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Justice Brennan | 1,985 | 13 | majority | NLRB v. Longshoremen | https://www.courtlistener.com/opinion/111497/nlrb-v-longshoremen/ | change" while still preserving some type of work for union members may nevertheless be lawful primary agreements; the work preservation doctrine does not require that unions block progress by refusing to permit any use at all of new technology in order to avoid the prohibitions of 8(b)(4)(B) and 8(e) The inquiry is whether "the objective of the agreement was work preservation rather than the satisfaction of union goals elsewhere," and the analytical focus must be "on the work of the bargaining unit employees, not on the work of *78 other employees doing the same or similar work" "The effect of work preservation agreements on the employment opportunities of employees not represented by the union, no matter how severe, is of course irrelevant so long as the union had no forbidden secondary purpose" n 22[18] Because the Board's analysis had proceeded from an erroneous premise, we remanded We directed the Board to examine "how the contracting parties sought to preserve work to the extent possible, in the face of" containerization, and "to evaluate the relationship between traditional longshore work and the work which the Rules attempt to assign to LA members" f, on remand, the Rules were found to be a bona fide attempt to preserve longshore work, rather than an effort " `tactically calculated to satisfy union objectives elsewhere,' " then the Rules would be valid quoting National 386 U S, at 644 "[T]he question is not whether the Rules represent the most rational or efficient response to innovation, but whether they are a legally permissible effort to preserve jobs" 447 US, B We accept the Board's factual findings as supported by substantial evidence, Universal Camera Corp v NLRB, 340 US 474 and are mindful of the rule that the Board's construction of the Act is due our deference See, e g, Beth srael Hospital v NLRB, 437 US 483, ; NLRB v Erie Resistor Corp, 373 US 221, We are in agreement with the Board's basic statutory conclusions: 8(b)(4)(B) and 8(e) prohibit secondary, but not *79 primary, union activity, and bona fide work preservation agreements and their enforcement may constitute protected primary goals Now that the Board has fully developed the factual record regarding the Rules, the only question presented is whether, as a matter of law, the Board applied the "work preservation" doctrine consistently with our prior cases n our view, the Board committed two fundamental errors First, by focusing on the effect that the Rules may have on "shortstopping" truckers and "traditional" warehousers, the Board contravened our direction that such extra-unit effects, "no matter how severe," are |
Justice Brennan | 1,985 | 13 | majority | NLRB v. Longshoremen | https://www.courtlistener.com/opinion/111497/nlrb-v-longshoremen/ | direction that such extra-unit effects, "no matter how severe," are "irrelevant" to the analysis n 22 "So long as the union had no forbidden secondary purpose" to disrupt the business relations of a neutral employer, ib such effects are "incidental to primary activity" 429 U S, at 526 Here the ALJ, Board, and Court of Appeals all have agreed that the Rules were motivated entirely by the longshoremen's understandable desire to preserve jobs against "the steadily dwindling volume" of cargo work at the pier 734 F2d, at 978 Given this clear primary objective to preserve work in the face of a threat to jobs, extra-unit effects of a work preservation agreement along provide an insufficient basis for concluding that the agreement has an unlawful secondary objective Absent some additional showing of an attempt "to reach out to monopolize jobs," National that is, proof of an attempt "not to preserve, but to aggrandize," at 528-530, n 16, such an agreement is lawful[19] *80 Second, we believe the Board misconstrued our cases in suggesting that "eliminated" work can never be the object of a work preservation agreement Technological innovation will often by design eliminate some aspect of an industry's work For example, in National the agreement at issue strove to preserve carpentry work done by hand at the jobsite, even though new off-site machining techniques had eliminated the necessity for much of this work Yet the jobs of carpenters were no less threatened, nor was their attempt to preserve them any less primary, than if the contractor had decided to subcontract the cutting and fitting of doors to nonunion workers Cf Fibreboard Corp v NLRB, 379 US 203, Similarly, containers have eliminated some of the work of loading and unloading cargo by hand for all participants in the industry longshoremen, truckers, and warehousers alike[20] "Elimination" of work *81 in the sense that it is made unnecessary by innovation is not of itself a reason to condemn work preservation agreements under 8(b)(4)(B) and 8(e); to the contrary, such elimination provides the very premise for such agreements t must not be forgotten that the relevant inquiry under 8(b)(4)(B) and 8(e) is whether a union's activity is primary or secondary that is, whether the union's efforts are directed at its own employer on a topic affecting employees' wages, hours, or working conditions that the employer can control, or, instead, are directed at affecting the business relations of neutral employers and are "tactically calculated" to achieve union objectives outside the primary employer-employee relationship See National 386 U S, ; 429 U S, at 528-529, |
Justice Brennan | 1,985 | 13 | majority | NLRB v. Longshoremen | https://www.courtlistener.com/opinion/111497/nlrb-v-longshoremen/ | National 386 U S, ; 429 U S, at 528-529, and n 16 The various linguistic formulae and evidentiary mechanisms we have employed to describe the primary/secondary distinction are not talismanic nor can they substitute for analysis See generally Railroad Trainmen v Jacksonville Terminal Co, 394 US 369, The inquiry is often an inferential and fact-based on, at times requiring the drawing of lines "more nice than obvious" Electrical Workers v NLRB, 366 US 667, ; see n this case, however, the ALJ, Board, and Court of Appeals all found that the LA negotiated the Rules on Containers with the sole object of preserving work for its members and that there is no evidence of "any significant LA interest in the labor relations of the class of employers boycotted by the Rules" 266 N L R B, at 249 Furthermore, as the Fourth Circuit noted, this is not a case in which an avowed work preservation agreement "seeks to claim work so different from that traditionally performed by the bargaining unit employees" that a secondary objective might be inferred 734 F2d, [21] When the objective of an agreement and its enforcement *82 is so clearly one of work preservation, the lawfulness of the agreement under 8(b)(4)(B) and 8(e) is secure absent some other evidence of secondary purpose n sum, we believe that the Board correctly identified as erroneous the ALJ's focus on the effect of the Rules on the work of employees outside the bargaining unit, but then fell into the same analytical trap The crucial findings are that the LA's objective consistently has been to preserve longshore work, and that the LA's employers have the power to control assignment of that work LA 447 U S, at 504 n light of these facts, further inquiry into the effects of the Rules as applied was inconsistent with our precedents in this concededly difficult area C n LA it was argued that the Rules preserve work made "utterly useless" by containerization and thus are "nothing less than an invidious form of `featherbedding' to block full implementation of modern technological progress" (BURGER, C J, dissenting) Similar arguments are repeated today, see post, at 89, 90, and were presented in National as well See 386 US, at 644 Our response is no different than it was 18 years ago: "Those arguments are addressed to the wrong branch of government" [22] Justice Harlan wrote separately in National to underscore the Court's reasoning on this point: *83 "The only question thus to be decided is whether Congress meant, in enacting 8(b)(4)(B) and 8(e) of the |
Justice Brennan | 1,985 | 13 | majority | NLRB v. Longshoremen | https://www.courtlistener.com/opinion/111497/nlrb-v-longshoremen/ | whether Congress meant, in enacting 8(b)(4)(B) and 8(e) of the National Labor Relations Act, to prevent this kind of labor-management arrangement designed to forestall possible adverse effects upon workers arising from changing technology "[B]oth sides of today's division in the Court agree that we must be especially careful to eschew a resolution of the issue according to our own economic ideas and to find one in what Congress has done "n view of Congress' deep commitment to the resolution of matters of vital importance to management and labor through the collective bargaining process, and its recognition of the boycott as a legitimate weapon in that process, it would be unfortunate were this Court to attribute to Congress, on the basis of such an opaque legislative record, a purpose to outlaw the kind of collective bargaining and conduct involved in these cases Especially at a time when Congress is continuing to explore methods for meeting the economic problems increasingly arising in this technological age from scientific advances, this Court should not take such a step until Congress has made unmistakable clear that it wishes wholly to exclude collective bargaining as one avenue of approach to solutions *84A in this elusive aspect of our economy" Congress has not altered the provisions at issue in the 18 years since National was decided, nor has any new evidence been offered regarding Congress' original intent n the meantime, management and labor alike have relied on the work preservation doctrine to guide their bargaining n such circumstances we should follow the normal presumption of stare decisis in cases of statutory interpretation See llinois Brick Co v llinois, 431 US 720, ; Edelman v Jordan, 415 US 651, Under the Rules on Containers, the LA has given up some 80% of all containerized cargo work and the technological "container revolution" has secured its position in the industry We have often noted that a basic premise of the labor laws is that "collective discussions backed by the parties' economic weapons will result in decision that are better for both management and labor and for society as a whole" First National Maintenance Corp v NLRB, 452 US 666, The Rules represent a negotiated compromise of a violate problem bearing directly on the well-being of our national economy We concur with the ALJ, Board, and Court of Appeals that the Rules on Containers are a lawful work preservation agreement Nothing in this record supports a conclusion that their enforcement has had a secondary, rather than primary, objective The judgment below is therefore Affirmed |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | In Dr. Miles Medical the Court established the rule that it is per se illegal under 1 of the Sherman Act, 1 U.S.C. 1, for a manufacturer to agree with its distributor to set the minimum price the distributor can charge for the manufacturer's goods. The question presented by the instant case is whether the Court should overrule the per se rule and allow resale price maintenance agreements to be judged by the rule of reason, the usual standard applied to determine if there is a violation of 1. The Court has abandoned the rule of per se illegality for other vertical restraints a manufacturer imposes on its distributors. Respected economic analysts, furthermore, conclude that vertical price restraints can have procompetitive effects. We now hold that Dr. Miles should be overruled and that vertical price restraints are to be judged by the rule of I Petitioner, Leegin Creative Leather Products, Inc. (Leegin), designs, manufactures, and distributes leather goods and accessories. In 11, Leegin began to sell belts under the brand name "Brighton." The Brighton brand has now expanded into a variety of women's fashion accessories. It is sold across the United States in over000 retail establishments, for the most part independent, small boutiques and specialty stores. Leegin's president, Jerry Kohl, has an interest in about 70 stores that sell Brighton products. Leegin asserts that, at least for its products, small retailers treat customers better, *2711 provide customers more services, and make their shopping experience more satisfactory than do larger, often impersonal retailers. Kohl explained: "[W]e want the consumers to get a different experience than they get in Sam's Club or in Wal-Mart. And you can't get that kind of experience or support or customer service from a store like Wal-Mart." Record 127. Respondent, PSKS, Inc. (PSKS), operates Kay's Kloset, a women's apparel store in Lewisville, Texas. Kay's Kloset buys from about 7 different manufacturers and at one time sold the Brighton brand. It first started purchasing Brighton goods from Leegin in 1. Once it began selling the brand, the store promoted Brighton. For example, it ran Brighton advertisements and had Brighton days in the store. Kay's Kloset became the destination retailer in the area to buy Brighton products. Brighton was the store's most important brand and once accounted for 40 to 0 percent of its profits. In Leegin instituted the "Brighton Retail Pricing and Promotion Policy." 4 Following the policy, Leegin refused to sell to retailers that discounted Brighton goods below suggested prices. The policy contained an exception for products not selling well that the retailer did not plan on |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | not selling well that the retailer did not plan on reordering. In the letter to retailers establishing the policy, Leegin stated: "In this age of mega stores like Macy's, Bloomingdales, May Co. and others, consumers are perplexed by promises of product quality and support of product which we believe is lacking in these large stores. Consumers are further confused by the ever popular sale, sale, sale, etc. "We, at Leegin, choose to break away from the pack by selling [at] specialty stores; specialty stores that can offer the customer great quality merchandise, superb service, and support the Brighton product 36 days a year on a consistent basis. "We realize that half the equation is Leegin producing great Brighton product and the other half is you, our retailer, creating great looking stores selling our products in a quality manner." Leegin adopted the policy to give its retailers sufficient margins to provide customers the service central to its distribution strategy. It expressed concern that discounting harmed Brighton's brand image and reputation. A year after instituting the pricing policy Leegin introduced a marketing strategy known as the "Heart Store Program." See It offered retailers incentives to become Heart Stores, and, in exchange, retailers pledged, among other things, to sell at Leegin's suggested prices. Kay's Kloset became a Heart Store soon after Leegin created the program. After a Leegin employee visited the store and found it unattractive, the parties appear to have agreed that Kay's Kloset would not be a Heart Store beyond 18. Despite losing this status, Kay's Kloset continued to increase its Brighton sales. In December 2002, Leegin discovered Kay's Kloset had been marking down Brighton's entire line by 20 percent. Kay's Kloset contended it placed Brighton products on sale to compete with nearby retailers who were undercutting Leegin's suggested prices. Leegin, nonetheless, requested that Kay's Kloset cease discounting. Its request refused, Leegin stopped selling to the store. The loss of the Brighton brand had a considerable negative impact on the store's revenue from sales. *2712 PSKS sued Leegin in the United States District Court for the Eastern District of Texas. It alleged, among other claims, that Leegin had violated the antitrust laws by "enter[ing] into agreements with retailers to charge only those prices fixed by Leegin." Leegin planned to introduce expert testimony describing the procompetitive effects of its pricing policy. The District Court excluded the testimony, relying on the per se rule established by Dr. Miles. At trial PSKS argued that the Heart Store program, among other things, demonstrated Leegin and its retailers had agreed to fix prices. Leegin responded that |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | its retailers had agreed to fix prices. Leegin responded that it had established a unilateral pricing policy lawful under 1, which applies only to concerted action. See United The jury agreed with PSKS and awarded it $1.2 million. Pursuant to 1 U.S.C. 1(a), the District Court trebled the damages and reimbursed PSKS for its attorney's fees and costs. It entered judgment against Leegin in the amount of $3,7,000.80. The Court of Appeals for the Fifth Circuit affirmed. On appeal Leegin did not dispute that it had entered into vertical price-fixing agreements with its retailers. Rather, it contended that the rule of reason should have applied to those agreements. The Court of Appeals rejected this argument. It was correct to explain that it remained bound by Dr. Miles "[b]ecause [the Supreme] Court has consistently applied the per se rule to [vertical minimum price-fixing] agreements." On this premise the Court of Appeals held that the District Court did not abuse its discretion in excluding the testimony of Leegin's economic expert, for the per se rule rendered irrelevant any procompetitive justifications for Leegin's pricing policy. We granted certiorari to determine whether vertical minimum resale price maintenance agreements should continue to be treated as per se unlawful. U.S. II Section 1 of the Sherman Act prohibits "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States." Ch. 647, as amended, 1 U.S.C. 1. While 1 could be interpreted to proscribe all contracts, see, e.g., Board of Trade of the Court has never "taken a literal approach to [its] language," Rather, the Court has repeated time and again that 1 "outlaw[s] only unreasonable restraints." State Oil 22 U.S. 3, 118 S. Ct. 27, The rule of reason is the accepted standard for testing whether a practice restrains trade in violation of 1. See at "Under this rule, the factfinder weighs all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition." Continental T. V., 7 S. Ct. 2, 3 L. Ed. 2d 68 Appropriate factors to take into account include "specific information about the relevant business" and "the restraint's history, nature, and effect." at 118 S. Ct. 27. Whether the businesses involved have market power is a further, significant consideration. See, e.g., Copperweld 467 U.S. 72, 4 S. Ct. 2731, ; see Illinois Tool Works 47 U.S. 28, 4-46, In its design and function the rule distinguishes between restraints with anticompetitive effect that are harmful to the consumer and restraints stimulating |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | effect that are harmful to the consumer and restraints stimulating competition that are in the consumer's best interest. The rule of reason does not govern all restraints. Some types "are deemed unlawful per se." at 118 S. Ct. 27. The per se rule, treating categories of restraints as necessarily illegal, eliminates the need to study the reasonableness of an individual restraint in light of the real market forces at work, Business 48 U.S. 717, 8 S. Ct. 11, ; and, it must be acknowledged, the per se rule can give clear guidance for certain conduct. Restraints that are per se unlawful include horizontal agreements among competitors to fix prices, see at or to divide markets, see 8 U.S. 46, -0, 112 L. Ed. 2d 3 Resort to per se rules is confined to restraints, like those mentioned, "that would always or almost always tend to restrict competition and decrease output." Business at 8 S. Ct. 11 To justify a per se prohibition a restraint must have "manifestly anticompetitive" effects, GTE at 0, 7 S. Ct. 2, and "lack any redeeming virtue," Northwest Wholesale Stationers, S. Ct. 2613, (18) As a consequence, the per se rule is appropriate only after courts have had considerable experience with the type of restraint at issue, see Broadcast Music, S. Ct. 11, and only if courts can predict with confidence that it would be invalidated in all or almost all instances under the rule of reason, see 47 U.S. 332, 2 S. Ct. 2466, (182). It should come as no surprise, then, that "we have expressed reluctance to adopt per se rules with regard to restraints imposed in the context of business relationships where the economic impact of certain practices is not immediately obvious." at 118 S. Ct. 27 ; see White Motor 372 U.S. 23, 83 S. Ct. 66, L. Ed. 2d 738 (163) And, as we have stated, a "departure from the rule-of-reason standard must be based upon demonstrable economic effect rather than upon formalistic line drawing." GTE at 8-, 7 S. Ct. 2. III The Court has interpreted Dr. Miles Medical as establishing a per se rule against a vertical agreement between a manufacturer and its distributor to set minimum resale prices. See, e.g., 46 U.S. 72, 4 S. Ct. 1464, 7 L. Ed. 2d 77 In Dr. Miles the plaintiff, a manufacturer of medicines, sold its products only to distributors *2714 who agreed to resell them at set prices. The Court found the manufacturer's control of resale prices to be unlawful. It relied on the common-law rule that "a general restraint |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | It relied on the common-law rule that "a general restraint upon alienation is ordinarily invalid." -40, The Court then explained that the agreements would advantage the distributors, not the manufacturer, and were analogous to a combination among competing distributors, which the law treated as void. The reasoning of the Court's more recent jurisprudence has rejected the rationales on which Dr. Miles was based. By relying on the common-law rule against restraints on alienation, at 404-40, the Court justified its decision based on "formalistic" legal doctrine rather than "demonstrable economic effect," GTE at 8-, 7 S. Ct. 2. The Court in Dr. Miles relied on a treatise published in 1628, but failed to discuss in detail the business reasons that would motivate a manufacturer situated in to make use of vertical price restraints. Yet the Sherman Act's use of "restraint of trade" "invokes the common law itself, not merely the static content that the common law had assigned to the term in 180." Business 8 S. Ct. 11. The general restraint on alienation, especially in the age when then-Justice Hughes used the term, tended to evoke policy concerns extraneous to the question that controls here. Usually associated with land, not chattels, the rule arose from restrictions removing real property from the stream of commerce for generations. The Court should be cautious about putting dispositive weight on doctrines from antiquity but of slight relevance. We reaffirm that "the state of the common law 400 or even 0 years ago is irrelevant to the issue before us: the effect of the antitrust laws upon vertical distributional restraints in the American economy today." GTE 433 U.S., at 3, n. 21, 7 S. Ct. 2 Dr. Miles, furthermore, treated vertical agreements a manufacturer makes with its distributors as analogous to a horizontal combination among competing distributors. See 220 U.S., In later cases, however, the Court rejected the approach of reliance on rules governing horizontal restraints when defining rules applicable to vertical ones. See, e.g., Business 8 S. Ct. 11 (disclaiming the "notion of equivalence between the scope of horizontal per se illegality and that of vertical per se illegality"); Maricopa 2 S. Ct. 2466 (noting that "horizontal restraints are generally less defensible than vertical restraints"). Our recent cases formulate antitrust principles in accordance with the appreciated differences in economic effect between vertical and horizontal agreements, differences the Dr. Miles Court failed to consider. The reasons upon which Dr. Miles relied do not justify a per se rule. As a consequence, it is necessary to examine, in the first instance, the economic effects of vertical agreements |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | in the first instance, the economic effects of vertical agreements to fix minimum resale prices, and to determine whether the per se rule is nonetheless appropriate. See Business 48 U.S., at 726, 8 S. Ct. 11. A Though each side of the debate can find sources to support its position, it suffices to say here that economics literature is replete with procompetitive justifications for a manufacturer's use of resale price maintenance. See, e.g., Brief for Economists as Amici Curiae 16 ("In the theoretical literature, it is essentially undisputed *271 that minimum [resale price maintenance] can have procompetitive effects and that under a variety of market conditions it is unlikely to have anticompetitive effects"); Brief for United States as Amicus Curiae ("[T]here is a widespread consensus that permitting a manufacturer to control the price at which its goods are sold may promote interbrand competition and consumer welfare in a variety of ways"); ABA Section of Antitrust Law, Antitrust Law and Economics of Product Distribution 76 ("[T]he bulk of the economic literature on [resale price maintenance] suggests that [it] is more likely to be used to enhance efficiency than for anticompetitive purposes"); see H. Hovenkamp, The Antitrust Enterprise: Principle and Execution 184-11 (200) (hereinafter Hovenkamp); R. Bork, The Antitrust Paradox 288-21 (178) (hereinafter Bork). Even those more skeptical of resale price maintenance acknowledge it can have procompetitive effects. See, e.g., Brief for William S. Comanor et al. as Amici Curiae 3 ("[G]iven [the] diversity of effects [of resale price maintenance], one could reasonably take the position that a rule of reason rather than a per se approach is warranted"); F.M. Scherer & D. Ross, Industrial Market Structure and Economic Performance 8 (hereinafter Scherer & Ross) ("The overall balance between benefits and costs [of resale price maintenance] is probably close"). The few recent studies documenting the competitive effects of resale price maintenance cast doubt on the conclusion that the practice meets the criteria for a per se rule. See T. Overstreet, Resale Price Maintenance: Economic Theories and Empirical Evidence 170 (183) (hereinafter Overstreet) (noting that "[e]fficient uses of [resale price maintenance] are evidently not unusual or rare"); see Ippolito, Resale Price Maintenance: Empirical Evidence From Litigation, 34 J. Law & Econ. 22-23 (11) (hereinafter Ippolito). The justifications for vertical price restraints are similar to those for other vertical restraints. See GTE 433 U.S., at 4-7, 7 S. Ct. 2. Minimum resale price maintenance can stimulate interbrand competitionthe competition among manufacturers selling different brands of the same type of productby reducing intrabrand competitionthe competition among retailers selling the same brand. See at 1-2, 7 |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | among retailers selling the same brand. See at 1-2, 7 S. Ct. 2. The promotion of interbrand competition is important because "the primary purpose of the antitrust laws is to protect [this type of] competition." 22 U.S., at 1, 118 S. Ct. 27. A single manufacturer's use of vertical price restraints tends to eliminate intrabrand price competition; this in turn encourages retailers to invest in tangible or intangible services or promotional efforts that aid the manufacturer's position as against rival manufacturers. Resale price maintenance has the potential to give consumers more options so that they can choose among low-price, low-service brands; high-price, high-service brands; and brands that fall in between. Absent vertical price restraints, the retail services that enhance interbrand competition might be underprovided. This is because discounting retailers can free ride on retailers who furnish services and then capture some of the increased demand those services generate. GTE at 7 S. Ct. 2. Consumers might learn, for example, about the benefits of a manufacturer's product from a retailer that invests in fine showrooms, offers product demonstrations, or hires and trains knowledgeable employees. R. Posner, Antitrust Law 172-173 (2d ed.2001) (hereinafter Posner). Or consumers might decide to buy the product because *2716 they see it in a retail establishment that has a reputation for selling high-quality merchandise. Marvel & McCafferty, Resale Price Maintenance and Quality Certification, 1 Rand J. Econ. 346, 347-3 (hereinafter Marvel & McCafferty). If the consumer can then buy the product from a retailer that discounts because it has not spent capital providing services or developing a quality reputation, the high-service retailer will lose sales to the discounter, forcing it to cut back its services to a level lower than consumers would otherwise prefer. Minimum resale price maintenance alleviates the problem because it prevents the discounter from undercutting the service provider. With price competition decreased, the manufacturer's retailers compete among themselves over services. Resale price maintenance, in addition, can increase interbrand competition by facilitating market entry for new firms and brands. "[N]ew manufacturers and manufacturers entering new markets can use the restrictions in order to induce competent and aggressive retailers to make the kind of investment of capital and labor that is often required in the distribution of products unknown to the consumer." GTE at 7 S. Ct. 2; see Marvel & McCafferty 3 (noting that reliance on a retailer's reputation "will decline as the manufacturer's brand becomes better known, so that [resale price maintenance] may be particularly important as a competitive device for new entrants"). New products and new brands are essential to a dynamic economy, |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | products and new brands are essential to a dynamic economy, and if markets can be penetrated by using resale price maintenance there is a procompetitive effect. Resale price maintenance can increase interbrand competition by encouraging retailer services that would not be provided even absent free riding. It may be difficult and inefficient for a manufacturer to make and enforce a contract with a retailer specifying the different services the retailer must perform. Offering the retailer a guaranteed margin and threatening termination if it does not live up to expectations may be the most efficient way to expand the manufacturer's market share by inducing the retailer's performance and allowing it to use its own initiative and experience in providing valuable services. See Mathewson & Winter, The Law and Economics of Resale Price Maintenance, 13 Rev. Indus. Org. 7, 74-7 (18) (hereinafter Mathewson & Winter); Klein & Murphy, Vertical Restraints as Contract Enforcement Mechanisms, 31 J. Law & Econ. 26, 2 ; see Deneckere, Marvel, & Peck, Demand Uncertainty, Inventories, and Resale Price Maintenance, 111 Q.J. Econ. 88, 11 (16) (noting that resale price maintenance may be beneficial to motivate retailers to stock adequate inventories of a manufacturer's goods in the face of uncertain consumer demand). B While vertical agreements setting minimum resale prices can have procompetitive justifications, they may have anticompetitive effects in other cases; and unlawful price fixing, designed solely to obtain monopoly profits, is an ever present temptation. Resale price maintenance may, for example, facilitate a manufacturer cartel. See Business 48 U.S., at 72, 8 S. Ct. 11. An unlawful cartel will seek to discover if some manufacturers are undercutting the cartel's fixed prices. Resale price maintenance could assist the cartel in identifying price-cutting manufacturers who benefit from the lower prices they offer. Resale price maintenance, furthermore, could discourage a manufacturer from cutting prices to retailers with the concomitant benefit of cheaper prices to *2717 consumers. See ; see Posner 172; Overstreet 1-23. Vertical price restraints "might be used to organize cartels at the retailer level." Business at 72-726, 8 S. Ct. 11. A group of retailers might collude to fix prices to consumers and then compel a manufacturer to aid the unlawful arrangement with resale price maintenance. In that instance the manufacturer does not establish the practice to stimulate services or to promote its brand but to give inefficient retailers higher profits. Retailers with better distribution systems and lower cost structures would be prevented from charging lower prices by the agreement. See Posner 172; Overstreet 13-1. Historical examples suggest this possibility is a legitimate concern. See, e.g., Marvel |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | suggest this possibility is a legitimate concern. See, e.g., Marvel & McCafferty, The Welfare Effects of Resale Price Maintenance, 28 J. Law & Econ. 363, 373 (18) (hereinafter Marvel) (providing an example of the power of the National Association of Retail Druggists to compel manufacturers to use resale price maintenance); Hovenkamp 186 (suggesting that the retail druggists in Dr. Miles formed a cartel and used manufacturers to enforce it). A horizontal cartel among competing manufacturers or competing retailers that decreases output or reduces competition in order to increase price is, and ought to be, per se unlawful. See 47 U.S., at ; GTE 433 U.S., at 8, n. 28, 7 S. Ct. 2. To the extent a vertical agreement setting minimum resale prices is entered upon to facilitate either type of cartel, it, too, would need to be held unlawful