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Justice Ginsburg | 2,010 | 5 | majority | Berghuis v. Smith | https://www.courtlistener.com/opinion/1725/berghuis-v-smith/ | other decision of this Court specifies the method or test courts must use to measure the representation of distinctive groups in jury pools. The courts below and the parties noted three meth ods employed or identified in lower federal court decisions: absolute disparity, comparative disparity, and standard deviation. See –, 615 N.W. 2d, at 2–3; Brief for Petitioner 3; Brief for Respondent 26; –7. Each test is imperfect. Absolute disparity and compara tive disparity measurements, courts have recognized, can be misleading when, as here, “members of the distinctive group comp[ose] [only] a small percentage of those eligible 12 BERGHUIS v. SMITH Opinion of the Court for jury service.” 463 Mich., –204, 615 N.W. 2d, at 2–3. And to our knowledge, “[n]o court has accepted [a standard deviation analysis] alone as determi native in Sixth Amendment challenges to jury selection systems.” United (CA2 1996). On direct review, as earlier stated, the Michigan Su preme Court chose no single method “to measur[e] whether representation was fair and reasonable.” 615 N.W. 2d, at 3; see Instead, it “adopt[ed] a case-by-case approach.” 615 N.W. 2d, at 3. “Provided that the parties proffer sufficient evidence,” that court said, “the results of all of the tests [should be considered].” In contrast, the Sixth Circuit declared that “[w]here the distinctive group alleged to have been underrepresented is small, as is the case here, the comparative disparity test is the more appropriate measure of ” Even in the absence of AEDPA’s constraint, see at 8, we would have no cause to take sides today on the method or methods by which underrepresentation is ap propriately measured.4 Although the Michigan Supreme Court concluded that “[’s] statistical evidence failed to establish a legally significant disparity under either the absolute or comparative disparity tests,” 463 Mich., at 204–,5 that court nevertheless —————— 4 The State asks us to “adopt the absolute-disparity standard for measuring fair and reasonable representation” and to “requir[e] proof that the absolute disparity exceeds %” to make out a prima facie fair cross-section violation. Brief for Petitioner 45–46. Under the rule the State proposes, “the Sixth Amendment offers no remedy for complete exclusion of distinct groups in communities where the population of the distinct group falls below the percent threshold.” Brief for Respon dent 35. We need not reach that issue. 5 For similar conclusions, see, for example, United (absolute disparity of Cite as: 559 U. S. (20) 13 Opinion of the Court gave “the benefit of the doubt on underrepresenta tion,” at It did so in order to reach the issue ultimately dispositive in : To the |
Justice Ginsburg | 2,010 | 5 | majority | Berghuis v. Smith | https://www.courtlistener.com/opinion/1725/berghuis-v-smith/ | to reach the issue ultimately dispositive in : To the extent underrepresentation existed, was it due to “system atic exclusion”? ; see 439 U.S., B Addressing the ground on which the Sixth Circuit rested its decision, submits that the district-court-first assignment order systematically excluded African- Americans from Kent County Circuit Court Brief for Respondent 46–48. But as the Michigan Supreme Court not at all unreasonably concluded, 463 Mich., at 615 N.W. 2d, at 3, ’s evidence scarcely shows that the assignment order he targets caused under repre Although the record established that some officials and others in Kent County believed that the assignment order created racial disparities, and the County reversed the order in the belief was not substantiated by ’s evidence. Evidence that African-Americans were underrepre sented on the Circuit Court’s venires in significantly higher percentages than on the Grand Rapids District Court’s could have indicated that the assignment order made a critical difference. But, as the Michigan Supreme Court noted, adduced no evidence to that effect. See 463 Mich., at 615 N.W. 2d, at 3. Nor did address whether Grand Rapids, which had the County’s largest African-American population, “ha[d] more —————— 3.57%; comparative disparities “rang[ing] from 38.17% to 51.22%”); United (2.97% absolute disparity; 61.1% comparative disparity); United 97 F.3d 648, 657–658 (CA2 1996) (2.08% absolute disparity; 29% com parative disparity); 591–593, 758 A.2d 327, 337–338 (2000) (2.49% absolute disparity; 37% comparative disparity). 14 BERGHUIS v. SMITH Opinion of the Court need for jurors per capita than [any other district in Kent County].” Tr. of Oral Arg. 26; Furthermore, did not endeavor to compare the African-American representation levels in Circuit Court venires with those in the Federal District Court venires for the same region. See at 46–47; 439 U.S., n. 25. ’s best evidence of systematic exclusion was of fered by his statistics expert, who reported a decline in comparative underrepresentation, from 18 to 15.1%, after Kent County reversed the assignment order. See at 5. This evidence—particularly in view of AEDPA’s in struction, (d)(2)—is insufficient to support ’s claim that the assignment order caused the underrepre As ’s counsel recognized at oral argu ment, this decrease could not fairly be as “a big change.” Tr. of Oral Arg. 51; see (the drop was “a step in the right direction”). In short, ’s evidence gave the Michigan Supreme Court little reason to conclude that the district-court-first assignment order had a signifi cantly adverse impact on the representation of African- Americans on Circuit Court C To establish systematic exclusion, contends, the defendant must show only that the underrepresentation is persistent and |
Justice Ginsburg | 2,010 | 5 | majority | Berghuis v. Smith | https://www.courtlistener.com/opinion/1725/berghuis-v-smith/ | defendant must show only that the underrepresentation is persistent and “produced by the method or ‘system’ used to select [jurors],” rather than by chance. Brief for Respon dent 38, 40. In this regard, catalogs a laundry list of factors in addition to the alleged “siphoning” that, he urges, rank as “systematic” causes of underrepresentation of African-Americans in Kent County’s jury pool. at 53–54. ’s list includes the County’s practice of ex cusing people who merely alleged hardship or simply failed to show up for jury service, its reliance on mail notices, its failure to follow up on nons, its use of residential addresses at least 15 months old, and the Cite as: 559 U. S. (20) 15 Opinion of the Court refusal of Kent County police to enforce court orders for the appearance of prospective jurors. No “clearly established” precedent of this Court supports ’s claim that he can make out a prima facie case merely by pointing to a host of factors that, individually or in combination, might contribute to a group’s underrepre recites a sentence in our opinion that, he says, placed the burden of proving causation on the State. See Tr. of Oral Arg. 33, 35. The sentence reads: “Assuming, arguendo, that the exemptions mentioned by the court below [those for persons over 65, teachers, and government workers] would justify failure to achieve a fair community cross section on jury venires, the State must demonstrate that these exemptions [rather than the women’s exemption] caused the underrepresentation complained of.” –369. That sentence appears after the Court had already assigned to — and found he had carried—the burden of proving that the underrepresentation “was due to [women’s] systematic exclusion in the jury-selection process.” The Court’s comment, which clipped from its context, does not concern the demonstration of a prima face case. Instead, it addresses what the State might show to rebut the defendant’s prima facie case. The Michigan Supreme Court was therefore far from “unreasonable,” (d)(1), in concluding that first and foremost required himself to show that the underrepresentation com plained of was “due to systematic ” ; see 463 Mich., at 615 N.W. 2d, at 3. This Court, furthermore, has never “clearly established” that jury-selection-process features of the kind on ’s list can give rise to a fair-cross-section claim. In we “recognized broad discretion in the States” to “pre scribe relevant qualifications for their jurors and to pro vide reasonable exemptions.” 419 U.S., –538. And in the Court understood that hardship exemptions 16 BERGHUIS v. SMITH Opinion of the Court resembling those assails might well “survive a fair |
Justice Ginsburg | 2,010 | 5 | majority | Berghuis v. Smith | https://www.courtlistener.com/opinion/1725/berghuis-v-smith/ | the Court resembling those assails might well “survive a fair cross-section challenge,”6 In sum, the Michigan Supreme Court’s decision rejecting ’s fair cross-section claim is consistent with and “involved [no] unreasonable application o[f] clearly established Federal law,” * * * For the reasons stated, the judgment of the Court of Appeals for the Sixth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered. —————— 6 We have also never “clearly” decided, and have no need to consider here, whether the impact of social and economic factors can support a fair-cross-section claim. Compare 463 Mich., 615 N.W. 2d, at 3 (“[T]he influence of social and economic factors on juror partici pation does not demonstrate a systematic exclusion of [a distinctive group].”), with (“[T]he Sixth Amendment is concerned with social or economic factors when the particular system of selecting jurors makes such factors relevant to who is placed on the qualifying list and who is ultimately called to or ex cused from service on a venire panel.”). Cite as: 559 U. S. (20) 1 THOMAS, J., concurring SUPREME COURT OF THE UNITED STATES No. 08–1402 MARY BERGHUIS, WARDEN, PETITIONER v. |
Justice O'Connor | 2,005 | 14 | concurring | McCreary County v. American Civil Liberties Union of Ky. | https://www.courtlistener.com/opinion/799993/mccreary-county-v-american-civil-liberties-union-of-ky/ | I join in the Court's opinion. The First Amendment expresses our Nation's fundamental commitment to religious liberty by means of two provisionsone protecting the free exercise of religion, the other barring establishment of religion. They were written by the descendents of people who had come to this land precisely so that they could practice their religion freely. Together with the other First Amendment guaranteesof free speech, a free press, and the rights to assemble and petitionthe Religion Clauses were designed to safeguard the freedom of conscience and belief that those immigrants had sought. They embody an idea that was once considered radical: Free people are entitled to free *882 and diverse thoughts, which government ought neither to constrain nor to direct. Reasonable minds can disagree about how to apply the Religion Clauses in a given case. But the goal of the Clauses is clear: to carry out the Founders' plan of preserving religious liberty to the fullest extent possible in a pluralistic society. By enforcing the Clauses, we have kept religion a matter for the individual conscience, not for the prosecutor or bureaucrat. At a time when we see around the world the violent consequences of the assumption of religious authority by government, Americans may count themselves fortunate: Our regard for constitutional boundaries has protected us from similar travails, while allowing private religious exercise to flourish. The well-known statement that "[w]e are a religious people," has proved true. Americans attend their places of worship more often than do citizens of other developed nations, R. Fowler, A. Hertzke, & L. Olson, Religion and Politics in America 28-29 (2d ed. 1999), and describe religion as playing an especially important role in their lives, Pew Global Attitudes Project, Among Wealthy Nations U. S. Stands Alone in its Embrace of Religion (Dec. 19, 2002). Those who would renegotiate the boundaries between church and state must therefore answer a difficult question: Why would we trade a system that has served us so well for one that has served others so poorly? Our guiding principle has been James Madison'sthat "[t]he Religion of every man must be left to the conviction and conscience of every man." Memorial and Remonstrance Against Religious Assessments, 2 Writings of James Madison 183, 184 (G. Hunt ed. 1901) (hereinafter Memorial). To that end, we have held that the guarantees of religious freedom protect citizens from religious incursions by the States as well as by the Federal Government. ; Government may not coerce a person *883 into worshiping against her will, nor prohibit her from worshiping according to it. It may not prefer |
Justice O'Connor | 2,005 | 14 | concurring | McCreary County v. American Civil Liberties Union of Ky. | https://www.courtlistener.com/opinion/799993/mccreary-county-v-american-civil-liberties-union-of-ky/ | her from worshiping according to it. It may not prefer one religion over another or promote religion over nonbelief. at 15-. It may not entangle itself with religion. And government may not, by "endorsing religion or a religious practice," "mak[e] adherence to religion relevant to a person's standing in the political community." When we enforce these restrictions, we do so for the same reason that guided the Framersrespect for religion's special role in society. Our Founders conceived of a Republic receptive to voluntary religious expression, and provided for the possibility of judicial intervention when government action threatens or impedes such expression. Voluntary religious belief and expression may be as threatened when government takes the mantle of religion upon itself as when government directly interferes with private religious practices. When the government associates one set of religious beliefs with the state and identifies nonadherents as outsiders, it encroaches upon the individual's decision about whether and how to worship. In the marketplace of ideas, the government has vast resources and special status. Government religious expression therefore risks crowding out private observance and distorting the natural interplay between competing beliefs. Allowing government to be a potential mouthpiece for competing religious ideas risks the sort of division that might easily spill over into suppression of rival beliefs. Tying secular and religious authority together poses risks to both. Given the history of this particular display of the Ten Commandments, the Court correctly finds an Establishment Clause violation. See ante, at 867-873. The purpose behind the counties' display is relevant because it conveys an unmistakable message of endorsement to the reasonable observer. *884 See 0 It is true that many Americans find the Commandments in accord with their personal beliefs. But we do not count heads before enforcing the First Amendment. See West Virginia Bd. of Nor can we accept the theory that Americans who do not accept the Commandments' validity are outside the First Amendment's protections. There is no list of approved and disapproved beliefs appended to the First Amendmentand the Amendment's broad terms ("free exercise," "establishment," "religion") do not admit of such a cramped reading. It is true that the Framers lived at a time when our national religious diversity was neither as robust nor as well recognized as it is now. They may not have foreseen the variety of religions for which this Nation would eventually provide a home. They surely could not have predicted new religions, some of them born in this country. But they did know that line-drawing between religions is an enterprise that, once begun, has no logical stopping point. |
Justice Ginsburg | 1,999 | 5 | concurring | Sutton v. United Air Lines, Inc. | https://www.courtlistener.com/opinion/118311/sutton-v-united-air-lines-inc/ | I agree that 42 U.S. C. 12102(2)(A) does not reach the legions of people with correctable disabilities. The strongest clues to Congress' perception of the domain of the Americans with Disabilities Act of 1990 (ADA), as I see it, are legislative findings that "some 43,000,000 Americans have one or more physical or mental disabilities," 12101(a)(1), and that "individuals with disabilities are a discrete and insular minority," persons "subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society," 12101(a)(7). These declarations are inconsistent with the enormously embracing definition of disability petitioners urge. As the Court demonstrates, see ante, at 483-487, the inclusion of correctable disabilities within the ADA's domain would extend the Act's coverage to far more than 43 million people. And persons whose uncorrected eyesight is poor, or who rely on daily medication for their well-being, can be found in every social and economic class; they do not cluster among the politically powerless, nor do they coalesce as historical victims of discrimination. In short, in no sensible way can one rank the large numbers of diverse individuals with corrected disabilities as a "discrete and insular minority." I do not mean to suggest that any of the constitutional presumptions or doctrines that may apply to "discrete and insular" minorities in other contexts are relevant here; there is no constitutional *495 dimension to this case. Congress' use of the phrase, however, is a telling indication of its intent to restrict the ADA's coverage to a confined, and historically disadvantaged, class. |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | This case, like National Bellas involves a State's attempt to require an out-of-state mail-order house that has neither outlets nor sales representatives in the State to collect and pay a use tax on goods purchased for use within the State. In Bellas we held that a similar Illinois statute violated the Due Process Clause of the Fourteenth Amendment and created an unconstitutional burden on interstate commerce. In particular, we ruled that a "seller whose only connection with customers in the State is by common carrier or the United States mail" lacked the requisite minimum contacts with the State. In this case, the Supreme Court of North Dakota declined to follow Bellas because "the tremendous social, economic, commercial, and legal innovations" of the past quarter-century have rendered its holding "obsole[te]." Having granted certiorari, we must either reverse the State Supreme Court *302 or overrule Bellas While we agree with much of the state court's reasoning, we take the former course. I Quill is a Delaware corporation with offices and warehouses in Illinois, California, and Georgia. None of its employees work or reside in North Dakota, and its ownership of tangible property in that State is either insignificant or nonexistent.[1] Quill sells office equipment and supplies; it solicits business through catalogs and flyers, advertisements in national periodicals, and telephone calls. Its annual national sales exceed $200 million, of which almost $1 million are made to about 3,000 customers in North Dakota. It is the sixth largest vendor of office supplies in the State. It delivers all of its merchandise to its North Dakota customers by mail or common carrier from out-of-state locations. As a corollary to its sales tax, North Dakota imposes a use tax upon property purchased for storage, use, or consumption within the State. North Dakota requires every "retailer maintaining a place of business in" the State to collect the tax from the consumer and remit it to the State. N. D. Cent. Code 57-40.2-07 In 1987, North Dakota amended the statutory definition of the term "retailer" to include "every person who engages in regular or systematic *303 solicitation of a consumer market in th[e] state." 