be proper. See United States v. Shotwell Mfg. Co., . The judgment of the Court of Appeals is vacated and the case is remanded to that court with direction to enter a new judgment vacating the conviction and remanding the case to the District Court for further proceedings consistent with this opinion. It is so ordered. THE CHIEF JUSTICE joins the opinion of the Court except for Part I, from which he dissents for the reasons expressed in the opinion of MR. JUSTICE FORTAS.MR. JUSTICE DOUGLAS joins the opinion of the Court except for Part I. On that phase of the case he adheres to the dissenting views in Schmerber v. California, , since he believes that compulsory lineup violates the privilege against self-incrimination contained in the Fifth Amendment. |
11 | Section 6331(a) of the Internal Revenue Code of 1954 provides that the Government may collect taxes of a delinquent taxpayer "by levy upon all property and rights to property ... belonging to such person." Section 6332(a) then provides that "any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Secretary [of the Treasury or his delegate], surrender such property or rights ... to the Secretary, except such part of the property or rights as is ... subject to an attachment or execution." The Internal Revenue Service (IRS) levied on two joint accounts in respondent bank in Arkansas for delinquent income taxes owed by only one of the persons in whose names the accounts stood. When respondent, contending that it did not know how much of the money on deposit belonged to the delinquent taxpayer as opposed to his codepositors, refused to comply with the levy, the United States brought an action in Federal District Court, seeking judgment against respondent for the amount of the delinquent taxes. The District Court granted respondent's motion to dismiss. The Court of Appeals affirmed, holding that because under Arkansas garnishment law a creditor of a bank depositor is not subrogated to the depositor's power to withdraw the account, the IRS, too, could not stand in the depositor's shoes, and that the Government could not make use of the administrative procedure without negating or quantifying the claims that the delinquent taxpayer's codepositors might have to the funds in question. The court reasoned that the delinquent taxpayer did not possess a sufficient property interest in the funds to support the levy, that the codepositors might possess competing claims to the funds, and that an IRS levy is not normally intended for use against property in which third parties have an interest or which bears on its face the names of third parties.Held: The IRS had a right to levy on the joint accounts in question. Pp. 719-733. (a) A bank served with an IRS notice of levy has only two defenses for failure to comply with the demand: that it is neither "in possession of" nor "obligated with respect to" property or rights to property belonging to the delinquent taxpayer, or that the taxpayer's property is "subject to a prior judicial attachment or execution." Here, the latter defense was not available, and so respondent's only defense was that the joint accounts did not constitute "property or rights to property" of the delinquent taxpayer. Pp. 721-722. (b) In applying the Internal Revenue Code, state law controls in determining the nature of the legal interest which the taxpayer has in property. In this case, the delinquent taxpayer had an absolute right under state law to withdraw from the joint accounts, and such state-law right constitutes "property [or] rights to property" belonging to him within the meaning of 6331(a). Respondent, in its turn, was "obligated with respect to" the taxpayer's right to that property under 6332(a), since state law required it to honor any withdrawal request he might make. Respondent thus had no basis for refusing to honor the levy. In a levy proceeding, the IRS acquires whatever right the taxpayer himself possesses. Pp. 722-726. (c) The question whether a state-law right constitutes "property" or "right to property" for federal tax-collection purposes is a matter of federal law. Thus, the facts that under Arkansas law the delinquent taxpayer's creditors could not exercise his right to withdrawal in their favor, and in a garnishment proceeding would have to join his codepositors, are irrelevant. That other parties may have competing claims to the account is not a legitimate statutory defense to the levy. A 6331(a) administrative levy is only a provisional remedy, which does not determine the rights of third parties until after the levy is made, in post-seizure administrative or judicial hearings. Pp. 726-733. 