under the rule of This type of agreement may be useful evidence for a plaintiff attempting to prove the existence of a horizontal cartel. Resale price maintenance, furthermore, can be abused by a powerful manufacturer or retailer. A dominant retailer, for example, might request resale price maintenance to forestall innovation in distribution that decreases costs. A manufacturer might consider it has little choice but to accommodate the retailer's demands for vertical price restraints if the manufacturer believes it needs access to the retailer's distribution network. See Overstreet 31; 8 P. Areeda & H. Hovenkamp, Antitrust Law 47 (2d ed.2004) (hereinafter Areeda & Hovenkamp); cf. Toys "R" Us, 221 F.3d 28, 37-38 A manufacturer with market power, by comparison, might use resale price maintenance to give retailers an incentive not to sell the products of smaller rivals or new entrants. See, e.g., Marvel 366-368. As should be evident, the potential anticompetitive consequences of vertical price restraints must not be ignored or underestimated. C Notwithstanding the risks of unlawful conduct, it cannot be stated with any degree of confidence that resale price maintenance "always or almost always tend[s] to restrict competition and decrease output." Business at 8 S. Ct. 11 Vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed. And although the empirical evidence on the topic is limited, it does not suggest efficient uses of the agreements are infrequent or hypothetical. See Overstreet 170; see (noting that for the majority of enforcement actions brought by the Federal Trade Commission between 16 and 182, "the use of [resale price maintenance] was not likely motivated by collusive dealers who had successfully coerced their suppliers"); Ippolito 22 (reaching a similar conclusion). |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | successfully coerced their suppliers"); Ippolito 22 (reaching a similar conclusion). *2718 As the rule would proscribe a significant amount of procompetitive conduct, these agreements appear ill suited for per se condemnation. Respondent contends, nonetheless, that vertical price restraints should be per se unlawful because of the administrative convenience of per se rules. See, e.g., GTE at 0, n. 16, 7 S. Ct. 2 (noting "per se rules tend to provide guidance to the business community and to minimize the burdens on litigants and the judicial system"). That argument suggests per se illegality is the rule rather than the exception. This misinterprets our antitrust law. Per se rules may decrease administrative costs, but that is only part of the equation. Those rules can be counterproductive. They can increase the total cost of the antitrust system by prohibiting procompetitive conduct the antitrust laws should encourage. See Easterbrook, Vertical Arrangements and the Rule of Reason, 3 Antitrust L.J. 13, 18 (hereinafter Easterbrook). They may increase litigation costs by promoting frivolous suits against legitimate practices. The Court has thus explained that administrative "advantages are not sufficient in themselves to justify the creation of per se rules," GTE 433 U.S., at 0, n. 16, 7 S. Ct. 2, and has relegated their use to restraints that are "manifestly anticompetitive," at -0, 7 S. Ct. 2. Were the Court now to conclude that vertical price restraints should be per se illegal based on administrative costs, we would undermine, if not overrule, the traditional "demanding standards" for adopting per se rules. at 0, 7 S. Ct. 2. Any possible reduction in administrative costs cannot alone justify the Dr. Miles rule. Respondent argues the per se rule is justified because a vertical price restraint can lead to higher prices for the manufacturer's goods. See Overstreet 160 (noting that "price surveys indicate that [resale price maintenance] in most cases increased the prices of products sold"). Respondent is mistaken in relying on pricing effects absent a further showing of anticompetitive conduct. Cf. at 6 For, as has been indicated already, the antitrust laws are designed primarily to protect interbrand competition, from which lower prices can later result. See 22 U.S., at 1, 118 S. Ct. 27. The Court, moreover, has evaluated other vertical restraints under the rule of reason even though prices can be increased in the course of promoting procompetitive effects. See, e.g., Business 48 U.S., 8 S. Ct. 11. And resale price maintenance may reduce prices if manufacturers have resorted to costlier alternatives of controlling resale prices that are not per se unlawful. See infra, at 2721-2724; see |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | are not per se unlawful. See infra, at 2721-2724; see Marvel 371. Respondent's argument, furthermore, overlooks that, in general, the interests of manufacturers and consumers are aligned with respect to retailer profit margins. The difference between the price a manufacturer charges retailers and the price retailers charge consumers represents part of the manufacturer's cost of distribution, which, like any other cost, the manufacturer usually desires to minimize. See GTE 433 U.S., at 6, n. 24, 7 S. Ct. 2; see at 6, 7 S. Ct. 2 ("Economists have argued that manufacturers have an economic interest in maintaining as much intrabrand competition as is consistent with the efficient distribution of their products"). A manufacturer *271 has no incentive to overcompensate retailers with unjustified margins. The retailers, not the manufacturer, gain from higher retail prices. The manufacturer often loses; interbrand competition reduces its competitiveness and market share because consumers will "substitute a different brand of the same product." at 2, n. 1, 7 S. Ct. 2; see Business at 72, 8 S. Ct. 11. As a general matter, therefore, a single manufacturer will desire to set minimum resale prices only if the "increase in demand resulting from enhanced service will more than offset a negative impact on demand of a higher retail price." Mathewson & Winter 67. The implications of respondent's position are far reaching. Many decisions a manufacturer makes and carries out through concerted action can lead to higher prices. A manufacturer might, for example, contract with different suppliers to obtain better inputs that improve product quality. Or it might hire an advertising agency to promote awareness of its goods. Yet no one would think these actions violate the Sherman Act because they lead to higher prices. The antitrust laws do not require manufacturers to produce generic goods that consumers do not know about or want. The manufacturer strives to improve its product quality or to promote its brand because it believes this conduct will lead to increased demand despite higher prices. The same can hold true for resale price maintenance. Resale price maintenance, it is true, does have economic dangers. If the rule of reason were to apply to vertical price restraints, courts would have to be diligent in eliminating their anticompetitive uses from the market. This is a realistic objective, and certain factors are relevant to the inquiry. For example, the number of manufacturers that make use of the practice in a given industry can provide important instruction. When only a few manufacturers lacking market power adopt the practice, there is little likelihood it is facilitating a manufacturer cartel, |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | there is little likelihood it is facilitating a manufacturer cartel, for a cartel then can be undercut by rival manufacturers. See Overstreet 22; Bork 24. Likewise, a retailer cartel is unlikely when only a single manufacturer in a competitive market uses resale price maintenance. Interbrand competition would divert consumers to lower priced substitutes and eliminate any gains to retailers from their price-fixing agreement over a single brand. See Posner 172; Bork 22. Resale price maintenance should be subject to more careful scrutiny, by contrast, if many competing manufacturers adopt the practice. Cf. Scherer & Ross 8 (noting that "except when [resale price maintenance] spreads to cover the bulk of an industry's output, depriving consumers of a meaningful choice between high-service and low-price outlets, most [resale price maintenance arrangements] are probably innocuous"); Easterbrook 162 (suggesting that "every one of the potentially-anticompetitive outcomes of vertical arrangements depends on the uniformity of the practice"). The source of the restraint may be an important consideration. If there is evidence retailers were the impetus for a vertical price restraint, there is a greater likelihood that the restraint facilitates a retailer cartel or supports a dominant, inefficient retailer. See Brief for William S. Comanor et al. as Amici Curiae 7-8. If, by contrast, a manufacturer adopted the policy independent of retailer pressure, the restraint is less likely to promote anticompetitive conduct. Cf. Posner 177 ("It makes all the difference whether minimum retail prices are imposed by the manufacturer in order to evoke point-of-sale services or by the dealers in order to obtain monopoly profits"). A manufacturer has an incentive to protest inefficient retailer-induced *2720 price restraints because they can harm its competitive position. As a final matter, that a dominant manufacturer or retailer can abuse resale price maintenance for anticompetitive purposes may not be a serious concern unless the relevant entity has market power. If a retailer lacks market power, manufacturers likely can sell their goods through rival retailers. See Business 8 S. Ct. 11 (noting "[r]etail market power is rare, because of the usual presence of interbrand competition and other dealers"). And if a manufacturer lacks market power, there is less likelihood it can use the practice to keep competitors away from distribution outlets. The rule of reason is designed and used to eliminate anticompetitive transactions from the market. This standard principle applies to vertical price restraints. A party alleging injury from a vertical agreement setting minimum resale prices will have, as a general matter, the information and resources available to show the existence of the agreement and its scope of operation. As courts gain |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | the agreement and its scope of operation. As courts gain experience considering the effects of these restraints by applying the rule of reason over the course of decisions, they can establish the litigation structure to ensure the rule operates to eliminate anticompetitive restraints from the market and to provide more guidance to businesses. Courts can, for example, devise rules over time for offering proof, or even presumptions where justified, to make the rule of reason a fair and efficient way to prohibit anticompetitive restraints and to promote procompetitive ones. For all of the foregoing reasons, we think that were the Court considering the issue as an original matter, the rule of reason, not a per se rule of unlawfulness, would be the appropriate standard to judge vertical price restraints. IV We do not write on a clean slate, for the decision in Dr. Miles is almost a century old. So there is an argument for its retention on the basis of stare decisis alone. Even if Dr. Miles established an erroneous rule, "[s]tare decisis reflects a policy judgment that in most matters it is more important that the applicable rule of law be settled than that it be settled right." 22 U.S., 118 S. Ct. 27 And concerns about maintaining settled law are strong when the question is one of statutory interpretation. See, e.g., 24 U.S. 236, 21, 118 S. Ct. 16, (18). Stare decisis is not as significant in this case, however, because the issue before us is the scope of the Sherman Act. 118 S. Ct. 27 ("[T]he general presumption that legislative changes should be left to Congress has less force with respect to the Sherman Act"). From the beginning the Court has treated the Sherman Act as a common-law statute. See National Soc. of Professional 43 U.S. 67, 8 S. Ct. 13, L. Ed. 2d 637 (178); see Northwest Airlines, 41 U.S. 77, 8, n. 42, 1 S. Ct. 171, 67 L. Ed. 2d 70 (181) Just as the common law adapts to modern understanding and greater experience, so too does the Sherman Act's prohibition on "restraint[s] of trade" evolve to meet the dynamics of present economic conditions. The case-by-case adjudication contemplated by the rule of reason has implemented this common-law approach. See National Soc. of Professional at 8 S. Ct. 13. Likewise, the boundaries of *2721 the doctrine of per se illegality should not be immovable. For "[i]t would make no sense to create out of the single term `restraint of trade' a chronologically schizoid statute, in which a `rule of reason' evolves with new circumstance |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | in which a `rule of reason' evolves with new circumstance and new wisdom, but a line of per se illegality remains forever fixed where it was." Business 48 U.S., 8 S. Ct. 11. A Stare decisis, we conclude, does not compel our continued adherence to the per se rule against vertical price restraints. As discussed earlier, respected authorities in the economics literature suggest the per se rule is inappropriate, and there is now widespread agreement that resale price maintenance can have procompetitive effects. See, e.g., Brief for Economists as Amici Curiae 16. It is significant that both the Department of Justice and the Federal Trade Commissionthe antitrust enforcement agencies with the ability to assess the long-term impacts of resale price maintenancehave recommended that this Court replace the per se rule with the traditional rule of See Brief for United States as Amicus Curiae 6. In the antitrust context the fact that a decision has been "called into serious question" justifies our reevaluation of it. 118 S. Ct. 27. Other considerations reinforce the conclusion that Dr. Miles should be overturned. Of most relevance, "we have overruled our precedents when subsequent cases have undermined their doctrinal underpinnings." 30 U.S. 428, 147 L. Ed. 2d 40 The Court's treatment of vertical restraints has progressed away from Dr. Miles' strict approach. We have distanced ourselves from the opinion's rationales. See ; see 118 S. Ct. 27 (overruling a case when "the views underlying [it had been] eroded by this Court's precedent"); Rodriguez de 0 U.S. 477, S. Ct. 117, 4 L. Ed. 2d 26 (18) This is unsurprising, for the case was decided not long after enactment of the Sherman Act when the Court had little experience with antitrust analysis. Only eight years after Dr. Miles, moreover, the Court reined in the decision by holding that a manufacturer can announce suggested resale prices and refuse to deal with distributors who do not follow them. Colgate, 20 U.S., at -308, In more recent cases the Court, following a common-law approach, has continued to temper, limit, or overrule once strict prohibitions on vertical restraints. In the Court overturned the per se rule for vertical nonprice restraints, adopting the rule of reason in its stead. GTE 433 U.S., at 7-, 7 S. Ct. 2 (overruling United 388 U.S. 36, 87 S. Ct. 186, 18 L. Ed. 2d 12 (167)); see 433 U.S., at 8, n. 2, 7 S. Ct. 2 (noting "that the advantages of vertical restrictions should not be limited to the categories of new entrants and failing firms"). While the Court in a footnote in |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | and failing firms"). While the Court in a footnote in GTE suggested that differences between vertical price and nonprice restraints could support different legal treatment, see 433 U.S., at 1, n. 18, 7 S. Ct. 2, the central part of the opinion relied on authorities and arguments that find unequal treatment "difficult to justify," at 6-70, 7 S. Ct. 2 (White, J., concurring in judgment). Continuing in this direction, in two cases in the 180's the Court defined legal rules to limit the reach of Dr. Miles and to accommodate the doctrines enunciated in *2722 GTE and Colgate. See Business 8 S. Ct. 11; 46 U.S., at 763-764, 4 S. Ct. 1464. In the Court required that antitrust plaintiffs alleging a 1 price-fixing conspiracy must present evidence tending to exclude the possibility a manufacturer and its distributors acted in an independent manner. 4 S. Ct. 1464. Unlike Justice Brennan's concurrence, which rejected arguments that Dr. Miles should be overruled, see 46 U.S., at 76, 4 S. Ct. 1464, the Court "decline[d] to reach the question" whether vertical agreements fixing resale prices always should be unlawful because neither party suggested otherwise, at -762, n. 7, 4 S. Ct. 1464. In Business the Court further narrowed the scope of Dr. Miles. It held that the per se rule applied only to specific agreements over price levels and not to an agreement between a manufacturer and a distributor to terminate a price-cutting 48 U.S., at 726-727, 73-736, 8 S. Ct. 11. Most recently, in after examining the issue of vertical maximum price-fixing agreements in light of commentary and real experience, the Court overruled a 2-year-old precedent treating those agreements as per se illegal. 22 U.S., at 22, 118 S. Ct. 27 (overruling 30 U.S. 14, 88 S. Ct. 86, 1 L. Ed. 2d 8 (168)). It held instead that they should be evaluated under the traditional rule of 22 U.S., at 22, 118 S. Ct. 27. Our continued limiting of the reach of the decision in Dr. Miles and our recent treatment of other vertical restraints justify the conclusion that Dr. Miles should not be retained. The Dr. Miles rule is inconsistent with a principled framework, for it makes little economic sense when analyzed with our other cases on vertical restraints. If we were to decide the procompetitive effects of resale price maintenance were insufficient to overrule Dr. Miles, then cases such as Colgate and GTE themselves would be called into question. These later decisions, while they may result in less intrabrand competition, can be justified because they permit manufacturers to secure the |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | can be justified because they permit manufacturers to secure the procompetitive benefits associated with vertical price restraints through other methods. The other methods, however, could be less efficient for a particular manufacturer to establish and sustain. The end result hinders competition and consumer welfare because manufacturers are forced to engage in second-best alternatives and because consumers are required to shoulder the increased expense of the inferior practices. The manufacturer has a number of legitimate options to achieve benefits similar to those provided by vertical price restraints. A manufacturer can exercise its Colgate right to refuse to deal with retailers that do not follow its suggested prices. See 20 U.S., at The economic effects of unilateral and concerted price setting are in general the same. See, e.g., 46 U.S., at 762-764, 4 S. Ct. 1464. The problem for the manufacturer is that a jury might conclude its unilateral policy was really a vertical agreement, subjecting it to treble damages and potential criminal liability. ; Business 8 S. Ct. 11. Even with the stringent standards in and Business this danger can lead, and has led, rational manufacturers to take wasteful measures. See, e.g., Brief for PING, Inc., as Amicus Curiae -18. A manufacturer might refuse to discuss its pricing policy with its distributors except through counsel knowledgeable of the subtle intricacies of the law. Or it might terminate longstanding distributors for minor violations without seeking an explanation. See The increased costs these burdensome *2 measures generate flow to consumers in the form of higher prices. Furthermore, depending on the type of product it sells, a manufacturer might be able to achieve the procompetitive benefits of resale price maintenance by integrating downstream and selling its products directly to consumers. Dr. Miles tilts the relative costs of vertical integration and vertical agreement by making the former more attractive based on the per se rule, not on real market conditions. See Business at 72, 8 S. Ct. 11 (137). This distortion might lead to inefficient integration that would not otherwise take place, so that consumers must again suffer the consequences of the suboptimal distribution strategy. And integration, unlike vertical price restraints, eliminates all intrabrand competition. See, e.g., GTE 433 U.S., at 7, n. 26, 7 S. Ct. 2. There is yet another consideration. A manufacturer can impose territorial restrictions on distributors and allow only one distributor to sell its goods in a given region. Our cases have recognized, and the economics literature confirms, that these vertical nonprice restraints have impacts similar to those of vertical price restraints; both reduce intrabrand competition and can stimulate retailer |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | price restraints; both reduce intrabrand competition and can stimulate retailer services. See, e.g., Business 8 S. Ct. 11; 4 S. Ct. 1464; see Brief for Economists as Amici Curiae 17-18. Cf. Scherer & Ross 60 (noting that vertical nonprice restraints "can engender inefficiencies at least as serious as those imposed upon the consumer by resale price maintenance"); Steiner, How Manufacturers Deal with the Price-Cutting Retailer: When Are Vertical Restraints Efficient?, 6 Antitrust L.J. 407, 446-447 (indicating that "antitrust law should recognize that the consumer interest is often better served by [resale price maintenance]contrary to its per se illegality and the rule-of-reason status of vertical nonprice restraints"). The same legal standard (per se unlawfulness) applies to horizontal market division and horizontal price fixing because both have similar economic effect. There is likewise little economic justification for the current differential treatment of vertical price and nonprice restraints. Furthermore, vertical nonprice restraints may prove less efficient for inducing desired services, and they reduce intrabrand competition more than vertical price restraints by eliminating both price and service competition. See Brief for Economists as Amici Curiae 17-18. In sum, it is a flawed antitrust doctrine that serves the interests of lawyersby creating legal distinctions that operate as traps for the unwarymore than the interests of consumersby requiring manufacturers to choose second-best options to achieve sound business objectives. B Respondent's arguments for reaffirming Dr. Miles on the basis of stare decisis do not require a different result. Respondent looks to congressional action concerning vertical price restraints. In 137, Congress passed the Miller-Tydings Fair Trade Act, 0 Stat. 63, which made vertical price restraints legal if authorized by a fair trade law enacted by a State. Fifteen years later, Congress expanded the exemption to permit vertical price-setting agreements between a manufacturer and a distributor to be enforced against other distributors not involved in the agreement. McGuire Act, In 17, however, Congress repealed both Acts. Consumer Goods Pricing Act, 8 Stat. 801. That the Dr. Miles rule applied to vertical *2724 price restraints in 17, according to respondent, shows Congress ratified the rule. This is not so. The text of the Consumer Goods Pricing Act did not codify the rule of per se illegality for vertical price restraints. It rescinded statutory provisions that made them per se legal. Congress once again placed these restraints within the ambit of 1 of the Sherman Act. And, as has been discussed, Congress intended 1 to give courts the ability "to develop governing principles of law" in the common-law tradition. Texas Industries, 41 U.S. 630, 1 S. Ct. 2061, 68 L. Ed. |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | 41 U.S. 630, 1 S. Ct. 2061, 68 L. Ed. 2d 00 (181); see Business 48 U.S., at 731, 8 S. Ct. 11 ("The changing content of the term `restraint of trade' was well recognized at the time the Sherman Act was enacted"). Congress could have set the Dr. Miles rule in stone, but it chose a more flexible option. We respect its decision by analyzing vertical price restraints, like all restraints, in conformance with traditional 1 principles, including the principle that our antitrust doctrines "evolv[e] with new circumstances and new wisdom." Business 8 S. Ct. 11; see Easterbrook 13. The rule of reason, furthermore, is not inconsistent with the Consumer Goods Pricing Act. Unlike the earlier congressional exemption, it does not treat vertical price restraints as per se legal. In this respect, the justifications for the prior exemption are illuminating. Its goal "was to allow the States to protect small retail establishments that Congress thought might otherwise be driven from the marketplace by large-volume discounters." California Retail Liquor Dealers 44 U.S. 7, 2, 0 S. Ct. 37, (180). The state fair trade laws appear to have been justified on similar grounds. See Areeda & Hovenkamp 28. The rationales for these provisions are foreign to the Sherman Act. Divorced from competition and consumer welfare, they were designed to save inefficient small retailers from their inability to compete. The purpose of the antitrust laws, by contrast, is "the protection of competition, not competitors." Atlantic Richfield U.S. 328, 1 S. Ct. 1884, L. Ed. 2d 333 To the extent Congress repealed the exemption for some vertical price restraints to end its prior practice of encouraging anticompetitive conduct, the rule of reason promotes the same objective. Respondent relies on several congressional appropriations in the mid-180's in which Congress did not permit the Department of Justice or the Federal Trade Commission to use funds to advocate overturning Dr. Miles. See, e.g., 7 Stat. 71. We need not pause long in addressing this argument. The conditions on funding are no longer in place, see, e.g., Brief for United States as Amicus Curiae 21, and they were ambiguous at best. As much as they might show congressional approval for Dr. Miles, they might demonstrate a different proposition: that Congress could not pass legislation codifying the rule and reached a short-term compromise instead. Reliance interests do not require us to reaffirm Dr. Miles. To be sure, reliance on a judicial opinion is a significant reason to adhere to it, 01 U.S. 808, 111 S. Ct. 27, 11 L. Ed. 2d 720 (11), especially "in cases involving property |
Justice Kennedy | 2,007 | 4 | majority | Leegin Creative Leather Products v. PSKS, Inc. | https://www.courtlistener.com/opinion/145701/leegin-creative-leather-products-v-psks-inc/ | L. Ed. 2d 720 (11), especially "in cases involving property and contract rights," 22 U.S., 118 S. Ct. 27. The reliance interests here, however, like the reliance interests in cannot justify an inefficient rule, especially because the narrowness of the rule has allowed manufacturers *272 to set minimum resale prices in other ways. And while the Dr. Miles rule is longstanding, resale price maintenance was legal under fair trade laws in a majority of States for a large part of the past century up until 17. It is of note that during this time "when the legal environment in the [United States] was most favorable for [resale price maintenance], no more than a tiny fraction of manufacturers ever employed [resale price maintenance] contracts." Overstreet 6; see at 16 ; Scherer & Ross (noting that "[t]he fraction of U.S. retail sales covered by [resale price maintenance] in its heyday has been variously estimated at from 4 to percent"). To the extent consumers demand cheap goods, judging vertical price restraints under the rule of reason will not prevent the market from providing them. Cf. Easterbrook 12-13 (noting that "S.S. Kresge (the old K-Mart) flourished during the days of manufacturers' greatest freedom" because "discount stores offer a combination of price and service that many customers value" and that "[n]othing in restricted dealing threatens the ability of consumers to find low prices"); Scherer & Ross 7 (noting that "for the most part, the effects of the [Consumer Goods Pricing Act] were imperceptible because the forces of competition had already repealed the [previous antitrust exemption] in their own quiet way"). For these reasons the Court's decision in Dr. Miles Medical is now overruled. Vertical price restraints are to be judged according to the rule of V Noting that Leegin's president has an ownership interest in retail stores that sell Brighton, respondent claims Leegin participated in an unlawful horizontal cartel with competing retailers. Respondent did not make this allegation in the lower courts, and we do not consider it here. The judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion. It is so ordered. |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | The question in this case is whether a federal statute that permits national banks to sell insurance in small towns preempts a state statute that forbids them to do so. To answer this question, we must consider both ordinary pre-emption principles, and also a special federal anti-pre-emption rule, which provides that a federal statute will not pre-empt a *28 state statute enacted "for the purpose of regulating the business of insurance"unless the federal statute "specifically relates to the business of insurance. " McCarran-Ferguson Act, 15 U.S. C. 1012(b) We decide that the McCarran-Ferguson Act's special anti-pre-emption rule does not govern this case, because the federal statute in question "specifically relates to the business of insurance." We conclude that, under ordinary pre-emption principles, the federal statute pre-empts the state statute, thereby prohibiting application of the state statute to prevent a national bank from selling insurance in a small town. I In 1916 Congress enacted a federal statute that says that certain national banks "may" sell insurance in small towns. It provides in relevant part: "In addition to the powers now vested by law in national [banks] organized under the laws of the United States any such [bank] located and doing business in any place [with a population] [of not more than] five thousand may, under such rules and regulations as may be prescribed by the Comptroller of the Currency, act as the agent for any fire, life, or other insurance company authorized by the authorities of the State to do business [there], by soliciting and selling insurance Provided, however, That no such bank shall guarantee the payment of any premium And provided further, That the bank shall not guarantee the truth of any statement made by an assured [when applying] for insurance." Act of Sept. 7, 1916 (Federal Statute), as amended, 12 U.S. C. 92 (emphases changed). In 14 Florida enacted a statute that prohibits certain banks from selling most kinds of insurance. It says: *29 "No [Florida licensed] insurance agent who is associated with, owned or controlled by a financial institution shall engage in insurance agency activities" Fla. Stat. 626.8(2) (Supp. 1996) The term "financial institution" includes "any bank [except for a] bank which is not a subsidiary or affiliate of a bank holding company and is located in a city having a population of less than 5,000" 626.8(1)(a). Thus, the State Statute says, in essence, that banks cannot sell insurance in Floridaexcept that an unaffiliated small town bank (i. e., a bank that is not affiliated with a bank holding company) may sell insurance in a small town. In |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | holding company) may sell insurance in a small town. In October petitioner Barnett Bank, an "affiliate[d]" national bank which does business through a branch in a small Florida town, bought a Florida licensed insurance agency. The Florida State Insurance Commissioner, pointing to the State Statute (and noting that the unaffiliated small town bank exception did not apply), ordered Barnett's insurance agency to stop selling the prohibited forms of insurance. Barnett, claiming that the Federal Statute pre-empted the State Statute, then filed this action for declaratory and injunctive relief in federal court. The District Court held that the Federal Statute did not pre-empt the State Statute, but only because of the special insurance-related federal anti-pre-emption rule. The McCarran-Ferguson Act, which creates that rule, says: "No act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance." McCarran-Ferguson Act, 2(b), 15 U.S. C. 1012(b). *30 The District Court decided both (1) that the Federal Statute did not fall within the McCarran-Ferguson Act's exception because it did not "specifically relat[e] to the business of insurance"; and (2) that the State Statute was a "law enacted. for the purpose of regulating the business of insurance." Barnett Bank of Marion County, N. Consequently, the McCarran-Ferguson Act, in the District Court's view, instructs courts not to "constru[e]" the Federal Statute "to invalidate" the State Statute. 