57-40.2-01(6). State regulations in turn define "regular or systematic solicitation" to mean three or more advertisements within a 12-month period. N. D. Admin. Code 81-04.1-01-03.1 Thus, since 1987, mail-order companies that engage in such solicitation have been subject to the tax even if they maintain no property or personnel in North Dakota. Quill has taken the position that North Dakota does not have the power to compel it to collect a use tax from |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | power to compel it to collect a use tax from its North Dakota customers. Consequently, the State, through its Tax Commissioner, filed this action to require Quill to pay taxes (as well as interest and penalties) on all such sales made after July 1, 1987. The trial court ruled in Quill's favor, finding the case indistinguishable from Bellas ; specifically, it found that because the State had not shown that it had spent tax revenues for the benefit of the mailorder business, there was no "nexus to allow the state to define retailer in the manner it chose." App. to Pet. for Cert. A41. The North Dakota Supreme Court reversed, concluding that "wholesale changes" in both the economy and the law made it inappropriate to follow Bellas The principal economic change by the court was the remarkable growth of the mail-order business "from a relatively inconsequential market niche" in 1967 to a "goliath" with annual sales that reached "the staggering figure of $183.3 billion in 1989." at 209. Moreover, the court observed, advances in computer technology greatly eased the burden of compliance with a "`welter of complicated obligations'" imposed by state and local taxing authorities. (quoting Bellas -760). Equally important, in the court's view, were the changes in the "legal landscape." With respect to the Commerce Clause, the court emphasized that Complete Auto Transit, rejected the line of cases holding that the direct taxation of interstate commerce was *304 impermissible and adopted instead a "consistent and rational method of inquiry [that focused on] the practical effect of [the] challenged tax." Mobil Oil This and subsequent rulings, the court maintained, indicated that the Commerce Clause no longer mandated the sort of physical-presence nexus suggested in Bellas Similarly, with respect to the Due Process Clause, the North Dakota court observed that cases following Bellas had not construed "minimum contacts" to require physical presence within a State as a prerequisite to the legitimate exercise of state power. The state court then concluded that "the Due Process requirement of a `minimal connection' to establish nexus is encompassed within the Complete Auto test" and that the relevant inquiry under the latter test was whether "the state has provided some protection, opportunities, or benefit for which it can expect a return." Turning to the case at hand, the state court emphasized that North Dakota had created "an economic climate that fosters demand for" Quill's products, maintained a legal infrastructure that protected that market, and disposed of 24 tons of catalogs and flyers mailed by Quill into the State every year. Based on these facts, the court |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | the State every year. Based on these facts, the court concluded that Quill's "economic presence" in North Dakota depended on services and benefits provided by the State and therefore generated "a constitutionally sufficient nexus to justify imposition of the purely administrative duty of collecting and remitting the use tax."[2] *305 II As in a number of other cases involving the application of state taxing statutes to out-of-state sellers, our holding in Bellas relied on both the Due Process Clause and the Commerce Clause. Although the "two claims are closely related," Bellas the Clauses pose distinct limits on the taxing powers of the States. Accordingly, while a State may, consistent with the Due Process Clause, have the authority to tax a particular taxpayer, imposition of the tax may nonetheless violate the Commerce Clause. See, e. g., Tyler Pipe Industries, The two constitutional requirements differ fundamentally, in several ways. As discussed at greater length below, see Part IV, infra, the Due Process Clause and the Commerce Clause reflect different constitutional concerns. Moreover, while Congress has plenary power to regulate commerce among the States and thus may authorize state actions that burden interstate commerce, see International Shoe it does not similarly have the power to authorize violations of the Due Process Clause. Thus, although we have not always been precise in distinguishing between the two, the Due Process Clause and the Commerce Clause are analytically distinct. "`Due process' and `commerce clause' conceptions are not always sharply separable in dealing with these problems. To some extent they overlap. If there is a want of due process to sustain the tax, by that fact alone any burden the tax imposes on the commerce among the states becomes `undue.' But, though overlapping, the two conceptions are not identical. There may be more than sufficient factual connections, with economic and legal effects, between the transaction and the taxing state to sustain the tax as against due process *306 objections. Yet it may fall because of its burdening effect upon the commerce. And, although the two notions cannot always be separated, clarity of consideration and of decision would be promoted if the two issues are approached, where they are presented, at least tentatively as if they were separate and distinct, not intermingled ones." International Harvester Heeding Justice Rutledge's counsel, we consider each constitutional limit in turn. III The Due Process Clause "requires some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax," Miller Brothers and that the "income attributed to the State for tax purposes must be rationally related |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | to the State for tax purposes must be rationally related to `values connected with the taxing State,' " Moorman Mfg. Here, we are concerned primarily with the first of these requirements. Prior to Bellas we had held that that requirement was satisfied in a variety of circumstances involving use taxes. For example, the presence of sales personnel in the State[3] or the maintenance of local retail stores in the State[4] justified the exercise of that power because the seller's local activities were "plainly accorded the protection and services of the taxing State." Bellas The furthest extension of that power was recognized in Scripto, in which the Court upheld a use tax despite the fact that all of the seller's in-state solicitation was performed by independent contractors. These cases all involved some sort of physical presence within the State, and in Bellas *307 the Court suggested that such presence was not only sufficient for jurisdiction under the Due Process Clause, but also necessary. We expressly declined to obliterate the "sharp distinction between mail-order sellers with retail outlets, solicitors, or property within a State, and those who do no more than communicate with customers in the State by mail or common carrier as a part of a general interstate business." 386 U.S., Our due process jurisprudence has evolved substantially in the 25 years since Bellas particularly in the area of judicial jurisdiction. Building on the seminal case of International Shoe we have framed the relevant inquiry as whether a defendant had minimum contacts with the jurisdiction "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' " ). In that spirit, we have abandoned more formalistic tests that focused on a defendant's "presence" within a State in favor of a more flexible inquiry into whether a defendant's contacts with the forum made it reasonable, in the context of our federal system of Government, to require it to defend the suit in that State. In the Court extended the flexible approach that International Shoe had prescribed for purposes of in personam jurisdiction to in rem jurisdiction, concluding that "all assertions of statecourt jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny." Applying these principles, we have held that if a foreign corporation purposefully avails itself of the benefits of an economic market in the forum State, it may subject itself to the State's in personam jurisdiction even if it has no physical presence in the State. As we explained in Burger King : "Jurisdiction in these circumstances may |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | explained in Burger King : "Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically *308 enter the forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are `purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there." Comparable reasoning justifies the imposition of the collection duty on a mail-order house that is engaged in continuous and widespread solicitation of business within a State. Such a corporation clearly has "fair warning that [its] activity may subject [it] to the jurisdiction of a foreign sovereign." In "modern commercial life" it matters little that such solicitation is accomplished by a deluge of catalogs rather than a phalanx of drummers: The requirements of due process are met irrespective of a corporation's lack of physical presence in the taxing State. Thus, to the extent that our decisions have indicated that the Due Process Clause requires physical presence in a State for the imposition of duty to collect a use tax, we overrule those holdings as superseded by developments in the law of due process. In this case, there is no question that Quill has purposefully directed its activities at North Dakota residents, that the magnitude of those contacts is more than sufficient for due process purposes, and that the use tax is related to the benefits Quill receives from access to the State. We therefore agree with the North Dakota Supreme Court's conclusion that the Due Process Clause does not bar enforcement of that State's use tax against Quill. *309 IV Article I, 8, cl. 3, of the Constitution expressly authorizes Congress to "regulate Commerce with foreign Nations, and among the several States." It says nothing about the protection of interstate commerce in the absence of any action by Congress. Nevertheless, as Justice Johnson suggested in his concurring opinion in the Commerce Clause is more than an affirmative grant of power; it has a negative sweep as well. The Clause, in Justice Stone's phrasing, "by its own force" prohibits certain state actions that interfere with interstate commerce. South Carolina State Highway Our interpretation of the "negative" or "dormant" Commerce Clause has evolved substantially |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | of the "negative" or "dormant" Commerce Clause has evolved substantially over the years, particularly as that Clause concerns limitations on state taxation powers. See generally P. Hartman, Federal Limitations on State and Local Taxation 2:9-2:17 Our early cases, beginning with swept broadly, and in we declared that "no State has the right to lay a tax on interstate commerce in any form." We later narrowed that rule and distinguished between direct burdens on interstate commerce, which were prohibited, and indirect burdens, which generally were not. See, e. g., aff'd sub nom. Adams Express Western Live and subsequent decisions rejected this formal, categorical analysis and adopted a "multiple-taxation doctrine" that focused not on whether a tax was "direct" or "indirect" but rather on whether a tax subjected interstate commerce to a risk of multiple taxation. However, in we embraced again the formal distinction between direct and indirect taxation, invalidating Indiana's imposition of a gross receipts tax on a *310 particular transaction because that application would "impos[e] a direct tax on interstate sales." Most recently, in Complete Auto Transit, we renounced the Freeman approach as "attaching constitutional significance to a semantic difference." We expressly overruled one of Freeman `s progeny, Spector Motor Service, which held that a tax on "the privilege of doing interstate business" was unconstitutional, while recognizing that a differently denominated tax with the same economic effect would not be unconstitutional. Spector, as we observed in Railway Express Agency, created a situation in which "magic words or labels" could "disable an otherwise constitutional levy." Complete Auto emphasized the importance of looking past "the formal language of the tax statute [to] its practical effect," and set forth a four-part test that continues to govern the validity of state taxes under the Commerce Clause.[5] Bellas was decided in 1967, in the middle of this latest rally between formalism and pragmatism. Contrary to the suggestion of the North Dakota Supreme Court, this timing does not mean that Complete Auto rendered Bellas "obsolete." Complete Auto rejected Freeman and Spector `s formal distinction between "direct" and "indirect" taxes on interstate commerce because that formalism allowed the validity of statutes to hinge on "legal terminology," "draftsmanship and phraseology." Bellas *311 did not rely on any such labeling of taxes and therefore did not automatically fall with Freeman and its progeny. While contemporary Commerce Clause jurisprudence might not dictate the same result were the issue to arise for the first time today, Bellas is not inconsistent with Complete Auto and our recent cases. Under Complete Auto`s four-part test, we will sustain a tax against a Commerce Clause |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | test, we will sustain a tax against a Commerce Clause challenge so long as the "tax [1] is applied to an activity with a substantial nexus with the taxing State, [2] is fairly apportioned, [3] does not discriminate against interstate commerce, and [4] is fairly related to the services provided by the State." Bellas concerns the first of these tests and stands for the proposition that a vendor whose only contacts with the taxing State are by mail or common carrier lacks the "substantial nexus" required by the Commerce Clause. Thus, three weeks after Complete Auto was handed down, we cited Bellas for this proposition and discussed the case at some length. In National Geographic we affirmed the continuing vitality of Bellas `"sharp distinction between mail-order sellers with [a physical presence in the taxing] State and those who do no more than communicate with customers in the State by mail or common carrier as part of a general interstate business." We have continued to cite Bellas with approval ever since. For example, in we expressed "doubt that termination of an interstate telephone call, by itself, provides a substantial enough nexus for a State to tax a call. See National Bellas (receipt of mail provides insufficient nexus)." See also D. H. Holmes ; Commonwealth Edison ; Mobil Oil Corp. v. Commissioner of ; National Geographic 430 U. S., at For these reasons, we disagree with the State Supreme Court's conclusion *312 that our decision in Complete Auto undercut the Bellas rule. The State of North Dakota relies less on Complete Auto and more on the evolution of our due process jurisprudence. The State contends that the nexus requirements imposed by the Due Process and Commerce Clauses are equivalent and that if, as we concluded above, a mail-order house that lacks a physical presence in the taxing State nonetheless satisfies the due process "minimum contacts" test, then that corporation also meets the Commerce Clause "substantial nexus" We disagree. Despite the similarity in phrasing, the nexus requirements of the Due Process and Commerce Clauses are not identical. The two standards are animated by different constitutional concerns and policies. Due process centrally concerns the fundamental fairness of governmental activity. Thus, at the most general level, the due process nexus analysis requires that we ask whether an individual's connections with a State are substantial enough to legitimate the State's exercise of power over him. We have, therefore, often identified "notice" or "fair warning" as the analytic touchstone of due process nexus analysis. In contrast, the Commerce Clause and its nexus requirement are informed not so |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | Commerce Clause and its nexus requirement are informed not so much by concerns about fairness for the individual defendant as by structural concerns about the effects of state regulation on the national economy. Under the Articles of Confederation, state taxes and duties hindered and suppressed interstate commerce; the Framers intended the Commerce Clause as a cure for these structural ills. See generally The Federalist Nos. 7, 11 (A. Hamilton). It is in this light that we have interpreted the negative implication of the Commerce Clause. Accordingly, we have ruled that that Clause prohibits discrimination against interstate commerce, see, e. g., and bars state regulations that unduly burden interstate commerce, see, e. g., *313 The Complete Auto analysis reflects these concerns about the national economy. The second and third parts of that analysis, which require fair apportionment and nondiscrimination, prohibit taxes that pass an unfair share of the tax burden onto interstate commerce. The first and fourth prongs, which require a substantial nexus and a relationship between the tax and state-provided services, limit the reach of state taxing authority so as to ensure that state taxation does not unduly burden interstate commerce.[6] Thus, the "substantial nexus" requirement is not, like due process' "minimum contacts" requirement, a proxy for notice, but rather a means for limiting state burdens on interstate commerce. Accordingly, contrary to the State's suggestion, a corporation may have the "minimum contacts" with a taxing State as required by the Due Process Clause, and yet lack the "substantial nexus" with that State as required by the Commerce Clause.[7] *314 The State Supreme Court reviewed our recent Commerce Clause decisions and concluded that those rulings signaled a "retreat from the formalistic constrictions of a stringent physical presence test in favor of a more flexible substantive approach" and thus supported its decision not to apply Bellas 470 N. W. 2d, at 214 and Tyler Pipe Industries, ). Although we agree with the state court's assessment of the evolution of our cases, we do not share its conclusion that this evolution indicates that the Commerce Clause ruling of Bellas is no longer good law. First, as the state court itself all of these cases involved taxpayers who had a physical presence in the taxing State and therefore do not directly conflict with the rule of Bellas or compel that it be overruled. Second, and more importantly, although our Commerce Clause jurisprudence now favors more flexible balancing analyses, we have never intimated a desire to reject all established "bright-line" tests. Although we have not, in our review of other types of taxes, articulated the |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | in our review of other types of taxes, articulated the same physical-presence requirement that Bellas established for sales and use taxes, that silence does not imply repudiation of the Bellas rule. Complete Auto, it is true, renounced Freeman and its progeny as "formalistic." But not all formalism is alike. Spector `s formal distinction between taxes on the "privilege of doing business" and all other taxes served no purpose within our Commerce Clause jurisprudence, but stood "only as a trap for the unwary draftsman." Complete Auto, In contrast, the bright-line rule of Bellas furthers the ends of the dormant Commerce Clause. Undue * burdens on interstate commerce may be avoided not only by a case-by-case evaluation of the actual burdens imposed by particular regulations or taxes, but also, in some situations, by the demarcation of a discrete realm of commercial activity that is free from interstate taxation. Bellas followed the latter approach and created a safe harbor for vendors "whose only connection with customers in the [taxing] State is by common carrier or the United States mail." Under Bellas such vendors are free from state-imposed duties to collect sales and use taxes.[8] Like other bright-line tests, the Bellas rule appears artificial at its edges: Whether or not a State may compel a vendor to collect a sales or use tax may turn on the presence in the taxing State of a small sales force, plant, or office. Cf. National Geographic ; Scripto, This artificiality, however, is more than offset by the benefits of a clear rule. Such a rule firmly establishes the boundaries of legitimate state authority to impose a duty to collect sales and use taxes and reduces litigation concerning those taxes. This benefit is important, for as we have so frequently our law in this area is something of a "quagmire" and the "application of constitutional principles to specific state statutes leaves much room for controversy and confusion and little in the way of precise guides to the States in the exercise of their indispensable power of *316 taxation." Northwestern States Portland Cement Moreover, a bright-line rule in the area of sales and use taxes also encourages settled expectations and, in doing so, fosters investment by businesses and individuals.