726 F.2d 1292, reversed.BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C. J., and WHITE, REHNQUIST, and O'CONNOR, JJ., joined. POWELL, J., filed a dissenting opinion, in which BRENNAN, MARSHALL, and STEVENS, JJ., joined, post, p. 733.Albert G. Lauber, Jr., argued the cause for the United States. With him on the brief were Solicitor General Lee, Assistant Attorney General Archer, William S. Estabrook, and John A. Dudeck, Jr.Terry F. Wynne argued the cause and filed a brief for respondent.JUSTICE BLACKMUN delivered the opinion of the Court.Section 6331(a) of the Internal Revenue Code of 1954, as amended, 26 U.S.C. 6331(a), provides that the Government may collect taxes of a delinquent taxpayer "by levy upon all property and rights to property ... belonging to such person."1 Section 6332(a) of the Code, 26 U.S.C. 6332(a), then provides that "any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Secretary, surrender such property or rights ... to the Secretary."2 The controversy in this case concerns two joint accounts in a bank in Arkansas.3 The issue is whether the Internal Revenue Service (IRS) has a right to levy on those accounts for delinquent federal income taxes owed by only one of the persons in whose names the joint accounts stand in order that the IRS may obtain provisional control over the amount in question.IAThe relevant facts are stipulated. On December 10, 1979, the IRS assessed against Roy J. Reeves federal income taxes, penalties, and interest for the taxable year 1977 in the total amount of $3,607.45. As a result of payments and credits, the amount owing on the assessment was reduced to $856.61. App. 11.On June 13, 1980, there were on deposit with respondent National Bank of Commerce, at Pine Bluff, Ark., the sum of $321.66 in a checking account and the sum of $1,241.60 in a savings account, each in the names of "Roy Reeves or Ruby Reeves or Neva R. Reeves." Id., at 11-12.4 Each of the persons named, Roy Reeves, Ruby Reeves, and Neva R. Reeves, was authorized by contract with the bank to make withdrawals from each of these joint accounts. Id., at 12.On the same date, that is, on June 13, 1980, a notice of levy was served on the respondent bank pursuant to 6331(d) of the Code, 26 U.S.C. 6331(d), demanding that the bank pay over to the United States all sums the bank owed to Roy J. Reeves up to a total of $1,302.56. Subsequently, there was a Partial Release of Levy for the amount in excess of $856.61. On October 10, a final demand for payment was served on the bank.The bank, contending that it did not know how much of the money on deposit belonged to Roy as opposed to Ruby and Neva, refused to comply with the levy. Ibid. The United States thereupon instituted this action in the United States District Court for the Eastern District of Arkansas, pursuant to 6332(c)(1) of the Code, 26 U.S.C. 6332(c)(1), seeking judgment against the bank in the amount of $856.61.5 By way of a supplement to the stipulation of facts, it was agreed that "[n]o further evidence as to the ownership of the monies in the subject bank accounts will be submitted." Id., at 17. As a consequence, we do not know which of the three codepositors, as a matter of state law, owned the funds in the two accounts, or in what proportion. The facts thus come to us in very bare form. We are not confronted with any dispute as to who owns what share of the accounts. We deal simply with two joint accounts in the names of three persons, with each of the three entitled to draw out all the money in each of the accounts.BThe case was submitted to the District Court on cross-motions for summary judgment and on the respondent bank's motion to dismiss the complaint. Id., at 18-24. The District Court granted the motion to dismiss, holding the case procedurally "premature." 