15 U.S. C. 1012(b). The Eleventh Circuit Court of Appeals, for similar reasons, agreed that the Federal Statute did not pre-empt the State Statute. Barnett Bank of Marion County, N. We granted certiorari due to uncertainty among lower courts ab the pre-emptive effect of this Federal Statute. See Owensboro Nat. ; First Advantage Ins., (La. Ct. App.), cert. and review denied, We now reverse the Eleventh Circuit. We shall put the McCarran-Ferguson Act's special antipre-emption rule to the side for the moment, and begin by asking whether, in the absence of that rule, we should construe the Federal Statute to pre-empt the State Statute. This question is basically one of congressional intent. Did Congress, in enacting the Federal Statute, intend to exercise its constitutionally delegated authority to set aside the laws of a State? If so, the Supremacy Clause requires courts to follow federal, not state, law. U. S. Const., Art. VI, cl. 2; see California Fed. Sav. & Loan *31 Sometimes courts, when facing the pre-emption question, find language in the federal statute that reveals |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | pre-emption question, find language in the federal statute that reveals an explicit congressional intent to pre-empt state law. E. g., More often, explicit pre-emption language does not appear, or does not directly answer the question. In that event, courts must consider whether the federal statute's "structure and purpose," or nonspecific statutory language, nonetheless reveal a clear, but implicit, pre-emptive intent. ; Fidelity Fed. Sav. & Loan A federal statute, for example, may create a scheme of federal regulation "so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it." Alternatively, federal law may be in "irreconcilable conflict" with state law. Compliance with both statutes, for example, may be a "physical impossibility," Florida Lime & Avocado Growers, ; or, the state law may "stan[d] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." In this case we must ask whether or not the Federal and State Statutes are in "irreconcilable conflict." The two statutes do not impose directly conflicting duties on national banksas they would, for example, if the federal law said, "you must sell insurance," while the state law said, "you may not." Nonetheless, the Federal Statute authorizes national banks to engage in activities that the State Statute expressly forbids. Thus, the State's prohibition of those activities would seem to "stan[d] as an obstacle to the accomplishment" of one of the Federal Statute's purposesunless, of course, that federal purpose is to grant the bank only a very limited permission, that is, permission to sell insurance to the extent that state law also grants permission to do so. *32 That is what the State of Florida and its supporting amici argue. They say that the Federal Statute grants national banks a permission that is limited to circumstances where state law is not to the contrary. In their view, the Federal Statute removes only federal legal obstacles, not state legal obstacles, to the sale of insurance by national banks. But we do not find this, or the State's related, ordinary preemption arguments, convincing. For one thing, the Federal Statute's language suggests a broad, not a limited, permission. That language says, with relevant qualification, that national banks "may act as the agent" for insurance sales. 12 U.S. C. 92. It specifically refers to "rules and regulations" that will govern such sales, while citing as their source not state law, but the federal Comptroller of the Currency. It also specifically refers to state regulation, while limiting that reference to licensingnot of banks or insurance agents, but of the insurance |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | licensingnot of banks or insurance agents, but of the insurance companies whose policies the bank, as insurance agent, will sell. For another thing, the Federal Statute says that its grant of authority to sell insurance is in"addition to the powers now vested by law in national [banks]." In using the word "powers," the statute chooses a legal concept that, in the context of national bank legislation, has a history. That history is one of interpreting grants of both enumerated and incidental "powers" to national banks as grants of authority not normally limited by, but rather ordinarily pre-empting, contrary state law. See, e. g., First Nat. Bank of San ; 229- ; cf. Thus, this Court, in a case quite similar to this one, held that a federal statute permitting, but not requiring, national banks to receive savings deposits pre-empts a state statute prohibiting certain state and national banks from using the word "savings" in their advertising. Franklin Nat. Bank of Franklin See also De la ; cf. Lawrence In defining the pre-emptive scope of statutes and regulations granting a power to national banks, these cases take the view that normally Congress would not want States to forbid, or to impair significantly, the exercise of a power that Congress explicitly granted. To say this is not to deprive States of the power to regulate national banks, where (unlike here) doing so does not prevent or significantly interfere with the national bank's exercise of its powers. See, e. g., Anderson Nat. ; ; National *34 (national banks subject to state law that does not "interfere with, or impair [national banks'] efficiency in performing the functions by which they are designed to serve [the Federal] Government"). Nor do these cases control the interpretation of federal banking statutes that accompany a grant of an explicit power with an explicit statement that the exercise of that power is subject to state law. See, e. g., 12 U.S. C. 36(c) (McFadden Act) (authorizing national banks to operate branches, but only where state law authorizes state banks to do so); 92a(a) (Comptroller of Currency may grant fiduciary powers "by special permit to national banks applying therefor, when not in contravention of State or local law"). Not surprisingly, this Court has interpreted those explicit provisions to mean what they say. See, e. g., First Nat. Bank in Plant ; First Nat. Bank of ; see also Van But, as we pointed where Congress has not expressly conditioned the grant of "power" upon a grant of state permission, the Court has ordinarily found that no such condition applies. In |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | Court has ordinarily found that no such condition applies. In Franklin Nat. Bank, the Court made this point explicit. It held that Congress did not intend to subject national banks' power to local restrictions, because the federal power-granting statute there in question contained "no indication that Congress [so] intended. as it has done by express language in several other instances." and n. 7 (collecting examples). The Federal Statute before us, as in Franklin Nat. Bank, explicitly grants a national bank an authorization, permission, or power. And, as in Franklin Nat. Bank, it contains *35 no "indication" that Congress intended to subject that power to local restriction. Thus, the Court's discussion in Franklin Nat. Bank, the holding of that case, and the other precedent we have cited above, strongly argue for a similar interpretation herea broad interpretation of the word "may" that does not condition federal permission upon that of the State. Finally, Florida and its supporters challenge this interpretation by arguing that special circumstances surrounding the enactment of the Federal Statute nonetheless demonstrate Congress' intent to grant only a limited permission (subject to state approval). They point to a letter to Congress written by the Comptroller of the Currency in 1916. The Comptroller attached a draft of what became the Federal Statute, and the letter explains to Congress why the Comptroller wants Congress to enact his proposal. The letter says that, since 1900, many small town national banks had failed; that some States had authorized small town state banks to sell insurance; that providing small town national banks with authority to sell insurance would help them financially; and that doing so would also improve their competitive position vis-à-vis state banks. The relevant language in the letter (somewhat abridged) reads as follows: "[Since 1900, of 3,084 small national banks, 438] have either failed or gone into liquidation. [T]here are many banks located in [small towns] where the small deposits which the banks receive may make it somewhat difficult [to earn] a satisfactory return "For some time I have been giving careful consideration to the question as to how the powers of these small national banks might be enlarged so as to provide them with additional sources of revenue and place them in a position where they could better compete with local State banks and trust companies which are sometimes *36 authorized under the law to do a class of business not strictly that of commercial banking. "[The federal banking laws, while granting national banks certain "incidental powers," do not give them] either expressly nor by necessary implication the power to act |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | either expressly nor by necessary implication the power to act as agents for insurance companies. "My investigations lead me respectfully to recommend to Congress an amendment to the national-bank act by which national banks located in [small towns] may be permitted to act as agents for insurance companies "It seems desirable from the standpoint of public policy and banking efficiency that this authority should be limited to banks in small communities. This additional income will strengthen them and increase their ability to make a fair return "I think it would be unwise and therefore undesirable to confer this privilege generally upon banks in large cities where the legitimate business of banking affords ample scope for the energies of trained and expert bankers "I inclose a draft designed to empower national banks located in [small] towns under such regulations and restrictions as may from time to time be approved and promulgated by the Comptroller of the Currency, to act as agents for the placing of insurance policies" 53 Cong. Rec. 11001 (1916) (letter from Comptroller Williams to the Chairman of the Senate Bank and Currency Committee). Assuming for argument's sake that this letter is relevant, and in response to the arguments of Florida and its supporters, we point that the letter does not significantly advance their cause. Although the letter mentions that enlarging the powers of small national banks will help them "better compete with local State banks," it primarily focuses upon small town national banks' need for added revenue *37 an objective met by a broad insurance-selling authority that is not limited by state law. The letter refers to limitations that federal regulation might impose, but it says nothing ab limitations imposed by state regulation or state law. The letter makes clear that authority to sell insurance in small towns is an added "incidental power" of a national banka term that, in light of this Court's then-existing cases, suggested freedom from conflicting state regulation. See -; First Nat. Bank of San 262 U. S., at The letter sets forth as potential objections to the proposal (or to its extension to larger national banks) concerns ab distracting banking management or inhibiting the development of banking expertise not concerns related to state regulatory control. We have found nothing elsewhere in the Federal Statute's background or history that significantly supports the State's arguments. And as far as we are aware, the Comptroller's subsequent interpretation of the Federal Statute does not suggest that the statute provides only a limited authority subject to similar state approval. Cf. 12 CFR 7.7100 ; OCC Interpretive Letter No. |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | approval. Cf. 12 CFR 7.7100 ; OCC Interpretive Letter No. 366, CCH Fed. Banking L. Rep. ¶ 85,536, p. 77,8 (16). In light of these considerations, we conclude that the Federal Statute means to grant small town national banks authority to sell insurance, whether or not a State grants its own state banks or national banks similar approval. Were we to apply ordinary legal principles of pre-emption, the federal law would pre-empt that of the State. I We now must decide whether ordinary legal principles of pre-emption, or the special McCarran-Ferguson Act antipre-emption rule, governs this case. The lower courts held that the McCarran-Ferguson Act's special anti-pre-emption rule applies, and instructs courts not to "construe" the Federal Statute to "invalidate, impair, or supersede" that of the *38 State. 15 U.S. C. 1012(b). By its terms, however, the Act does not apply when the conflicting federal statute "specifically relates to the business of insurance. " In our view, the Federal Statute in this case "specifically relates to the business of insurance"therefore the McCarran-Ferguson Act's special anti-pre-emption rule does not apply. Our conclusion rests upon the McCarran-Ferguson Act's language and purpose, taken together. Consider the language"specifically relates to the business of insurance." In ordinary English, a statute that says that banks may act as insurance agents, and that the Comptroller of the Currency may regulate their insurance-related activities, "relates " to the insurance business. The word "relates" is highly general, and this Court has interpreted it broadly in other pre-emption contexts. See, e. g., Pilot Life Ins. in turn quoting ); (interpreting similarly the words "`relating to' " in the Airline Deregulation Act of 18). More importantly, in ordinary English, this statute "specifically " relates to the insurance business. "Specifically" can mean "explicitly, particularly, [or] definitely," Black's Law Dictionary 13 (6th ed. 1990), thereby contrasting a specific reference with an implicit reference made by more general language to a broader topic. The general words "business activity," for example, will sometimes include, and thereby implicitly refer, to insurance; the particular words "finance, banking, and insurance" make that reference explicitly and specifically. *39 Finally, using ordinary English, one would say that this statute specifically relates to the "business of insurance. " The statute explicitly grants national banks permission to "act as the agent for any fire, life, or other insurance company," to "solici[t] and sel[l] insurance," to "collec[t] premiums," and to "receive for services so rendered fees or commissions," subject to Comptroller regulation. 12 U.S. C. 92. It also sets forth certain specific rules prohibiting banks from guaranteeing the "payment of any premium on |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | prohibiting banks from guaranteeing the "payment of any premium on insurance policies issued through its agency" and the "truth of any statement made by an assured in filing his application for insurance." The statute thereby not only focuses directly upon industry-specific selling practices, but also affects the relation of insured to insurer and the spreading of riskmatters that this Court, in other contexts, has placed at the core of the McCarran-Ferguson Act's concern. See Union Labor Life Ins. (citing Group Life & Health Ins. (19); see also Department of Consider, too, the McCarran-Ferguson Act's basic purposes. The Act sets forth two mutually reinforcing purposes in its first section, namely, that "continued regulation and taxation by the several States of the business of insurance is in the public interest," and that "silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States." 15 U.S. C. 1011 The latter phrase, particularly the word "silence," indicates that the Act does not seek to insulate state insurance regulation from the reach of all federal law. Rather, it seeks to protect state regulation primarily against inadvertent federal intrusion say, through enactment of a federal statute that describes an affected activity in broad, general terms, of which the insurance business happens to constitute one part. *40 The circumstances surrounding enactment of the McCarran-Ferguson Act suggest the same. Just prior to the law's enactment, this Court, in United States v. ShEastern Underwriters Assn., 322 U.S. held that a federal antitrust law, the Sherman Act, applied to the business of insurance. The Sherman Act's highly general language said nothing specifically ab insurance. See 15 U.S. C. 1 (forbidding every "contract, combination or conspiracy, in restraint of trade or commerce among the several States"). The Sherman Act applied only to activities in or affecting interstate commerce. Many lawyers and insurance professionals had previously thought and other cases) that the issuance of an insurance policy was not a "transaction of commerce," and therefore fell side the Sherman Act's scope. Sh-Eastern Underwriters told those professionals that they were wrong ab interstate commerce, and that the Sherman Act did apply. And Sh-Eastern Underwriters' principle meant, consequently, that other generally phrased congressional statutes might also apply to the issuance of insurance policies, thereby interfering with state regulation of insurance in similarly unanticipated ways. In reaction to Sh-Eastern Underwriters, Congress "moved quickly," enacting the McCarran-Ferguson Act "to restore the supremacy of the States in the realm of insurance regulation." But the circumstances we have just described mean that |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | regulation." But the circumstances we have just described mean that "restor[ation] " of "supremacy" basically required setting aside the unanticipated effects of Sh-Eastern Underwriters, and cautiously avoiding similar unanticipated interference with state regulation in the future. It did not require avoiding federal preemption by future federal statutes that indicate, through their "specific relat[ion]" to insurance, that Congress had focused upon the insurance industry, and therefore, in all *41 likelihood, consciously intended to exert upon the insurance industry whatever pre-emptive force accompanied its law. See also, e. g., insofar as relevant, 91 Cong. Rec. 483 (1945) (statement of Sen. O'Mahoney, floor manager of the Act, that the Act was intended to be "a sort of catch-all provision to take into consideration other acts of Congress which might affect the insurance industry, but of which we did not have knowledge at the time"); The language of the Federal Statute before us is not general. It refers specifically to insurance. Its state regulatory implications are not surprising, nor do we believe them inadvertent. See Part Consequently, considerations of purpose, as well as of language, indicate that the Federal Statute falls within the scope of the McCarranFerguson Act's "specifically relates" exception to its antipre-emption rule. Cf. John Hancock Mut. Life Ins. (adopting the United States' view that language in the Employee Retirement Income Security Act of 14 defining a "guaranteed benefit policy" as a certain kind of "insurance" policy "obviously and specifically relates to the business of insurance") We shall mention briefly why we are not convinced by several of the parties' remaining arguments. Florida says that the Federal Statute "specifically relates" to banking, not to insurance. But a statute may specifically relate to more than one thing. Just as an ordinance forbidding dogs in city parks specifically relates to dogs and to parks, so a statute permitting banks to sell insurance can specifically relate to banks and to insurance. Neither the McCarran-Ferguson Act's language, nor its purpose, requires the Federal Statute to relate predominantly to insurance. To the contrary, specific detailed references to the insurance industry in proposed legislation normally will achieve the McCarranFerguson Act's objectives, for they will call the proposed legislation *42 to the attention of interested parties, and thereby normally guarantee, should the proposal become law, that Congress will have focused upon its insurance-related effects. An amicus argues that our interpretation would give the Act "little meaning," because "whenever a state statute `regulates' the business of insurance, any conflicting federal statute necessarily will `specifically relate' to the insurance business." Brief for American Council of Life Insurance as Amicus Curiae 4. |
Justice Breyer | 1,996 | 2 | majority | Barnett Bank of Marion Cty., NA v. Nelson | https://www.courtlistener.com/opinion/118010/barnett-bank-of-marion-cty-na-v-nelson/ | for American Council of Life Insurance as Amicus Curiae 4. We disagree. Many federal statutes with potentially pre-emptive effect, such as the bankruptcy statutes, use general language that does not appear to "specifically relate" to insurance; and where those statutes conflict with state law that was enacted "for the purpose of regulating the business of insurance," the McCarran-Ferguson Act's anti-pre-emption rule will apply. See generally The lower courts argued that the Federal Statute's 1916 date of enactment was significant, because Congress would have then believed that state insurance regulation was beyond its "Commerce Clause" power to affect. The lower courts apparently thought that Congress therefore could not have intended the Federal Statute to pre-empt contrary state law. The short answer to this claim is that there is no reason to think that Congress believed state insurance regulation beyond its constitutional powers to affectinsofar as Congress exercised those powers to create, to empower, or to regulate national banks. See ; Farmers' and Mechanics' Nat. ; see also, e. g., We have explained, see Part why we conclude that Congress indeed did intend the Federal Statute to pre-empt conflicting state law. *43 Finally, Florida points to language in which states that the McCarran-Ferguson Act "imposes what is, in effect, a clear-statement rule" that forbids pre-emption "unless a federal statute specifically requires otherwise." Florida believes that this statement in means that the Federal Statute would have to use the words "state law is pre-empted," or the like, in order to fall within the McCarran-Ferguson Act exception. We do not believe, however, that imposes any such requirement. Rather, the quoted language in was a general description of the Act's effect. It simply pointed to the existence of the clause at issue herethe exception for federal statutes that "specifically relat[e] to the business of insurance." But it did not purport authoritatively to interpret the "specifically relates" clause. That matter was not at issue in We therefore believe that does not require us to reach a different result here. For these reasons, the judgment of the Court of Appeals is reversed. It is so ordered. |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | ] Respondent Construction Laborers Pension Trust for Southern California (Plan) is a multiemployer pension trust fund established under a Trust Agreement executed in 9. Petitioner Concrete Pipe and Products of California, (Concrete Pipe), is an employer and former contributor to the Plan that withdrew from it and was assessed "withdrawal liability" under provisions of the Employee Retirement Income Security Act of 974 (ERISA), 29 U.S. C. 30-46 (988 ed. and Supp. III), added by the Multiemployer Pension Plan Amendments Act of 980 (MPPAA), Stat. 208. Concrete Pipe contends that the MPPAA's assessment and arbitration provisions worked to deny it procedural due process. And, although we have upheld the MPPAA against constitutional challenge under the substantive component of the Due Process Clause and the Takings Clause, Pension Benefit Guaranty ; Concrete Pipe contends that, as applied to it, the MPPAA violates these provisions as well. We see merit in none of Concrete Pipe's contentions. I A pension plan like the one in issue, to which more than one employer contributes, is characteristically maintained to fulfill the terms of collective-bargaining agreements. The contributions made by employers participating in such a multiemployer plan are pooled in a general fund available to pay any benefit obligation of the plan. To receive benefits, an *606 employee participating in such a plan need not work for one employer for any particular continuous period. Because service credit is portable, employees of an employer participating in the plan may receive such credit for any work done for any participating employer. An employee obtains a vested right to secure benefits upon retirement after accruing a certain length of service for participating employers; benefits vest under the Plan in this case when an employee accumulates 0 essentially continuous years of credit. See Brief for Petitioner 28. Multiemployer plans like the one before us have features that are beneficial in industries where "there is] little if any likelihood that individual employers would or could establish single-employer plans for their employees] where there are hundreds and perhaps thousands of small employers, with countless numbers of employers going in and out of business each year, and where] the nexus of employment has focused on the relationship of the workers to the union to which they belong, and/or the industry in which they are employed, rather than to any particular employer." Multiemployer Pension Plan Termination Insurance Program: Hearings before the Subcommittee on Oversight of the House Committee on Ways and Means, 96th Cong., st Sess., 50 (979) (statement of Robert A. Georgine, Chairman, National Coordinating Committee for Multiemployer Plans). Multiemployer plans provide the participating |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | Coordinating Committee for Multiemployer Plans). Multiemployer plans provide the participating employers with such labor market benefits as the opportunity to offer a pension program (a significant part of the covered employees' compensation package) with cost and risk-sharing mechanisms advantageous to the employer. The plans, in consequence, help ensure that each participating employer will have access to a trained labor force whose members are able to move from one employer and one job to another without *607 losing service credit toward pension benefits. See (c)() (99); accord, Washington Star Since the enactment of ERISA in 974, the Plan has been subject to the provisions of the statute as a "defined benefit plan." Such a plan is one that does not qualify as an "`individual account plan' or `defined contribution plan,'" which provide, among other things, for an individual account for each covered employee and for benefits based solely upon the amount contributed to the covered employee's account. See 29 U.S. C. 002(35), 002(34), 002(7). Concrete Pipe has not challenged the determination that the Plan falls within the statutory definition of defined benefit plan, and no issue as to that is before the Court. A We have canvassed the history of ERISA and the MPPAA before. See Pension Benefit Guaranty ERISA was designed "to ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in them]. Congress wanted to guarantee that if a worker has been promised a defined pension benefit upon retirementand if he has fulfilled whatever conditions are required to obtain a vested benefithe will actually receive it." As enacted in 974, ERISA created the Pension Benefit Guarantee (PBGC) to administer and enforce a pension plan termination insurance program, to which contributors to both single-member and multiemployer plans were required to pay insurance premiums. 29 U.S. C. 302(a), 306 (988 ed. and Supp. III). Under the terms of the statute as originally enacted, the guarantee of basic *608 benefits by multiemployer plans that terminated was not to be mandatory until 978, and for terminations prior to that time, any guarantee of benefits upon plan termination was discretionary with PBGC. 29 U.S. C. 38(c)(2)(4) (976 ed.). If PBGC did choose to extend a guarantee when a multiemployer plan terminated with insufficient assets to pay promised benefits, an employer that had contributed to the plan in the five preceding years was liable to PBGC for the shortfall in proportion to its share of contributions during that 5-year period, up to 30 percent of the employer's net |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | 5-year period, up to 30 percent of the employer's net worth. 29 U.S. C. 3(b), 364 (976 ed.). "In other words, any employer withdrawing from a multiemployer plan was subject to a contingent liability that was dependent upon the plan's termination in the next five years and the PBGC's decision to exercise its discretion and pay guaranteed benefits." "As the date for mandatory coverage of multiemployer plans approached, Congress became concerned that a significant number of plans were experiencing extreme financial hardship." Indeed, the possibility of liability upon termination of a plan created an incentive for employers to withdraw from weak multiemployer plans. The consequent risk to the insurance system was unacceptable to Congress, which in 978 postponed the mandatory guarantee pending preparation by the PBGC of a report "analyzing the problems of multiemployer plans and recommending possible solutions." PBGC issued that report on July 978. Pension Benefit Guaranty Multiemployer Study Required by P. L. 95-24 (978). "To alleviate the problem of employer withdrawals, the PBGC suggested new rules under which a withdrawing employer would be required to pay whatever share of the plan's unfunded liabilities was attributable to that employer's participation." *609 Congress ultimately agreed, see and passed the MPPAA, which was signed into law by the President on September 26, 980. Under certain provisions of the MPPAA (which when enacted had an effective date of April 29, 980, 29 U.S. C. 46(e)(2)(A) (976 ed., Supp. V)), if an employer withdraws from a multiemployer plan, it incurs "withdrawal liability" in the form of "a fixed and certain debt to the pension plan." An employer's withdrawal liability is its "proportionate share of the plan's `unfunded vested benefits,'" that is, "the difference between the present value of vested benefits" (benefits that are currently being paid to retirees and that will be paid in the future to covered employees who have already completed some specified period of service, 29 U.S. C. 053) "and the current value of the plan's assets. 29 U.S. C. 38, 39."2] B The MPPAA provides the procedure for calculating and assessing withdrawal liability. The plan's actuary, who is subject to regulatory and professional standards, 29 U.S. C. 24, ; 26 U.S. C. 770(a)(35), must determine the present value of the plan's liability for vested benefits.3] In the absence of regulations promulgated by the PBGC, the actuary must employ "actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary's best estimate of anticipated experience under the plan." 29 U.S. C. *60 |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | of anticipated experience under the plan." 29 U.S. C. *60 393(a)().4] The assumptions must cover such matters as mortality of covered employees, likelihood of benefits vesting, and, importantly, future interest rates. After settling the present value of vested benefits, the actuary calculates the unfunded portion by deducting the value of the plan's assets. 393(c). In order to determine a particular employer's withdrawal liability, the unfunded vested liability is allocated under one of several methods provided by law. 39. In this case, the Plan used the presumptive method of 39(b), which bases withdrawal liability on the proportion of total employer contributions to the plan made by the withdrawing employer during certain 5-year periods. See 39(b)(2) (E)(ii), (b)(3)(B), (b)(4)(D)(ii). In essence, the withdrawal liability imposes on the withdrawing employer a share of the unfunded vested liability proportional to the employer's share of contributions to the plan during the years of its participation. Withdrawal liability is assessed in a notification by the "plan sponsor" (here the trustees, see 30(a)(0)(A)) and a demand for payment. 399(b). The statute requires notification and demand to be made "a]s soon as practicable after an employer's complete or partial withdrawal." 399(b)(). A "complete withdrawal" "occurs when an employer "() Permanently ceases to have an obligation to contribute under the plan, or "(2) permanently ceases all covered operations under the plan." 383(a).5] *6 "T]he date of a complete withdrawal is the date of the cessation of the obligation to contribute or the cessation of covered operations." 383(e). The statute provides that if an employer objects after notice and demand for withdrawal liability, and the parties cannot resolve the dispute, 399(b)(2), it shall be referred to arbitration. See 40(a)(). Two presumptions may attend the arbitration. First, "any determination made by a plan sponsor under 29 U.S. C. 38-399 and (988 ed. and Supp. III)] is presumed correct unless the party contesting the determination shows by a preponderance of the evidence that the determination was unreasonable or clearly erroneous." 29 U.S. C. 40(a)(3)(A). Second, the sponsor's calculation of a plan's unfunded vested benefits "is presumed correct unless a party contesting the determination shows by a preponderance of evidence that "(i) the actuarial assumptions and methods used in the determination were, in the aggregate, unreasonable (taking into account the experience of the plan and reasonable expectations), or "(ii) the plan's actuary made a significant error in applying the actuarial assumptions or methods." 40(a) (3)(B). The statute provides for judicial review of the arbitrator's decision by an action in the district court to enforce, vacate, or modify the award. See 40(b)(2). In any |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | enforce, vacate, or modify the award. See 40(b)(2). In any such action "there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the arbitrator were correct." 