[9] Indeed, it is not unlikely that the mail-order industry's dramatic growth over the last quarter century is due in part to the bright-line exemption from state taxation created in Bellas Notwithstanding the benefits of bright-line tests, we have, in some situations, decided to replace such tests with more contextual balancing inquiries. For example, in Arkansas Electric Cooperative we reconsidered a |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | inquiries. For example, in Arkansas Electric Cooperative we reconsidered a bright-line test set forth in Public Util. Comm'n of R. U.S. 83 Attleboro distinguished between state regulation of wholesale sales of electricity, which was constitutional as an "indirect" regulation of interstate commerce, and state regulation of retail sales of electricity, which was unconstitutional as a "direct regulation" of commerce. In Arkansas Electric, we considered whether to *317 "follow the mechanical test set out in Attleboro, or the balance-of-interests test applied in our Commerce Clause cases." -391. We first observed that "the principle of stare decisis counsels us, here as elsewhere, not lightly to set aside specific guidance of the sort we find in Attleboro. " In deciding to reject the Attleboro analysis, we were influenced by the fact that the "mechanical test" was "anachronistic," that the Court had rarely relied on the test, and that we could "see no strong reliance interests" that would be upset by the rejection of that 461 U.S., -392. None of those factors obtains in this case. First, the Attleboro rule was "anachronistic" because it relied on formal distinctions between "direct" and "indirect" regulation (and on the regulatory counterparts of our Freeman line of cases); as discussed above, Bellas turned on a different logic and thus remained sound after the Court repudiated an analogous distinction in Complete Auto. Second, unlike the Attleboro rule, we have, in our decisions, frequently relied on the Bellas rule in the last 25 years, see and we have never intimated in our review of sales or use taxes that Bellas was unsound. Finally, again unlike the Attleboro rule, the Bellas rule has engendered substantial reliance and has become part of the basic framework of a sizable industry. The "interest in stability and orderly development of the law" that undergirds the doctrine of stare decisis, see therefore counsels adherence to settled precedent. In sum, although in our cases subsequent to Bellas and concerning other types of taxes we have not adopted a similar bright-line, physical-presence requirement, our reasoning in those cases does not compel that we now reject the rule that Bellas established in the area of sales and use taxes. To the contrary, the continuing value of a bright-line rule in this area and the doctrine and principles of stare decisis indicate that the Bellas rule remains good law. For *318 these reasons, we disagree with the North Dakota Supreme Court's conclusion that the time has come to renounce the bright-line test of Bellas This aspect of our decision is made easier by the fact that the underlying issue is |
Justice Stevens | 1,992 | 16 | majority | Quill Corp. v. North Dakota | https://www.courtlistener.com/opinion/112739/quill-corp-v-north-dakota/ | made easier by the fact that the underlying issue is not only one that Congress may be better qualified to resolve,[10] but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions. See Prudential Insurance Indeed, in recent years Congress has considered legislation that would "overrule" the Bellas rule.[11] Its decision not to take action in this direction may, of course, have been dictated by respect for our holding in Bellas that the Due Process Clause prohibits States from imposing such taxes, but today we have put that problem to rest. Accordingly, Congress is now free to decide whether, when, and to what extent the States may burden interstate mail-order concerns with a duty to collect use taxes. Indeed, even if we were convinced that Bellas was inconsistent with our Commerce Clause jurisprudence, "this very fact [might] giv[e us] pause and counse[l] withholding our hand, at least for now. Congress has the power to protect interstate commerce from intolerable or even undesirable burdens." Commonwealth Edison In this situation, it *319 may be that "the better part of both wisdom and valor is to respect the judgment of the other branches of the Government." The judgment of the Supreme Court of North Dakota is reversed, and the case is remanded for further proceedings not inconsistent with this opinion. It is so ordered. Justice Scalia, with whom Justice Kennedy and Justice Thomas join, concurring in part and concurring in the judgment. |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | These cases have created, as did the Penn-Central Merger cases,[1] that "hydraulic pressure" which, Mr. Justice Holmes once said, "makes what previously was clear *1 seem doubtful, and before which even well settled principles of law will bend."[2] If the rule of law under a moral order is the measure of our responsibility, as I have always assumed, we can only hold that the Rail Act of January 2, 1974, 45 U.S. C. 701 et seq. (1970 ed., Supp. III), undertakes to sanction a fraudulent conveyance, as those words were used in 13 Eliz.,[3] and in our Bankruptcy Act. I have been reluctant so to conclude, implicating as it does our legislative branch in a lawless maneuver of gigantic proportions. But, baldly put, the present law is a tour de force to that end. Article I, 10, of the Constitution bars the from passing a law "impairing the Obligation of Contracts." Though the Federal Government is not so enjoined, it is restrained by the Fifth Amendment which provides that no person can be deprived of "property" without "due process of law." I assume it is conceded that Congress, apart from the bankruptcy power in Art. I, 8, may not impair the obligation of contracts without violating the Due Process Clause.[4] But "[t]he bankruptcy power, like the other great substantive powers of Congress, is subject to the Fifth Amendment," as Mr. Justice Brandeis, writing for the Court in Louisville held. This does not mean that so far as rail carriers are concerned the creditors can exact their pound of flesh, dismembering or liquidating the debtor. The public interest *163 may not be subverted in that manner. As the Court said in Continental Illinois Nat. Bank & Trust a case involving a rail reorganization under 77 of the Bankruptcy Act, 11 U.S. C. 205: "A railway is a unit; it can not be divided up and disposed of piecemeal like a stock of goods. It must be sold, if sold at all, as a unit and as a going concern. Its activities can not be halted because its continuous, uninterrupted operation is necessary in the public interest" Congress made such findings in these cases in 101 (a) of the Act, 45 U.S. C. 701 (a) (1970 ed., Supp. III). Hence the congressional objective in the Rail Act of preserving the assets of these six railroads[5] as part of a continuing enterprise in the form of a new corporation (for convenience called Conrail[6]) is well within the Bankruptcy Clause. The question remains, however, whether by the means it has chosen Congress has transgressed |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | whether by the means it has chosen Congress has transgressed constitutional boundaries. I The property is "taken for public use" within the meaning of the Fifth Amendment. First is the mandate of Congress. The Rail Act provides for an obligatory transfer of the assets of these companies to Conrail. The creditors, the trustees, the stockholders, the reorganization judge have no other option. The record makes abundantly clear what all the parties concede, that Conrail, though dubbed "a for-profit corporation" by 301 *164 (b) of the Act, 45 U.S. C. 741 (b) (1970 ed., Supp. III), shows no prospect of being an enterprise operating on a profitable basis.[7] Penn Central losses between June 21, 1970, and December 31, 1973, were $851 million, and the Reorganization Court,[8] whose judgment we are not reviewing, found that reorganization on an income basis was not possible. The values that ride on today's decisions are therefore not based on the prospect of future profitable operations.[9] The only consideration in the framework of the Act which provides "just compensation" for the taking is in the form of "securities" of Conrail, 206 (d) (1), 45 U.S. C. 716 (d) (1) (1970 ed., Supp. III). If those "securities" are common stock, they will have value only insofar as Conrail will be a viable entity which generates income in excess of costs and fixed charges. If the trustees under 77 of the Bankruptcy Act, 11 U.S. C. 205, cannot make ends meet, there is no reason to expect that Conrail can. Conrail, to be sure, is made eligible to receive obligations of the United Railway Association *165 (USRA), an incorporated nonprofit association created by the Act to issue obligations not exceeding $1,500,000,000, which are guaranteed by the Secretary of the Treasury, 210, 45 U.S. C. 720 (1970 ed., Supp. III). But of this one billion and a half not more than one billion can be issued to Conrail; of the one billion "not less than $500,000,000 shall be available solely for the rehabilitation and modernization" of the rail properties, 210 (b). Hence $500 million might be apportioned under a plan to creditors. But if the Special Court determines under 303 (c), 45 U.S. C. 743 (c) (1970 ed., Supp. III), that the value of the securities given creditors in exchange for the property pledged under prior law for payment of their claims is less than the fair value of the properties conveyed, the Special Court can under 303 (c) (2) do only three things: 1. Reallocate the securities issued; 2. Require Conrail to issue additional securities; 3. Enter a deficiency |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | Require Conrail to issue additional securities; 3. Enter a deficiency judgment against Conrail. The common stock of Conrail is plainly only token payment. Issuance of new and different securities by Conrail would have to have interest or dividend rights to be marketable and that would bring back into play some of the forces that plague the present trustees under 77. Any securities issued by Conrail must "minimize any actual or potential debt burden" of Conrail, 206 (i), 45 U.S. C. 716 (i) (1970 ed., Supp. III). Moreover, 301 (d) of the Rail Act provides that so long as more than half the debt of Conrail is guaranteed by the Government, a majority of the 15 directors are designated from outsidethe Secretary of Transportation, the Chairman and the President of the USRA, and five others named by the President with the consent of the Senate. One cannot read the Rail Act and believe that Congress thought that federal money going *166 into Conrail could be made subordinate to any debt created by Conrail. A contrary assumption would make the watch-dog purpose of 301 (d) quite superfluous. Yet, unless Conrail's new debt were serviced, it could not be marketed and even if it were, it could add no element of value to the compensation received by the creditors of these railroads under a reorganization plan. The upshot is that compensation for properties acquired by Conrail would be mostly paid for in Conrail stock with a sprinkling of the bonds of the Association issued to Conrail, assuming that they were not expended in the operations of Conrail between the time it started its operation and the date of the final plan of reorganization. The value of the properties to be transferred has not yet been determined. We held in the New Haven Inclusion where the New Haven road was being shut down and its assets sold, that just compensation was to be measured by the "highest and best value" of the assets sold. In that case that value was liquidation value. In light of the findings of the Reorganization Courts in the present cases, we cannot say that the $500 million of federally guaranteed bonds comes anywhere near any reasonably assured value.[10]*167 Value of any substantial amount cannot be attributed to the common stock of Conrail, because most of the problems of the existing roads will be inherited by Conrail and its prospects of generating income in excess of costs and fixed charges are, if not nil, remote. It would be irony to call entry of a deficiency judgment against Conrail adequate to |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | call entry of a deficiency judgment against Conrail adequate to make up any deficiency. For that judgment would only eat away at any value which the common stock of Conrail had. The vicious character of these legislative decisions is emphasized by the cram-down provision of the Rail Act. In 77 proceedings there is a cram-down provision to prevent one class from a holdup of a fair and equitable plan. Section 77, however, allows a cram-down only if the Court first finds the plan fair and equitable and after the security holders have had their hearing. Under the Rail Act the assets are first transferred to Conrail even before the Special Court has made its "fair and equitable" finding. Moreover, the security holders never have a vote on the plan. Congress has lowered all the procedural barriers and foisted on these rail carriers a conveyance of their assets which, if done by private parties in control of a bankrupt estate, would be a fraudulent conveyance. Here it is achieved by Congress' purporting to act in the "public interest." That is a taking for a public purpose; but by Fifth Amendment standards it is a taking of property without assurance of just compensation. II The Court relies, as do all parties who seek to sustain the statute, on the assumed availability of a suit in *168 the Court of Claims under the Tucker Act, 28 U.S. C. 1491, to recover any shortfall between fair liquidation value and the compensation the bankrupt roads receive under the Rail Act. The Solicitor General, while initially arguing that the judgment below could be reversed without reaching the Tucker Act question, now pitches his argument in support of the statute chiefly upon the availability of a Tucker Act suit. The Tucker Act confers jurisdiction on the Court of Claims "to render judgment upon any claim against the United founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United or for liquidated or unliquidated damages in cases not sounding in tort." The Rail Act neither expressly permits nor expressly excludes a suit under 1491. USRA says that "[o]ne searches the Rail Act in vain for a sentence such as `The Court of Claims shall have no jurisdiction over any action alleging that the property of any person has been taken pursuant to this Act without just compensation.' " But this observation is only the beginning of analysis. It is not enough merely to note that the Rail Act carves out no |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | merely to note that the Rail Act carves out no exception to 1491 in express words. "Statutory interpretation requires more than concentration upon isolated words; rather, consideration must be given to the total corpus of pertinent law and the policies that inspired ostensibly inconsistent provisions." Boys' Markets, This precept requires us to inquire whether provisions that are not mutually exclusive by their terms are so divergent in approach that they cannot co-exist in a particular setting. Congress may provide a mechanism for dealing with a particular problem that by its structure and purpose is inconsistent with a traditional avenue of relief applicable *169 to a broader class of cases. Under these circumstances, Congress may have supplanted the traditional remedy, albeit by implication. In my view, this is precisely what Congress has done in the Rail Act. The Act provides a strict timetable for bringing Conrail into operation. USRA is expected to present the Final System Plan to Congress within 570 days of the enactment of the Rail Act.[11] The Plan is deemed approved unless Congress specifically disapproves within a specified period. 208 (b). Once the plan is approved, USRA must certify it to the three-judge Special Court within 90 days, 209 (c). Within 10 days after certification, Conrail must deposit its stock and securities with the Special Court, 303 (a), and the court must direct the conveyance of properties to Conrail pursuant to the plan within 10 days thereafter, 303 (b). Congress plainly sought expedition in the process of creating Conrail. This is apparently the reason for deferring until after the transfer of the properties the question of valuation and distribution of stock to the contributing railroads.[12] The policy of expedition carries over into the provisions for judicial participation in this process. Appeals from decisions of the reorganization district courts concerning the inclusion of the debtor roads in the provisions of the Rail Act lie exclusively to *170 the Special Court; its decision in these appeals must be made within 80 days, 207 (b), 45 U.S. C. 717 (b) (1970 ed., Supp. III). Once the Final System Plan is approved by Congress, 209 (b) of the Act, 45 U.S. C. 719 (b) (1970 ed., Supp. III), provides for consolidation in the Special Court of "all judicial proceedings with respect to the final system plan." The decision of the Special Court regarding the distribution of Conrail stock and securities pursuant to 303 (c) is appealable directly to this Court. We are directed to give the appeal "the highest priority" and even to dismiss it within seven days if we conclude that |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | to dismiss it within seven days if we conclude that its pendency "would not be in the interest of an expeditious conclusion of the proceedings." 303 (d). A suit in the Court of Claims would be quite an odd appendage to the streamlined judicial procedures just described. The language of 209 (b) vesting in the Special Court "all judicial proceedings with respect to the final system plan" immediately raises doubt that a Tucker Act remedy is compatible with the Act.[13] The doubt is amplified when one looks at the entire scheme of judicial participation. I do not think that Congress, in setting up a Special Court, consolidating proceedings, limiting appeals, and demanding expeditious decisions, intended at the same time to permit yet another round of litigation on the compensation question to begin *171 in the Court of Claims after all the procedures mandated by the Rail Act had been exhausted. Despite the obvious frustration of the policy of expedition, the inference that a Tucker Act remedy is available might still be justified were it not for the special features of the compensation arrangement that limit the infusion of federal funds. As will be seen, these features were important to Congress, and they are circumvented if a suit in the Court of Claims is allowed. The Special Court, after it has directed the transfer to Conrail of "all right, title, and interest" in the properties of contributing roads designated in the Final System Plan, 303 (b), must determine whether the transfers of property from the bankrupt roads are "fair and equitable to the estate." But the Special Court has only limited tools for rectifying any unfairness or inequity it finds, and the limitations on its powers quite clearly indicate congressional intent to limit the commitment of federal funds. The preferred form of compensation to the debtor roads is stock of Conrail. 