554 F. Supp. 110, 117 (1982). The court concluded that due process mandates "something more than the post-seizure lawsuit allowed" by the Code's levy procedures. Id., at 114. In its view, "the minimum due process required in distraint actions against joint bank accounts," ibid., compelled the IRS to identify the codepositors of the delinquent taxpayer and to provide them with notice and an opportunity to be heard. Id., at 114-115. The court then outlined the procedures it believed the Constitution requires the IRS to follow when levying on a joint account. Specifically, it ruled that a bank, upon receiving a notice of levy, should freeze the assets in the account and provide the IRS with the names of the codepositors. Id., at 114. The IRS then should notify the codepositors and give them a reasonable time "in which to respond both to the government and to the bank by affidavit or other appropriate means, specifically setting out any ownership interest in the joint account which they claim and the factual and legal basis for that claim." Id., at 115. If the bank, on the basis of such information, "believes that a genuine dispute exists as to the legality of any ownership claim made by" the codepositors, "it may refuse to surrender any portion of the funds so claimed." Id., at 116. At that point, "the government may bring suit to enforce the levy on the contested funds," ibid., but it must name the codepositors as defendants along with the bank.The United States Court of Appeals for the Eighth Circuit affirmed. 726 F.2d 1292 (1984). It expressed no opinion on the District Court's constitutional analysis. Id., at 1293, 1300. It reached essentially the same result, however, as a matter of statutory construction. It ruled that the IRS, when levying on a joint bank account, has the burden of proving "the actual value of the delinquent taxpayer's interest in jointly owned property." Id., at 1293. It observed that here "the rights of the various parties," id., at 1300, had not been determined. Therefore, the Government had not shown the bank to be in possession of property or rights to property belonging to the delinquent taxpayer, Roy J. Reeves, as 6331(a) required.The Court of Appeals acknowledged that "Roy could have withdrawn any amount he wished from the account and used it to pay his debts, including federal income taxes... ." Id., at 1295. It rejected, however, the Government's contention that it stood "in Roy's shoes and could do anything Roy could do, subject to whatever duties Roy owes to Ruby or Neva," id., at 1295-1296, for it observed that "at least as to ordinary creditors, [that] is not the law of Arkansas." Id., at 1296. Under state garnishment law, the court noted, a creditor of a codepositor is not "subrogated to that co-owner's power to withdraw the entire account." Instead, a creditor must join both co-owners as defendants and permit them to "show by parol or otherwise the extent of his or her interest in the account." Ibid.The Court of Appeals then concluded that a similar precept should apply in administrative levy proceedings under the Internal Revenue Code. It accordingly ruled that the Government could not prevail without negating or quantifying the claims that Ruby or Neva might have to the funds in question. It expressed the belief that an IRS administrative levy "is not normally intended for use as against property in which third parties have an interest" or as "against property bearing on its face the names of third parties." Id., at 1300. In such a situation, the Government was free to "brin[g] suit to foreclose its lien under Section 7403," joining the codepositors as defendants. Ibid.Because the opinion of the Court of Appeals appeared to us to conflict, directly or in principle, with decisions of other Courts of Appeals,6 we granted certiorari. .IIASection 6321 of the Code, 26 U.S.C. 6321, provides: "If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount ... 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." Under the succeeding 6322, the lien generally arises when an assessment is made, and it continues until the taxpayer's liability "is satisfied or becomes unenforceable by reason of lapse of time."The statutory language "all property and rights to property," appearing in 6321 (and, as well, in 6331(a) and, essentially, in 6332(a), see nn. 1 and 2, supra), is broad and reveals on its face that Congress meant to reach every interest in property that a taxpayer might have. See 4 B. Bittker, Federal Taxation of Income, Estates and Gifts § 111.5.4, p. 111-100 (1981) (Bittker). "Stronger language could hardly have been selected to reveal a purpose to assure the collection of taxes." Glass City Bank v. United States, .A federal tax lien, however, is not self-executing. Affirmative action by the IRS is required to enforce collection of the unpaid taxes. The Internal Revenue Code provides two principal tools for that purpose. The first is the lien-foreclosure suit. Section 7403(a) authorizes the institution of a civil action in federal district court to enforce a lien "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." Section 7403(b) provides: "All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto." The suit is a plenary action in which the court "shall ... adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property." 