40(c). II The parties to the Trust Agreement creating the Plan in 9 are the Southern California District Council of Laborers (Laborers) and three associations of contractors, the * Building Industry of California, the Engineering Contractors Association, and the Southern California Contractors Association, App. 75, ¶ 6 (stipulation of facts filed in the District Court). Under 302(c)(5)(B) of the Labor Management Relations Act, 947 (LMRA), 29 U.S. C. 86(c)(5)(B), when a union participates in management of a plan permitted by the LMRA, the plan must be administered jointly by representatives of labor and management. Accordingly, half of the Plan's trustees are selected by the Laborers, and half by these contractors' associations. Concrete Pipe has never been a member of any of the contractors' associations that are parties to the Trust Agreement. In 976, Concrete Pipe, which is a wholly owned subsidiary of Concrete Pipe and Products purchased certain assets of another company, Cen-Vi-Ro, including a concrete pipe manufacturing plant near Shafter, California, which Concrete Pipe continued to operate much as Cen-Vi-Ro had done. Cen-Vi-Ro had collective-bargaining agreements with several unions including the Laborers, and Concrete Pipe abided by the agreement with the latter by contributing to the Plan at a specified rate for each hour worked by a covered employee.6] In 978, Concrete Pipe negotiated a new 3-year contract with the Laborers that called for continuing contributions to be made to the Plan based on hours worked by covered employees in the collective-bargaining unit.7] The collective-bargaining agreement specified that it would remain in effect until June 30, 98, and thereafter from year to year unless either Concrete Pipe or the Laborers gave notice of a desire to renegotiate or terminate it. "`Such written notice was to] be given at least sixty (60) *63 days prior to June 30 and if] no agreement was] reached by June 30 the Employer or the Laborers might] thereafter give written notice to the other that on a specified date at least] fifteen (5) days thereafter] the Agreement should] be considered terminated.'" App. 76. In August 979, Concrete Pipe stopped production at the Shafter facility. Although the details do not matter here, by October 979, work by employees covered by the agreement with the Laborers had virtually ceased, and Concrete Pipe eventually stopped making contributions to the Plan. In the spring of 98, Concrete Pipe and the Laborers |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | In the spring of 98, Concrete Pipe and the Laborers each sent the other a timely notice of a desire to renegotiate the collective-bargaining agreement. Concrete Pipe subsequently bargained to an impasse and, on November 30, 98, sent the Laborers a letter withdrawing recognition of that union as an employee representative, and giving notice of intent to terminate the 978 collective-bargaining agreement. At about the same time, however, in November 98, Concrete Pipe reopened the Shafter plant to produce 7,000 tons of concrete pipe needed to fill two orders for which it had successfully bid. It hired employees in classifications covered by its prior agreement with the Laborers, but did not contribute to the Plan for their work. In January 982, the Plan notified Concrete Pipe of withdrawal liability claimed to amount to $268,68.8. See Although the demand letter did not specify the date on which the Plan contended that "complete withdrawal" from it had taken place, it referred to the failure of Concrete Pipe to make contributions to the Plan since February 98, and stated that "w]e are further advised that you have not signed a renewal of a collective bargaining agreement obligating you to continue contributions to the Plan on behalf of the Construction laborers currently in your employ." The Plan filed suit seeking the assessed withdrawal liability. Concrete Pipe countersued to bar collection, contending *64 that "complete withdrawal" had occurred when operations at the Shafter plant ceased in August 979, a date prior to the effective date of the MPPAA, and challenging the MPPAA on constitutional grounds. These cases were consolidated in the United States District Court for the Central District of California, which sua sponte ordered the parties to arbitrate the issue of whether withdrawal occurred prior to the effective date of the MPPAA.8] The arbitration took place in two phases. In the first, the arbitrator determined that Concrete Pipe had not withdrawn from the Plan prior to the effective date of the MPPAA. App. 26. In the second phase, explicitly applying the presumption of 29 U.S. C. 40(a)(3)(B), the arbitrator found that Concrete Pipe had failed to meet its burden of showing the actuarial assumptions and methods to be unreasonable in the aggregate. App. 400. For reasons not at issue here, the arbitrator did rule partially in Concrete Pipe's favor, and reduced the withdrawal liability from $268,68.8 to $90,465.57. Concrete Pipe then filed a third action in the District Court, to set aside or modify the arbitrator's decision, and again raised its constitutional challenge. The District Court treated Concrete Pipe's subsequent motion for summary judgment |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | District Court treated Concrete Pipe's subsequent motion for summary judgment as a petition to vacate the arbitrator's award, which it denied, and granted a motion by the Plan to confirm the award. Construction Laborers Pension Trust for Southern California v. Cen-Vi-Ro Concrete Pipe *65 and Products, CV-82-584HLH (CD Cal., July 5, 989), App. 46-425.9] On Concrete Pipe's appeal, the judgment of the District Court was affirmed. Board of Trustees of Construction Laborers Pension Trust for Southern California v. Concrete Pipe and Products of California, No. 89-554 (CA9, June 27, 99), App. 43-432, judgt. order reported at0] III Concrete Pipe challenges the assessment of withdrawal liability on several grounds, the first being that by placing determination of withdrawal liability in the trustees, subject to the presumptions provided by 40, the MPPAA is unconstitutional because it denies Concrete Pipe an impartial This is not the first time this legal question has been before the Court. See Pension Benefit Guaranty v. Yahn & McDonnell, aff'g by an equally divided Court United Retail & Wholesale Employees Teamsters Union Local No. 5 Pension *66 A Concrete Pipe and its amici point to several potential sources of trustee bias toward imposing the greatest possible withdrawal liability. The one they emphasize most strongly has roots in the fact that "all of the trustees, including those selected by employers, are fiduciaries of the fund, 29 U.S. C. 002(2)(A]), and thus owe an exclusive duty to the fund." As we said in another case discussing employee benefit pension plans permitted under LMRA: "Under principles of equity, a trustee bears an unwavering duty of complete loyalty to the beneficiary of the trust, to the exclusion of the interests of all other parties. To deter the trustee from all temptation and to prevent any possible injury to the beneficiary, the rule against a trustee dividing his loyalties must be enforced with `uncompromising rigidity.' "In sum, the duty of the management-appointed trustee of an employee benefit fund under 302(c)(5) is directly antithetical to that of an agent of the appointing party. ERISA essentially codified the strict fiduciary standards that a 302(c)(5) trustee must meet. Title 29 U.S. C. 04(a)()] requires a trustee to `discharge his duties solely in the interest of the participants i. e., covered employees] and beneficiaries.'" NLRB v. Amax Coal The resulting tug away from the interest of the employer is fueled by the threat of personal liability for any breach of the trustees' fiduciary responsibilities, obligations, or duties, 29 U.S. C. 09, which may be enforced by civil actions brought by the Secretary of Labor or any covered |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | actions brought by the Secretary of Labor or any covered employee or beneficiary of the plan, 32(a)(2). *67 The trustees could act in a biased fashion for several reasons. The most obvious would be in attempting to maximize assets available for the beneficiaries of the trust by making findings to enhance withdrawal liability. The next would not be so selfless, for if existing underfunding was the consequence of prior decisions of the trustees, those decisions could, if not offset, leave the trustees open to personal liability. See Brief for American Trucking Associations, as Amicus Curiae 9. A risk of bias may also inhere in the mere fact that, fiduciary obligations aside, the trustees are appointed by the unions and by employers. Union trustees may be thought to have incentives, unrelated to the question of withdrawal, to impose greater rather than lesser withdrawal liability. Employer trustees may be responsive to concerns of those employers who continue to contribute, whose future burdens may be reduced by high withdrawal liability, and whose competitive position may be enhanced to boot. See Brief for Midwest Motor Express, et al. as Amici Curiae 8, citing Note, Trading Fairness for Efficiency: Constitutionality of the Dispute Resolution Procedures of the Multiemployer Pension Plan Amendments Act of 980, 7 Geo. L. J. 6, 68 As against these supposed threats to the trustees' neutrality, due process requires a "neutral and detached judge in the first instance," and the command is no different when a legislature delegates adjudicative functions to a private party, see "That officers acting in a judicial or quasi-judicial capacity are disqualified by their interest in the controversy to be decided is, of course, the general rule." Before one may be deprived of a protected interest, whether in a criminal or civil setting, see one is entitled as a matter of due process of law to an adjudicator who is not in a situation "`which would offer a possible *68 temptation to the average man as a judge which might lead him not to hold the balance nice, clear and true" (quoting ). Even appeal and a trial de novo will not cure a failure to provide a neutral and detached "J]ustice," indeed, "must satisfy the appearance of justice, and this stringent rule may sometimes bar trial even] by judges who have no actual bias and who would do their very best to weigh the scales of justice equally between contending parties." This, too, is no less true where a private party is given statutory authority to adjudicate a dispute, and we will assume that the possibility of |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | a dispute, and we will assume that the possibility of bias, if only that stemming from the trustees' statutory role and fiduciary obligation, would suffice to bar the trustees from serving as adjudicators of Concrete Pipe's withdrawal liability. 2 The assumption does not win the case for Concrete Pipe, however, for a further strand of governing law has to be applied. Not all determinations affecting liability are adjudicative, and the "`rigid requirements' designed for officials performing judicial or quasi-judicial functions, are not applicable to those acting in a prosecutorial or plaintiff-like capacity." Where an initial determination is made by a party acting in an enforcement capacity, due process may be satisfied by providing for a neutral adjudicator to "conduct a de novo review of all factual and legal issues." Cf. ; see also and n. 9; cf. ("Clearly, if the initial view of the facts based on the evidence derived from nonadversarial processes as a practical or legal matter foreclosed fair and effective consideration at a subsequent adversary hearing leading to ultimate decision, a substantial due process question would be raised"). *69 The distinction between adjudication and enforcement disposes of the claim that the assumed bias or appearance of bias in the trustees' initial determination of withdrawal liability alone violates the Due Process Clause, much as it did the similar claim in Marshall v. Jerrico. Although we were faced there with a federal agency administrator who determined violations of a child labor law and assessed penalties under the statute, we concluded that the administrator could not be held to the high standards required of those "whose duty it is to make the final decision and whose impartiality serves as the ultimate guarantee of a fair and meaningful proceeding in our constitutional regime." Of the administrator there we said, "He is not a judge. He performs no judicial or quasi-judicial functions. He hears no witnesses and rules on no disputed factual or legal questions. The function of assessing a violation is akin to that of a prosecutor or civil plaintiff." This analysis applies with equal force to the trustees, who, we find, act only in an enforcement capacity. The statute requires the plan sponsor, here the trustees, to notify the employer of the amount of withdrawal liability and to demand payment, 29 U.S. C. 399(b)(), actions that bear the hallmarks of an assessment, not an adjudication. The trustees are not required to hold a hearing, to examine witnesses, or to adjudicate the disputes of contending parties on matters of fact or law.] In Marshall, we observed that an employer "excepting] to |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | law.] In Marshall, we observed that an employer "excepting] to a penalty is entitled to a de novo hearing before an law judge," 446 U.S., and we concluded that this latter proceeding was the *0 "initial adjudication," n. 9. Likewise here, we conclude that the first adjudication is the proceeding that occurs before the arbitrator, not the trustees' initial determination of liability.2] B This does not end our enquiry, however, for Concrete Pipe goes on to argue that the statutory presumptions preserve the trustees' bias by limiting the arbitrator's autonomy to determine withdrawal liability, and thereby work to deny the employer a fair adjudication. Under the first provision at issue here, "any determination made by the plan sponsor under 29 U.S. C. 38-399 and ] is presumed correct unless the party contesting the determination shows by a preponderance of the evidence that the determination was unreasonable or clearly erroneous." 29 U.S. C. 40(a)(3)(A). Concrete Pipe argues that this presumption denied it an impartial adjudicator on the issue of its withdrawal date, thus raising a constitutional question on which the Courts of Appeals have divided.3] * The parties apparently agree that this presumption applies only to factual determinations, see Reply Brief for Petitioner 7; Brief for Respondent 24 (deferring to brief for the PBGC as amicus curiae ); Brief for Pension Benefit Guaranty as Amicus Curiae 0, and n. and this position is consistent with a PBGC regulation requiring the arbitrator "i]n reaching his decision to] follow applicable law, as embodied in statutes, regulations, court decisions, interpretations of the agencies charged with the enforcement of the Act, and other pertinent authorities," 29 CFR 264.4(a)() We will assume for purposes of this case that the regulation reflects a sound reading of the statute.4] a It is clear that the presumption favoring determinations of the plan sponsor shifts a burden of proof or persuasion to the employer. The hard question is what the employer must show under the statute to rebut the plan sponsor's factual determinations, that is, how and to what degree of probability the employer must persuade the arbitrator that the sponsor was wrong. The question is hard because the statutory text refers to three different concepts in identifying this burden: "preponderance," "clearly erroneous," and "unreasonable." *2 The burden of showing something by a "preponderance of the evidence," the most common standard in the civil law, "simply requires the trier of fact `to believe that the existence of a fact is more probable than its nonexistence before he] may find in favor of the party who has the burden to persuade |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | favor of the party who has the burden to persuade the judge] of the fact's existence.'" In re Winship, 397 U.S. 3, (brackets in original) (citation omitted). "A finding is `clearly erroneous' when although there is evidence to support it, the reviewing body] on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum A showing of "unreasonableness" would require even greater certainty of error on the part of a reviewing body. See, e. g., Anderson v. Liberty Lobby, 477 U.S. In creating the presumption at issue, these terms are combined in a very strange way. As our descriptions indicate, the first, "preponderance," is customarily used to prescribe one possible burden or standard of proof before a trier of fact in the first instance, as when the proponent of a proposition loses unless he proves a contested proposition by a preponderance of the evidence. The term thus belongs in the same category with "clear and convincing" and "beyond a reasonable doubt," which are also used to prescribe standards of proof (but when greater degrees of certainty are thought necessary). Before any such burden can be satisfied in the first instance, the factfinder must evaluate the raw evidence, finding it to be sufficiently reliable and sufficiently probative to demonstrate the truth of the asserted proposition with the requisite degree of certainty. The second and third terms differ from the first in an important way. They are customarily used to describe, not a degree of certainty that some fact has been proven in the first instance, but a degree of certainty that a factfinder in the first instance made a mistake in concluding that a fact *3 had been proven under the applicable standard of proof. They are, in other words, standards of review, and they are normally applied by reviewing courts to determinations of fact made at trial by courts that have made those determinations in an adjudicatory capacity (unlike the trustees here). See, e. g., Fed. Rule Civ. Proc. 52(a). As the terms readily indicate, a reviewing body characteristically examines prior findings in such a way as to give the original factfinder's conclusions of fact some degree of deference. This makes sense because in many circumstances the costs of providing for duplicative proceedings are thought to outweigh the benefits (the second would render the first ultimately useless), and because, in the usual case, the factfinder is in a better position to make judgments about the reliability of some forms of evidence than a reviewing body acting solely |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | some forms of evidence than a reviewing body acting solely on the basis of a written record of that evidence. Evaluation of the credibility of a live witness is the most obvious example. Thus, review under the "clearly erroneous" standard is significantly deferential, requiring a "definite and firm conviction that a mistake has been committed." And application of a reasonableness standard is even more deferential than that, requiring the reviewer to sustain a finding of fact unless it is so unlikely that no reasonable person would find it to be true, to whatever the required degree of proof. The strangeness in the statutory language creating the first presumption arises from the combination of terms from the first category (burdens of proof) with those from the second (standards of review). It is true, of course, that this apparent confusion of categories may have resulted from the hybrid nature of the arbitrator's proceeding in which it is supposed to be applied. The arbitrator here does not function simply as a reviewing body in the classic sense, for he is not only obliged to enquire into the soundness of the sponsor's determinations when they are challenged, but may receive new evidence in the course of his review and adopt his own conclusions of fact. He may conduct proceedings in the *4 same manner and with the same powers as an arbitrator may do under Title 9 of the United State Code, see 29 U.S. C. 40(b)(3), being authorized, for example, to hear (indeed to subpoena) witnesses and to take evidence. See 9 U.S. C. 7; 29 U.S. C. 40(b)(3) (making specific reference to subpoena power). He is, then, a reviewing body (as is clear from his obligation, absent a contrary showing, to deem certain determinations by the plan sponsor correct), but a reviewing body invested with the further powers of a finder of fact (as is clear from his power to take evidence in the course of his review and from the presumption of correctness that a district court is bound to give his "findings of fact," 40(c)). The arbitrator may thus provide a dual sort of trial and review, ultimately empowered to draw his own conclusions, and it would make sense to describe his different functions respectively by the language of trial and the language of review. It does not, however, make sense to use the language of trial and the language of review as the statute does, for the statute does not refer to different arbitrator's functions in language appropriate to each; it refers, rather, to one single conclusion that must |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | each; it refers, rather, to one single conclusion that must be drawn about a determination previously made by a plan sponsor. By its terms the statute purports to provide a standard for reviewing the sponsor's findings, and it defines the nature of the conclusion the arbitrator must draw by using a combination of terms that are categorically ill-matched. They are also inconsistent with each other on any reading. As used here, as distinct from its more usual context, the statutory phrase authorizing the arbitrator to reject a factual conclusion upon proof by a "preponderance" implies review of the sponsor's determination on the basis of the record, supplemented by any new evidence, for simple error. If this statutory phrase were given effect, and the arbitrator concluded from a review of the record and of new evidence that a finding of fact was more probably wrong than not, it would be rejected, and a different *5 finding might be substituted. On the other hand, requiring a showing that the sponsor's determination was "clearly erroneous" or "unreasonable" would grant the plan sponsor's factual findings a great deal of deference. But to say in this context that one must demonstrate that something is more probably clearly erroneous than not or more probably than not unreasonable is meaningless. One might as intelligibly say, in a trial court, that a criminal prosecutor is bound to prove each element probably true beyond a reasonable doubt. The statute is thus incoherent with respect to the degree of probability of error required of the employer to overcome a factual conclusion made by the plan sponsor.5] The proper response to this incomprehensibility is obviously important in deciding this case. If it permitted an employer to rebut the plan sponsor's factual conclusions by a *6 preponderance, merely placing a burden of persuasion on the employer, and permitting adjudication of the facts by the arbitrator without affording deference to the plan sponsor's determinations, the provision would be constitutionally unremarkable. For although we have observed that "w]here the burden of proof lies on a given issue is, of course, rarely without consequence and frequently may be dispositive to the outcome of the litigation or application, o]utside the criminal law area, where special concerns attend, the locus of the burden of persuasion is normally not an issue of federal constitutional moment." 5 Concrete Pipe points to no special interest that would distinguish this from the normal case. It is indeed entirely sensible to burden the party more likely to have information relevant to the facts about its withdrawal from the Plan with the obligation |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | facts about its withdrawal from the Plan with the obligation to demonstrate that facts treated by the Plan as amounting to a withdrawal did not occur as alleged. Such was the rule at common law. W. Bailey, Onus Probandi (886) (citing Powell on Evidence 67-7) ("In every case the onus probandi lies on the party who wishes to support his case by a particular fact which lies more peculiarly within his knowledge, or of which he is supposed to be cognizant"). On the other hand, if the employer were required to show the trustees' findings to be either "unreasonable or clearly erroneous," there would be a substantial question of procedural fairness under the Due Process Clause. In essence, the arbitrator provided for by the statute would be required to accept the plan sponsor's findings, even if they were probably incorrect, absent a showing at least sufficient to instill a definite or firm conviction that a mistake had been made. Cf. 42 U. S., at In light of our assumption of possible bias, the employer would seem to be deprived thereby of the impartial adjudication in the first instance to which it is entitled under the Due Process Clause. See *7 b Having found the statutory language itself incoherent, we turn, as we would in the usual case of textual ambiguity, to the legislative purpose as revealed by the history of the statute, for such light as it may shed.6] Unsurprisingly, we have found no direct discussion in the legislative history of the degree of certainty on the part of the arbitrator required for the employer to overcome the sponsor's factual conclusions. The Report of the House Committee on Education and Labor on the bill that became the MPPAA describes the presumption as applying to "a determination of withdrawal liability by a plan," and lumps it together with the statutory presumption, discussed below, that applies to the choice of actuarial assumptions and methods. See H. R. Rep. No. 96-869, pt. p. 86 ; 29 U.S. C. 40(a)(3)(B).7] The Report states that *8 "t]hese rules are necessary in order to ensure the enforceability of employer liability. In the absence of these presumptions, employers could effectively nullify their obligation by refusing to pay and forcing the plan sponsor to prove every element involved in making an actuarial determination. The committee believes it is extremely important that a withdrawn employer begin making the annual payments even though the period of years for which payments must continue will be based on the actual liability allocated to the employer." H. R. Rep. 96-869, pt. The only |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | to the employer." H. R. Rep. 96-869, pt. The only other comment that we have found in the legislative history occurs in a Report prepared by the Senate Committee on Labor and Human Resources, which first purports to speak about both statutory presumptions, but directs its brief discussion to problems unique to "technical actuarial matters." See S. 076: The Multiemployer Pension Plan Amendments Act of 980: Summary and Analysis of Consideration, 96th Cong., 2d Sess., 20-2 (hereinafter Committee Print); see also infra, at 635, 0. The legislative history thus sheds little light on the odd language chosen to describe the employer's burden. All it tells us is that the provision's purpose is to prevent the employer from "forcing the plan sponsor to prove every element involved in making an actuarial determination." Since this purpose would be served simply by placing the burden of proof as to historical fact on the employer, however light or heavy that burden may be, the legislative history does nothing to make sense of the drafter's failure to choose among the standards included in the text. c The only way out of the muddle is by a different rule of construction. It is a hoary one that, in a case of statutory ambiguity, "where an otherwise acceptable construction of *9 a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress." Edward J. DeBartolo (988). "Federal statutes are to be so construed as to avoid serious doubt of their constitutionality. `When the validity of an act of Congress is drawn in question, and even if a serious doubt of constitutionality israised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.' (932)]." (96). Cf. (830) (a construction that would render a statute unconstitutional should be avoided); 8 (804) Although we are faced here not with ambiguity within the usual degree, but with incoherence, we have a common obligation in each situation to resolve the uncertainty in favor of definite meaning, and the canon for resolving ambiguity applies with equal force when terminology renders a statute incoherent. In applying that canon here, we must give effect to the one conclusion clearly supported by the statutory language, that Congress intended to shift the burden of persuasion to the employer in a dispute over a sponsor's factual determination. This objective can be realized without raising serious constitutional concerns simply by construing the presumption to place |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | serious constitutional concerns simply by construing the presumption to place the burden on the employer to disprove a challenged factual determination by a preponderance. In so construing the statute we make no pretense to have read the congressional mind to perfection. We would not, indeed, even have this problem if an argument could not obviously be made that Congress intended greater deference than the preponderance standard extends. But one could hardly call the intent clear after wondering why the preponderance *630 standard was also included. In these circumstances it is enough that the choice to attain coherence by obviating constitutional problems is not "plainly contrary to the intent of Congress." DeBartolo, at Because the statute as we construe it does not foreclose any factual issue from independent consideration by the arbitrator (the presumption is, again, assumed by all to be inapplicable to issues of law), there is no constitutional infirmity in it. For the same reason, that an employer may avail itself of independent review by the concededly neutral arbitrator, we find no derivative constitutional defect infecting the further presumption that a district court must afford to an arbitrator's findings of fact. See 29 U.S. C. 40(c). d Before applying the presumption to this case, one must recognize that in spite of Concrete Pipe's contention to the contrary, determining the date of "complete withdrawal" presents not a mere question of fact on which the arbitrator was required in the first instance to apply the 40(a)(3)(A) presumption, but a mixed question of fact and law. The relevant facts are about the closure of the Shafter plant (such as the intent of Concrete Pipe with respect to the plant, its expression of that intent, its activities while the plant was not operating, and the circumstances of the plant's reopening), while the question whether these facts amount to a "complete withdrawal" is one of law. As to the truly factual issues, the arbitrator's decision fails to reveal the force with which factual conclusions by the trustees here were presumed correct, and in such a case we would ordinarily reverse the judgment below for consideration of the extent to which the arbitrator's application of the presumption was contrary to the construction we adopt today. But two reasons (urged upon us by neither party) persuade us not to take this course: the Plan's letter to Concrete Pipe contains no statement of facts justifying the trustees' *63 demand, and the parties entered into a factual stipulation in the District Court prior to commencing the arbitration. Because of these two circumstances, there were virtually no contested factual |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | of these two circumstances, there were virtually no contested factual determinations to which the arbitrator might have deferred. And, on the one question of fact that may have been disputed, the arbitrator found, apparently in the first instance, that Concrete Pipe's intent in closing the Shafter plant had been to cease operations permanently. App. 23-24.8] While we express no opinion on whether the facts in this case constitute a "complete withdrawal" within the meaning of the statute, a question not before us today, the approach taken by the arbitrator and the courts below is not inconsistent with our interpretation of the first presumption. The determination of the date of withdrawal by the arbitrator did not involve a misapplication of the statutory presumption, and it did not deprive Concrete Pipe of its right to procedural due process. 