303 (c) (2) (A). If the stock is insufficient, the Special Court may next order distribution of Government-guaranteed obligations of Conrail, 303 (c) (2) (B), but these are limited in face value to $500 million,[14] absent an authorization by joint resolution of Congress to exceed the limitation. If any shortfall remains after distribution of stock and Government-guaranteed obligations, the Special Court is directed to enter a deficiency judgment against Conrail, 303 *172 (c) (2) (C). The judgment is against the corporation and not the United with the apparent purpose of protecting the Treasury from a liability of unanticipated magnitude. As Representative Adams, one of the principal architects of the Rail Act in the House, explained when specific assurances about the |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | Act in the House, explained when specific assurances about the federal exposure were sought early in debate on the bill: "Mr. ADAMS. There is a specific limitation in the final bill which says no more than $200 million [later raised to $500 million] of Government loan guarantees can be used for acquisition in any event, so if the court in 5 to 10 years should come in with a higher value, the only judgment would be against this new corporation that is there. "Under the New Haven case the court was placed in this kind of position that if it loads up that new corporation with a debt structure by requiring it to issue additional bonds, it lowers the value of the common stock, which is what it is being paid for in terms of these assets. "Mr. RUPPE. Does it not have to deliver more stock? It seems to me from reading the language that we have to cause the corporation securities issued in payment of the properties to have a value which is a fair and equitable value as determined by the court. "Mr. ADAMS. That is correct, but that is this corporation's and not the taxpayers of the United money." 119 Cong. Rec. 36355 (1973). The possibility that there might be a large deficiency judgment was not unnoticed. See and 36355 (remarks of Rep. Shoup). But those who adverted to this possibility noted that Congress would have an opportunity to consider later *173 whether to deal with it by relaxing the limitations on the amount of Government loan guarantees available to Conrail, by means of a joint resolution as provided in 210 (b). Congress was thus to have a "second look" at the debt structure of Conrail after the Special Court valuation proceedings had concluded; at that point Congress might improve the corporation's balance sheet by an additional commitment from public funds. What is clear, however, is that Congress intended to preserve a choice whether to allow Conrail to begin life with a large deficiency judgment unalleviated by further federal aid.[15] *174 To hold that a Tucker Act remedy is available is, first, to leave just compensation of security holders to wholly speculative chances that Congress might grant it and, second, to deprive Congress of that opportunity to choose, since the bankrupt estates would be permitted to obtain a deficiency judgment against the United after proceedings under the Rail Act have been exhausted. Assurances against such an eventuality were given in the following colloquy between two of the managers for the House, during debate on the conference |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | the managers for the House, during debate on the conference report: "Mr. KUYKENDALL. Mr. Speaker, I would like to ask the gentleman from Washington to clarify one point, and that is the matter of the deficiency judgment. There was a lot of colloquy in the original debate which expressed fears that the Federal court had the key to the Treasury. "Will the gentleman give us his interpretation of the guarantees we have to keep that from happening in the court proceedings? "Mr. ADAMS. Mr. Speaker, there is a definite limitation on the total amount that can be authorized under this bill. Any amounts that go beyond that, or the shifting of the way in which it is spent, is to be approved by an act of Congress, to be signed by the President. It is defined as a joint resolution in the bill, and the statement of the managers, and it was the clear intent of the managers that any amount other than common stock was to be at the lowest possible limit to meet the constitutional guarantees. "Mr. KUYKENDALL. Mr. Speaker, is it not *175 true, I will ask the gentleman from Washington (Mr. Adams) that the creditors, of course, are given protection, and that the Board of Directors, under the control of Government officials, is the owner of the entire block of stock of 100 million shares, whatever it is? "Mr. ADAMS. The gentleman is correct. It is controlled by the United so long as the Secretary determines that there is an amount of obligation funds which the United might, in any way ever, have to have anything to do with. "During that period of time, it is controlled by a board of directors which consists of Government officials. "Mr. KUYKENDALL. There is no way the Federal court may assess the taxpayers or this Congress on the judgments of the creditors; is that correct? "Mr. ADAMS. The gentleman is correct. "Mr. KUYKENDALL. There is no way they can assess the Congress for the money? "Mr. ADAMS. The gentleman is correct." 119 Cong. Rec. 42947 (1973). None of these comments refer expressly to the Court of Claims or to the Tucker Act. But the implication of depriving the courts of a "key to the federal Treasury" is powerful, and the reference to "assess[ing] Congress for the money" equally so, since that is in practical terms what the Court of Claims does. For me, the import of the words is clear: there was to be no possibility that an aggrieved party was to have recourse against the United in such |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | party was to have recourse against the United in such a way as to circumvent the limitations on federal funds embodied in the Rail Act.[16] On *176 oral argument as amicus curiae, Representative Adams stated that Congress had not repealed the Tucker Act. The majority seizes upon this statement as a concession that suit might be brought in the Court of Claims to *177 supplement compensation. But that interpretation of his words is overborne by the manifestations of a contrary congressional intent reviewed above. Mr. Adams' remarks, however, have a straightforward import that accords with the colloquy cited above and with the position taken in the brief he filed with this Court, which urged us to uphold the Rail Act without reference to a Tucker Act remedy. His remarks confirm that the Tucker Act remains available to enforce obligations against the United (and not merely against Conrail) created by the Act. For example, should the Government fail to make good on its guarantee of bonds issued under 210, holders thereof could obtain relief in the Court of Claims. We are asked to infer a Tucker Act remedy by applying the canon that favors interpretations of statutes that avoid substantial constitutional questions. See, e. g., United ex rel. Attorney ; United ; Richmond Screw Anchor ; ; As originally stated, the proposition was that where a statute is "reasonably susceptible of two interpretations," the courts will choose the one that steers clear of collision with constitutional limitations. United ex rel. Attorney ; Texas v. Eastern Texas R. The principle is applied so as to preserve substantially the legislative purpose, even where a statute must be tailored to avoid a question of constitutional infirmity. See FTC v. American Tobacco 264 U.S. 2 In more recent applications, however, the Court has on occasion abandoned any fidelity to congressional intent in *178 order to avoid a constitutional question. See United v. Rumely, ; United v. In those cases, I believe, the Court engaged in a judicial rewriting of the relevant congressional Acts, and I concurred in the result only after reaching the constitutional questions the Court avoided. Today's decision, however, goes well beyond what was done in Rumely and In those cases, as in most that have applied the canon of construction, the Court has narrowed the congressional regulatory scheme in order to avoid confronting the possibility of overreaching. See United ex rel. Attorney United Texas v. Eastern Texas R. FTC v. American Tobacco ; Missouri Pacific R. v. Boone, Today, however, the Court expands the opportunities for correcting unfairness in the congressional program, |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | expands the opportunities for correcting unfairness in the congressional program, foisting upon Congress a device it never chose and indeed thought it had rejected. Today's holding thus represents a sheer tour de force. Cf. United v. Seeger, This judicial legislation transgresses the bounds of our responsibility to avoid unnecessary constitutional questions. What Mr. Justice Cardozo said in Moore Ice Cream v. Rose, bears repeating: " `A statute must be construed, if fairly possible, so as to avoid not only the conclusion that it is unconstitutional, but also grave doubts upon that score.' [Citation omitted.] But avoidance of a difficulty will not be pressed to the point of disingenuous evasion. Here the intention of the Congress is revealed too distinctly to permit us to ignore it The problem must be faced and answered." *179 See also ; United v. at 129- The drafters of the Rail Act wrote against a background of reorganization law, in which the Tucker Act has never before been regarded as a device for escaping constitutional questions. Challenges to bankruptcy legislation as permitting unconstitutional deprivations of property have occurred before. Our cases until today have faced these challenges without adverting to any Tucker Act remedy. See Continental Illinois Nat. Bank & Trust v. Chicago, R. I. & P. R. Corp., ; Louisville Joint Stock Land ; ; Ecker v. Western Pacific R.[17] In construing the Rail Act to embrace a Tucker Act remedy, the Court disregards this tradition, and in this case opens up the possibility which Congress sought diligently to avoidthe imposition of a large financial burden upon the Treasury for the Conrail acquisition. The Court of Claims is without power to enforce its judgments. While those amounting to less than $100,000 are paid from a general appropriation, the payment of judgments exceeding this sum require special action by Congress. Ordinarily, of course, Congress pays these *180 judgments as a matter of routine. See Glidden v. Zdanok, (19). But this is an exceptional case, involving the possibility of judgments in the billions of dollars. The construction the Court gives the Rail Act today will amaze the legislators who drafted and voted for this statute. I cannot believe that Congress would have enacted this law had it been told that in the end it might have to dig into taxpayers' pockets not for the one billion appropriated but for unknown billionsperhaps 10 or 12 billionfor "just compensation" for property it authorized to be "taken." III Article I, 8, cl. 4, of the Constitution empowers Congress to establish "uniform Laws on the subject of Bankruptcies throughout the United" |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | "uniform Laws on the subject of Bankruptcies throughout the United" This Court held many years back that that requirement required "geographical" uniformity. Its main purpose was to treat claimants against debtors the same in one area as in another. As stated by Mr. Justice Frankfurter, concurring in Vanston Bondholders Protective :[18] "The Constitutional requirement of uniformity is a requirement of geographic uniformity. It is wholly satisfied when existing obligations of a debtor are treated alike by the bankruptcy administration throughout the country, regardless of the State in which the bankruptcy court sits. See Hanover National Bank v. ses, To establish *181 uniform laws of bankruptcy does not mean wiping out the differences among the forty-eight in their laws governing commercial transactions. The Constitution did not intend that transactions that have different legal consequences because they took place in different shall come out with the same result because they passed through a bankruptcy court. In the absence of bankruptcy such differences are the familiar results of a federal system having forty-eight diverse codes of local law. These differences inherent in our federal scheme the day before a bankruptcy are not wiped out or transmuted the day after." The Solicitor General makes the curious argument that the Commerce Clause power which supports the continuance of this rail system requires no uniformity. But it is the bankruptcy power that gives Congress power to cut down on the obligation of contracts. Recourse to the Bankruptcy Clause is necessary to sustain this statute, for, as noted below, it authorizes significant impairment beyond that permitted under 77. The Act applies not across the Nation but only in the midwest and northeast region of the United Section 102 (13), 45 U.S. C. 702 (13) (1970 ed., Supp. III), indeed so defines "region." It is to that "region" that USRA is confined by 202 (b), 45 U.S. C. 712 (b) (1970 ed., Supp. III), in the performance of its various duties. Reporting features of the Act reach only railroads in this "region." 203 (a), 45 U.S. C. 713 (a) (1970 ed., Supp. III). The Secretary of Transportation is likewise so confined. 204 (a), 45 U.S. C. 714 (a) (1970 ed., Supp. III). So is the new officeRail Services Planning Officein the Interstate Commerce Commission. 205 (a), (d), 45 U.S. C. 715 (a), (d) (1970 ed., Supp. III). The "final system plan" covers *182 only rail service in this "region." 206 (a), (c), (d), 45 U.S. C. 716 (a), (c), (d) (1970 ed., Supp. III). In short, the Act would have to be amended to make its procedure applicable |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | would have to be amended to make its procedure applicable to rail carriers not in the midwest and northeast region. The Solicitor General is therefore quite wrong when he says that the Rail Act applies with the same force and effect wherever railroad reorganizations are found. The Special Court is a bankruptcy court, for Congress has given it "such powers" as "a reorganization court" has. 209 (b), 45 U.S. C. 719 (b) (1970 ed., Supp. III). And, "a railroad in reorganization" as defined in 102 (12) includes those in 77 of the Bankruptcy Act. That means that a railroad in 77 proceedings but not located in the midwest and northeast region has more benign treatment than the six rail carriers before us in these cases. The importance of that difference is felt among the ranks of security holders: security holders of rail carriers who now or in the future are in a 77 reorganization in the South or West will receive more considerate treatment than plaintiffs below in these cases. The differences are not minor but exceedingly substantial. (1) Under 77, as we held in the New Haven Inclusion a plan was approved whereby the rail assets were disposed of with a view to reorganizing the remaining enterprise as an investment company. Under the Rail Act, 207 (b) mandates a dismissal if "this chapter does not provide a process which would be fair and equitable to the estate of the railroad." 45 U.S. C. 717 (b) (1970 ed., Supp. III). As the Reorganization Court held, the plan approved in the New Haven Inclusion would not be permissible under the Rail Act, as the Rail Act nowhere envisages a bifurcated reorganization, one for nonrail assets and another for rail assets. The only choice is between an overall reorganization on *183 the one hand and a dismissal whereupon all the diversities of the old equity receivership can be explored. Thus, security holders of companies reorganized under the Act are deprived of advantages which security holders of other rail carriers in 77 proceedings enjoy. (2) In a sale or conveyance of assets pursuant to a plan under 77, any lien on those assets is transferred to the proceeds. 77 (o). But by reason of 303 (b) (2) of the Rail Act the transfer is "free and clear of any liens or encumbrances." (3) Under 77 (d) before a plan can be consummated, the judge (as well as the Interstate Commerce Commission) must find it to be "fair and equitable." Under the Rail Act, 303 (c), that finding is made only ex post facto. |
Justice Douglas | 1,974 | 10 | dissenting | Regional Rail Reorganization Act Cases | https://www.courtlistener.com/opinion/109117/regional-rail-reorganization-act-cases/ | 303 (c), that finding is made only ex post facto. Thus the pressures are on to consummate the plan with no alternatives open to the Special Court except dismissal. The choice under 77, which the New Haven Inclusion illustrate, is barred; and the security holders here lack the benefit of the expertise of the Interstate Commerce Commission to which the courts give very great deference. See The ex post facto finding on the "fair and equitable" prerequisite of this plan robs these security holders of protective measures that security holders enjoy in reorganizations of rail carriers in other geographical areas. (4) While the Rail Services Planning Office is directed to hold public hearings on the "preliminary system plan," 207 (a) (2), it is USRA that prepares the final system plan, 207 (c), (d), and submits it to the Congress. 208. That submission to Congress is, however, perfunctory in the sense that the plan clears that hurdle unless Congress disapproves it. Under 77 (e) the security holders ("all parties in interest") have a right to be heard before the court approves a plan. Under the *184 Rail Act no like hearing is granted. The denial of the right to be heard may at times amount to a denial of due process. I intimate no opinion on whether such a right could be constitutionally eliminated from all 77 rail reorganizations.[19] But where the security holders of some rail carriers under 77 are given that right and those who are claimants against plaintiffs below are denied it, that provision of this Rail Act obviously lacks that "uniformity" which the Constitution mandates. While we have heretofore recognized that local variations by reason of state law governing the rights of creditors and debtors may be honored in bankruptcy without violating the uniformity clause,[20] we have never sanctioned a harsher bankruptcy procedure for the same class of debtors in one region than is applied to the same class in a different region. The bankruptcy court may, of course, be empowered to make its orders turn on the availability of credit which may be existent in one area but not in another.[21] But down to this day we have never dreamed of allowing debtors in the same class and their creditors to be treated more leniently in one region than in another.[22] *185 My conclusion that this Rail Act does not have that "uniformity" required by Art. I, 8, cl. 4, of the Constitution does not mean that it is unconstitutional in its entirety. It does mean, however, that the four ways in which "uniformity" is lacking |
Justice Marshall | 1,972 | 15 | majority | Heublein, Inc. v. South Carolina Tax Comm'n | https://www.courtlistener.com/opinion/108647/heublein-inc-v-south-carolina-tax-commn/ | In this case we must determine whether South Carolina may tax the income from local sales of Heublein's products, consistent with the limitations on the State's power to tax imposed by 15 U.S. C. 381 (a).[1] The South Carolina Tax Commission assessed Heublein, Inc., a Connecticut corporation that produces alcoholic beverages, a total of $21,549.50 in taxes on income derived from the sale of its goods in South Carolina.[2] After a hearing before the Tax Commission, Heublein paid the taxes and brought suit to recover them. The Court of Common Pleas held that 381 (a) protected Heublein from tax liability in South Carolina. The Supreme Court of South Carolina reversed. 257 S. C. 17, and now affirm. We hold that Heublein's activities within South Carolina exceed the minimum standards established in 15 U.S. C. 381 (a), *277 and that South Carolina may, pursuant to an otherwise valid regulatory scheme, compel Heublein to undertake activities that take it beyond the protection of 15 U.S. C. 381 (a). I During the years in question, Heublein had one employee in South Carolina. He maintained an office in his home and a desk at the warehouse of Ben Arnold Co., the local distributor of Heublein's products. Heublein's representative briefed Ben Arnold's salesmen on Heublein's products, and traveled throughout the State to liquor retailers, telling them of the products and leaving promotional literature with them. Ordinarily, the retailers sent orders directly to Ben Arnold, but occasionally Heublein's representative transmitted them. Ben Arnold, in turn, placed its orders with Heublein's home office in Connecticut. Heublein then acknowledged its acceptance of the orders and indicated to Ben Arnold when the goods would be shipped. They were sent by common carrier consigned to Heublein in care of its representative at the premises of Ben Arnold. This arrangement, which served none of Heublein's business interests, was adopted to conform to the requirements of the South Carolina Alcoholic Beverage Control Act. S. C. Code Ann. 4-1 et seq. Under that Act, only registered producers of registered brands of alcoholic beverages may ship those brands of alcoholic beverages into the State. 4-134, 4-135. Such producers must have a resident representative who has no direct or indirect interest in a local liquor business. 4-131 (3), 4-139. Shipments of liquor into the State may be made only to the producer in care of its representative. 4-141. Prior to the shipment, the producer must mail a copy of the invoice showing the quantity and price of the items shipped, and a copy of the bill of lading, to the Alcoholic Beverage Control *278 Commission. |