7403(c). See generally United States v. Rodgers, . The second tool is the collection of the unpaid tax by administrative levy. The levy is a provisional remedy and typically "does not require any judicial intervention." Id., at 682. The governing statute is 6331(a). See n. 1, supra. It authorizes collection of the tax by levy which, by 6331(b), "includes the power of distraint and seizure by any means."In the situation where a taxpayer's property is held by another, a notice of levy upon the custodian is customarily served pursuant to 6332(a). This notice gives the IRS the right to all property levied upon, United States v. Eiland, 223 F.2d 118, 121 (CA4 1955), and creates a custodial relationship between the person holding the property and the IRS so that the property comes into the constructive possession of the Government. Phelps v. United States, , 334 (1975). If the custodian honors the levy, he is "discharged from any obligation or liability to the delinquent taxpayer with respect to such property or rights to property arising from such surrender or payment." 6332(d). If, on the other hand, the custodian refuses to honor a levy, he incurs liability to the Government for his refusal. 6332(c)(1).The administrative levy has been aptly described as a "provisional remedy." 4 Bittker, § 111.5.5, at 111-108. In contrast to the lien-foreclosure suit, the levy does not determine whether the Government's rights to the seized property are superior to those of other claimants; it, however, does protect the Government against diversion or loss while such claims are being resolved. "The underlying principle" justifying the administrative levy is "the need of the government promptly to secure its revenues." Phillips v. Commissioner, . "Indeed, one may readily acknowledge that the existence of the levy power is an essential part of our self-assessment tax system," for it "enhances voluntary compliance in the collection of taxes." G. M. Leasing Corp. v. United States, . "Among the advantages of administrative levy is that it is quick and relatively inexpensive." United States v. Rodgers, 461 U.S., at 699.The constitutionality of the levy procedure, of course, "has long been settled." Phillips v. Commissioner, 283 U.S., at 595. See G. M. Leasing Corp. v. United States, 429 U.S., at 352, n. 18.BIt is well established that a bank account is a species of property "subject to levy," within the meaning of 6331 and 6332. A levy on a bank account has been permitted since the Revenue Act of 1924, 1016, 43 Stat. 343, and the Treasury Regulations explicitly authorize such levies. Treas. Reg. 301.6331-1(a)(1), 26 CFR 301.6331-1(a)(1) (1984).The courts uniformly have held that a bank served with an IRS notice of levy "has only two defenses for a failure to comply with the demand." United States v. Sterling National Bank & Trust Co. of New York, 494 F.2d 919, 921 (CA2 1974), and cases cited. One defense is that the bank, in the words of 6332(a), is neither "in possession of" nor "obligated with respect to" property or rights to property belonging to the delinquent taxpayer. The other defense, again with reference to 6332(a), is that the taxpayer's property is "subject to a prior judicial attachment or execution." 494 F.2d, at 921. Accord, Bank of Nevada v. United States, 251 F.2d 820, 824 (CA9 1957), cert. denied, .There is no suggestion here that the Reeves accounts were subject to a prior judicial attachment or execution. Nor is there any doubt that the bank was "obligated with respect to" the accounts because, as it concedes, "Roy Reeves did have a right under Arkansas law to make withdrawals from the bank accounts in question." Brief for Respondent 2. The bank's only defense, therefore, is that the joint accounts did not constitute "property or rights to property" of Roy J. Reeves. See 6331(a).C"`[I]n 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.'" Aquilino v. United States, , quoting Morgan v. Commissioner, . See also Sterling National Bank, 494 F.2d, at 921. This follows from the fact that the federal statute "creates no property rights but merely attaches consequences, federally defined, to rights created under state law." United States v. Bess, . And those consequences are "a matter left to federal law." United States v. Rodgers, 461 U.S., at 683. "[O]nce it has been determined that state law creates sufficient interests in the [taxpayer] to satisfy the requirements of [the statute], state law is inoperative," and the tax consequences thenceforth are dictated by federal law. United States v. Bess, 357 U.S., at 56-57. See also Fidelity & Deposit Co. of Maryland v. New York City Housing Authority, 241 F.2d 142, 144 (CA2 1957); Note, Property Subject to the Federal Tax Lien, 77 Harv. L. Rev. 1485, 1486-1487 (1964). In the Bess case, the Court held that a delinquent taxpayer, who had purchased life insurance policies, did not have "property or rights to property" in the death proceeds of the policies, but that he did have such rights in their cash surrender value. 