2 The second presumption at issue attends the calculation of the amount of withdrawal liability. The statute provides that in the absence of more particular PBGC regulations, the plan is required to use "actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary's best estimate of anticipated experience under the plan." 29 U.S. C. 393(a)(). The presumption in question arises under 40(a)(3)(B), which provides that *632 "the determination of a plan's unfunded vested benefits for a plan year, is] presumed correct unless a party contesting the determination shows by a preponderance of evidence that "(i) the actuarial assumptions and methods used in the determination were, in the aggregate, unreasonable (taking into account the experience of the plan and reasonable expectations), or "(ii) the plan's actuary made a significant error in applying the actuarial assumptions or methods." Concrete Pipe's concern is with the presumptive force of the actuarial assumptions and methods covered by subsection (i). While this provision is like its counterpart creating the presumption as to factual determinations in placing the burden of proof on the employer, the issues implicated in applying it to the actuary's work are not the same. As the text plainly indicates, the assumptions and methods used in calculating withdrawal liability are selected in the first instance not by the trustees, but by the plan actuary. For a variety of reasons, this actuary is not, like the trustees, vulnerable to suggestions of bias or its appearance. Although plan sponsors employ them, actuaries are trained professionals subject to regulatory standards. See 29 U.S. C. 24, ; 26 U.S. C. 770(a)(35). The technical nature of an actuary's assumptions and methods, and the necessity for |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | of an actuary's assumptions and methods, and the necessity for applying the same assumptions and methods in more than one context, as a practical matter limit the opportunity an actuary might otherwise have to act unfairly toward the withdrawing employer. The statutory requirement (of "actuarial assumptions and methodswhich, in the aggregate, are reasonable ") is not unique to the withdrawal liability context, for the statute employs identical language in 29 U.S. C. 082(c)(3) to describe the actuarial assumptions and methods to be used in determining whether a plan has satisfied the minimum funding requirements contained in the statute. The use of the same language to describe the actuarial *633 assumptions and methods to be used in these different contexts tends to check the actuary's discretion in each of them. "Using different assumptions for different purposes] could very well be attacked as presumptively unreasonable both in arbitration and on judicial review. "This] view that the trustees are required to act in a reasonably consistent manner greatly limits their discretion, because the use of assumptions overly favorable to the fund in one context will tend to have offsetting unfavorable consequences in other contexts. For example, the use of assumptions (such as low interest rates) that would tend to increase the fund's unfunded vested liability for withdrawal liability purposes would also make it more difficult for the plan to meet the minimum funding requirements of 082." United Retail & Wholesale Employees Teamsters Union Local No. 5 Pension 787 F. 2d, at 46-47 (Seitz, J., dissenting in part). This point is not significantly blunted by the fact that the assumptions used by the Plan in its other calculations may be "supplemented by several actuarial assumptions unique to withdrawal liability." Brief for Respondent 26. Concrete Pipe has not shown that any method or assumption unique to the calculation of withdrawal liability is so manipulable as to create a significant opportunity for bias to operate, and arguably the most important assumption (in fact, the only actuarial assumption or method that Concrete Pipe attacks in terms, see Reply Brief for Petitioner 8-20) is the critical interest rate assumption that must be used for other purposes as well.9] *634 The second major difference attending the two presumptions lies in the sense of reasonableness that must be disproven by an employer attacking the actuary's methods and assumptions, as against the reasonableness of the trustees' determinations of historical fact. Following the usual presumption of statutory interpretation, that the same term carries the same meaning whenever it appears in the same Act, see Atlantic Cleaners & Dyers, v. United States, (932), |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | Act, see Atlantic Cleaners & Dyers, v. United States, (932), we might expect "reasonable" in 40(a)(3)(B) to function here just as it did in 40(a) (3)(A), to denote a certain range of probability that a factual determination is correct. For several reasons, however, we think it clear that this second presumption of reasonableness functions quite differently. First, of course, the statute does not speak in terms of disproving the reasonableness of the calculation of the employer's share of the unfunded liability, which would be the finding of future fact most obviously analogous to the findings of historical fact to which the 40(a)(3)(A) presumption applies. Section 40(a)(3)(B) speaks instead of the aggregate reasonableness of the assumptions and methods employed by the actuary in calculating the dollar liability figure. Because a "method" is not "accurate" or probably "true" within some range, "reasonable" must be understood here to refer to some different kind of judgment, one that it would make sense to apply to a review of methodology as *635 well as of assumptions. Since the methodology is a subject of technical judgment within a recognized professional discipline, it would make sense to judge the reasonableness of a method by reference to what the actuarial profession considers to be within the scope of professional acceptability in making an unfunded liability calculation. Accordingly, an employer's burden to overcome the presumption in question (by proof by a preponderance that the actuarial assumptions and methods were in the aggregate unreasonable) is simply a burden to show that the combination of methods and assumptions employed in the calculation would not have been acceptable to a reasonable actuary. In practical terms it is a burden to show something about standard actuarial practice, not about the accuracy of a predictive calculation, even though consonance with professional standards in making the calculation might justify confidence that its results are sound. As thus understood, the presumption in question supports no due process objection. The employer merely has a burden to show that an apparently unbiased professional, whose obligations tend to moderate any claimed inclination to come down hard on withdrawing employers, has based a calculation on a combination of methods and assumptions that falls outside the range of reasonable actuarial practice. To be sure, the burden may not be so "mere" when one considers that actuarial practice has been described as more in the nature of an "actuarial art" than a science, Keith Fulton & 7 F.2d 37, 43 (CA 985) (internal quotation marks omitted), and that the employer's burden covers "technical actuarial matters with respect to which there are often |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | "technical actuarial matters with respect to which there are often several equally `correct' approaches," Committee Print 20-2.20] But since imprecision *636 inheres in the choice of actuarial methods and assumptions, the resulting difficulty is simply in the nature of the beast. Because it must fall on whichever party bears the burden of persuasion on such an issue, at least where the interests at stake are no more substantial than Concrete Pipe's are here, its allocation to one party or another does not raise an issue of due process. See at 5-6. IV Concrete Pipe argues next that, as applied, the MPPAA violates substantive due process and takes Concrete Pipe's property without just compensation, both in violation of the Fifth Amendment. As to these issues, our decisions in and provide the principal guidance. A In we upheld the MPPAA against substantive due process challenge. Unlike the employer in Concrete Pipe here has no complaint that the MPPAA has been retroactively applied by predicating liability on a withdrawal decision made before passage of the statute. To be sure, since there would be no withdrawal liability without prewithdrawal contributions to the Plan, some of which were made before the statutory enactment, some of the conduct upon which Concrete Pipe's liability rests antedates the statute. But this fact presents a far weaker premise for claiming a substantive due process violation even than the employer raised, and rejection of Concrete Pipe's contention is compelled by our decisions not only in but in Usery v. Turner Mining 428 U.S. upon which the Court relied. *637 "`It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way. See, e. g., (963); Williamson v. Lee Optical (5). "`I]t may be that the liability imposed by the Act was not anticipated at the time of actual employment. But our cases are clear that legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations. See 33 U.S. 00 (947); Carpenter v. Wabash R. (940); Norman v. Baltimore & Ohio R. (935); Home Bldg. & Loan (934); Louisville & Nashville R. v. Mottley, 29 U.S. 467 (9). This is true even though the effect of the legislation is to impose a new duty or liability based on past acts. See ; 305 U.S. 34 (938); Funkhouser v. Preston 290 U.S. 63 (933).' " -730, quoting |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | Funkhouser v. Preston 290 U.S. 63 (933).' " -730, quoting Turner at 5-6 To avoid this reasoning, Concrete Pipe relies not merely on a claim of retroactivity, but on one of irrationality. Since the company contributed to the plan for only 3 2 years, it argues, none of its employees had earned vested benefits through employment by Concrete Pipe at the time of its withdrawal. See Brief for Petitioner 28. Concrete Pipe argues that, consequently, no rational relationship exists between its payment of past contributions and the imposition of liability for a share of the unfunded vested benefits. But this argument simply ignores the nature of multiemployer plans, which, as we have said above, operate by *638 pooling contributions and liabilities. An employer's contributions are not solely for the benefit of its employees or employees who have worked for it alone. Thus, Concrete Pipe's presupposition that none of its employees had vested benefits at the time of its withdrawal may be wrong. An employee whose benefits had vested before coming to work for Concrete Pipe may have earned additional vested benefits by the subsequent covered service. Another may have had sufficient prior service credit to obtain vesting of benefits during employment at Concrete Pipe. A third may have attained vesting while working for other employers but based in part on service credits earned at Concrete Pipe. But even if Concrete Pipe is correct and none of its employees had earned enough service credits for entitlement to vested benefits by the time of Concrete Pipe's withdrawal, as a Concrete Pipe employee each had earned service credits that could be built upon in future employment with any other participating employer. In determining whether the imposition of withdrawal liability is rational, then, the relevant question is not whether a withdrawing employer's employees have vested benefits, but whether an employer has contributed to the plan's probable liability by providing employees with service credits. When the withdrawing employer's liability to the plan is based on the proportion of the plan's contributions (and coincident service credits) provided by the employer during the employer's participation in the plan, the imposition of withdrawal liability is clearly rational. It is true that, depending on the future employment of Concrete Pipe's former employees, the withdrawal liability assessed against Concrete Pipe may amount to more (or less) than the share of the Plan's liability strictly attributable to employment of covered workers at Concrete Pipe. But this possibility was exactly what Concrete Pipe accepted when it joined the Plan. A multi employer plan has features of an insurance scheme in which employers |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | plan has features of an insurance scheme in which employers spread the risk that their employees will meet the plan's vesting requirements *639 and obtain an entitlement to benefits. A rational employer hopes that its employees will vest at a rate above the average for all employees of contributing employers, and that, in this way, it will pay less than it would have by creating a single-employer plan. But the rational employer also appreciates the foreseeable risk that circumstances may produce the opposite result.2] Since the MPPAA spreads the unfunded vested liability among employers in approximately the same manner that the cost would have been spread if all of the employers participating at the time of withdrawal had seen the venture through, the withdrawal liability is consistent with the risks assumed on joining a plan (however inconsistent that liability may be with the employer's hopes). In any event, under the deferential standard of review applied in substantive due process challenges to economic legislation there is no need for mathematical precision in the fit between justification and means. See Turner 428 U. S., at 9. Concrete Pipe's substantive due process claim is not enhanced by its argument that the MPPAA imposes obligations upon it contrary to limitations on liability variously contained in the 9 Trust Agreement,] in a collectivebargaining *640 agreement between the Laborers and multiemployer associations (the "977-980 Laborer's Craft Master Labor Agreement")23] and in an appendix to the "Southern California Master Labor Agreements in 977-980."24] Even assuming that all these provisions apply to Concrete Pipe,25] its argument runs against the holding in that federal economic legislation, which is not subject to constraints *64 coextensive with those imposed upon the States by the Contract Clause of Art. I, 0, of the Federal Constitution, ; United States Trust of N. 43 U.S. 7, n. 3 (977), is subject to due process review only for rationality, which, as we have said, is satisfied in the application of the MPPAA to Concrete Pipe. Nor does the possibility that trustee decisions made "before Concrete Pipe] entered the Plan]" may have led to the unfunded liability alter the constitutional calculus. See Brief for Petitioner 3. Concrete Pipe's decision to enter the Plan after any such decisions were made was voluntary, and Concrete Pipe could at that time have assessed any implications for the Plan's future liability. Similarly, Concrete Pipe cannot rely on any argument based on the fact that, because it was not a member of any of the contractors' associations represented among the Plan's trustees, it had no control over decisions of the trustees |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | trustees, it had no control over decisions of the trustees after it entered the Plan that may have increased the unfunded liability. Again, Concrete Pipe could have assessed the implications for future liability of the identity of the trustees of the Plan before it decided to enter.26] The imposition of withdrawal liability here is rationally related to the terms of Concrete Pipe's participation in the Plan it joined and that suffices for substantive due process scrutiny of this economic legislation. B Given that Concrete Pipe's due process arguments are unavailing, "it would be surprising indeed to discover" the challenged statute nonetheless violating the Takings Clause. Nor is there any violation. Following the analysis in we begin with the contractual provisions relied upon from the Trust Agreement and *642 the collective-bargaining agreements, which we find no more helpful to Concrete Pipe than those adduced in the facial challenge brought in as described in that opinion: "By the express terms of the Trust Agreement and the Plan, the employer's sole obligation to the Pension Trust is to pay the contributions required by the collectivebargaining agreement. The Trust Agreement clearly states that the employer's obligation for pension benefits to the employee is ended when the employer pays the appropriate contribution to the Pension Trust. This is true even though the contributions agreed upon are insufficient to pay the benefits under the Plan." at 28 Indeed, one provision of the Trust Agreement on which Concrete Pipe primarily relies is substantially identical to the one at issue in Compare n. with at 28, n. 2. We said in that "a]ppellants' claim of an illegal taking gains nothing from the fact that the employer in the present litigation was protected by the terms of its contract from any liability beyond the specified contributions to which it had agreed. `Contracts, however express, cannot fetter the constitutional authority of Congress. Contracts may create rights of property, but when contracts deal with a subject matter which lies within the control of Congress, they have a congenital infirmity. Parties cannot remove their transactions from the reach of dominant constitutional power by making contracts about them.' "If the regulatory statute is otherwise within the powers of Congress, therefore, its application may not be defeated by private contractual provisions." 475 U.S., at 3-4 *643 Nothing has changed since these words were first written.27] Following the next step in our analysis is to subject the operative facts, including the facts of the contractual relationship, to the standards derived from our prior Takings Clause cases. See at 4-5. They have identified three factors with |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | cases. See at 4-5. They have identified three factors with particular significance for assessing the results of the required "ad hoc, factual inquiry] into the circumstances of each particular case." at 4. The first is the nature of the governmental action. Again, our analysis in applies with equal force to the facts before us today. "T]he Government does not physically invade or permanently appropriate any of the employer's assets for its own use. Instead, the Act safeguards the participants in multi employer pension plans by requiring a withdrawing employer to fund its share of the plan obligations incurred during its association with the plan. This interference with the property rights of an employer arises from a public program that adjusts the benefits and burdens of economic life to promote the common good and, under our cases, does not constitute a taking requiring Government compensation." at 5. We reject Concrete Pipe's contention that the appropriate analytical framework is the one employed in our cases dealing with permanent physical occupation or destruction of economically beneficial use of real property. See 505 U.S. 003, 05 While Concrete Pipe tries to shoehorn its claim into this analysis by asserting that "t]he property of Concrete Pipe] which is taken, is taken in its entirety," Brief for Petitioner *644 37, we rejected this analysis years ago in Penn Central Transp. v. New York City, 438 U.S. 04, 30-3 (978), where we held that a claimant's parcel of property could not first be divided into what was taken and what was left for the purpose of demonstrating the taking of the former to be complete and hence compensable. To the extent that any portion of property is taken, that portion is always taken in its entirety; the relevant question, however, is whether the property taken is all, or only a portion of, the parcel in question. Accord, Keystone Bituminous Coal ("O]ur test for regulatory taking requires us to compare the value that has been taken from the property with the value that remains in the property, and] one of the critical questions is determining how to define the unit of property `whose value is to furnish the denominator of the fraction' ") (citation omitted). There is no more merit in Concrete Pipe's contention that its property is impermissibly taken "for the sole purpose of protecting the PBGC a government body] from being forced to honor its pension insurance." Brief for Petitioner 38; see also Brief for Midwest Motor Express, et al. as Amici Curiae 2. That the solvency of a pension trust fund may ultimately redound to |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | solvency of a pension trust fund may ultimately redound to the benefit of the PBGC, which was set up in part to guarantee benefits in the event of plan failure, is merely incidental to the primary congressional objective of protecting covered employees and beneficiaries of pension trusts like the Plan. "H]ere, the United States has taken nothing for its own use, and only has nullified a contractual provision limiting liability by imposing an additional obligation that is otherwise within the power of Congress to impose." at 4. Nor is Concrete Pipe's argument about the character of the governmental action strengthened by the fact that Concrete Pipe lacked control over investment and benefit decisions that may have increased the size of the unfunded vested liability. The response to the same argument raised *645 under the substantive Due Process Clause is appropriate here: although Concrete Pipe is not itself a member of any of the management associations that are represented among the trustees of the fund, Concrete Pipe voluntarily chose to participate in the Plan, notwithstanding this fact. See at 64, 6. As to the second factor bearing on the taking determination, the severity of the economic impact of the Plan, Concrete Pipe has not shown its withdrawal liability here to be "out of proportion to its experience with the plan," 475 U.S., at 6, notwithstanding the claim that it will be required to pay out 46% of shareholder equity. As a threshold matter, the Plan contests this figure, arguing that Concrete Pipe, a wholly owned subsidiary of Concrete Pipe & Products was simply "formed to facilitate the purchase of certain assets of Cen-Vi-Ro," Brief for Respondent 2, and that the relevant issue turns on the diminution of net worth of the parent company, not Concrete Pipe. See Tr. of Oral Arg. 29. But this dispute need not be resolved, for even assuming that Concrete Pipe has used the appropriate measure in determining the portion of net worth required to be paid out, our cases have long established that mere diminution in the value of property, however serious, is insufficient to demonstrate a taking. See, e. g., Village of Euclid v. Ambler Realty (926) ; (95) The final factor is the degree of interference with Concrete Pipe's "reasonable investment-backed expectations." 475 U.S., at 6. Again, controls. At the time Concrete Pipe purchased Cen-Vi-Ro and began its contributions to the Plan, pension plans had long been subject to federal regulation, and "`t]hose who do business in the regulated field cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the |
Justice Souter | 1,993 | 20 | majority | Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. | https://www.courtlistener.com/opinion/112883/concrete-pipe-products-of-cal-inc-v-construction-laborers-pension/ | legislative scheme is buttressed by subsequent amendments to achieve the legislative end.' FHA v. The Darlington, 3 U.S. 84, 9 (8). See *646 also Usery v. Turner Mining 428 U. S., at 5-6 and cases cited therein." at 7. Indeed, at that time the Plan was already subject to ERISA, and a withdrawing employer faced contingent liability up to 30% of its net worth. See 29 U.S. C. 364 (976 ed.); see also 29 U.S. C. 3(b) (976 ed.); at 6-7; Thus while Concrete Pipe argues that requiring it to pay a share of promised benefits "ignores express and bargained-for conditions on its contractual] promises," it could have had no reasonable expectation that it would not be faced with liability for promised benefits. at 7 Because "legislation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations even though the effect of the legislation is to impose a new duty or liability based on past acts," Turner 428 U. S., at 6, Concrete Pipe's reliance on ERISA's original limitation of contingent liability to 30% of net worth is misplaced,28] there being no reasonable basis to expect that the legislative ceiling would never be lifted.29] "The employer] in the present litigation voluntarily negotiated and maintained a pension plan which was determined to be within the strictures of ERISA." at 7. In light of the relationship between Concrete Pipe and the Plan, we find no basis to conclude that Concrete Pipe is *647 being forced to bear a burden "which, in all fairness and justice, should be borne by the public as a whole." (960). V Having concluded that the statutory presumptions work no deprivation of procedural due process, and that the statute, as applied to Concrete Pipe, violates no substantive constraint of the Fifth Amendment, we affirm the judgment of the Court of Appeals. It is so ordered. |
Justice Stevens | 2,007 | 16 | concurring | Safeco Ins. Co. of America v. Burr | https://www.courtlistener.com/opinion/145725/safeco-ins-co-of-america-v-burr/ | While I join the Court's judgment and Parts I, II, III-A, and IV-B of the Court's opinion, I disagree with the reasoning in Parts III-B and III-C, as well as with Part IV-A, which relies on that reasoning. *2217 An adverse action taken after reviewing a credit report "is based in whole or in part on" that report within the meaning of 15 U.S.C. 1681m(a). That is true even if the company would have made the same decision without looking at the report, because what the company actually did is more relevant than what it might have done. I find nothing in the statute making the examination of a credit report a "necessary condition" of any resulting increase. Ante, at 2211. The more natural reading is that reviewing a report is only a sufficient condition. The Court's contrary position leads to a serious anomaly. As a matter of federal law, companies are free to adopt whatever "neutral" credit scores they want. That score need not (and probably will not) reflect the median consumer credit score. More likely, it will reflect a company's assessment of the creditworthiness of a run-of-the-mill applicant who lacks a credit report. Because those who have yet to develop a credit history are unlikely to be good credit risks, "neutral" credit scores will in many cases be quite low. Yet under the Court's reasoning, only those consumers with credit scores even lower than what may already be a very low "neutral" score will ever receive adverse action notices.[1] While the Court acknowledges that "the neutral-score baseline will leave some consumers without a notice that might lead to discovering errors," ante, at 2213-2214, it finds this unobjectionable because Congress was likely uninterested in "the theoretical question of whether the consumer would have gotten a better rate with perfect credit." Ante, at 2213.[2] The Court's decision, however, disserves not only those consumers with "gilt-edged credit report[s]," ante, at 2214, but also the much larger category of consumers with better-than-"neutral" scores. I find it difficult to believe that Congress could have intended for a company's unrestrained adoption of a "neutral" score to keep many (if not most) consumers from ever hearing that their credit reports are costing them money. In my view, the statute's text is amenable to a more sensible interpretation. Justice THOMAS, with whom Justice ALITO joins, concurring in part. I agree with the Court's disposition and most of its reasoning. Safeco did not send notices to new customers because it took the position that the initial insurance rate it offered a customer could not be an "increase |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | I join the Court's opinion and judgment except for the dictum on page 456 of the opinion indicating that requires a state court in the trial of a capital case to permit the defendant to waive the statute of limitations and to give a lesser-included-offense instruction as to an offense that would otherwise be barred. *467B JUSTICE STEVENS, with whom JUSTICE BRENNAN and JUSTICE MARSHALL join, concurring in part and dissenting in part. In this case, as in 82 others arising under the capital punishment statute enacted by Florida in 1972, the trial judge sentenced the defendant to death after a jury had recommended a sentence of life imprisonment. The question presented is whether the Constitution of the United States permits petitioner's execution when the prosecution has been unable to persuade a jury of his peers that the death penalty is the appropriate punishment for his crime. The Fourteenth Amendment provides that no State may "deprive any person of life, liberty, or property without due *468 process of law." The concept of due process permits no such deprivation whether of life, liberty, or property to occur if it is grossly excessive in the particular case if it is "cruel and unusual punishment" proscribed by the Eighth Amendment.[1] The differences between the three categories, however, are not mere matters of degree. For although we look to state law as the source of the right to property, "it is not the source of liberty, and surely not the exclusive source." See Board of Because a deprivation of liberty is qualitatively different from a deprivation of property, heightened procedural safeguards are a hallmark of Anglo-American criminal jurisprudence. But that jurisprudence has also unequivocally established that a State's deprivation of a person's life is also qualitatively different from any lesser intrusion on liberty. In the 12 years since every Member of this Court has written or joined at least one opinion endorsing the proposition that because of its severity and irrevocability, the death penalty is qualitatively different from any other punishment, and hence must be accompanied by unique safeguards to ensure that it is a justified response to a given offense.[2] Because it is the one punishment *469 that cannot be prescribed by a rule of law as judges normally understand such rules, but rather is ultimately understood only as an expression of the community's outrage its sense that an individual has lost his moral entitlement to live[3] I am convinced that the danger of an excessive response can only be avoided if the decision to impose the death |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | only be avoided if the decision to impose the death penalty is made by a jury rather than by a single governmental official. This conviction is consistent with the judgment *470 of history and the current consensus of opinion that juries are better equipped than judges to make capital sentencing decisions. The basic explanation for that consensus lies in the fact that the question whether a sentence of death is excessive in the particular circumstances of any case is one that must be answered by the decisionmaker that is best able to "express the conscience of the community on the ultimate question of life or death." I Florida has adopted an unusual "trifurcated" procedure for identifying the persons convicted of a capital felony who shall be sentenced to death. It consists of a determination of guilt or innocence by the jury, an advisory sentence by the jury, and an actual sentence imposed by the trial judge.[4] The judge's determination is then reviewed by the Florida Supreme Court to determine whether the aggravating and mitigating circumstances found *471 by the trial judge are supported by the evidence and justify a sentence of death. Because this procedure was adopted by a democratically elected legislature, "we presume its validity," Nevertheless, this presumption could not be conclusive, or the Eighth Amendment would be effectively read out of the Constitution. The Eighth Amendment is based on the recognition that there are occasions on which the State or Federal Governments will undertake to punish in a manner inconsistent with a fundamental value that the Framers wished to secure against legislative majorities. Thus, the Court correctly states: " `Although the judgments of legislatures, juries, and prosecutors weigh heavily in the balance, it is ultimately for us to judge whether the Eighth Amendment' is violated by a challenged practice." Ante, at 464 ). Our cases have established the appropriate mode of analysis there must be "an assessment of contemporary values concerning the infliction of a challenged sanction," to determine whether punishment has been imposed in a way that offends an "evolving standar[d] of decency,"[5] *472 II Inquiry into the practices adopted by the majority of legislatures provides a logical starting point for determining whether the practice at issue here comports with the Eighth Amendment: "[L]egislative measures adopted by the people's chosen representatives weigh heavily in ascertaining contemporary standards of decency."[6] The judgment of the people's representatives firmly supports the conclusion that the jury ought to make the life-or-death decision necessary in capital cases. "Except for four States that entirely abolished capital punishment in the middle of the |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | that entirely abolished capital punishment in the middle of the last century, every American jurisdiction has at some time authorized jury sentencing in capital cases." For example, of 42 jurisdictions that employed discretionary capital sentencing in 1948, only 3 did not require its imposition through jury determinations which the trial judge could not disregard.[7] At the time of Furman, only 2 jurisdictions of the 41 which employed discretionary capital punishment permitted a death sentence to be imposed without the consent of a jury.[8] Currently, as the Court explains, ante, at 463, 30 of the 37 jurisdictions with capital punishment statutes require that the decision to impose the death penalty be made with the consent of a jury, and only 3 jurisdictions permit an override of a jury's recommendation of leniency. *473 In we relied on the fact that only one-third of the jurisdictions with capital statutes permitted the imposition of the death penalty on a defendant who had not intended the death of his victim as strong support for our conclusion that in such cases the imposition of capital punishment offends contemporary standards of decency and therefore violates the Eighth Amendment. See Here the level of consensus is even greater, thereby demonstrating a strong community feeling that it is only decent and fair to leave the life-or-death decision to the authentic voice of the community the jury rather than to a single governmental official. Examination of the historical and contemporary evidence thus unequivocally supports the conclusion reached by the Royal Commission on Capital Punishment three decades ago: "For our part, we have no hesitation in agreeing with the many witnesses who considered that, in this country at least, the responsibility of deciding whether a person convicted of murder should be sentenced to death or to a lesser punishment is too heavy a burden to impose on any single individual. The sentence of death differs absolutely, not in degree, from any other sentence; and it would be wholly inconsistent with our traditional approach to such issues to lay on the shoulders of the Judge a responsibility so grave and invidious. It is more in accord with the instinct of our people to entrust to the men and women of the jury a joint responsibility for decisions which will affect the life of the accused." Royal Commission on Capital Punishment, 1949-1953, Report 193-194 (1953).