Justice Marshall | 1,972 | 15 | majority | Heublein, Inc. v. South Carolina Tax Comm'n | https://www.courtlistener.com/opinion/108647/heublein-inc-v-south-carolina-tax-commn/ | bill of lading, to the Alcoholic Beverage Control *278 Commission. Immediately after accepting delivery, the representative must furnish the Commission a copy of the invoice showing the time and place of delivery. When received, the shipment must be stored in a licensed warehouse of the producer, or, after delivery is complete, the shipment may be transferred to a licensed wholesaler. 4-140, 4-141. Before the goods are shipped to a wholesaler, however, the representative must obtain the Commission's permission to make the transfer. 4-141. Heublein complied with this regulatory scheme. II Title 15 U.S. C. 381 (a) (1), on which Heublein relies, provides that no State shall have power to impose a net income tax on income derived within the State from interstate commerce if the recipient of the income confined its business within the State to "the solicitation of orders in such State for sales of tangible personal property, which orders are sent outside the State for approval or rejection, and, if approved, are filled by shipment or delivery from a point outside the State." We need not decide whether, as the State urges, the actions of Heublein's representative in maintaining a local office, meeting with retailers, distributing promotional literature, and personally delivering some orders to the wholesaler, do not fall within the term "solicitation." Compare Smith Kline & with Clairol, appeal dismissed, For here Heublein has done more than just those acts. It sent its products to its local representative who transferred them to a local wholesaler. This transfer occurred within the State and clearly was neither "solicitation" nor the filling of *279 orders "by shipment or delivery from a point outside the State" within the meaning of 381 (a) (1). Heublein contends, however, that the transfer never would have occurred had not South Carolina required it as a condition of conducting business within the State. Heublein argues that a State may not evade the purpose of 381 (a) by requiring a firm to do more than solicit business within the State and then taxing the firm for engaging in this compelled additional activity. If we were persuaded that South Carolina has evaded the intent of the statute we would, of course, be reluctant to uphold its actions. But that is not what South Carolina has done here. The legislative history of 381 shows that Congress had rather limited purposes which are not evaded by South Carolina's regulation of liquor sales in the manner it has chosen. Congress did not focus on the consequences of its actions for such local regulatory schemes. We therefore will not read the statute |
Justice Marshall | 1,972 | 15 | majority | Heublein, Inc. v. South Carolina Tax Comm'n | https://www.courtlistener.com/opinion/108647/heublein-inc-v-south-carolina-tax-commn/ | local regulatory schemes. We therefore will not read the statute as prohibiting the States from adopting such schemes, even when the regulation requires the producer to have more than the minimum contacts with the State for which 381 provides tax immunity. Such a reading would require us to assume that Congress carefully considered the difficult problems of accommodating the federal interest in an open national economy with local interest in regulating the sale of liquor. The evidence is clear that Congress did not do so. The impetus behind the enactment of 381 was this Court's opinion in Northwestern States Portland Cement There we held that "net income from the interstate operations of a foreign corporation may be subjected to state taxation provided the levy is not discriminatory and is properly apportioned to local activities within the taxing State forming sufficient nexus to support the same." Congress promptly responded to the "considerable *280 concern and uncertainty"[3] and the "serious apprehension in the commercial community"[4] generated by this decision by enacting Stat. 555, 15 U.S. C. 381, within seven months. In this statute, Congress attempted to allay the apprehension of businessmen that "mere solicitation" would subject them to state taxation. Such apprehension arose because, as businessmen who sought relief from Congress viewed the situation, Northwestern States Portland Cement did not adequately specify what local activities were enough to create a "sufficient nexus" for the exercise of the State's power to tax.[5] Section 381 was designed to define clearly a lower limit for the exercise of that power. Clarity that would remove uncertainty was Congress' primary goal. By establishing such a limit, Congress did, of course, implicitly determine that the State's interest in taxing business activities below that limit was weaker than the national interest in promoting an open economy. But it did not address the questions raised by a requirement, incident to a valid regulatory scheme, that a business undertake activities above the limit as a condition of doing business within the State.[6] *281 Congress recognized, instead, that the accommodation of local and national interests in this area was a delicate matter. The committees reporting the bill to the House and Senate emphasized the difficulty of devising appropriate limitations on state taxing powers. Both Committees called their bills temporary solutions to meet only the most pressing problems created by Northwestern States Portland Cement.[7] More comprehensive legislation could only follow careful study, in the Committees' view. Congress agreed, and in Title II of provided that the Committee on the Judiciary of the House of Representatives and the Committee on Finance of the Senate |
Justice Marshall | 1,972 | 15 | majority | Heublein, Inc. v. South Carolina Tax Comm'n | https://www.courtlistener.com/opinion/108647/heublein-inc-v-south-carolina-tax-commn/ | of Representatives and the Committee on Finance of the Senate study the entire problem of state taxation of interstate commerce.[8] Congress, then, did not address in 381 the problem of taxing a business when it undertook local activities simply in order to comply with the requirements of a valid regulatory scheme. Such regulation is an important function of local governments in our federal scheme. As we said last Term, "unless Congress conveys its purpose *282 clearly, it will not be deemed to have significantly changed the Federal-State balance." United Congress of course did not enact in 381 a statute which a State can deliberately evade by requiring a firm to undertake more than mere solicitation. When a State enacts a regulatory scheme that serves legitimate State purposes other than assuring that the State may tax the firm's income, it is not evading 381; it is pursuing permissible ends in a manner that Congress did not address. Thus, if South Carolina's system of regulating the sale of liquor is valid, 381 does not prohibit taxation of Heublein's local sales.[9] III South Carolina's Alcoholic Beverage Control Act is a long and detailed statute. Requirements that certain records be kept by the manufacturer, the wholesaler, and the retailer pervade the scheme. There must be complete records of the quantities, brands, and prices involved at every stage of each liquor sale. By requiring manufacturers to localize their sales, South Carolina establishes a check on the accuracy of these records. For *283 example, when a manufacturer can transfer its goods to a wholesaler in the State only after it submits an invoice showing the price and after it receives permission for the transfer, it is easier for the State to enforce its requirement that the wholesale price in South Carolina be no higher than that elsewhere in the country. S. C. Code Ann. 4-137.1 The requirement that sales be localized is, unquestionably, reasonably related to the State's purposes and is not simply an attempt by the State to provide a basis for the taxation of an out-of-state seller's local sales. Nor does this requirement violate the Commerce Clause. The Twenty-first Amendment, 2, provides that "[t]he transportation or importation into any State for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." As this Court said in : "This Court made clear in the early years following the adoption of the Twenty-first Amendment that by virtue of its provisions a State is totally unconfined by traditional Commerce Clause limitations when it restricts the importation of intoxicants destined for use, |
Justice Powell | 1,981 | 17 | dissenting | Ridgway v. Ridgway | https://www.courtlistener.com/opinion/110578/ridgway-v-ridgway/ | The Court holds that the Servicemen's Group Life Insurance Act of 1965 (SGLIA or Act) broadly pre-empts state law. The Court also finds, as it must in light of previous decisions, that the pre-emptive power of this Act does not extend to cases of fraud or breach of trust. Ante, at 58, citing[1] See also ; The Court concludes, however, that there is not even an "allegation of fraud or breach of trust" in this case: "Sergeant Ridgway's conduct did not amount to breach of trust or conversion of another's property. A careful reading of the complaint and the amended complaint, App. 11 and 24, in this case reveals no allegation of fraud *65 or breach of trust. And we are not inclined to provide or infer such an allegation when a case comes to us, as this one does, with the record indicating nothing more than a breach of contract on the part of the deceased service member." Ante, at 58-59. I In reaching the conclusion that this case presents "nothing more than a breach of contract," the Court's opinion does not linger over the facts.[2] The decree divorcing Richard from *66 his first wife April and incorporating the agreement of the parties was entered on December 7, 1977. The agreement required several months to negotiate, and it was negotiated in detail. April received custody of the couple's three children. Richard was entitled to claim one child as a tax exemption in 1977 and two in 1978. He was to make specified monthly support payments beginning in 1978 and increasing in 1979. Although Richard was to pay for his children's medical and dental expenses, April agreed to incur them, to the extent possible, "so that they will be payable under [Richard's] serviceman's insurance." App. 14. In addition to other particular exchanges and responsibilities, the settlement specified and the decree ordered: "Defendant [Richard] is ordered to keep in force the life insurance policies on his life now outstanding for the benefit of the parties' three children. If any of such insurance policies should subsequently be terminated for any reason, defendant shall immediately replace it with other life insurance of equal amount for the benefit of the children."[3] Less than four months later, Richard remarried and promptly changed the beneficiary clause of his serviceman's *67 policy so that the entire insurance proceeds would go to his new wife, Donna. I return to the Court's view that the complaint makes "no allegation of fraud or breach of trust," and that this is a simple case involving "nothing more than a breach of |
Justice Powell | 1,981 | 17 | dissenting | Ridgway v. Ridgway | https://www.courtlistener.com/opinion/110578/ridgway-v-ridgway/ | a simple case involving "nothing more than a breach of contract" by Richard. Ante, at 59. Perhaps the complaint, as amended, is inartful. Yet it specifically averred that a constructive trust existed under which Donna the recipient of the insurance proceeds was the "constructive trustee for the benefit" of the children. App. 26. The Supreme Judicial Court of Maine explicitly held that a constructive trust existed and that Donna was the constructive trustee of the corpus of this trust.[4] In a technical sense, perhaps it can be argued there was "no allegation of fraud or breach of trust" as these precise terms were not used. But the complaint averred, and the substance of this case is, that a constructive trust was created by Richard's agreement and conduct. In my view, the Court is plainly wrong in concluding that Richard's conduct was "nothing more than a breach of contract" and that his obligation was like that of "any commercial" debtor who defaults on a judgment.[5]Ante, at 59. *68 Familial obligations are not merely commercial. Few legal duties are more universally acknowledged than the duty of a father to support his children. This duty existed in this case by law before the divorce. As a result of the divorce, it was recognized explicitly by Richard's contract with his family and by the divorce decree ordering him to discharge that duty by maintaining the insurance at issue for the benefit of his children. Yet, the Court today analogizes a father's support duty to that of a commercial debtor! This holding ignores the difference not only in character of the duties but also in their consequences. A defaulting debtor may be subjected to a judgment and an attachment lien. He may not be sent to jail. But a father who defaults on his duty to support his children or who violates a court decree enforcing that duty may be imprisoned for contempt. The Court responds to this dissent in its footnotes 8 and 11. Yiatchos and Free are said to involve "a particular type of fraudulent behavior: attempts `to divest the wife of any interest in her own property.' " Ante, at 59, n. 8 (emphasis deleted). The Court distinguishes, for the purpose of determining the pre-emption issue, between fraud or breach of trust that affects a wife's interest in community property and fraud or breach of trust that affects minor children's interest in a fund set aside for their support. I see no basis for such a distinction. Yiatchos and Free recognize, without qualification, *69 that "federal pre-emption [may not be |
Justice Powell | 1,981 | 17 | dissenting | Ridgway v. Ridgway | https://www.courtlistener.com/opinion/110578/ridgway-v-ridgway/ | recognize, without qualification, *69 that "federal pre-emption [may not be allowed] to shield fraud or breach of trust." I would not have thought before today's decision that any court would suggest much less find that minor children are less entitled to be "shielded" from this type of conduct than an adult wife. Indeed, because of the difference between the capacity of an adult and that of young children, our law always has reflected a special solicitude for minors. See, e. g., The Court further argues that "by way of contrast" with a husband's "divest[ing]" his wife of her interest in community property, "Sergeant Ridgway [merely] misdirected property over which he had exclusive control." (Emphasis added.) Ante, at 59, n. 8. This is indeed a generous way to describe the Sergeant's conduct. Moreover, the statement that he had "exclusive control" over the property begs the very question before us: whether Richard retained this control despite his conduct. He had divested himself voluntarily of all interest in the insurance policies by the agreement. The Maine court had approved the agreement, and ordered Richard to comply with it. He had far less "control" over the fund he had thereby created for his children's support than the husband had in either Yiatchos or Free. He had no interest whatever in the policies to "misdirect" to his new wife unless contrary to those decisions the Act is now read to allow fraud or breach of trust.[6] *70 I would hold that the special nature of the parental legal duty, as expressly manifested in this case by both Richard's negotiated bargain with his family and by the terms of his divorce decree, imposes a constructive trust upon the proceeds of the insurance for the benefit of Richard's children as a matter of federal law.[7] As the Court acknowledges, ante, at 58, the intention of Congress to supplant state law does not extend to a breach of trust. Here the fund impressed with a trust should be held for its agreed purpose in accordance with the law of Maine.[8] I would affirm the judgment of the Supreme Judicial Court of Maine. II Although I think the breach-of-trust issue is dispositive, I would be willing in the interest of preventing what seems to me a uniquely unjust decision to join an opinion remanding the case to the Maine Supreme Judicial Court on the issue of fraud.[9] There is no specific allegation of fraud, and yet the admitted facts create the strongest inference that Richard intended to evade his support obligation by diverting |
Justice Powell | 1,981 | 17 | dissenting | Ridgway v. Ridgway | https://www.courtlistener.com/opinion/110578/ridgway-v-ridgway/ | that Richard intended to evade his support obligation by diverting to his *71 new wife the fund he had created for the benefit of his children. The temporal sequence itself is persuasive. Following several months of negotiation, the divorce was granted on December 7, 1977, but only on conditions that included the funding of the support obligation. On March 28, 1978, less than four months thereafter, Richard married Donna. Six days later he stripped his children of this fund by changing the beneficiary clause so that Donna would receive the proceeds. This hardly was an inadvertent act. It is unlikely that even the enchantment of a new wife caused him to forget both his duty and his obligation to his children. It would be appropriate, however, to afford the state courts an opportunity to address the fraud issue. The Supreme Judicial Court of Maine ruled in April's favor without considering this alternative theory. This Court should not foreclose this consideration, for whether April will be permitted to advance this argument at this stage of the proceedings is a question of state procedural law. |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | Petitioner Timothy Abbott, the father of A. J. A., has no authority to decide whether his son undergoes a particular medical procedure; whether his son attends a school field trip; whether and in what manner his son has a religious upbringing; or whether his son can play a videogame before he completes his homework. These are all rights and responsibilities of A. J. A.’s mother, respondent Jac quelyn Abbott. It is she who received sole custody, or “daily care and control,” of A. J. A. when the expatriate couple divorced while living in Chile in 2004. 45 F. Supp. 2d 635, 637, and n. 2 (WD Tex. 2007). Mr. Abbott pos sesses only visitation rights. On Ms. Abbott’s custodial rights, Chilean law placed a restriction: She was not to travel with her son outside of Chile without either Mr. Abbott’s or the court’s consent. Put differently, Mr. Abbott had the opportunity to veto Ms. Abbott’s decision to remove A. J. A. from Chile unless a Chilean court overrode that veto. The restriction on A. J. A.’s and Ms. Abbott’s travel was an automatic, de fault provision of Chilean law operative upon the award of visitation rights under Article 48 of Chile’s Minors Law 16,618. It is this travel restriction—also known as a ne exeat clause—that the Court today declares is a “ ‘righ[t] of 2 ABBOTT v. ABBOTT STEVENS, J., dissenting custody’ ” within the meaning of the Hague Convention on the Civil Aspects of International Child Abduction (Con vention), Oct. 25, 180, T. I. A. S. No. 670, S. Treaty Doc. No. –. Ante, at 1. Because the Court concludes that this travel restriction constitutes a right of custody, and because Ms. Abbott indisputably violated the restriction when she took A. J. A. from Chile without either Mr. Abbott’s or the court’s per mission, Mr. Abbott is now entitled to the return of A. J. A. to Chile under the terms of the Convention. Thus, absent a finding of an exception to the Convention’s pow erful return remedy, see ante, at 18–1, and even if the return is contrary to the child’s best interests, an Ameri can court must now order the return of A. J. A. to Mr. Abbott, who has no legal authority over A. J. A., based solely on his possessing a limited veto power over Ms. Abbott’s ability to take A. J. A. from Chile. As I shall explain, use of the Convention’s return remedy under these circumstances is contrary to the Convention’s text and purpose. I When the drafters of the Convention gathered in |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | purpose. I When the drafters of the Convention gathered in 180, they sought an international solution to an emerging problem: transborder child abductions perpetrated by noncustodial parents “to establish artificial jurisdictional links with a view to obtaining custody of a child.” 