357 U.S., at 55-56. The latter conclusion, it was said, followed from the fact that the taxpayer insured had "the right under the policy contract to compel the insurer to pay him this sum." Id., at 56. Thus, the insured's interest in the cash surrender value was subject to the federal tax lien. The fact that "under State law the insured's property right represented by the cash surrender value is not subject to creditors' liens" was irrelevant. Id., at 56-57. State law defined the nature of the taxpayer's interest in the property, but the state-law consequences of that definition are of no concern to the operation of the federal tax law.As noted above, it is stipulated that Roy J. Reeves had the unqualified right to withdraw the full amounts on deposit in the joint accounts without notice to his codepositors. In any event, wholly apart from the stipulation, Roy's right of withdrawal is secured by his contract with the bank, as well as by the relevant Arkansas statutory provisions. See Ark. Stat. Ann. 67-521 and 67-552 (1980).7 On its part, the bank was obligated to honor any withdrawal requests Roy might make, even up to the full amounts of the accounts. The Court of Appeals thus correctly concluded that, under Arkansas law, "Roy could have withdrawn any amount he wished from the account and used it to pay his debts, including federal income taxes, and his co-owners would have had no lawful complaint against the bank." 726 F.2d, at 1295.Roy, then, had the absolute right under state law and under his contract with the bank to compel the payment of the outstanding balances in the two accounts. This, it seems to us, should have been an end to the case, for we agree with the Government that such a state-law right constituted "property [or] rights to property ... belonging to" Roy, within the meaning of 6331(a). The bank, in its turn, was "obligated with respect to" Roy's right to that property, 6332(a), since state law required it to honor any withdrawal request he might make. The bank had no basis for refusing to honor the levy.8 The overwhelming majority of courts that have considered the issue have held that a delinquent taxpayer's unrestricted right to withdraw constitutes "property" or "rights to property" subject to provisional IRS levy, regardless of the facts that other claims to the funds may exist and that the question of ultimate ownership may be unresolved at the time. See, e. g., United States v. Sterling National Bank & Trust Co. of New York, 494 F.2d, at 921-922; United States v. Citizens & Southern National Bank, 538 F.2d 1101, 1105-1107 (CA5 1976), cert. denied, ; Citizens & Peoples National Bank of Pensacola, Fla. v. United States, 570 F.2d 1279, 1282-1284 (CA5 1978); Babb v. Schmidt, 496 F.2d 957, 958-960 (CA9 1974); Bank of Nevada v. United States, 251 F.2d, at 824-826; United States v. First National Bank of Arizona, 348 F. Supp. 388, 389 (Ariz. 1970), aff'd, 458 F.2d 513 (CA9 1972); United States v. Equitable Trust Co., 49 AFTR 2d § 82-428 (Md. 1982); Sebel v. Lytton Savings & Loan Assn., 65-1 USTC § 9343 (SD Cal. 1965); Tyson v. United States, 63-1 USTC § 9300 (Mass. 1962); United States v. Third Nat. Bank & Trust Co., 111 F. Supp. 152, 155-156 (MD Pa. 1953). And the Eighth Circuit itself has observed that the "unqualified contractual right to receive property is itself a property right subject to seizure by levy." St. Louis Union Trust Co. v. United States, 617 F.2d 1293, 1302 (1980).9 Common sense dictates that a right to withdraw qualifies as a right to property for purposes of 6331 and 6332. In a levy proceeding, the IRS "`steps into the taxpayer's shoes,'" United States v. Rodgers, 461 U.S., at 691, n. 16, quoting 4 Bittker, § 111.5.4, at 111-102; M. Saltzman, IRS Practice and Procedure § 14.08, p. 14-32 (1981); Brief for Respondent 8. The IRS acquires whatever rights the taxpayer himself possesses. And in such