[9] *474 III Florida is one of only a few States that permits the imposition of a sentence of death without the consent of a jury. Examination of the reasons for Florida's decision illuminates the extent to |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | of the reasons for Florida's decision illuminates the extent to which this statute can be considered consistent with contemporary standards of fairness and decency. During the century between 1872 and 1972 Florida law required the jury to make the capital sentencing decision. The change in the decisionmaking process that occurred in 1972 was not motivated by any identifiable change in the legislature's assessment of community values; rather, it was a response to this Court's decision in Furman. In Furman a plurality of the Court had condemned the arbitrary pattern of results under the then-existing capital punishment statutes.[10] A number of States responded to Furman by reducing the discretion granted to juries not because of some deeply rooted communal value, but rather in an attempt to comply with the several opinions in that case.[11] In we specifically noted that the Florida jury override now under challenge was adopted in an attempt to comply with Furman, see -297.[12] We have subsequently made it clear that jury sentencing is not inconsistent *475 with Furman,[13] thereby undermining the basis for the legislative judgment challenged here. A legislative choice that is predicated on this sort of misunderstanding is not entitled to the same presumption of validity as one that rests wholly on a legislative assessment of sound policy and community sentiment.[14] Even apart from its history, there is reason to question whether the Florida statute can be viewed as representing a judgment that judicial sentencing is consistent with contemporary standards. The administration of the statute actually reflects a deeply rooted impulse to legitimate the process through involvement of the jury. That is made evident not only through the use of an advisory jury,[15] but also by the fact *476 that the statute has been construed to forbid a trial judge to reject the jury's decision unless he finds that the evidence favoring a sentence of death is so clear and convincing that virtually no reasonable person could impose a lesser sentence.[16] Thus, the Florida experience actually lends support to the conclusion that American jurisprudence has considered the use of the jury to be important to the fairness and legitimacy of capital punishment. IV The Court correctly notes that sentencing has traditionally been a question with which the jury is not concerned. Ante, at 459. Deciding upon the appropriate sentence for a person who has been convicted of a crime is the routine work of judges. By reason of this experience, as well as their training, judges presumably perform this function well. But, precisely because the death penalty is unique, the normal presumption that a judge |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | death penalty is unique, the normal presumption that a judge is the appropriate sentencing authority does not apply in the capital context. The decision whether or not an individual must die is not one that has traditionally been entrusted to judges. This tradition, which has marked a sharp distinction between the usual evaluations of judicial competence with respect to capital and noncapital sentencing, not only eliminates the general presumption that judicial sentencing is appropriate in the capital context, but also in itself provides reason to question whether assigning this role to governmental officials and not juries is consistent with the community's moral sense.[17] *477 While tradition and contemporary practice in most American jurisdictions indicate that capital sentencing by judges offends a moral sense that this unique kind of judgment must be made by a more authentic voice of the community, nevertheless the Court is correct to insist that these factors cannot be conclusive, or the Eighth Amendment would prevent any innovation or variation in the administration of the criminal law. Ante, at 464. Therefore, a more focused inquiry into the Eighth Amendment implications of the decision to put an accused to death, and the jury's relationship to those implications, is essential. V Punishment may be "cruel and unusual" because of its barbarity or because it is "excessive" or "disproportionate" to the offense.[18] In order to evaluate a claim that a punishment is excessive, one must first identify the reasons for imposing it. In general, punishment may rationally be imposed for four reasons: (1) to rehabilitate the offender; (2) to incapacitate him from committing offenses in the future; (3) to deter *478 others from committing offenses; or (4) to assuage the victim's or the community's desire for revenge or retribution. The first of these purposes is obviously inapplicable to the death sentence. The second would be served by execution, but in view of the availability of imprisonment as an alternative means of preventing the defendant from violating the law in the future, the death sentence would clearly be an excessive response to this concern.[19] We are thus left with deterrence and retribution as the justifications for capital punishment.[20] A majority of the Court has concluded that the general deterrence rationale adequately justifies the imposition of capital punishment at least for certain classes of offenses for which the legislature may reasonably conclude that the death penalty has a deterrent effect. However, in reaching this conclusion we have stated that this is a judgment peculiarly within the competence of legislatures and not the judiciary.[21]*479 Thus, the deterrence rationale cannot be used to support |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | judiciary.[21]*479 Thus, the deterrence rationale cannot be used to support the use of judicial as opposed to jury discretion in capital sentencing, at least absent some finding, which the Florida Legislature has not purported to make, that judges are better at gauging the general deterrent effect of a capital sentence than are juries. Moreover, the deterrence rationale in itself argues only for ensuring that the death sentence be imposed in a significant number of cases and remain as a potential social response to the defined conduct. Since the decision whether to employ jury sentencing does not change the number of cases for which death is a possible punishment, the use of judicial sentencing cannot have sufficient impact on the deterrent effect of the statute to justify its use;[22] a murderer's calculus will not be affected by whether the death penalty is imposed by a judge or jury.[23] *480 Finally, even though the deterrence rationale may provide a basis for identifying the defendants eligible for the death penalty, our cases establish that the decision whether to condemn a man to death in a given case may not be the product of deterrence considerations alone. Despite the fact that a legislature may rationally conclude that mandatory capital punishment will have a deterrent effect for a given class of aggravated crimes significantly greater than would discretionary capital sentencing, we have invalidated mandatory capital punishment statutes, as well as statutes that do not permit the trier of fact to consider any mitigating circumstance, even if unrelated to or perhaps inconsistent with the deterrent purposes of the penalty. It is now well settled that the trier of fact in a capital case must be permitted to weigh any consideration indeed any aspect of the defendant's crime or character relevant to the question whether death is an excessive punishment for the offense.[24] Thus, particular capital sentencing decisions cannot rest entirely on deterrent considerations. In the context of capital felony cases, therefore, the question whether the death sentence is an appropriate, nonexcessive response to the particular facts of the case will depend on the retribution justification. The nature of that justification was described in : "In part, capital punishment is an expression of society's moral outrage at particularly offensive conduct. This function may be unappealing to many, but it is essential in an ordered society that asks its citizens to rely *481 on legal processes rather than self-help to vindicate their wrongs." -184[25] Thus, in the final analysis, capital punishment rests on not a legal but an ethical judgment an assessment of what we |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | but an ethical judgment an assessment of what we called in Enmund the "moral guilt" of the -801. And if the decision that capital punishment is the appropriate sanction in extreme cases is justified because it expresses the community's moral sensibility its demand that a given affront to humanity requires retribution it follows, I believe, that a representative cross section of the community must be given the responsibility for making that decision. In no other way can an unjustifiable risk of an excessive response be avoided. VI The authors of our federal and state constitutional guarantees uniformly recognized the special function of the jury in any exercise of plenary power over the life and liberty of the citizen. In our jurisprudence, the jury has always played an essential role in legitimating the system of criminal justice. "The guarantees of jury trial in the Federal and State Constitutions reflect a profound judgment about the way in which law should be enforced and justice administered. A right to jury trial is granted to criminal defendants in order to prevent oppression by the Government. Those who wrote our constitutions knew from history and experience that it was necessary to protect against unfounded criminal charges brought to eliminate enemies and against judges too responsive to the voice of higher authority. The framers of the constitutions *482 strove to create an independent judiciary but insisted upon further protection against arbitrary action. Providing an accused with the right to be tried by a jury of his peers gave him an inestimable safeguard against the corrupt or overzealous prosecutor and against the compliant, biased, or eccentric judge. If the defendant preferred the common-sense judgment of a jury to the more tutored but perhaps less sympathetic reaction of the single judge, he was to have it. Beyond this, the jury trial provisions in the Federal and State Constitutions reflect a fundamental decision about the exercise of official power a reluctance to entrust plenary powers over the life and liberty of the citizen to one judge or to a group of judges. Fear of unchecked power, so typical of our State and Federal Governments in other respects, found expression in the criminal law in this insistence upon community participation in the determination of guilt or innocence."[26] Thus, the jury serves to ensure that the criminal process is not subject to the unchecked assertion of arbitrary governmental power; community participation is "critical to public confidence in the fairness of the criminal justice system."[27] The same consideration that supports a constitutional entitlement to a trial by a |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | that supports a constitutional entitlement to a trial by a jury rather than a judge at the guilt or innocence stage the right to have an authentic representative of the community apply its lay perspective to the determination that must precede a deprivation of liberty applies with special force to the determination that must precede *483 a deprivation of life. In many respects capital sentencing resembles a trial on the question of guilt, involving as it does a prescribed burden of proof of given elements through the adversarial process.[28] But more important than its procedural aspects, the life-or-death decision in capital cases depends upon its link to community values for its moral and constitutional legitimacy. In after observing that "a jury that must choose between life imprisonment and capital punishment can do little more and must do nothing less than express the conscience of the community on the ultimate question of life or death," at the Court added: "[O]ne of the most important functions any jury can perform in making such a selection is to maintain a link between contemporary community values and the penal system a line without which the determination of punishment could hardly reflect `the evolving standards of decency that mark the progress of a maturing society.' " at n. 15 ).[29] That the jury is central to the link between capital punishment and the standards of decency contained in the Eighth Amendment is amply demonstrated by history. Under the common law capital punishment was mandatory for all felonies, and even through the last century it was mandatory for large categories of offenses. "[O]ne of the most significant developments in our society's treatment of capital punishment has been the rejection of the common-law practice of inexorably imposing a death sentence upon every person *484 convicted of a specified offense." The jury played a critical role in this process. Juries refused to convict in cases in which they felt the death penalty to be morally unjustified. This forced the adoption of more enlightened capital punishment statutes that were more in accord with the community's moral sensibilities: "At least since the Revolution, American jurors have, with some regularity, disregarded their oaths and refused to convict defendants where a death sentence was the automatic consequence of a guilty verdict. As we have seen, the initial movement to reduce the number of capital offenses and to separate murder into degrees was prompted in part by the reaction of jurors as well as by reformers who objected to the imposition of death as the penalty for any |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | to the imposition of death as the penalty for any crime. Nineteenth century journalists, statesmen, and jurists repeatedly observed that jurors were often deterred from convicting palpably guilty men of first-degree murder under mandatory statutes. Thereafter, continuing evidence of jury reluctance to convict persons of capital offenses in mandatory death penalty jurisdictions resulted in legislative authorization of discretionary jury sentencing"[30] Thus the lesson history teaches is that the jury and in particular jury sentencing has played a critical role in ensuring that capital punishment is imposed in a manner consistent with evolving standards of decency. This is a lesson of constitutional magnitude, and one that was forgotten during the enactment of the Florida statute. *485 VII The importance of the jury to the legitimacy of the capital sentencing decision has been a consistent theme in our evaluation of post-Furman capital punishment statutes. In we reaffirmed the link between evolving standards of decency and the imposition of capital punishment provided by the jury, as well as the traditional function of the jury in ensuring that the death penalty is assessed only in cases where its imposition is consistent with Eighth Amendment standards: "The jury also is a significant and reliable objective index of contemporary values because it is so directly involved. The Court has said that `one of the most important functions any jury can perform in making a selection [between life imprisonment and death for a defendant convicted in a capital case] is to maintain a link between contemporary community values and the penal system.' It may be true that evolving standards have influenced juries in recent decades to be more discriminating in imposing the sentence of death. But the relative infrequency of jury verdicts imposing the death sentence does not indicate rejection of capital punishment per se. Rather, the reluctance of juries in many cases to impose the sentence may well reflect the humane feeling that this most irrevocable of sanctions should be reserved for a small number of extreme cases." -182 (footnote and citations omitted) (quoting 391 U. S., at n. 15).[31] Highly relevant to the present inquiry is the invalidation of post-Furman statutes requiring mandatory death sentences *486 because they broke the critical link provided by the jury between the death penalty and community standards: "[E]vidence of the incompatibility of mandatory death penalties with contemporary values is provided by the results of jury sentencing under discretionary statutes. In the Court observed that `one of the most important functions any jury can perform' in exercising its discretion to choose `between life imprisonment and capital punishment' is |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | discretion to choose `between life imprisonment and capital punishment' is `to maintain a link between contemporary community values and the penal system.' at and n. 15. Various studies indicate that even in first-degree murder cases juries with sentencing discretion do not impose the death penalty `with any great frequency.' " (quoting H. Kalven & H. Zeisel, The American Jury 436 (1966)). We therefore concluded that "North Carolina's mandatory death penalty statute for first-degree murder departs markedly from contemporary standards respecting the imposition of the punishment of death and thus cannot be applied consistently with the Eighth and Fourteenth Amendments' requirement that the State's power to punish `be exercised within the limits of civilized standards.' " (quoting ). That the jury provides a better link to community values than does a single judge is supported not only by our cases, but also by common sense. Juries comprised as they are of a fair cross section of the community[32] are more representative institutions than is the judiciary; they reflect more accurately the composition and experiences of the community as a whole, and inevitably make decisions based on community values more reliably, than can that segment of the community *487 that is selected for service on the bench.[33] Indeed, as the preceding discussion demonstrates, the belief that juries more accurately reflect the conscience of the community than can a single judge is the central reason that the jury right has been recognized at the guilt stage in our jurisprudence. This same belief firmly supports the use of juries in capital sentencing, in order to address the Eighth Amendment's *488 concern that capital punishment be administered consistently with community values. In fact, the available empirical evidence indicates that judges and juries do make sentencing decisions in capital cases in significantly different ways,[34] thus supporting the conclusion that entrusting the capital decision *489 to a single judge creates an unacceptable risk that the decision will not be consistent with community values. Thus, the legitimacy of capital punishment in light of the Eighth Amendment's mandate concerning the proportionality of punishment critically depends upon whether its imposition in a particular case is consistent with the community's sense of values. Juries have historically been, and continue to be, a much better indicator as to whether the death penalty is a disproportionate punishment for a given offense in light of community values than is a single judge. If the prosecutor cannot convince a jury that the defendant deserves to die, there is an unjustifiable risk that the imposition of that punishment will not reflect the community's sense |
Justice White | 1,984 | 6 | concurring | Spaziano v. Florida | https://www.courtlistener.com/opinion/111250/spaziano-v-florida/ | imposition of that punishment will not reflect the community's sense of the defendant's "moral guilt." The Florida statute is thus inconsistent with "the need for reliability in the determination that death is the appropriate punishment in a specific case," ; it "introduce[s] a level of uncertainty and unreliability into the factfinding process that cannot be tolerated in a capital case." As a result, the statute "creates the risk that the death penalty will be imposed in spite of factors which may call for a less severe penalty. When the choice is between life and death, that risk is unacceptable and incompatible with the commands of the Eighth and Fourteenth Amendments." Once a State, through specification of aggravating circumstances and meaningful appellate review of jury verdicts, develops a capital sentencing process which in the aggregate distinguishes between those who may live and those who will die in some acceptably nonarbitrary way,[35]Furman and its progeny provide no warrant *490 for indeed do not tolerate the exclusion from the capital sentencing process of the jury and the critical contribution only it can make toward linking the administration of capital punishment to community values. VIII History, tradition, and the basic structure and purpose of the jury system persuade me that jury sentencing is essential if the administration of capital punishment is to be governed by the community's evolving standards of decency. The constitutional legitimacy of capital punishment depends upon the extent to which the process is able to produce results which reflect the community's moral sensibilities. Judges simply cannot acceptably mirror those sensibilities the very notion of a right to jury trial is premised on that realization. Judicial sentencing in capital cases cannot provide the type of community participation in the process upon which its legitimacy depends. If the State wishes to execute a citizen, it must persuade a jury of his peers that death is an appropriate punishment for his offense. If it cannot do so, then I do not believe it can be said with an acceptable degree of assurance that imposition of the death penalty would be consistent with the community's sense of proportionality. Thus, in this case Florida has authorized the imposition of disproportionate punishment in violation of the Eighth and Fourteenth Amendments. Accordingly, while I join Part II of the opinion of the Court, with respect to the remainder of the Court's opinion and its judgment, I respectfully dissent. |
Justice White | 1,990 | 6 | majority | United States v. Energy Resources Co. | https://www.courtlistener.com/opinion/112433/united-states-v-energy-resources-co/ | In this case, we decide that a bankruptcy court has the authority to order the Internal Revenue Service (IRS) to treat tax payments made by Chapter 11 debtor corporations as trust fund payments where the bankruptcy court determines that this designation is necessary for the success of a reorganization plan. I The Internal Revenue Code requires employers to withhold from their employees' paychecks money representing employees' personal income taxes and Social Security taxes. 26 U.S. C. 3102(a), 3402(a). Because federal law requires employers to hold these funds in "trust for the United *547 States," 26 U.S. C. 7501(a), these taxes are commonly referred to as "trust fund" taxes. Should employers fail to pay trust fund taxes, the Government may collect an equivalent sum directly from the officers or employees of the employer who are responsible for collecting the tax. 26 U.S. C. 6672. These individuals are commonly referred to as "responsible" individuals. This case involves corporations that have filed petitions for reorganization under Chapter 11 of the Bankruptcy Code, 11 U.S. C. 1101-1174. Newport Offshore, Ltd., filed a petition for reorganization on November 13, 1985; the Bankruptcy Court approved a reorganization plan in June 1986, creating Newport Oil Offshore, Inc. Over the IRS' objection, that plan included a provision stating that the reorganized Newport Offshore would pay its tax debts (totaling about $300,000) over a period of about six years and that the payments would be applied to extinguish all trust fund tax debts " `prior to the commencement of payment of the nontrust fund portion' " of the tax debts owed. In re Energy Resources Co., The IRS appealed to the United States District Court for the District of Rhode Island, which reversed in an unpublished opinion. The debtor then sought review in the Court of Appeals for the First Circuit. Energy Resources Co., Inc., petitioned for reorganization under Chapter 11 in January 1983. In September 1984, the Bankruptcy Court confirmed a reorganization plan that created a special trust which, among other things, was to pay Energy Resources' federal tax debt of approximately $1 million over roughly five years. In November 1985, the trustee of the special trust sent approximately $358,000 in payment to the IRS. The trustee asked the IRS to apply the money to Energy Resources' trust fund tax debt. After the IRS refused to do so, the trustee successfully petitioned the Bankruptcy Court to order the IRS to apply the money to the *548 trust fund tax liabilities. at -227. The IRS appealed this order to the United States District Court for the District of Massachusetts, |
Justice White | 1,990 | 6 | majority | United States v. Energy Resources Co. | https://www.courtlistener.com/opinion/112433/united-states-v-energy-resources-co/ | the United States District Court for the District of Massachusetts, which affirmed the Bankruptcy Court in an oral opinion. The Government then appealed to the First Circuit. Consolidating the two cases, the First Circuit reversed in In re Newport Offshore Ltd. and affirmed in In re Energy Resources Co. The court first considered whether a tax payment made pursuant to a Chapter 11 reorganization plan is "voluntary" or "involuntary" as those terms are used in the IRS' own IRS policy permits taxpayers who "voluntarily" submit payments to the IRS to designate the tax liability to which the payment will apply. See citing Rev. Rul. 79-284, 1979-2 Cum. Bull. 83, modifying Rev. Rul. 73-305, 1973-2 Cum. Bull. 43, superseding Rev. Rul. 58-239, 1958-1 Cum. Bull. 94. The taxpayer corporations argued that tax payments within a Chapter 11 reorganization are best characterized as "voluntary" and therefore that the IRS' own rules bind the agency to respect the debtors' designation of the tax payments. Granting deference to the agency's interpretation of its own rules, the First Circuit accepted the IRS' view that payments made pursuant to the Chapter 11 plan are involuntary for purposes of the IRS' The First Circuit concluded, however, that even if the payments were properly characterized as involuntary under the IRS' regulations, the Bankruptcy Courts nevertheless had the authority to order the IRS to apply an "involuntary" payment made by a Chapter 11 debtor to trust fund tax liabilities if the Bankruptcy Court concluded that this designation was necessary to ensure the success of the reorganization. We granted certiorari because the First Circuit's conclusion on this issue conflicts with decisions in other Circuits. ; see, e. g., In re Ribs-R-Us, Inc., We affirm the judgment below, for whether or not the payments at issue are rightfully considered *549 to be involuntary, a bankruptcy court has the authority to order the IRS to apply the payments to trust fund liabilities if the bankruptcy court determines that this designation is necessary to the success of a reorganization plan. II The Bankruptcy Code does not explicitly authorize the bankruptcy courts to approve reorganization plans designating tax payments as either trust fund or nontrust fund. The Code, however, grants the bankruptcy courts residual authority to approve reorganization plans including "any appropriate provision not inconsistent with the applicable provisions of this title." 11 U.S. C. 1123(b)(5); see also 1129. The Code also states that bankruptcy courts may "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions" of the Code. 105 (a). These statutory directives are consistent with |
Justice White | 1,990 | 6 | majority | United States v. Energy Resources Co. | https://www.courtlistener.com/opinion/112433/united-states-v-energy-resources-co/ | the Code. 105 (a). These statutory directives are consistent with the traditional understanding that bankruptcy courts, as courts of equity, have broad authority to modify creditor-debtor relationships. See ; United States National ; The Government suggests that, in this case, the Bankruptcy Courts have transgressed one of the limitations on their equitable power. Specifically, the Government contends that the orders conflict with the Code's provisions protecting the Government's ability to collect delinquent taxes. As the Government points out, the Code provides a priority for specified tax claims, including those at issue in this case, and makes those tax debts nondischargeable. See 11 U.S. C. 507(a)(7), 523(a)(1)(A). The Code, moreover, requires a bankruptcy court to assure itself that reorganization will succeed, 1129(a)(11), and therefore that the IRS, in all likelihood, will collect the tax debt owed. The tax debt must be paid off within six years. 1129(a)(9)(C). *550 It is evident that these restrictions on a bankruptcy court's authority do not preclude the court from issuing orders of the type at issue here, for those restrictions do not address the bankruptcy court's ability to designate whether tax payments are to be applied to trust fund or non-trust-fund tax liabilities. The Government is correct that, if it can apply a debtor corporation's tax payments to non-trust-fund liability before trust fund liability, it stands a better chance of debt discharge because the debt that is not guaranteed will be paid off before the guaranteed debt. While this result might be desirable from the Government's standpoint, it is an added protection not specified in the Code itself: Whereas the Code gives it the right to be assured that its taxes will be paid in six years, the Government wants an assurance that its taxes will be paid even if the reorganization fails i. e., even if the bankruptcy court is incorrect in its judgment that the reorganization plan will succeed. Even if consistent with the Code, however, a bankruptcy court order might be inappropriate if it conflicted with another law that should have been taken into consideration in the exercise of the court's discretion. The Government maintains that the orders at issue here contravene 6672 of the Internal Revenue Code, the provision permitting the IRS to collect unpaid trust fund taxes directly from the personal assets of "responsible" individuals. The Government contends that 6672 reflects a congressional decision to protect the Government's tax revenues by ensuring an additional source from which trust fund taxes might be collected. It is true that 6672 provides that, if the Government is unable to collect trust fund |