180 Conférence de La Haye de droit international privé, Enlèvement d’enfants, E. Pérez-Vera, Explanatory Report (Pérez-Vera Report), in 3 Actes et Documents de la Qua torzième session ¶, p. 426 (182);1 see also Convention —————— 1 As the Court recognizes, see ante, at 15, the Executive Branch con siders the Pérez-Vera Report “the ‘official history’ ” for the Convention and “a source of background on the meaning of the provisions of the Convention available to all States becoming parties to it.” Legal Analysis of Hague Convention on the Civil Aspects of International Cite as: 560 U. S. (2010) 3 STEVENS, J., dissenting Analysis 1054 (“[F]undamental purpose” of the Convention is “to protect children from wrongful international remov als or retention by persons bent on obtaining their physi cal and/or legal custody”). The drafters’ primary concern was to remedy abuses by noncustodial parents who at tempt to circumvent adverse custody decrees (e.g., those granting sole custodial rights to the other parent) by seeking a more favorable judgment in a second nation’s family court system. Pérez-Vera Report ¶14, at 42. The drafters determined that when a noncustodial parent abducts a child across international borders, the best remedy is return of that child to his or her country of habitual residence—or, in other words, the best remedy is return of the child to his or her custodial parent. at 430. The drafters concluded that the same remedy should not follow, however, when a custodial parent takes a child from his or her country of habitual residence in breach of the other parent’s visitation rights, or “rights of access” in the Convention’s parlance. at 444–445. The distinction between rights of custody and rights of access, therefore, is critically important to the Conven tion’s scheme and purpose. It defines the scope of the available Convention remedies. Article 5 defines these rights as follows: “For the purposes of this Convention— “a ‘rights of custody’ shall include rights relating to the care of the person of the child and, in particular, the right to determine the child’s place of residence; “b ‘rights of access’ shall include the right to take a child for a limited period of time to a place other than the child’s habitual residence.” S. Treaty Doc. No. – (hereinafter Treaty Doc.). —————— Child Abduction, (186) (hereinafter Convention Analysis). 4 ABBOTT v. ABBOTT |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | Child Abduction, (186) (hereinafter Convention Analysis). 4 ABBOTT v. ABBOTT STEVENS, J., dissenting Article 3 of the Convention provides that the removal or retention of a child is “wrongful,” and thus in violation of the Convention, only when the removal “is in breach of the rights of custody.” Art. 3(a), The fact that a removal may be “wrongful” in the sense that it violates domestic law or violates only “rights of access” does not make it “wrongful” within the meaning of the Convention. Only when a removal is “wrongful” under Article 3 may the parent who possesses custody rights force the child’s return to the country of habitual residence under the Convention’s remedial procedures, pursuant to Articles 8 through 20. For those removals that frustrate a noncusto dial parent’s “rights of access,” the Convention provides that the noncustodial parent may file an application “to make arrangements for organizing or securing the effec tive exercise of rights of access”; but he may not force the child’s return. Art. 21, A parent without “rights of custody,” therefore, does not have the power granted by Article 3 to compel the child’s return to his or her country of habitual residence. His rights are limited to those set forth in Article 21. II Mr. Abbott, claiming “rights of custody” by virtue of the travel restriction Chilean law places on Ms. Abbott, seeks the return of A. J. A. to Chile. Such relief is warranted only if A. J. A.’s removal was “wrongful” within the mean ing of the Convention; as such, it must have been “in breach of [Mr. Abbott’s] rights of custody.”2 Art. 3, at —————— 2 Indisputably, Ms. Abbott’s removal of A. J. A. from Chile was wrong ful in the generic sense of the word. She violated Chilean law when she took A. J. A. to Texas because she sought neither Mr. Abbott’s permis sion nor the court’s authorization before doing so. She violated both the existing “ne exeat” order imposed by judicial decree in the couple’s custody dispute, see ante, at 2, as well as Chilean statutory law defin ing the access rights of noncustodial parents, see Art. 4, Minors Law 16,618, App. to Pet. for Cert. 61a. The removal was illegal, then, but it Cite as: 560 U. S. (2010) 5 STEVENS, J., dissenting 7. Putting aside the effect of the travel restriction, it is undisputed that Ms. Abbott possesses “rights of custody” over A. J. A. while Mr. Abbott would possess “rights of access,” as those terms are used in the Convention. Brief for Petitioner 6; Brief for |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | used in the Convention. Brief for Petitioner 6; Brief for Respondent 6. The only issue in this case, therefore, is whether Mr. Abbott also possesses “rights of custody” within the meaning of the Convention by virtue of the travel restriction, or ne exeat clause,3 that Chilean law imposes on Ms. Abbott. In other words, the question is whether the “right” of one parent to veto the other parent’s decision to remove a child from the country, subject to judicial override, belongs in the category of “rights relating to the care of the person of the child and, in particular, the right to determine the child’s place of residence.” Art. 5(a), Treaty Doc., In my judgment, it clearly does not, and I need look no further than to the Convention’s text to explain why. See (“The interpretation of a treaty, like the interpretation of a statute, begins with its text”). Rights relating to the care of the child. The Court con cludes that the veto power Mr. Abbott has over Ms. Ab bott’s travel plans is equivalent to those rights “ ‘relating to the care of the person of the child.’ ” Ante, –8. This is so, the Court tells us, because Mr. Abbott has a limited power to keep A. J. A. within Chile’s bounds and, there fore, indirectly to influence “the language the child speaks, —————— was only wrongful within the meaning of the Convention if it was in breach of Mr. Abbott’s rights of custody. Unfortunately, I fear the Court’s preoccupation with deterring parental misconduct—even, potentially, at the sake of the best interests of the child—has caused it to minimize this important distinction. 3 The Court repeatedly refers to “ne exeat rights,” ante, at 3, 10, 12, 14, 15, and 16, as if the single travel restriction at issue in this case were on a par with the multiple rights commonly exercised by custodial parents. Chile’s statutory ne exeat provision is better characterized as a restriction on the travel of both the minor and the custodial parent than as a bundle of “rights” possessed by the noncustodial parent. 6 ABBOTT v. ABBOTT STEVENS, J., dissenting the identity he finds, or the culture and traditions she will come to absorb.” Ante, It is not nearly as self-evident as the Court assumes that Mr. Abbott’s veto power carries with it any ability to decide the language A. J. A. speaks or the cultural experiences he will have, ante, –8. A. J. A.’s mere presence in Chile does not determine any num ber of issues, including: whether A. J. A. learns |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | num ber of issues, including: whether A. J. A. learns Spanish while there; whether he attends an American school or a British school or a local school; whether he participates in sports; whether he is raised Catholic or Jewish or Bud dhist or atheist; whether he eats a vegetarian diet; and on and on. The travel restriction does not confer upon Mr. Abbott affirmative power to make any number of decisions that are vital to A. J. A.’s physical, psychological, and cultural development. To say that a limited power to veto a child’s travel plans confers, also, a right “relating to the care” of that child devalues the great wealth of decisions a custodial parent makes on a daily basis to attend to a child’s needs and development. The Court’s interpretation depends entirely on a broad reading of the phrase “relating to” in the Convention’s definition of “rights of custody.” It is, undeniably, broad language. But, as the Court reads the term, it is so broad as to be utterly unhelpful in interpreting what “rights of custody” means. We “cannot forget that we ultimately are determining the meaning of the term” rights of custody in this case, and we should not lose sight of the import of this term in construing the broad words that follow in its wake. I suppose it could be said that Mr. Abbott’s ability to decide whether A. J. A. spends the night with one of his friends during a Saturday visit is also a “right relating to the care of the child.” Taken in the abstract—and to its most absurd— any decision on behalf of a child could be construed as a right “relating to” the care of a child. Cite as: 560 U. S. (2010) 7 STEVENS, J., dissenting Such a view of the text obliterates the careful distinction the drafters drew between the rights of custody and the rights of access. Undoubtedly, they were aware of the concept of joint custody. See Pérez-Vera Report ¶71, at 457 (“[C]ustody rights may have been awarded to that person in his own right or jointly. It cannot be otherwise in an era when types of joint custody, regarded as best suited to the general principle of sexual non discrimination, are gradually being introduced into inter nal law”). But just because rights of custody can be shared by two parents, it does not follow that the drafters in tended this limited veto power to be a right of custody. And yet this, it seems, is how the Court understands the case: Because the drafters intended to |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | the Court understands the case: Because the drafters intended to account for joint custodial arrangements, they intended for this travel restriction to be joint custody because it could be said, in some abstract sense, to relate to care of the child. I fail to understand how the Court’s reading is faithful to the Convention’s text and purpose, given that the text ex pressly contemplates two distinct classes of parental rights. Today’s decision converts every noncustodial par ent with access rights—at least in Chile—into a custodial parent for purposes of the Convention. On this point, it is important to observe the effect of the Court’s decision to classify the travel restriction as a right “relating to” A. J. A.’s care. Mr. Abbott possesses no legal authority presently to exercise care or control of A. J. A., or to make decisions on his behalf. The Court would nev ertheless read the Convention to require A. J. A.’s return to a parent without such rights merely because the travel restriction, in an abstract sense, could be said to relate to A. J. A.’s care. The Court fails to explain how a parent who otherwise possesses no legal authority to exercise “charge,” “supervision,” or “management” over a child, see Webster’s Third New International Dictionary 338 (186) (hereinafter Webster’s) (5th definition of “care”), can be 8 ABBOTT v. ABBOTT STEVENS, J., dissenting come a joint custodian of a child merely because he can attempt to veto one of the countless decisions the child’s other parent has sole legal authority to make on the child’s behalf. The right to determine the child’s place of residence. The Court also concludes that Mr. Abbott’s veto power satisfies the Convention’s definition of custodial rights because it is, in the Court’s view, a “right to determine the child’s place of residence.” Art. 5(a), Treaty Doc., I disagree with the Court’s assessment of the significance and mean ing of this phrase, both on its face and within the context of the Convention’s other provisions. As an initial matter, the Court’s reading of the Conven tion depends on isolating the phrase “and, in particular, the right to determine the child’s place of residence” to refer to a freestanding right separate and apart from the rights related to the care of the child. I do not agree with this view of the text, nor did the Convention’s drafters: “The Convention seeks to be more precise by empha sizing, as an example of the ‘care’ referred to [in the “ ‘rights of custody’ ” clause, Art. 5(a)], the right to de termine the child’s |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | clause, Art. 5(a)], the right to de termine the child’s place of residence. However, if the child, although still a minor at law, has the right itself to determine its own place of residence, the substance of the custody rights will have to be determined in the context of other rights concerning the person of the child.” Pérez-Vera Report ¶84, at 452 (emphasis added). The drafters thus intended the “right to determine the child’s place of residence” to be an “example” of what the Convention means by “care of the person of the child.” It is indicative of the “substance” of what it means to be a custodial parent. The definition is not, as the Court would have it, one stick in the bundle that may be parsed as a singular “ ‘righ[t] of custody,’ ” ante, at 1; rather, it is a Cite as: 560 U. S. (2010) STEVENS, J., dissenting shorthand method to assess what types of rights a parent may have. The parent responsible for determining where and with whom a child resides, the drafters assumed, would likely also be the parent who has the responsibility to “care” for the child. Yet even assuming, as the Court does, that the “right to determine the child’s place of residence,” Art. 5(a), Treaty Doc., is divisible from the “care” of the child, I still fail to understand how a travel restriction on one parent’s exercise of her custodial rights is equivalent to an affirmative “right to determine the child’s place of resi dence.” Analyzing its text, in the context of the Conven tion’s focus on distinguishing custodial parents from non custodial ones, leads me to conclude that the “right to determine the child’s place of residence” means the power to set or fix the location of the child’s home. It does not refer to the more abstract power to keep a child within one nation’s borders. “To determine” means “to fix conclusively or authorita tively” or “to settle a question or controversy.”4 Webster’s 616. A “place” is a “physical environment” or “a building or locality used for a special purpose.” “Resi —————— 4 “To determine” can also mean, as the Court observes, “ ‘to set bounds or limits to,’ ” ante, (quoting Webster’s New International Dictionary 7 (2d ed. 154) (1st definition) (hereinafter Webster’s 2d)). However, this definition of “to determine” makes little functional sense as applied to this treaty. In the context of understanding the meaning of rights of custody, the phrase “to determine” cannot be so indetermi nate as to merely set “limits to” a child’s place |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | nate as to merely set “limits to” a child’s place of residence. Although the Court emphasizes that the definition of “to deter mine” on which it relies is the first such entry in Webster’s, ante, it is worth noting that surely the Court would not rely on the first such definition of the word “care” in that source (“suffering of mind; grief; sorrow”) to understand the Convention’s use of that word. See Web ster’s 2d, at 405. Instead, the fifth definition of that word—“charge, supervision, management”—is clearly the relevant one. The point is only that context, as well as common sense, matters when selecting among possible definitions. 10 ABBOTT v. ABBOTT STEVENS, J., dissenting dence,” even standing alone, refers to a particular loca tion—and not, more generally, to a nation or country. In the law, “residence” can mean: “[t]he act or fact of living in a given place for some time”; “[t]he place where one actu ally lives”; or, “[a] house or other fixed abode; a dwelling.” Black’s Law Dictionary 1423 (th ed. 200).5 Lay defini tions of “residence” similarly describe a specific location: “the act or fact of abiding or dwelling in a place for some time”; “the place where one actually lives or has his home”; or, “a temporary or permanent dwelling place, abode, or habitation.” Webster’s 131. It follows that a “place of residence” describes a “physical” location in which a child “actually lives.” The Court’s reading of this text depends on its substitu tion of the word “country” for the word “place.” Such a substitution is not illogical, of course, in light of the Con vention’s international focus. See v. 22 F.3d 133, 147, 148 (CA2 2000) (Sotomayor, J., dissenting) (read ing “place of residence” to mean “authority over the child’s more specific living arrangements” “ignores the basic international character of the Hague Convention”). But it is inconsistent with the Convention’s text and purpose. When the drafters wanted to refer to country, they did. For example, in Article 3, the drafters explained that rights of custody should be defined by looking to “the law of the State in which the child was habitually resident.” Art. 3(a), Treaty Doc., Had the drafters intended the definition of the child’s “place of residence” in Article 5 to refer to his or her “State” or country of “residence,” they —————— 5 “Residence” can also refer to “[t]he place where a corporation or other enterprise does business or is registered to do business.” Black’s Law Dictionary 1423. Earlier this Term, we recognized the self-evident principle that a corporation’s principal “place” of |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | recognized the self-evident principle that a corporation’s principal “place” of business for diversity jurisdiction purposes is a single location “within a State” and “not the State itself.” Hertz Corp. v. Friend, 55 U. S. (2010) (slip op., at 14). Cite as: 560 U. S. (2010) STEVENS, J., dissenting could have defined the “right” at issue as “the right to determine the child’s State of habitual residence.” But they did not, even though they used the phrase “State of habitual residence” no fewer than four other times else where within the Convention’s text.6 Moreover, the draft ers also explained that “reference[s] to habitual residence in [a] State shall be construed as referring to habitual residence in a territorial unit of that State.” Art. 31(a), at 13 (emphasis added). The point is: When the drafters wanted to refer to a particular geographic unit, they did so. Instead, the drafters elected the formulation “place of residence,” which is also utilized similarly in the definition of “rights of access.” See Art. 5(b), (defining “ ‘rights of access’ ” to include “the right to take a child for a limited period of time to a place other than the child’s habitual residence” (emphasis added)). And they utilized this phrase only within one particular Article, as opposed to their more frequent use of “State of habitual residence” throughout the Convention. In interpreting statutory text, we ordinarily presume that the use of different words is purposeful and evinces an intention to convey a differ ent meaning. See, e.g., Russello v. United States, 464 U. S. —————— 6 See, e.g., Preamble, Treaty Doc., (“Desiring to protect children internationally from the harmful effects of their wrongful removal or retention and to establish procedures to ensure their prompt return to the State of their habitual residence” (emphasis added)); Art. 8(f), Treaty Doc., at (stating that an application for return may be accom panied by “a certificate emanating from competent authority of the State of the child’s habitual residence” (emphasis added)); Art. 14, (explaining that when determining whether a removal is wrongful, a contracting state “may take notice directly of the law of the State of the habitual residence of the child” (emphasis added)); Art. 15, (authorizing contracting state to obtain a decree from “the authorities of the State of the habitual residence of the child” a decision on whether removal was wrongful before ordering return (emphasis added)). 