circumstances, where, under state law, a taxpayer has the unrestricted right to withdraw funds from the account, "it is inconceivable that Congress ... intended to prohibit the Government from levying on that which is plainly accessible to the delinquent taxpayer-depositor." United States v. First National Bank of Arizona, 348 F. Supp., at 389. Accord, United States v. Citizens & Southern National Bank, 538 F.2d, at 1107.10 The taxpayer's right to withdraw is analogous in this sense to the IRS's right to levy on the property and secure the funds. Both actions are similarly provisional and subject to a later claim by a codepositor that the money in fact belongs to him or her.IIIThe Court of Appeals, however, applied state law beyond the point of that law's specification of the nature of the property right, and bound the IRS to certain consequences of state property law. Because under Arkansas garnishment law, a creditor of a depositor is not subrogated to the depositor's power to withdraw the account, the court reasoned that the IRS, too, could not stand in the depositor's shoes. This gloss, it seems to us, is contrary to the analysis and holding in United States v. Bess, . The Court of Appeals adduced three principal justifications for its result. The first was its belief that under Arkansas law Roy did not have a sufficient property interest in the funds to support the levy. The second was its concern that Ruby and Neva might possess competing claims to the funds on deposit, and that the bank might be subject to claims asserted by them. The third was its stated conclusion that "levy is not normally intended for use as against property ... bearing on its face the names of third parties, and in which those third parties likely have a property interest." 726 F.2d, at 1300.We are not persuaded by any of these asserted justifications.The Court of Appeals' conclusion that Roy did not possess "property [or] rights to property" on which the IRS could levy rested heavily on its understanding of the Arkansas law of creditors' rights, particularly those in garnishment. Id., at 1295-1296. See Hayden v. Gardner, 238 Ark. 351, 381 S. W. 2d 752 (1964). As we have suggested, this misconceives the role properly played by state law in federal tax-collection matters. The question whether a state-law right constitutes "property" or "rights to property" is a matter of federal law. United States v. Bess, 357 U.S., at 56-57. Thus, the facts that under Arkansas law Roy's creditors, unlike Roy himself, could not exercise his right of withdrawal in their favor and in a garnishment proceedings would have to join his codepositors are irrelevant. The federal statute relates to the taxpayer's rights to property and not to his creditors' rights. The Court of Appeals would remit the IRS to the rights only an ordinary creditor would have under state law. That result "compare[s] the government to a class of creditors to which it is superior." Randall v. H. Nakashima & Co., 542 F.2d 270, 274, n. 8 (CA5 1976).The Court of Appeals also was concerned that Ruby and Neva might have rights that are affected if the levy were honored. 726 F.2d, at 1297-1300. This reasoning, however, runs counter to the observation above that a bank served with a notice of levy has two, and only two, possible defenses for failure to comply with the demand: that it is not in possession of property of the taxpayer, or that the property is subject to a prior judicial attachment or execution. As we have stated, neither defense is applicable here. That another party or parties may have competing claims to the accounts is not a legitimate statutory defense. In its understandable concern for Ruby's and Neva's property interests, the Court of Appeals has ignored the statutory scheme established by Congress to protect those rights. Crucially, the administrative levy, as has been noted, is only a provisional remedy. "The final judgment in [a levy] action settles no rights in the property subject to seizure." United States v. New England Merchants National Bank, 465 F. Supp. 83, 87 (Mass. 1979). Other claimants, if they have rights, may assert them. Congress recognized this when the Code's summary-collection procedures were enacted, S. Rep. No. 1708, 89th Cong., 2d Sess., 29 (1966), and when it provided in 7426 of the Code, 26 U.S.C. 7426, that one claiming an interest in property seized for another's taxes may bring a civil action against the United States to have the property or the proceeds of its sale returned.11 Congress also has provided, by 6343(b), an