Justice White | 1,990 | 6 | majority | United States v. Energy Resources Co. | https://www.courtlistener.com/opinion/112433/united-states-v-energy-resources-co/ | that, if the Government is unable to collect trust fund taxes from a corporate taxpayer, the Government has an alternative source for this revenue. Here, however, the Bankruptcy Courts' orders do not prevent the Government from collecting trust fund revenue; to the contrary, the orders require the Government to collect trust fund payments before collecting non-trust-fund payments. As the Government concedes, 6672 remains both during and *551 after the corporate Chapter 11 filing as an alternative collection source for trust fund taxes. The Government nevertheless contends that the Bankruptcy Courts' orders contravene 6672 because, if the IRS cannot designate a debtor corporation's tax payments as nontrust-fund, the debtor might be able to pay only the guaranteed debt, leaving the Government at risk for non-trust-fund taxes. This may be the case, but 6672, by its terms, does not protect against this eventuality. That section plainly does not require us to hold that the orders at issue here, otherwise wholly consistent with a bankruptcy court's authority under the Bankruptcy Code, were nonetheless improvident. III In this case, the Bankruptcy Courts have not transgressed any limitation on their broad power. We therefore hold that they may order the IRS to apply tax payments to offset trust fund obligations where it concludes that this action is necessary for a reorganization's success. The judgment of the Court of Appeals is therefore Affirmed. JUSTICE BLACKMUN dissents. |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | This case concerns an endeavor by Arizona voters to address the problem of partisan gerrymandering—the drawing of legislative district lines to subordinate adher ents of one political party and entrench a rival party in power.1 “[P]artisan gerrymanders,” this Court has recog nized, “[are incompatible] with democratic principles.” (plurality ); (KENNEDY, J., concurring in judg ment). Even so, the Court in Vieth did not grant relief on the plaintiffs’ partisan gerrymander claim. The plurality held the matter nonjusticiable. JUSTICE KENNEDY found no standard workable in that case, but left open the possibility that a suitable standard might be identified in later litigation. —————— 1 The term “gerrymander” is a portmanteau of the last name of El- bridge Gerry, the eighth Governor of Massachusetts, and the shape of the electoral map he famously contorted for partisan gain, which included one district shaped like a salamander. See E. Griffith, The Rise and Development of the Gerrymander 16–19 (Arno ed. 1974). 2 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court In 00, Arizona voters adopted an initiative, Proposi tion 106, aimed at “ending the practice of gerrymandering and improving voter and candidate participation in elec tions.” App. 50. Proposition 106 amended Arizona’s Con stitution to remove redistricting authority from the Ari- zona Legislature and vest that authority in an independent commission, the Arizona Independent Redistricting Com mission (AIRC or Commission). After the 10 census, as after the 00 census, the AIRC adopted redistrict- ing maps for congressional as well as state legislative districts. The Arizona Legislature challenged the map the Com mission adopted in January 12 for congressional dis tricts. Recognizing that the voters could control redistrict ing for state legislators, Brief for Appellant 42, 47; Tr. of Oral Arg. 3–4, the Arizona Legislature sued the AIRC in federal court seeking a declaration that the Commission and its map for congressional districts violated the “Elec tions Clause” of the U. S. Constitution. That Clause, critical to the resolution of this case, provides: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Con gress may at any time by Law make or alter such Regulations” Art. I, cl. 1. The Arizona Legislature’s complaint alleged that “[t]he word ‘Legislature’ in the Elections Clause means [specifi cally and only] the representative body which makes the laws of the people,” App. 21, ¶37; so read, the Legislature urges, the Clause precludes resort to an independent commission, created by initiative, to accomplish redistrict ing. The AIRC responded that, for Elections |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | to accomplish redistrict ing. The AIRC responded that, for Elections Clause pur poses, “the Legislature” is not confined to the elected representatives; rather, the term encompasses all legisla tive authority conferred by the State Constitution, includ Cite as: 576 U. S. (15) 3 Opinion of the Court ing initiatives adopted by the people themselves. A three-judge District Court held, unanimously, that the Arizona Legislature had standing to sue; dividing two to one, the Court rejected the Legislature’s complaint on the merits. We postponed jurisdiction and instructed the parties to address two questions: (1) Does the Arizona Legislature have standing to bring this suit? (2) Do the Elections Clause of the United States Constitution and 2 U.S. C. permit Arizona’s use of a commission to adopt congressional districts? 573 U. S. We now affirm the District Court’s judgment. We hold, first, that the Arizona Legislature, having lost authority to draw congressional districts, has standing to contest the constitutionality of Proposition 106. Next, we hold that lawmaking power in Arizona includes the initiative proc- ess, and that both and the Elections Clause permit use of the AIRC in congressional districting in the same way the Commission is used in districting for Arizona’s own Legislature. I A Direct lawmaking by the people was “virtually unknown when the Constitution of 1787 was drafted.” Donovan & Bowler, An Overview of Direct Democracy in the American States, in Citizens as Legislators 1 (S. Bowler, T. Don- ovan, & C. Tolbert eds. 1998). There were obvious pre- cursors or analogues to the direct lawmaking operative today in several States, notably, New England’s town hall meetings and the submission of early state constitutions to the people for ratification. See Lowell, The Referendum in the United States, in The Initiative, Referendum and Recall 126, 127 (hereinafter IRR); W. Dodd, The Revision and Amendment of State Constitu 4 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court tions –67 (1910).2 But it was not until the turn of the th century, as part of the Progressive agenda of the era, that direct lawmaking by the electorate gained a foothold, largely in Western States. See generally Persily, The Peculiar Geography of Direct Democracy: Why the Initia tive, Referendum and Recall Developed in the American West, 2 Mich. L. & Pol’y Rev. 11 The two main “agencies of direct legislation” are the initiative and the referendum. Munro, Introductory, in IRR 8. The initiative operates entirely outside the States’ representative assemblies; it allows “voters [to] petition to propose statutes or constitutional amendments to be adopted or rejected by the voters |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | constitutional amendments to be adopted or rejected by the voters at the polls.” D. Magleby, Direct Legislation 1 (1984). While the initiative allows the electorate to adopt positive legislation, the referendum serves as a negative check. It allows “voters [to] petition to refer a legislative action to the voters [for approval or disapproval] at the polls.” “The initiative [thus] corrects sins of omission” by representative bodies, while the “referendum corrects sins of commission.” Johnson, Direct Legislation as an Ally of Representative Govern ment, in IRR 139, 142. In 1898, South Dakota took the pathmarking step of affirming in its Constitution the people’s power “directly [to] control the making of all ordinary laws” by initiative and referendum. Introductory, In 1902, Oregon became the first State to adopt the initiative as a means, —————— 2 The Massachusetts Constitution of 1780 is illustrative of the under standing that the people’s authority could trump the state legislature’s. Framed by a separate convention, it was submitted to the people for ratification. That occurred after the legislature attempted to promul gate a Constitution it had written, an endeavor that drew opposition from many Massachusetts towns. See J. Rakove, Original Meanings: Politics and Ideas in the Making of the Constitution 96–101 (1996); G. Wood, The Creation of the American Republic, 1776–1787, pp. 339–341 Cite as: 576 U. S. (15) 5 Opinion of the Court not only to enact ordinary laws, but also to amend the State’s Constitution. J. Dinan, The American State Con stitutional Tradition 62 (06). By 19, the people in 19 States had reserved for themselves the power to initiate ordinary lawmaking, and, in 13 States, the power to initi ate amendments to the State’s Constitution. and n. 132, 94, and n. 151. Those numbers increased to 21 and 18, respectively, by the close of the th century. 3 B For the delegates to Arizona’s constitutional convention, direct lawmaking was a “principal issu[e].” J. Leshy, The Arizona State Constitution 8–9 (hereinafter Leshy). By a margin of more than three to one, the people of Arizona ratified the State’s Constitution, which included, among lawmaking means, initiative and referendum pro- visions. at 14–16, 22. In the runup to Arizona’s ad mission to the Union in 1912, those provisions generated no controversy. In particular, the Arizona Constitution “establishes the electorate [of Arizona] as a coordinate source of legisla tion” on equal footing with the representative legislative body. Queen Creek Land & Cattle (1972); Cave Creek Unified School (rejecting challenge to referendum mounted under Article IV, undertaking by the United States to “guarantee to every State in th[e] Union |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | United States to “guarantee to every State in th[e] Union a Repub lican Form of Government”). But see New York v. United States, 505 U.S. 144, 185 (1992) (“[P]erhaps not all claims under the Guarantee Clause present nonjusticiable political questions.”). 6 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court electorate share lawmaking power under Arizona’s system of government.” ). The initiative, housed under the article of the Arizona Consti tution concerning the “Legislative Department” and the section defining the State’s “legislative authority,” re serves for the people “the power to propose laws and amendments to the constitution.” Art. IV, pt. 1, The Arizona Constitution further states that “[a]ny law which may be enacted by the Legislature under this Constitution may be enacted by the people under the Initiative.” Art. XXII, Accordingly, “[g]eneral references to the power of the ‘legislature’ ” in the Arizona Constitution “include the people’s right (specified in Article IV, part 1) to bypass their elected representatives and make laws directly through the initiative.” Leshy xxii. C Proposition 106, vesting redistricting authority in the AIRC, was adopted by citizen initiative in 00 against a “background of recurring redistricting turmoil” in Arizona. Cain, Redistricting Commissions: A Better Political Buf- fer? 121 Yale L. J. 1808, 1831 (12). Redistricting plans adopted by the Arizona Legislature sparked controversy in every redistricting cycle since the 1970’s, and several of those plans were rejected by a federal court or refused preclearance by the Department of Justice under the Voting Rights Act of 1965. See at 1830–1832.4 —————— 4 From Arizona’s admission to the Union in 1912 to 1940, no congres sional districting occurred because Arizona had only one Member of Congress. K. Martis, The Historical Atlas of United States Congres sional Districts, 1789–1983, p. 3 (Table 1). Court-ordered congressional districting plans were in place from 1966 to 1970, and from 1982 through 00. See (Ariz. 1970); ; Arizo- nans for Fair (Ariz. 1992); Norrander & Wendland, Redistricting in Arizona, in Reappor tionment and Redistricting in the West 177, 178–179 (G. Moncrief ed. Cite as: 576 U. S. (15) 7 Opinion of the Court Aimed at “ending the practice of gerrymandering and improving voter and candidate participation in elections,” App. 50, Proposition 106 amended the Arizona Constitu tion to remove congressional redistricting authority from the state legislature, lodging that authority, instead, in a new entity, the AIRC. Ariz. Const., Art. IV, pt. 2, ¶¶3– 23. The AIRC convenes after each census, establishes final district boundaries, and certifies the new districts to the Arizona Secretary of State. ¶¶16–17. The legislature may |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | to the Arizona Secretary of State. ¶¶16–17. The legislature may submit nonbinding recommendations to the AIRC, ¶16, and is required to make necessary appropriations for its operation, ¶18. The highest ranking officer and minor ity leader of each chamber of the legislature each select one member of the AIRC from a list compiled by Arizona’s Commission on Appellate Court Appointments. ¶¶4–7. The four appointed members of the AIRC then choose, from the same list, the fifth member, who chairs the Commission. ¶8. A Commission’s tenure is confined to one redistricting cycle; each member’s time in office “ex pire[s] upon the appointment of the first member of the next redistricting commission.” ¶23. Holders of, or candidates for, public office may not serve on the AIRC, except candidates for or members of a school board. ¶3. No more than two members of the Commission may be members of the same political party, ib and the presiding fifth member cannot be registered with any party already represented on the Commission, ¶8. Subject to the concurrence of two-thirds of the Arizona Senate, AIRC members may be removed by the Arizona Governor for gross misconduct, substantial neglect of duty, or inabil ity to discharge the duties of office. ¶10.5 —————— 11). 5 In the current climate of heightened partisanship, the AIRC has encountered interference with its operations. In particular, its depend ence on the Arizona Legislature for funding, and the removal provision have proved problematic. In 11, when the AIRC proposed boundaries 8 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court Several other States, as a means to curtail partisan gerrymandering, have also provided for the participation of commissions in redistricting. Some States, in common with Arizona, have given nonpartisan or bipartisan com missions binding authority over redistricting.6 The Cali fornia Redistricting Commission, established by popular initiative, develops redistricting plans which become effective if approved by public referendum.7 Still other States have given commissions an auxiliary role, advising the legislatures on redistricting,8 or serving as a “backup” in the event the State’s representative body fails to com plete redistricting.9 Studies report that nonpartisan and bipartisan commissions generally draw their maps in a timely fashion and create districts both more competitive and more likely to survive legal challenge. See Miller & Grofman, Redistricting Commissions in the Western United States, 3 U. C. Irvine L. Rev. 637, 661, 663–6, 666 D On January 17, 12, the AIRC approved final congres sional and state legislative maps based on the 10 cen sus. See Arizona Independent Redistricting, Final Maps, —————— the majority party did not |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | Independent Redistricting, Final Maps, —————— the majority party did not like, the Governor of Arizona attempted to remove the Commission’s independent chair. Her attempt was stopped by the Arizona Supreme Court. See Cain, Redistricting Commissions: A Better Political Buffer? 121 Yale L. J. 1808, 1835–1836 (12) (citing Mathis v. Brewer, No. CV–11–0313–SA (Ariz. 11)); Arizona Inde- pendent Redistricting (12). 6 See Haw. Const., Art. IV, and –1 to 25–9 (09 and Cum. Supp.); Idaho Const., Art. III, Mont. Const., Art. V, N. J. Const., Art. II, Wash Const., Art. II, 7 See Cal. Const., Art. XXI, Cal. Govt. Code Ann. (West Supp. 15). 8 See –42.6 ; ; Me. Const., Art. IV, pt. 3, 9 See Conn. Const., Art. III, –3–2–2 Cite as: 576 U. S. (15) 9 Opinion of the Court http://azredistricting.org/Maps/Final-Maps/default.asp (all Internet materials as visited June 25, 15, and included in Clerk of Court’s case file). Less than four months later, on June 6, 12, the Arizona Legislature filed suit in the United States District Court for the District of Arizona, naming as defendants the AIRC, its five members, and the Arizona Secretary of State. The Legislature sought both a declaration that Proposition 106 and congressional maps adopted by the AIRC are unconstitutional, and, as affirm ative relief, an injunction against use of AIRC maps for any congressional election after the 12 general election. A three-judge District Court, convened pursuant to 28 U.S. C. unanimously denied a motion by the AIRC to dismiss the suit for lack of standing. The Arizona Legislature, the court determined, had “demonstrated that its loss of redistricting power constitute[d] a [sufficiently] concrete injury.” On the merits, dividing two to one, the District Court granted the AIRC’s motion to dismiss the complaint for failure to state a claim. Decisions of this Court, the majority con cluded, “demonstrate that the word ‘Legislature’ in the Elections Clause refers to the legislative process used in [a] state, determined by that state’s own constitution and laws.” As the “lawmaking power” in Arizona “plainly includes the power to enact laws through initia tive,” the District Court held, the “Elections Clause per mits [Arizona’s] establishment and use” of the Commis sion. Judge Rosenblatt dissented in part. Proposition 106, in his view, unconstitutionally denied “the Legislature” of Arizona the “ability to have any out come-defining effect on the congressional redistricting process.” We postponed jurisdiction, and now affirm. II We turn first to the threshold question: Does the Ari 10 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court zona Legislature have standing to bring this suit? Trained |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | Court zona Legislature have standing to bring this suit? Trained on “whether the plaintiff is [a] proper party to bring [a particular lawsuit,]” standing is “[o]ne element” of the Constitution’s case-or-controversy limitation on federal judicial authority, expressed in Article III of the Constitu tion. “To qual ify as a party with standing to litigate,” the Arizona Legis lature “must show, first and foremost,” injury in the form of “ ‘invasion of a legally protected interest’ that is ‘con crete and particularized’ and ‘actual or imminent.’ ” Ari- zonans for Official (quoting Lujan v. Defenders of Wild, 504 U.S. 555, 560 (1992)). The Legislature’s injury also must be “fairly traceable to the challenged action” and “redressable by a favorable ruling.” Clapper v. Amnesty Int’l USA, 568 U. S. (slip op., at 10) (internal quotation marks omitted). The Arizona Legislature maintains that the Elections Clause vests in it “primary responsibility” for redistricting. Brief for Appellant 51, 53. To exercise that responsibility, the Legislature urges, it must have at least the opportun- ity to engage (or decline to engage) in redistricting before the State may involve other actors in the redistricting process. See at 51–53. Proposition 106, which gives the AIRC binding authority over redistricting, regardless of the Legislature’s action or inaction, strips the Legisla ture of its alleged prerogative to initiate redistricting. That asserted deprivation would be remedied by a court order enjoining the enforcement of Proposition 106. Al- though we conclude that the Arizona Legislature does not have the exclusive, constitutionally guarded role it asserts, see infra, at 24–35, one must not “confus[e] weakness on the merits with absence of Article III standing.” Davis v. United States, 5 U. S. n. 10 (11) (slip op., at 19, n. 10); see (standing “often turns on the nature and source of the Cite as: 576 U. S. (15) 11 Opinion of the Court claim asserted,” but it “in no way depends on the merits” of the claim). The AIRC argues that the Legislature’s alleged injury is insufficiently concrete to meet the standing requirement absent some “specific legislative act that would have taken effect but for Proposition 106.” Brief for Appellees The United States, as amicus curiae, urges that even more is needed: the Legislature’s injury will remain speculative, the United States contends, unless and until the Arizona Secretary of State refuses to implement a competing redis tricting plan passed by the Legislature. Brief for United States 14–17. In our view, the Arizona Legislature’s suit is not premature, nor is its alleged injury too “conjectural” or “hypothetical” to establish standing. Defenders of Wild- Two |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | “conjectural” or “hypothetical” to establish standing. Defenders of Wild- Two prescriptions of Arizona’s Constitution would ren der the Legislature’s passage of a competing plan and submission of that plan to the Secretary of State unavail ing. Indeed, those actions would directly and immediately conflict with the regime Arizona’s Constitution establishes. Cf. Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 944, n. 2 (failure to apply for permit which “would not have been granted” under existing law did not deprive plaintiffs of standing to challenge permitting regime). First, the Arizona Constitution instructs that the Legislature “shall not have the power to adopt any meas ure that supersedes [an initiative], in whole or in part, unless the superseding measure furthers the purposes” of the initiative. Art. IV, pt. 1, Any redistricting map passed by the Legislature in an effort to supersede the AIRC’s map surely would not “furthe[r] the purposes” of Proposition 106. Second, once the AIRC certifies its redis tricting plan to the Secretary of State, Arizona’s Constitu tion requires the Secretary to implement that plan and no other. See Art. IV, pt. 2, Arizona Minority Coali- tion for Fair Redistricting v. Arizona Independent Redis- 12 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court tricting Comm’n, (App. 05) (per curiam) (“Once the Commission certifies [its] maps, the secretary of state must use them in con ducting the next election.”). To establish standing, the Legislature need not violate the Arizona Constitution and show that the Secretary of State would similarly disregard the State’s fundamental instrument of government. does not aid AIRC’s argument that there is no standing here. In this Court held that six individual Members of Congress lacked standing to challenge the Line Item Veto Act. at 813–814, 829–830 (holding specifically and only that “individual members of Congress [lack] Article III standing”). The Act, which gave the President author- ity to cancel certain spending and tax benefit measures after signing them into law, allegedly diluted the efficacy of the Congressmembers’ votes. at 815–817. The “institutional injury” at issue, we reasoned, scarcely ze roed in on any individual Member. “[W]idely dispersed,” the alleged injury “necessarily [impacted] all Members of Congress and both Houses equally.” at 829, 821. None of the plaintiffs, therefore, could tena bly claim a “personal stake” in the suit. In concluding that the individual Members lacked standing, the Court “attach[ed] some importance to the fact that [the plaintiffs had] not been authorized to represent their respective Houses of Congress.” at 829. “[I]ndeed,” the Court observed, “both houses actively oppose[d] their suit.” Having failed to |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | observed, “both houses actively oppose[d] their suit.” Having failed to prevail in their own Houses, the suitors could not repair to the Judi ciary to complain. The Arizona Legislature, in contrast, is an institutional plaintiff asserting an institutional injury, and it commenced this action after authorizing votes in both of its chambers, App. 26–27, 46. That “different circumstanc[e],” 521 U.S., was not sub judice in Cite as: 576 U. S. (15) 13 Opinion of the Court10 Closer to the mark is this Court’s decision in Coleman v. Miller, There, plaintiffs were (of 40) Kansas State Senators, whose votes “would have been sufficient to defeat [a] resolution ratifying [a] proposed [federal] constitutional amendment.”11 We held they had standing to challenge, as impermissible under Article V of the Federal Constitution, the State Lieutenant Governor’s tie-breaking vote for the amend —————— featured in JUSTICE SCALIA’s dissent, post, at 4, bears little resemblance to this case. There, the Court unanimously found that Massachusetts lacked standing to sue the Secretary of the Treasury on a claim that a federal grant program exceeded Congress’ Article I powers and thus violated the Tenth Amendment. If suing on its own behalf, the Court reasoned, Massachusetts’ claim involved no “quasi-sovereign rights actually invaded or threatened.” As parens patriae, the Court stated: “[I]t is no part of [Massachusetts’] duty or power to enforce [its citizens’] rights in respect of their relations with the Federal Government. In that field it is the United States, and not the State, which represents them as parens patriae.” –486. As astutely observed, moreover: “The cases on the standing of states to sue the federal government seem to depend on the kind of claim that the state advances. The decisions are hard to reconcile.” R. Fallon, J. Man ning, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal Courts and the Federal System 263–266 (6th ed. 09) (rejecting on the merits the claim that the Voting Rights Act of 1965 invaded reserved powers of the States to determine voter qualifications and regulate elections), (recognizing that Wyoming could bring suit to vindicate the State’s “quasi-sovereign” interests in the physical environment within its domain (emphasis deleted; internal quotation marks omitted)), and 5 (07) (maintaining that Massachusetts “is entitled to special solicitude in our standing analysis”)). 11 Coleman concerned the proposed Child Labor Amendment, which provided that “Congress shall have power to limit, regulate, and pro- hibit the labor of persons under eighteen years of age.” 307 U.S., at 435, n. 1 14 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court ment. Coleman, as |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | INDEPENDENT REDISTRICTING COMM’N Opinion of the Court ment. Coleman, as we later explained in stood “for the proposition that legislators whose votes would have been sufficient to defeat (or enact) a specific legislative Act have standing to sue if that legislative action goes into effect (or does not go into effect), on the ground that their votes have been completely nullified.”12 Our conclusion that the Arizona Legis lature has standing fits that bill. Proposition 106, to- gether with the Arizona Constitution’s ban on efforts to un dermine the purposes of an initiative, see would “completely nullif[y]” any vote by the Legislature, now or “in the future,” purporting to adopt a redistricting plan. –824.13 This dispute, in short, “will be resolved in a concrete factual context conducive to a realistic appreciation of the consequences of judicial action.” Valley Forge Christian 454 U.S. 4,14 Accordingly, we —————— 12 The case before us does not touch or concern the question whether Congress has standing to bring a suit against the President. There is no federal analogue to Arizona’s initiative power, and a suit between Congress and the President would raise separation-of-powers concerns absent here. The Court’s standing analysis, we have noted, has been “especially rigorous when reaching the merits of the dispute would force [the Court] to decide whether an action taken by one of the other two branches of the Federal Government was unconstitutional.” v. Byrd, 819–8 13 In an endeavor to wish away Coleman, JUSTICE SCALIA, in dissent, suggests the case may have been “a 4-to-4 standoff.” Post, at 5. He overlooks that Chief Justice Hughes’ announced by Justice Stone, was styled “Opinion of the Court.” Describing Coleman, the Court wrote in : “By a vote of 5–4, we held that [the Kansas Senators who voted against ratification of a proposed federal constitutional amendment] had standing.” For s recognizing the precedential weight of Coleman, see Baker v. Carr, 8 ; United States v. Windsor, 570 U. S. (ALITO, J., dissenting) (slip op., at 4–5). 14 Curiously, JUSTICE SCALIA, dissenting on standing, berates the Court for “treading upon the powers of state legislatures.” Post, at 6. Cite as: 576 U. S. (15) 15 Opinion of the Court proceed to the merits.15 III On the merits, we instructed the parties to address this question: Do the Elections Clause of the United States Constitution and 2 U.S. C. permit Arizona’s use of a commission to adopt congressional districts? The Elec tions Clause is set out at the start of this at 2. Section 2a(c) provides: “Until a State is redistricted in the manner pro |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | provides: “Until a State is redistricted in the manner pro vided by the law thereof after any apportionment, the Representatives to which such State is entitled under such apportionment shall be elected in the following manner: [setting out five federally prescribed redis tricting procedures].” Before focusing directly on the statute and constitutional prescriptions in point, we summarize this Court’s prece dent relating to appropriate state decisionmakers for redistricting purposes. Three decisions compose the rele vant case law: Ohio ex rel. Davis v. Hildebrant, 241 U.S. 565 (1916); (19); and A Davis v. Hildebrant involved an amendment to the Constitution of Ohio vesting in the people the right, exer cisable by referendum, to approve or disapprove by popu lar vote any law enacted by the State’s legislature. A 1915 Act redistricting the State for the purpose of congressional —————— He forgets that the party invoking federal-court jurisdiction in this case, and inviting our review, is the Arizona State Legislature. 15 JUSTICE THOMAS, on the way to deciding that the Arizona Legisla ture lacks standing, first addresses the merits. In so doing, he over looks that, in the cases he features, it was entirely immaterial whether the law involved was adopted by a representative body or by the people, through exercise of the initiative. 16 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court elections had been submitted to a popular vote, resulting in disapproval of the legislature’s measure. State election officials asked the State’s Supreme Court to declare the referendum void. That court rejected the request, holding that the referendum authorized by Ohio’s Constitution, “was a part of the legislative power of the State,” and “nothing in [federal statutory law] or in [the Elections Clause] operated to the contrary.” This Court affirmed the Ohio Supreme Court’s judgment. In upholding the state court’s decision, we recognized that the referendum was “part of the legislative power” in Ohio, ib legitimately exercised by the people to disapprove the legislation creating congressional districts. For redis tricting purposes, Hildebrant thus established, “the Leg- islature” did not mean the representative body alone. Rather, the word encompassed a veto power lodged in the people. See (Elections Clause does not bar “treating the referendum as part of the legislative power for the purpose of apportionment, where so ordained by the state constitutions and laws”). v. Smith involved the Eighteenth Amendment to the Federal Constitution. Ohio’s Legislature had ratified the Amendment, and a referendum on that ratification was at issue. Reversing the Ohio Supreme Court’s deci sion upholding the referendum, we held that “ratification by a State |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | upholding the referendum, we held that “ratification by a State of a constitutional amendment is not an act of legislation within the proper sense of the word.” 253 U.S., 9. Instead, Article V governing ratification had lodged in “the legislatures of three-fourths of the several States” sole authority to assent to a proposed amendment. 6. The Court contrasted the ratifying function, exercisable exclusively by a State’s legislature, with “the ordinary business of legislation.” 9. Davis v. Hildebrant, the Court explained, involved the enactment of legislation, i.e., a redistricting plan, and properly held that “the referendum [was] part of the legislative author- Cite as: 576 U. S. (15) 17 Opinion of the Court ity of the State for [that] purpose.” raised the question whether legislation purporting to redistrict Minnesota for congressional elec tions was subject to the Governor’s veto. The Minnesota Supreme Court had held that the Elections Clause placed redistricting authority exclusively in the hands of the State’s legislature, leaving no role for the Governor. We reversed that determination and held, for the purpose at hand, Minnesota’s legislative authority includes not just the two houses of the legislature; it includes, in addition, a make-or-break role for the Governor. In holding that the Governor’s veto counted, we distinguished instances in which the Constitution calls upon state legislatures to exercise a function other than lawmaking. State legisla tures, we pointed out, performed an “electoral” function “in the choice of United States Senators under Article I, sec tion 3, prior to the adoption of the Seventeenth Amend ment,”16 a “ratifying” function for “proposed amendments to the Constitution under Article V,” as explained in v. Smith, and a “consenting” function “in relation to the acquisition of lands by the United States under Article I, section 8, paragraph 17.” –366. In contrast to those other functions, we observed, redis tricting “involves lawmaking in its essential features and most important aspect.” Lawmaking, we further noted, ordinarily “must be in accordance with the method which the State has prescribed for legislative enactments.” In Minnesota, the State’s Con stitution had made the Governor “part of the legislative process.” And the Elections Clause, we ex plained, respected the State’s choice to include the Gover nor in that process, although the Governor could play no part when the Constitution assigned to “the Legislature” a —————— 16 The Seventeenth Amendment provided for election of Senators “by the people” of each State. 