12 ABBOTT v. ABBOTT STEVENS, J., dissenting 16, 23 (183) (“We refrain from concluding here that the differing language in the two subsections has the same meaning in each. We would not presume |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | has the same meaning in each. We would not presume to ascribe this difference to a simple mistake in draftsmanship”). There is no reason we should presume otherwise in the context of treaties. Accordingly, I would give “place of residence” the loca tion-specific meaning its plain text connotes, irrespective of the fact that this Convention concerns international abduction. The right described by the Convention is the right to decide, conclusively, where a child’s home will be. And this makes a good deal of sense. The child lives with the parent who has custodial rights or, in the language of the Convention, “care of the person of the child,” Art. 5(a), Treaty Doc., The child’s home—his or her “place of residence”—is fixed by the custody arrangement.7 This comports too with the Convention’s decision to privilege the rights of custodians over the rights of those parents with only visitation rights. Understanding the effect of a travel restriction. So, the question we confront is whether a travel restriction on one parent’s right to embark on international travel with his or her child creates in the other parent a “right to deter mine the child’s place of residence” or the ability “to fix conclusively” the child’s “physical” “home.” Before answer ing this question, it is important to understand the nature of the travel restriction we must classify. The departure of a minor from Chile—including when that child lives in a married, two-parent household—is governed by Article 4 of of that country’s Minors Law. Under Chilean law, no minor is allowed outside of —————— 7 I do not mean to suggest by my view of the significance of a travel restriction that there could not be a custody arrangement in which both parents have the “right to determine the child’s place of residence.” Art. 5(a), My view is only that the type of ne exeat provision at issue in this case does not, by itself, confer such an affirmative right. Cite as: 560 U. S. (2010) 13 STEVENS, J., dissenting the country without his or her parents’ authorization. Art. 4, Minors Law 16,618, App. to Pet. for Cert. 61a–62a. Ordinarily, if the judge has entrusted custody of a child to only one parent, the child may not leave without that parent’s—the custodial parent’s—permission. See ; see also at 61a (“If the judge has entrusted custody to one of the parents or to a third party, the legitimate child may not leave except under authorization of the person to whom he has been entrusted”). But the statute further provides that if the noncustodial parent has been |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | statute further provides that if the noncustodial parent has been granted visitation rights, the authorization of the parent with visitation rights shall also be required: “Once the court has decreed the obligation to allow visits pursuant to the preceding article,[8] authorization of the father or mother who has the right to visit a child shall also be required.” The statute provides, also, an important backstop in the event a noncustodial parent denies authorization “without good reason”: A Chilean court may grant the minor or his parent permission to leave the country. at 62a. Finally, if the custodial parent does not return the child to Chile within the time authorized, “the judge may decree the suspension of ali mony that may have been decreed.” Returning, then, to the question at hand: By virtue of —————— 8 The “preceding article” referred to, Article 48, simply provides: “Each time a minor is entrusted to one of the parents or a third person, such decision must include the obligation to allow the non-custodial parent to exercise his or her right to visit. The decision should also specify the way in which this right will be exercised. The judge may order ex officio, upon the parties petition or in special cases, that the same authorization be extended, to the minor’s ascendants or siblings, through the means and under the conditions set by the judge. Ascen dants and siblings should be identified.” Memorandum from Graciela I. Rodriguez-Ferrand, Senior Legal Specialist, Law Library of Congress, to Supreme Court Library (Apr. 1, 2010) (available in Clerk of Court’s case file (containing English translation of Art. 48, Minors Law 16,618)). 14 ABBOTT v. ABBOTT STEVENS, J., dissenting the restriction Chilean law places on Ms. Abbott’s move ment, Mr. Abbott has no “right to determine [A. J. A.’s] place of residence.” He cannot “conclusively” “fix,” “settle,” or “determine” the place where A. J. A. “actually lives or has his home.” See at –10. True, the travel re striction bestows upon the noncustodial parent a limited power to prevent his child from leaving the country with out his permission, but it does not grant an affirmative power to fix or set the location of the child’s home. Mr. Abbott has no power whatever to determine where A. J. A. actually lives within the nearly 300,000 square miles that compose Chile. Even more important, Mr. Abbott has no power whatever to select another country in which A. J. A. would live, were Mr. Abbott’s work to take him to another country altogether. In sum, a right to object to a proposed departure |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | In sum, a right to object to a proposed departure gives a parent far less authority than a right to determine where the child shall reside. Moreover, the right to determine where to live within a country, as well as what country to live in, is far broader than the limited right to object to a child’s travel abroad. In my view, the “right” Mr. Abbott has by virtue of the travel restriction is therefore best understood as relating to his “rights of access,” as the Convention defines that term—and not as a standalone “ ‘righ[t] of custody,’ ” as the Court defines it, ante, at 1. Chile’s statutory travel re striction provision is plainly ancillary to the access rights the Chilean family court granted to him as the noncusto dial parent. By its terms, the obligation on the custodial parent to seek the other parent’s permission before remov ing the child from Chile only operates upon the award of visitation rights; it has nothing to do with custody rights. And it operates automatically to facilitate the noncusto dial parent’s ability to access the child and to exercise his visitation rights. In the best of all possible circumstances, Mr. Abbott’s limited veto power assures him relatively easy access to A. J. A. so that he may continue a meaning Cite as: 560 U. S. (2010) 15 STEVENS, J., dissenting ful relationship with his son. But this power, standing alone, does not transform him into a custodian for pur poses of the Convention’s return remedy. Instead, it au thorizes him, pursuant to Article 21, to seek assistance from this country in carrying out the Chilean family court’s visitation order. III Although the Court recognizes, as it must, that “ ‘[t]he interpretation of a treaty, like the interpretation of a statute, begins with its text,’ ” ante, at 6 (quoting Medellín, 552 U.S., at ), the Court’s analysis is atextual—at least as far as the Convention’s text goes. The Court first relies on the text of the Chilean law at issue and a single Chilean administrator’s alleged interpretation thereof. —————— Because differences in statutory provisions, as well as cultural differences and personal predilections, may affect the opinions of local officials, I would attach no weight to the letter from Paula Strap Camus, describing Article 4 of Chile’s Minors Law 16,618 as establish ing a shared right to determine the place of residence of a child. Moreover, we have no obligation to defer, on questions of treaty inter pretation, to the nonjudicial decisions of another signatory state, let alone a return request—a piece |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | of another signatory state, let alone a return request—a piece of advocacy—filed on behalf of Chile in another case. In any event, the letter cited offers much less support for the Court’s position than meets the eye. Unlike in this case, in which a Chilean court has already decreed Ms. Abbott to be A. J. A.’s sole custodian, in Villegas Duran v. Beaumont, “no Judge of the Republic of Chile has granted the custody of the child to her mother” Letter from Paula Strap Camus, Director General, Corporation of Judicial Assistance of the Region Metropolitana to National Center for Missing and Exploited Children (Jan. 17, 2006), App. to Pet. for Cert. in Villegas Duran v. Beaumont, O. T. No. 08–775, p. 36a. In other words, Ms. Camus’ letter request for the child’s return in that case depends on a provision of Article 4 not at issue in this case: “If the custody of a legitimate child has not been entrusted by the judge to any of his parents or to a third party, the child may not leave without authorization of both parents.” App. to Pet. for Cert. 61a. The travel restriction that bound Ms. Abbott in this case, however, arose “[o]nce the court decreed the obligation to allow visits” by Mr. Abbott. Although not before us, 16 ABBOTT v. ABBOTT STEVENS, J., dissenting See ante, at 6. While it is true that the meaning of Chile’s statute matters to our determining whether a parent has taken a child in “breach of rights of custody under the law of the State in which the child was habitually resident immediately before the removal or retention,” Art. 3(a), Treaty Doc., it does not and should not inform what the Convention’s definition of “rights of custody” means in the first place. The Court also reminds us that the Convention’s terms are to be broadly construed. See ante, at 15–16. To be sure, the Convention’s leading interpretive authority informs us that the Convention’s understanding of what constitutes “rights of custody” is broad and flexible. See Pérez-Vera Report ¶, 71, 84, at 446, 447, 451–452. And we are to apply its terms to “allo[w] the greatest possible number of cases to be brought into consideration.” at 446. But such breadth should not circumvent the Convention’s text in order to sweep a travel restriction under the umbrella of rights of custody. A reading as broad and flexible as the Court’s eviscer ates the distinction the Convention draws between rights of custody and rights of access. Indeed, the Court’s read ing essentially voids the Convention’s Article 21, |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | the Court’s read ing essentially voids the Convention’s Article 21, which provides a separate remedy for breaches of rights of ac cess. If a violation of this type of provision were not a breach of the rights of access, I find it quite difficult to imagine what the Convention’s drafters had in mind when —————— there may be a sound basis for distinguishing the legal effect and significance of a travel restriction in effect prior to an award of custody to either or both parents, from one that occurs ancillary to the award of visitation rights to a parent who has no custodial rights. Moreover, the U. S. Department of State, at the time the Convention was ratified, believed that the Convention would require return in these circum stances: “Children who are wrongfully removed or retained prior to the entry of a custody order are protected by the Convention. There need not be a custody order in effect in order to invoke the Convention’s return provisions.” Convention Analysis 10505. Cite as: 560 U. S. (2010) 17 STEVENS, J., dissenting they created a second, lesser remedy for the breach of access rights. The drafters obviously contemplated that some removals might be in violation of the law of the child’s home nation, but not “wrongful” within the mean ing of the Convention—i.e., not in breach of “rights of custody.” This is precisely why Article 5 carefully deline ates between the two types of parental rights in the first place. And this is precisely why Article 21 exists. Nevertheless, the Court has now decreed that whenever an award of visitation rights triggers a statutory default travel restriction provision, or is accompanied by a travel restriction by judicial order, a parent possess a right of custody within the meaning of the Convention. Such a bright-line rule surely will not serve the best interests of the child in many cases. See Pérez-Vera Report ¶25, at 432. It will also have surprising results. In Chile, for example, as a result of this Court’s decision, all parents— so long as they have the barest of visitation rights—now also have joint custody within the meaning of the Conven tion and the right to utilize the return remedy.10 It bears emphasis that such a result—treating the type —————— 10 In 2003, the latest year for which statistics appear available, Chile’s Central Authority, which is the entity responsible for adminis tering its obligations under the Hague Convention, made five outgoing “access applications” under Article 21. Hague Conference on Private International Law, International Child Abduction, N. Lowe, A Statisti cal Analysis |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | Law, International Child Abduction, N. Lowe, A Statisti cal Analysis of Applications Made in 2003 Under the [180 Hague Convention] on the Civil Aspects of International Child Abduction, Part II–National Reports, p. 125 (Prelim. Doc. No. 3, 2006–2007) (hereinaf ter Lowe Analysis). Were the Court correct—and were the view the Court ascribes to Chile’s interpretation of its own law also correct, see ante, at 6–7—all of Chile’s outgoing applications under the Convention almost certainly should have been “return applications” because any person with rights of access under Chilean law, also has a right of custody by virtue of the statutory ne exeat provision. It is plain that even Chilean officials have not thought correct the Court’s interpreta tion of the intersection of the travel restriction in Article 4 of its Minors Law 16,618 and the Convention. 18 ABBOTT v. ABBOTT STEVENS, J., dissenting of travel restriction at issue in this case as part of “rights of custody”—will undermine the Convention’s careful balance between the “rights of custody and the “rights of access”: “Although the problems which can arise from a breach of access rights, especially where the child is taken abroad by its custodian, were raised during the Four teenth Session, the majority view was that such situa tions could not be put in the same category as the wrongful removals which it is sought to prevent. “This example, and others like it where breach of ac cess rights profoundly upsets the equilibrium estab lished by a judicial or administrative decision, cer tainly demonstrate that decisions concerning the custody of children should al be open to review. This problem however defied all efforts the Hague Conference to coordinate views thereon. A question able result would have been attained had the applica tion of the Convention, by granting the same degree of protection to custody and access rights, led ultimately to the substitution of the holders of one type of right by those who held the other.” at 445 (emphasis added; footnote omitted). It seems the very same authority on which the Court relies to support its broad, flexible reading of the Conven tion’s terms also tell us that the drafters expressly rejected the very outcome the Court reaches today. Far from “ren der[ing] the Convention meaningless,” ante, at a faithful reading of the Convention’s text avoids the very “question able result” its drafters foresaw and attempted to preclude were they to extend “the same degree of protection” “to custody and access rights.” Pérez-Vera Report at 445. IV Hence, in my view, the Convention’s language is plain Cite as: 560 U. |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | view, the Convention’s language is plain Cite as: 560 U. S. (2010) 1 STEVENS, J., dissenting and that language precludes the result the Court reaches. See Shoji America, Inc. v. Avagliano, 457 U.S. 176, 180 (182). In these circumstances, the “clear import of treaty language controls” the decision. To support its reading of the text, however, the Court turns to author ity we utilize to aid us in interpreting ambiguous treaty text: the position of the Executive Branch and authorities from foreign jurisdictions that have confronted the ques tion before the Court. Ante, –14. Were I to agree with the Court that it is necessary turn to these sources to resolve the question before us, I would not afford them the weight the Court does in this case. Views of the Department of State. Without discussing precisely why, we have afforded “great weight” to “the meaning given [treaties] by the departments of govern ment particularly charged with their negotiation and enforcement.” (161); see also –185; v. Laubenheimer, We have awarded “great weight” to the views of a particular gov ernment department even when the views expressed by the department are newly memorialized, see n. 10, and even when the views appear contrary to those expressed by the department at the time of the treaty’s signing and negotiation, In this case, it appears that both are true: The Department of State’s position, which supports the Court’s conclusion, is newly memorialized, see Brief for United States as Amicus Cu riae 21, n. 13, and is possibly inconsistent with the De partment’s earlier position, see Convention Analysis —————— See Art. 32, Vienna Convention on the Law of Treaties, May 23, 16, 55 U. N. T. S. 331, 340 (“Recourse may be had to supplemen tary means of interpretation when the interpretation (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable”). 20 ABBOTT v. ABBOTT STEVENS, J., dissenting 10504–10505.12 Putting aside any concerns arising from the fact that the Department’s views are newly memorialized and chang ing, I would not in this case abdicate our responsibility to interpret the Convention’s language. This does not seem to be a matter in which deference to the Executive on matters of foreign policy would avoid international con flict, cf. Itel Containers Int’l Corp. v. Huddleston, 507 U.S. 60, 76 (13) (acknowledging that “the nuances of foreign policy ‘are much more the province of the Executive Branch and Congress than of this Court’ ” (quoting Con tainer Corp. of America v. Franchise Tax Bd., 463 U.S. 15, 16 |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | of America v. Franchise Tax Bd., 463 U.S. 15, 16 (183))); the State Department has made no such argument. Nor is this a case in which the Executive’s understanding of the treaty’s drafting history is particu —————— 12 The State Department explained to the Senate at the time it sought ratification of the Convention that the “fundamental purpose of the Hague Convention” was “to protect children from wrongful interna tional removals or retentions by persons bent on obtaining their physi cal and/or legal custody.” Convention Analysis 10504. I find it quite unlikely, in light of its framing of the “fundamental purpose” of the Convention, that the State Department would have agreed at the time that a removal was “wrongful” within the meaning of the Convention when a parent with physical custody of a child took that child to an other country, even when that removal was in violation of a restriction on the custodial parent’s travel rights. See also Brief for Eleven Law Professors as Amici Curiae 4–5, n. 7. Even more telling, however, is the fact that, in a response to a questionnaire used by the Convention’s drafters in preparing the treaty, the United States characterized a ne exeat right as one with “the purpose of preserving the jurisdiction of the state in the custody matter and of safeguarding the visitation rights of the other parent.” 