effective and inexpensive administrative remedy for the return of the property. See Treas. Reg. 301.6343-1(b)(2), 26 CFR 301.6343-1(b)(2) (1984).12 Congress thus balanced the interest of the Government in the speedy collection of taxes against the interests of any claimants to the property, and reconciled those interests by permitting the IRS to levy on the assets at once, leaving ownership disputes to be resolved in a postseizure administrative or judicial proceeding. See United Sand & Gravel Contractors, Inc. v. United States, 624 F.2d 733, 739 (CA5 1980); Valley Finance, Inc. v. United StatesApp. D.C. 128, 136-137, 629 F.2d 162, 170-171 (1980), cert. denied sub nom. Pacific Development, Inc. v. United States, . Its decision that certain property rights must yield provisionally to governmental need should not have been disregarded by the Court of Appeals. Nor would the bank be exposed to double liability were it to honor the IRS levy. The Code provides administrative and judicial remedies for codepositors against the Government, and any attempt to secure payment in this situation from the bank itself would be contrary to the federal enforcement scheme.13 The Court of Appeals' final justification for its holding was its belief that an IRS levy "is not normally intended for use as against property in which third parties have an interest" or "as against property bearing on its face the names of third parties, and in which those third parties likely have a property interest." 726 F.2d, at 1300. The court acknowledged the existence of 7426 but felt that that statute was designed to protect only those third parties "whose property has been seized `inadvertently.'" 726 F.2d, at 1300.We disagree. The IRS's understanding of the terms of the Code is entitled to considerable deference. Here, moreover, collection provisions plainly contemplate that a taxpayer's interest in property may be less than full ownership. The tax lien attaches not only to "property" but also to "rights to property." See S. Rep. No. 1708, at 29. Further, we see nothing in the language of 7426 that distinguishes among various species of third-party claimants. The language of the statute encompasses advertent seizures as well as inadvertent ones.14 There is nothing express or implied in United States v. Rodgers, , to the contrary.Rodgers held that 7403 empowers a district court to order the sale of a family house in which a delinquent taxpayer has an interest, even though a nondelinquent spouse also has a homestead interest in the house under state law. 461 U.S., at 698-700. In so ruling, the Court contrasted the operation of 7403 with that of 6331. See 461 U.S., at 696. The Court noted that 6331, unlike 7403, does not "implicate the rights of third parties," because an administrative levy, unlike a judicial lien-foreclosure action, does not determine the ownership rights to the property. Instead, third parties whose property is seized in an administrative levy "are entitled to claim that the property has been `wrongfully levied upon,' and may apply for its return either through administrative channels ... or through a civil action." Ibid. The Court, in other words, recognized what we now make explicit: that 6331 is a provisional remedy, which does not determine the rights of third parties until after the levy is made, in postseizure administrative or judicial hearings.15 The Court of Appeals' result would force the IRS, if it wished to pursue a delinquent taxpayer's interest in a joint bank account, to institute a lien-foreclosure suit under 7403, joining all codepositors as defendants. The practical effect of this would be to eliminate the alternative procedure for administrative levy under 6331 and 6332. We do not lightly discard this alternative relief that Congress so clearly has provided for the Government. If the IRS were required to bring a lien-foreclosure suit each time it wished to execute a tax lien on funds in a joint bank account, it would be uneconomical, as a practical matter, to do so on small sums of money such as those at issue here. And it would be easy for a delinquent taxpayer to evade, or at least defer, his obligations by placing his funds in joint bank accounts. While one might not be enthusiastic about paying taxes, it is still true that "taxes are the life-blood of government, and their prompt and certain availability an imperious need." Bull v. United States, .The judgment of the Court of Appeals is reversed. It is so ordered. |
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