18 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court ratifying, electoral, or consenting function. Nothing in the Elections Clause, we said, “attempt[ed] to endow the legislature |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | the Elections Clause, we said, “attempt[ed] to endow the legislature of the State with power to enact laws in any manner other than that in which the constitution of the State ha[d] provided that laws shall be enacted.” at 368. THE CHIEF JUSTICE, in dissent, features, indeed trum pets repeatedly, the pre-Seventeenth Amendment regime in which Senators were “chosen [in each State] by the Legislature thereof.” Art. I, see post, at 1, 8–9, 19. If we are right, he asks, why did popular election proponents resort to the amending process instead of simply interpret ing “the Legislature” to mean “the people”? Post, at 1. Smiley, as just indicated, answers that question. Article I, gave state legislatures “a function different from that of lawgiver,” ; it made each of them “an electoral body” charged to perform that function to the exclusion of other participants, So too, of the ratify ing function. As we explained in “the power to legislate in the enactment of the laws of a State is derived from the people of the State.” Ratifica tion, however, “has its source in the Federal Constitution” and is not “an act of legislation within the proper sense of the word.” 9–230. Constantly resisted by THE CHIEF JUSTICE, but well understood in s that speak for the Court: “[T]he meaning of the word ‘legislature,’ used several times in the Federal Constitution, differs according to the connection in which it is employed, depend[ent] upon the character of the function which that body in each instance is called upon to exercise.” Atlantic Cleaners & Dyers, (citing Smiley, 285 U.S. 355). Thus “the Legislature” comprises the referen dum and the Governor’s veto in the context of regulating congressional elections. Hildebrant, see –16; Smiley, see at 17–18. In the context of ratifying Cite as: 576 U. S. (15) 19 Opinion of the Court constitutional amendments, in contrast, “the Legislature” has a different identity, one that excludes the referendum and the Governor’s veto. see17 In sum, our precedent teaches that redistricting is a legislative function, to be performed in accordance with the State’s prescriptions for lawmaking, which may in clude the referendum and the Governor’s veto. The exer cise of the initiative, we acknowledge, was not at issue in our prior decisions. But as developed below, we see no constitutional barrier to a State’s empowerment of its people by embracing that form of lawmaking. B We take up next the statute the Court asked the parties to address, 2 U.S. C. a measure modeled on the Reapportionment Act Congress passed in 1911, Act of Aug. 8 (1911 |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | Act Congress passed in 1911, Act of Aug. 8 (1911 Act), ch. 5, Section 2a(c), we hold, permits use of a commission to adopt Arizona’s congres sional districts. See18 From 1862 through 1901, the decennial congressional apportionment Acts provided that a State would be re —————— 17 The list of constitutional provisions in which the word “legislature” appears, appended to THE CHIEF JUSTICE’s post, at 28–32, is illustrative of the variety of functions state legislatures can be called upon to exercise. For example, Art. I, cl. 1, superseded by the Seventeenth Amendment, assigned an “electoral” function. See Smiley, Article I, cl. 2, assigns an “appointive” function. Article I, cl. 17, assigns a “consenting” function, see Smiley, 285 U.S., as does Art. IV, cl. 1. “[R]atifying” functions are assigned in Art. V, Amdt. 18, Amdt. and Amdt. 22, See 253 U.S., 9. But Art. I, cl. 1, unquestionably calls for the exercise of lawmaking authority. That authority can be carried out by a representative body, but if a State so chooses, legislative authority can also be lodged in the people themselves. See infra, at 24–35. 18 The AIRC referenced in briefing below, see Motion to Dis miss 8–9, and Response to Plaintiff’s Motion for Preliminary Injunction 12–14, in No. 12–1211 (D Ariz.), and in its motion to dismiss or affirm in this Court, see Motion to Dismiss or Affirm 28–31. ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court quired to follow federally prescribed procedures for redis tricting unless “the legislature” of the State drew district lines. E.g., Act of July 14, 1862, ch. 170, ; Act of Jan. 16, 1901, ch. 93, In drafting the 1911 Act, Congress focused on the fact that several States had supplemented the representative legislature mode of lawmaking with a direct lawmaking role for the people, through the processes of initiative (positive legislation by the electorate) and referendum (approval or disapproval of legislation by the electorate). 47 Cong. Rec. 3508 (state ment of Sen. Burton); see at 3–5. To accommodate that development, the 1911 Act eliminated the statutory reference to redistricting by the state “legislature” and instead directed that, if a State’s apportionment of Repre sentatives increased, the State should use the Act’s de fault procedures for redistricting “until such State shall be redistricted in the manner provided by the laws thereof.” Ch. 5,19 Some Members of Congress questioned whether the language change was needed. In their view, existing apportionment legislation (referring to redistricting by a State’s “legislature”) “suffic[ed] to allow, whatever the law of the State may be, the people of |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | the law of the State may be, the people of that State to control [redistricting].” 47 Cong. Rec. 3507 (statement of Sen. —————— 19 The 1911 Act also required States to comply with certain federally prescribed districting rules—namely, that Representatives be elected “by districts composed of a contiguous and compact territory, and containing as nearly as practicable an equal number of inhabitants,” and that the districts “be equal to the number of Representatives to which [the] State may be entitled in Congress, no district electing more than one Representative.” Act of Aug. 8, 1911, ch. 5, When a State’s apportionment of Representatives remained constant, the Act directed the State to continue using its pre-existing districts “until [the] State shall be redistricted as herein prescribed.” See The 1911 Act did not address redistricting in the event a State’s apportionment of Representatives decreased, likely because no State faced a decrease following the 1910 census. Cite as: 576 U. S. (15) 21 Opinion of the Court Shively); cf. Shiel v. Thayer, Bartlett Contested Election Cases, H. R. Misc. Doc. No. 57, 38th Cong., 2d Sess., (1861) (view of House Committee of Elections Member Dawes that Art. I, reference to “the Legislature” meant simply the “constituted authorities, through whom [the State] choose[s] to speak,” prime among them, the State’s Constitution, “which rises above all legislative action”). Others anticipated that retaining the reference to “the legislature” would “condem[n] any [redistrict ing] legislation by referendum or by initiative.” 47 Cong. Rec. 3436 (statement of Sen. Burton). In any event, pro ponents of the change maintained, “[i]n view of the very serious evils arising from gerrymanders,” Congress should not “take any chances in [the] matter.” (same). “[D]ue respect to the rights, to the established methods, and to the laws of the respective States,” they urged, required Congress “to allow them to establish congressional districts in whatever way they may have provided by their constitution and by their statutes.” at 3436; see As this Court observed in Hildebrant, “the legislative history of th[e] [1911 Act] leaves no room for doubt [about why] the prior words were stricken out and the new words inserted.” The change was made to safeguard to “each State full authority to employ in the creation of congressional districts its own laws and regula tions.” 47 Cong. Rec. 3437 (statement of Sen. Burton). The 1911 Act, in short, left the question of redistricting “to the laws and methods of the States. If they include initia tive, it is included.” While the 1911 Act applied only to reapportionment following the 1910 census, see 6–7 Congress used |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | to reapportionment following the 1910 census, see 6–7 Congress used virtually identical language when it enacted in 1941. See Act of Nov. 15, 1941, ch. 470, –762. Section 2a(c) sets forth con gressional-redistricting procedures operative only if the 22 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court State, “after any apportionment,” had not redistricted “in the manner provided by the law thereof.” The 1941 provi sion, like the 1911 Act, thus accorded full respect to the redistricting procedures adopted by the States. So long as a State has “redistricted in the manner provided by the law thereof ”—as Arizona did by utilizing the independent commission procedure called for by its Constitution—the resulting redistricting plan becomes the presumptively governing map. The Arizona Legislature characterizes as an “obscure provision, narrowed by subsequent developments to the brink of irrelevance.” Brief for Appellant 56. True, four of the five default redistricting procedures—operative only when a State is not “redistricted in the manner pro vided by [state] law”—had “become (because of postenact ment decisions of this Court) in virtually all situations plainly unconstitutional.” –274 (03) (plurality ). Concretely, the default procedures specified in (1)–(4) contemplate that a State would continue to use pre-existing districts following a new census. The one-person, one-vote principle an nounced in (19), how ever, would bar those procedures, except in the “unlikely” event that “the decennial census makes no districting change constitutionally necessary,” Branch, 538 U.S., at (plurality ). Constitutional infirmity in (1)–(4)’s default proce dures, however, does not bear on the question whether a State has been “redistricted in the manner provided by [state] law.”21 As just observed, Congress expressly di —————— Because a State is required to comply with the Federal Constitu tion, the Voting Rights Act, and other federal laws when it draws and implements its district map, nothing in affects a challenge to a state district map on the ground that it violates one or more of those federal requirements. 21 The plurality in (03), consid Cite as: 576 U. S. (15) 23 Opinion of the Court rected that when a State has been “redistricted in the manner provided by [state] law”—whether by the legisla ture, court decree (see ), or a commission estab lished by the people’s exercise of the initiative—the result ing districts are the ones that presumptively will be used to elect Representatives.22 There can be no dispute that Congress itself may draw a State’s congressional-district boundaries. See Vieth, 541 U.S., at 275 (plurality ) (stating that the Elections Clause “permit[s] Congress to ‘make or alter’ ” the “dis tricts |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | “permit[s] Congress to ‘make or alter’ ” the “dis tricts for federal elections”). The Arizona Legislature urges that the first part of the Elections Clause, vesting power to regulate congressional elections in State “Legis lature[s],” precludes Congress from allowing a State to redistrict without the involvement of its representative body, even if Congress independently could enact the same redistricting plan under its plenary authority to “make or alter” the State’s plan. See Brief for Appellant 56–57; Reply Brief 17. In other words, the Arizona Legislature regards as a futile exercise. The Congresses that passed and its forerunner, the 1911 Act, did not share that wooden interpretation of the Clause, nor do we. Any uncertainty about the import of however, is resolved by our holding that the Elections Clause permits regulation of congressional elections by initiative, see infra, at 24–35, leaving no arguable conflict between and the first part of the Clause. —————— ered the question whether had been repealed by implication and stated, “where what it prescribes is constitutional,” the provision “continues to apply.” 22 THE CHIEF JUSTICE, in dissent, insists that and its precursor, the 1911 Act, have nothing to do with this case. Post, at –21, 23. Undeniably, however, it was the very purpose of the measures to recognize the legislative authority each State has to determine its own redistricting regime. 24 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court C In accord with the District Court, see we hold that the Elections Clause permits the people of Ari zona to provide for redistricting by independent commis sion. To restate the key question in this case, the issue centrally debated by the parties: Absent congressional authorization, does the Elections Clause preclude the people of Arizona from creating a commission operating independently of the state legislature to establish congres sional districts? The history and purpose of the Clause weigh heavily against such preclusion, as does the animat ing principle of our Constitution that the people them selves are the originating source of all the powers of government. We note, preliminarily, that dictionaries, even those in circulation during the founding era, capaciously define the word “legislature.” Samuel Johnson defined “legislature” simply as “[t]he power that makes laws.” 2 A Dictionary of the English Language (1st ed. 1755); (6th ed. 1785); ; Thomas Sheridan’s dictionary defined “legislature” exactly as Dr. Johnson did: “The power that makes laws.” 2 A Complete Dictionary of the English Language (4th ed. 1797). Noah Webster defined the term precisely that way as well. Compendious Dictionary of the English Language 174 (1806). And |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | well. Compendious Dictionary of the English Language 174 (1806). And Nathan Bailey similarly defined “legislature” as “the Authority of making Laws, or Power which makes them.” An Universal Etymological English Dictionary (th ed. 1763).23 —————— 23 Illustrative of an embracive comprehension of the word “legisla ture,” Charles Pinckney explained at South Carolina’s ratifying conven tion that America is “[a] republic, where the people at large, either collectively or by representation, form the legislature.” 4 Debates on the Federal Constitution 328 (J. Elliot 2d ed. 1863). Participants in the debates over the Elections Clause used the word “legislature” inter changeably with “state” and “state government.” See Brief for Brennan Cite as: 576 U. S. (15) 25 Opinion of the Court As to the “power that makes laws” in Arizona, initia tives adopted by the voters legislate for the State just as measures passed by the representative body do. See Ariz. Const., Art. IV, pt. 1, (“The legislative authority of the state shall be vested in the legislature, consisting of a senate and a house of representatives, but the people reserve the power to propose laws and amendments to the constitution and to enact or reject such laws and amend ments at the polls, independently of the legislature.”). See also Eastlake v. Forest City Enterprises, Inc., 426 U.S. 668, 672 (1976) (“In establishing legislative bodies, the people can reserve to themselves power to deal directly with matters which might otherwise be assigned to the legislature.”). As well in Arizona, the people may delegate their legislative authority over redistricting to an inde pendent commission just as the representative body may choose to do. See Tr. of Oral Arg. 15–16 (answering the Court’s question, may the Arizona Legislature itself estab lish a commission to attend to redistricting, counsel for appellant responded yes, state legislatures may delegate their authority to a commission, subject to their preroga tive to reclaim the authority for themselves). 1 The dominant purpose of the Elections Clause, the historical record bears out, was to empower Congress to override state election rules, not to restrict the way States enact legislation. As this Court explained in Arizona v. Inter Tribal Council of Ariz., Inc., the Clause “was the Framers’ insurance against the possibility that a State would refuse to provide for the election of representatives to the Federal Congress.” at (slip op., at 5) (citing The Federalist No. 59, pp. 362–363 (C. Rossiter ed. 1961) (A. Hamilton)). —————— Center for Justice at N. Y. U. School of Law as Amicus Curiae 6–7. 26 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court The Clause was also intended to act as a safeguard against manipulation of electoral rules by politicians and factions in the States to entrench themselves or place their interests over those of the electorate. As Madison urged, without the Elections Clause, “[w]henever the State Legis latures had a favorite measure to carry, they would take care so to mould their regulations as to favor the candi dates they wished to succeed.” 2 Records of the Federal Convention 241 Madison spoke in response to a motion by South Carolina’s delegates to strike out the federal power. Those delegates so moved because South Carolina’s coastal elite had malapportioned their legislature, and wanted to retain the ability to do so. See J. Rakove, Original Meanings: Politics and Ideas in the Making of the Constitution 223–224 (1996). The problem Madison identified has hardly lessened over time. Conflict of interest is inherent when “legislators dra[w] district lines that they ultimately have to run in.” Cain, 121 Yale L. J., at 1817. Arguments in support of congressional control under the Elections Clause were reiterated in the public debate over ratification. Theophilus Parsons, a delegate at the Massa chusetts ratifying convention, warned that “when faction and party spirit run high,” a legislature might take actions like “mak[ing] an unequal and partial division of the states into districts for the election of representatives.” Debate in Massachusetts Ratifying Convention (16–17, 21 Jan. 1788), in 2 The Founders’ Constitution 256 (P. Kur land & R. Lerner eds. 1987). Timothy Pickering of Massa chusetts similarly urged that the Clause was necessary because “the State governments may abuse their power, and regulate elections in such manner as would be highly inconvenient to the people.” Letter to Charles Tillinghast (24 Dec. 1787), in He described the Clause as a way to “ensure to the people their rights of election.” Cite as: 576 U. S. (15) 27 Opinion of the Court While attention focused on potential abuses by state- level politicians, and the consequent need for congres- sional oversight, the legislative processes by which the States could exercise their initiating role in regulating congres sional elections occasioned no debate. That is hardly surprising. Recall that when the Constitution was com posed in Philadelphia and later ratified, the people’s legis lative prerogatives—the initiative and the referendum— were not yet in our democracy’s arsenal. See at 3– 5. The Elections Clause, however, is not reasonably read to disarm States from adopting modes of legislation that place the lead rein in the people’s hands.24 2 |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | that place the lead rein in the people’s hands.24 2 The Arizona Legislature maintains that, by specifying “the Legislature thereof,” the Elections Clause renders the State’s representative body the sole “component of state government authorized to prescribe regulations for congressional redistricting.” Brief for Appellant 30. THE CHIEF JUSTICE, in dissent, agrees. But it is characteristic of our federal system that States retain autonomy to establish their own governmental processes. See Alden v. Maine, (“A State is entitled to order the processes of its own governance.”); The Federal ist No. 43, at 272 (J. Madison) as an important precedent we overlook. Post, at 24–25. There, we held that state-imposed term limits on candidates for the House and Senate violated the Clauses of the Consti tution setting forth qualifications for membership in Congress, Art. I, cl. 2, and Art. I, cl. 3. We did so for a reason entirely harmoni ous with today’s decision. Adding state-imposed limits to the qualifica tions set forth in the Constitution, the Court wrote, would be “contrary to the ‘fundamental principle of our representative democracy,’ that ‘the people should choose whom they please to govern them.’ ” 514 U.S., at 783 ). 28 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court right to do so.”). “Through the structure of its govern ment, and the character of those who exercise government authority, a State defines itself as a sovereign.” v. Ashcroft, Arizona engaged in definition of that kind when its people placed both the initiative power and the AIRC’s redistricting authority in the portion of the Arizona Constitution delineating the State’s legislative authority. See Ariz. Const., Art. IV; at 5–6. This Court has “long recognized the role of the States as laboratories for devising solutions to difficult legal prob lems.” (09); see United (KENNEDY, J., concurring) (“[T]he States may perform their role as lab oratories for experimentation to devise various solutions where the best solution is far from clear.”); New State Ice (Brandeis, J., dissenting) (“It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the coun try.”). Deference to state lawmaking “allows local policies ‘more sensitive to the diverse needs of a heterogeneous society,’ permits ‘innovation and experimentation,’ enables greater citizen ‘involvement in democratic processes,’ and makes government ‘more responsive by putting the States in competition for a mobile citizenry.’ ” Bond v. United States, 5 U. S. (11) (slip op., ) (quoting ). We |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | 5 U. S. (11) (slip op., ) (quoting ). We resist reading the Elections Clause to single out federal elections as the one area in which States may not use citizen initiatives as an alternative legislative process. Nothing in that Clause instructs, nor has this Court ever held, that a state legislature may prescribe regulations on the time, place, and manner of holding federal elections in defiance of provisions of the State’s constitution. See Cite as: 576 U. S. (15) 29 Opinion of the Court Shiel, H. R. Misc. Doc. No. 57, at 349–352 (concluding that Oregon’s Constitution prevailed over any conflicting leg- islative measure setting the date for a congressional election). THE CHIEF JUSTICE, in dissent, maintains that, under the Elections Clause, the state legislature can trump any initiative-introduced constitutional provision regulating federal elections. He extracts support for this position from Baldwin v. Trowbridge, 2 Bartlett Contested Election Cases, H. R. Misc. Doc. No. 152, 41st Cong., 2d Sess., 46– 47 (1866). See post, –16. There, Michigan voters had amended the State Constitution to require votes to be cast within a resident’s township or ward. The Michigan Leg islature, however, passed a law permitting soldiers to vote in other locations. One candidate would win if the State Constitution’s requirement controlled; his opponent would prevail under the Michigan Legislature’s prescription. The House Elections Committee, in a divided vote, ruled that, under the Elections Clause, the Michigan Legisla ture had the paramount power. As the minority report in Baldwin pointed out, however, the Supreme Court of Michigan had reached the opposite conclusion, holding, as courts generally do, that state legislation in direct conflict with the State’s constitution is void. Baldwin, H. R. Misc. Doc. No. 152, at 50. The Baldwin majority’s ruling, furthermore, appears in ten sion with the Election Committee’s unanimous decision in Shiel just five years earlier. (The Committee, we repeat, “ha[d] no doubt that the constitution of the State ha[d] fixed, beyond the control of the legislature, the time for holding [a congressional] election.” Shiel, H. R. Misc. Doc. No. 57, at) Finally, it was perhaps not entirely acci dental that the candidate the Committee declared winner in Baldwin belonged to the same political party as all but one member of the House Committee majority responsible for the decision. See U. S. House of Representatives Con 30 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court gress Profiles: 39th Congress (1865–1867), http:// history housegov / Congressional-Overview / Profiles/39th/; Biographical Directory of the United States Cong- ress: Trowbridge, Rowland Ebenezer (1821–1881). Cf. Cain, 121 Yale L. |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | ress: Trowbridge, Rowland Ebenezer (1821–1881). Cf. Cain, 121 Yale L. J., at 1817 (identifying legislative conflict of interest as the problem independent re- districting commissions aimed to check). In short, Bald- win is not a disposition that should attract this Court’s reliance. We add, furthermore, that the Arizona Legislature does not question, nor could it, employment of the initiative to control state and local elections. In considering whether Article I, really says “No” to similar control of federal elections, we have looked to, and borrow from, Alexander Hamilton’s counsel: “[I]t would have been hardly advisable to establish, as a fundamental point, what would deprive several States of the convenience of having the elections for their own governments and for the national government” held at the same times and places, and in the same manner. The Federalist No. 61, at 374. The Elec tions Clause is not sensibly read to subject States to that deprivation.25 3 The Framers may not have imagined the modern initia tive process in which the people of a State exercise legisla tive power coextensive with the authority of an institu tional legislature. But the invention of the initiative was in full harmony with the Constitution’s conception of the people as the font of governmental power. As Madison put it: “The genius of republican liberty seems to demand not only that all power should be derived from the people, —————— 25 A State may choose to regulate state and national elections differ ently, which is its prerogative under the Clause. E.g., –3– 2–2 (creating backup commission for congressional but not state legis lative districts). Cite as: 576 U. S. (15) 31 Opinion of the Court but that those intrusted with it should be kept in depend ence on the people.” No. 37, 3. The people’s ultimate sovereignty had been expressed by John Locke in 1690, a near century before the Constitu tion’s formation: “[T]he Legislative being only a Fiduciary Power to act for certain ends, there remains still in the People a Supream Power to remove or alter the Legislative, when they find the Legislative act contrary to the trust reposed in them. For all Power given with trust for the attaining an end, being limited by that end, whenever that end is manifestly neglected, or op posed, the trust must necessarily be forfeited, and the Power devolve into the hands of those that gave it, who may place it anew where they shall think best for their safety and security.” Two Treatises of Govern ment 49, p. 385 (P. Laslett ed. 19). Our Declaration of Independence, |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | p. 385 (P. Laslett ed. 19). Our Declaration of Independence, ¶2, drew from Locke in stating: “Governments are instituted among Men, deriving their just powers from the consent of the governed.” And our fundamental instrument of government derives its authority from “We the People.” U. S. Const., Preamble. As this Court stated, quoting Hamilton: “[T]he true prin ciple of a republic is, that the people should choose whom they please to govern them.” 395 U.S. 486, 540–541 (quoting 2 Debates on the Fed eral Constitution 257 (J. Elliot ed. 1876)). In this light, it would be perverse to interpret the term “Legislature” in the Elections Clause so as to exclude lawmaking by the people, particularly where such lawmaking is intended to check legislators’ ability to choose the district lines they run in, thereby advancing the prospect that Members of Congress will in fact be “chosen by the People of the several States,” Art. I, See Cain, 121 Yale L. J., at 1817. 32 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court THE CHIEF JUSTICE, in dissent, suggests that independ ent commissions established by initiative are a high- minded experiment that has failed. Post, at 26–27. For this assessment, THE CHIEF JUSTICE cites a three-judge Federal District Court That he asserts, “detail[s] the partisanship that has affected the Commission.” Post, at 26. No careful reader could so conclude. The report of the decision in Harris comprises a per curiam an concurring in the judgment by Judge Silver, and a dissenting by Judge Wake. The per curiam found “in favor of the Commis sion.” Deviations from the one- person, one-vote principle, the per curiam ex plained at length, were “small” and, in the main, could not be attributed to partisanship. While partisanship “may have played some role,” the per curiam stated, deviations were “predominantly a result of the Commission’s good-faith efforts to achieve preclearance under the Voting Rights Act.” Judge Silver, although she joined the per curiam made clear at the very outset of that her finding that “partisan ship did not play a role.” In her concur ring she repeated her finding that the evidence did not show partisanship at work, ; instead, she found, the evidence “[was] overwhelming [that] the final map was a product of the commissioners’s considera tion of appropriate redistricting criteria.” To describe Harris as a decision criticizing the Commission for pervasive partisanship, post, at 26, THE CHIEF JUSTICE could rely only upon the dissenting which ex pressed views the majority roundly rejected. Independent redistricting commissions, it is true, “have not eliminated the |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | Independent redistricting commissions, it is true, “have not eliminated the inevitable partisan suspicions associ- ated with political line-drawing.” Cain, 121 Yale L. J., at Cite as: 576 U. S. (15) 33 Opinion of the Court 1808. But “they have succeeded to a great degree [in limiting the conflict of interest implicit in legislative con trol over redistricting].” They thus impede legisla tors from choosing their voters instead of facilitating the voters’ choice of their representatives. 4 Banning lawmaking by initiative to direct a State’s method of apportioning congressional districts would do more than stymie attempts to curb partisan gerrymander ing, by which the majority in the legislature draws district lines to their party’s advantage. It would also cast doubt on numerous other election laws adopted by the initiative method of legislating. The people, in several States, functioning as the law making body for the purpose at hand, have used the initia tive to install a host of regulations governing the “Times, Places and Manner” of holding federal elections. Art. I, For example, the people of California provided for perma nent voter registration, specifying that “no amendment by the Legislature shall provide for a general biennial or other periodic reregistration of voters.” Cal. Elec. Code Ann. (West 03). The people of Ohio banned bal lots providing for straight-ticket voting along party lines. Ohio Const., Art. V, The people of Oregon shortened the deadline for voter registration to days prior to an election. Ore. Const., Art. II, None of those measures permit the state legislatures to override the people’s pre scriptions. The Arizona Legislature’s theory—that the lead role in regulating federal elections cannot be wrested from “the Legislature,” and vested in commissions initiated by the people—would endanger all of them. The list of endangered state elections laws, were we to sustain the position of the Arizona Legislature, would not stop with popular initiatives. Almost all state constitu tions were adopted by conventions and ratified by voters 34 ARIZONA STATE LEGISLATURE v. ARIZONA INDEPENDENT REDISTRICTING COMM’N Opinion of the Court at the ballot box, without involvement or approval by “the Legislature.”26 Core aspects of the electoral process regu lated by state constitutions include voting by “ballot” or “secret ballot,”27 voter registration,28 absentee voting,29 vote counting,30 and victory thresholds.31 Again, the States’ legislatures had no hand in making these laws and may not alter or amend them. The importance of direct democracy as a means to con trol election regulations extends beyond the particular statutes and constitutional provisions installed by the people rather than the States’ legislatures. The very prospect of lawmaking by the |
Justice Ginsburg | 2,015 | 5 | majority | Arizona State Legislature v. Arizona Independent Redistricting Comm'n | https://www.courtlistener.com/opinion/2812589/arizona-state-legislature-v-arizona-independent-redistricting-commn/ | the States’ legislatures. The very prospect of lawmaking by the people may influence the legislature when it considers (or fails to consider) election- related measures. See Persily & Anderson, Regulating Democracy Through Democracy: The Use of Direct Legis —————— 26 See App. to Brief for Appellees 11a–29a (collecting state constitu tional provisions governing elections). States’ constitutional conven tions are not simply past history predating the first election of state legislatures. Louisiana, for example, held the most recent of its 12 constitutional conventions in 1992. J. Dinan, The American State Constitutional Tradition 8–9 (06) (Table 1–1). The State’s provision for voting by “secret ballot” may be traced to the constitutional conven tion held by the State in 1812, see La. Const., Art. VI, 3, but was most recently reenacted at the State’s 1974 constitutional convention, see Art. XI, 27 Madison called the decision “[w]hether the electors should vote by ballot or vivâ voce” a quintessential subject of regulation under the Elections Clause. 2 Records of the Federal Convention 240–241 28 Miss. Const., Art. XII, N. C. Const., Art. VI, Va. Const., Art. II, W. Va. Const., Art. IV, 2; Wash. Const., Art. VI, 29 E.g., Haw. Const., Art. II, La. Const., Art XI, N. D. Const., Art. II, ; Pa. Const., Art. VII, 30 E.g., Ark. Const., Art. III, 1 (ballots unlawfully not counted in the first instance must be counted after election); La. Const., Art XI, (all ballots must be counted publicly). 31 E.g., Ariz. Const., Art. VII, (setting plurality of votes as the standard for victory in all elections, excluding runoffs); Mont. Const., Art. IV, (same); Ore. Const., Art. II, 6 (same). Cite as: 576 U. S. (15) 35 Opinion of the Court lation in Election Law Reform, 1006–1008 (05) (describing cases in which “indirect pressure of the initiative process was sufficient to spur [state] legislature[s] to action”). Turning the coin, the legislature’s responsiveness to the people its members represent is hardly heightened when the representative body can be confident that what it does will not be over turned or modified by the voters themselves. * * * Invoking the Elections Clause, the Arizona Legislature instituted this lawsuit to disempower the State’s voters from serving as the legislative power for redistricting purposes. But the Clause surely was not adopted to di minish a State’s authority to determine its own lawmak ing processes. Article I, stems from a different view. Both parts of the Elections Clause are in line with the fundamental premise that all political power flows from the people. 404– 405 (1819). So comprehended, the Clause doubly empow |
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