180 Conférence de La Haye de droit interna tional privé, Enlèvement d’enfants, Replies of the Governments to the Questionnaire, in 3 Actes et Documents de la Quatorzième session, pp. 85, 88 (182). Such a description is inconsistent with the Department’s current position that a ne exeat clause is a freestanding right of custody within the meaning of the Convention. See Brief for United States as Amicus Curiae 7. Cite as: 560 U. S. (2010) 21 STEVENS, J., dissenting larly rich or illuminating.13 See 20 U.S., at – 25 (observing that “diplomatic history”—“negotiations and diplomatic correspondence of the contracting parties relating to the subject-matter”—is entitled to weight). Finally, and significantly, the State Department, as the Central Authority for administering the Convention in the United States, has failed to disclose to the Court whether it has facilitated the return of children to America when the shoe is on the other foot.14 See Brief for United States as Amicus Curiae 4, n. 3 (describing responsibilities of the Central Authority). Thus, we have no informed basis to assess the Executive’s postratification conduct, or the conduct of other signatories, to aid us in understanding the accepted meaning of potentially ambiguous terms. See 227–228 (16) (considering “postratification conduct of |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | potentially ambiguous terms. See 227–228 (16) (considering “postratification conduct of the con tracting parties”); (113) (affording “much weight” to the fact that the “United States has al construed its obligation” under a treaty in a particular way and had acted in accord). Instead, the Department offers us little more than its —————— 13 This only underscores what seems quite clear: Whatever contempo rary international consensus the Court claims has now emerged, “that view was not generally formulated when the Convention was drafted in 180.” Ante, at 14. I understand the Court’s reference to contemporary consensus to depend on the views of contemporary scholars and indi vidual signatory states developed postratification, including the views of the Special Commission, a voluntary post hac collective body with no treaty-making authority, see Even assuming that the Court is correct that consensus has emerged after the Convention was written and ratified that ne exeat rights should be “rights of custody,” in my view this provides no support at all for the position that the Conven tion’s drafters had these types of rights in mind and intended for the Convention to treat them as rights of custody. To the contrary, I think it tends to prove the opposite point. 14 This is somewhat surprising given that in 1 the Department made 212 outgoing applications for return of children to the United States and made 85 such requests in 2003. Lowe Analysis 47. 22 ABBOTT v. ABBOTT STEVENS, J., dissenting own reading of the treaty’s text. Its view is informed by no unique vantage it has, whether as the entity responsible for enforcing the Convention in this country or as a par ticipating drafter. The Court’s perfunctory, one-paragraph treatment of the Department’s judgment of this matter only underscores this point. Ante, –12. I see no reason, therefore, to replace our understanding of the Convention’s text with that of the Executive Branch. Views of foreign jurisdictions. The Court believes that the views of our sister signatories to the Convention de serve special attention when, in a case like this, “Congress has directed that ‘uniform international interpretation’ of the Convention is part of the Convention’s framework.” Ante, at 12 (quoting 42 U.S. C. §601(b)(3)(B)). This may well be correct, but we should not substitute the judgment of other courts for our own. See Olympic Air And the handful of foreign decisions the Court cites, see ante, at 12–13, provide insufficient reason to depart from my understanding of the meaning of the Convention, an un derstanding shared by many U. S. Courts of Appeals. See, e.g., ; Gonzalez v. Gutierrez, |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | S. Courts of Appeals. See, e.g., ; Gonzalez v. Gutierrez, 3 F.3d 42, (parent’s right to “refuse permission for his children to leave Mexico” “hardly amounts to a right of custody, in the plainest sense of the term”); (“If we were to enforce rights held pursuant to a ne exeat clause by the remedy of mandatory return, the Convention would be come unworkable. It does not contemplate return of a child to a parent whose sole right—to visit or veto—impose no duty to give care”); (CA4 2003). Indeed, the interest in having our courts correctly interpret the Convention may outweigh the interest in having the ne exeat clause issue resolved in the same way that it is resolved in other countries. Cf. Breard v. Greene, (“[W]hile Cite as: 560 U. S. (2010) 23 STEVENS, J., dissenting we should give respectful consideration to the interpreta tion of an international treaty rendered by an interna tional court with jurisdiction to interpret such, it has been recognized in international law that, absent a clear and express statement to the contrary, the procedural rules of the forum State govern the implementation of the treaty in that State”). I also fail to see the international consensus—let alone the “broad acceptance,” ante, at 12—that the Court finds among those varied decisions from foreign courts that have considered the effect of a similar travel restriction within the Convention’s remedial scheme. The various decisions of the international courts are, at best, in equi poise. Indeed, the Court recognizes that courts in Canada and France have concluded that travel restrictions are not “rights of custody” within the meaning of the Convention. Ante, at 13–14. And those decisions supportive of the Court’s position do not offer nearly as much support as first meets the eye. For example, the English High Court of Justice decision on which the Court primarily relies, ante, at 12, appears to have decided a different issue. True, that court considered the effect of a similar travel restriction on both parents following the award of “custody” to the child’s mother. C. v. C., [18] 1 W. L. R. 654, 656 (C. A.). But the family court had also decreed, at the time it awarded “custody” to the mother, that both parents would remain “ ‘joint guardi ans’ ” of the child. Moreover, in the time between the mother’s removal of the child and the father’s petition ing for his return, the father had returned to the Family Court in Sydney, obtained an order for the child’s return, and received immediate custody of the child. Com parable facts |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | and received immediate custody of the child. Com parable facts do not exist in this case. Cf. Olympic Air 540 U.S., at (noting that “we are hesitant” to follow decisions of sister signatory courts when “there are substantial factual distinctions between” the cases). 24 ABBOTT v. ABBOTT STEVENS, J., dissenting Similar factual distinctions—involving, typically, joint guardianship rights or shared decisionmaking rights—are present in other of the foreign cases relied upon by the Court and Mr. Abbott.15 Those foreign courts that have reached a position con sistent with my own, the Court is right to point out, have also done so in slightly different factual scenarios. Ante, at 13–14. The Supreme Court of Canada, for example, first encountered a ne exeat provision as part of an interim custody order in Thomson v. Thomson, [14] 3 S. C. R. 551, 58–50, Dall. L. R. (4th) 253, 281. Although the Canadian high court concluded that a removal in breach of the temporary travel restriction was wrongful, it empha sized the interim nature of the provision, see n. and explained that the case would be different with a permanent order. See Thomson, 3 S. C. R., at 58, Dall. L. R., at 281 (“Such a [permanent] clause raises quite different issues. It is usually intended to ensure perma nent access to the non-custodial parent. The right of access is, of course, important but, as we have seen, it was not intended to be given the same level of protection by —————— 15 See Bundesverfassungsgericht [BVerfG] [Fed. Constitutional Ct. of Germany] July 18, 17, 2 BvR 26/7, ¶¶13–15 (considering ne exeat provision with respect to a noncustodial parent who also had joint authority to decide major life decisions for the child); M. S. H. v. L. H., [2000] 3 I. R. 30, 401 (Sup. Ct. of Ireland) (evaluating effect of ne exeat provision when parents had shared “rights of parental responsibility,” including “ ‘all the rights, duties, powers, responsibilities and authority which, by law, a parent of a child has in relation to a child and his property’ ”); Sonderup v. Tondelli, 2001(1) SA 71, 77–78 (Consti tutional Ct. of South Africa (2000)) (evaluating removal where parents were both granted “joint guardianship” of the minor); CA 5271/2 Foxman v. Foxman, [12] (Sup. Ct. of Israel) (examining whether removal was wrongful in the context of a custody and visita tion agreement that provided broadly that “each parent needs the consent of the other to every significant change in the children’s residency”). Cite as: 560 U. S. (2010) 25 STEVENS, J., dissenting the Convention as custody”).16 The |
Justice Stevens | 2,010 | 16 | dissenting | Abbott v. Abbott | https://www.courtlistener.com/opinion/146554/abbott-v-abbott/ | (2010) 25 STEVENS, J., dissenting the Convention as custody”).16 The Canadian Supreme Court later affirmed this important distinction in D. S. v. V. W., [16] 2 S. C. R. 108, 13, 134 Dall. L. R. (4th) 481, 503 (rejecting argument that “any removal of a child without the consent of the parent having access rights” should authorize return remedy because such a reading of the Convention would “indirectly afford the same protec tion to access rights as is afforded to custody rights”). In sum, the decisions relied upon by the Court and Mr. Abbott from our sister signatories do not convince me that we should refrain from a straightforward textual analysis in this case in order to make way for a “uniform interna tional interpretation” of the Convention. 42 U.S. C. §601(b)(3)(B). There is no present uniformity suffi ciently substantial to justify departing from our independ ent judgment on the Convention’s text and purpose and the drafters’ intent. V At bottom, the Convention aims to protect the best interests of the child. Pérez-Vera Report ¶25, at 432. Recognizing that not all removals in violation of the laws of the country of habitual residence are contrary to a child’s best interests, the Convention provides a powerful but limited return remedy. The judgment of the Conven tion’s drafters was that breaches of access rights, while significant (and thus expressly protected by Article 21), are secondary to protecting the child’s interest in main taining an existing custodial relationship. —————— 16 The Canadian high court also observed that construing a perma nent travel restriction on one parent as creating a right of custody in the other has “serious implications of the mobility rights of the custo dian.” Thomson, 3 S. C. R., at 50, Dall. L. R., at 281. A French Court of Appeals made a similar observation in Attorney for the Repub lic at Périgueux v. Mrs. S, T. G. I. Périgueux, Mar. 17, 12, Rev. cr. dr. internat. Privé 82(4) Oct.–Déc. 13, 650, 651–653. 26 ABBOTT v. ABBOTT STEVENS, J., dissenting Today, the Court has upended the considered judgment of the Convention’s drafters in favor of protecting the rights of noncustodial parents. In my view, the bright-line rule the Court adopts today is particularly unwise in the context of a treaty intended to govern disputes affecting the welfare of children. I, therefore, respectfully dissent |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | Franchise agreements between manufacturers and retailers frequently include provisions barring the retailers from selling franchised products from locations other than those specified in the agreements This case presents important questions concerning the appropriate antitrust analysis of these restrictions under 1 of the Sherman Act, as amended, 1 US C 1, and the Court's decision in United *38 I Respondent GTE Sylvania Inc (Sylvania) manufactures and sells television sets through its Home Entertainment Products Division Prior to 1962, like most other television manufacturers, Sylvania sold its televisions to independent or company-owned distributors who in turn resold to a large and diverse group of retailers Prompted by a decline in its market share to a relatively insignificant 1% to 2% of national television sales,[1] Sylvania conducted an intensive reassessment of its marketing strategy, and in 1962 adopted the franchise plan challenged here Sylvania phased out its wholesale distributors and began to sell its televisions directly to a smaller and more select group of franchised retailers An acknowledged purpose of the change was to decrease the number of competing Sylvania retailers in the hope of attracting the more aggressive and competent retailers thought necessary to the improvement of the company's market position[2] To this end, Sylvania limited the number of franchises granted for any given area and required each franchisee to sell his Sylvania products only from the location or locations at which he was franchised[3] A franchise did not constitute an exclusive territory, and Sylvania retained sole discretion to increase the number of retailers in an area in light of the success or failure of existing retailers in developing their market The revised marketing strategy appears to have been successful during the period at issue here, for by Sylvania's share of national television sales had increased to approximately %, and the *39 company ranked as the Nation's eighth largest manufacturer of color television sets This suit is the result of the rupture of a franchiser-franchisee relationship that had previously prospered under the revised Sylvania plan Dissatisfied with its sales in the city of San Francisco,[4] Sylvania decided in the spring of to franchise Young Brothers, an established San Francisco retailer of televisions, as an additional San Francisco retailer The proposed location of the new franchise was approximately a mile from a retail outlet operated by petitioner Continental T V, Inc (Continental), one of the most successful Sylvania franchisees[] Continental protested that the location of the new franchise violated Sylvania's marketing policy, but Sylvania persisted in its plans Continental then canceled a large Sylvania order and placed a large order with Phillips, one |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | Sylvania order and placed a large order with Phillips, one of Sylvania's competitors During this same period, Continental expressed a desire to open a store in Sacramento, Cal, a desire Sylvania attributed at least in part to Continental's displeasure over the Young Brothers decision Sylvania believed that the Sacramento market was adequately served by the existing Sylvania retailers and denied the request[6] In the face of this denial, Continental advised Sylvania in early September that it was in the process of moving Sylvania merchandise from its San Jose, Cal, warehouse to a new retail location that it had leased in Sacramento Two weeks later, allegedly for unrelated reasons, Sylvania's credit department reduced Continental's *40 credit line from $300,000 to $0,000[7] In response to the reduction in credit and the generally deteriorating relations with Sylvania, Continental withheld all payments owed to John P Maguire & Inc (Maguire), the finance company that handled the credit arrangements between Sylvania and its retailers Shortly thereafter, Sylvania terminated Continental's franchises, and Maguire filed this diversity action in the United District Court for the Northern District of California seeking recovery of money owed and of secured merchandise held by Continental The antitrust issues before us originated in cross-claims brought by Continental against Sylvania and Maguire Most important for our purposes was the claim that Sylvania had violated 1 of the Sherman Act by entering into and enforcing franchise agreements that prohibited the sale of Sylvania products other than from specified locations[8] At the close of evidence in the jury trial of Continental's claims, Sylvania requested the District Court to instruct the jury that its location restriction was illegal only if it unreasonably restrained or suppressed competition App -6, 9-1 Relying on this Court's decision in United the District Court rejected the proffered instruction in favor of the following one: "Therefore, if you find by a preponderance of the evidence that Sylvania entered into a contract, combination or conspiracy with one or more of its dealers pursuant to which Sylvania exercised dominion or control over the *41 products sold to the dealer, after having parted with title and risk to the products, you must find any effort thereafter to restrict outlets or store locations from which its dealers resold the merchandise which they had purchased from Sylvania to be a violation of Section 1 of the Sherman Act, regardless of the reasonableness of the location restrictions" App 492 In answers to special interrogatories, the jury found that Sylvania had engaged "in a contract, combination or conspiracy in restraint of trade in violation of the antitrust laws with |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | restraint of trade in violation of the antitrust laws with respect to location restrictions alone," and assessed Continental's damages at $91,0, which was trebled pursuant to 1 US C 1 to produce an award of $1,774,1 App 498, 01[9] On appeal, the Court of Appeals for the Ninth Circuit, sitting en banc, reversed by a divided vote The court acknowledged that there is language in Schwinn that could be read to support the District Court's instruction but concluded that Schwinn was distinguishable on several grounds Contrasting the nature of the restrictions, their competitive impact, and the market shares of the franchisers in the two cases, the court concluded that Sylvania's location restriction had less potential for competitive harm than the restrictions invalidated in Schwinn and thus should be judged under the "rule of reason" rather than the per se rule stated in Schwinn The court found support for its *42 position in the policies of the Sherman Act and in the decisions of other federal courts involving nonprice vertical restrictions[10] We granted Continental's petition for certiorari to resolve this important question of antitrust law [11] II A We turn first to Continental's contention that Sylvania's restriction on retail locations is a per se violation of 1 of the Sherman Act as interpreted in Schwinn The restrictions at issue in Schwinn were part of a three-tier distribution system comprising, in addition to Arnold, Schwinn & (Schwinn), 22 intermediate distributors and a network of franchised retailers Each distributor had a defined geographic area in which it had the exclusive right to supply franchised retailers Sales to the public were made only through franchised retailers, who were authorized to sell Schwinn bicycles only from specified locations In support of this limitation, Schwinn prohibited both distributors and retailers from selling Schwinn bicycles to nonfranchised retailers At the retail level, therefore, Schwinn was able to control the number of retailers of *43 its bicycles in any given area according to its view of the needs of that market As of 1967 approximately 7% of Schwinn's total sales were made under the "Schwinn Plan" Acting essentially as a manufacturer's representative or sales agent, a distributor participating in this plan forwarded orders from retailers to the factory Schwinn then shipped the ordered bicycles directly to the retailer, billed the retailer, bore the credit risk, and paid the distributor a commission on the sale Under the Schwinn Plan, the distributor never had title to or possession of the bicycles The remainder of the bicycles moved to the retailers through the hands of the distributors For the most part, |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | through the hands of the distributors For the most part, the distributors functioned as traditional wholesalers with respect to these sales, stocking an inventory of bicycles owned by them to supply retailers with emergency and "fill-in" requirements A smaller part of the bicycles that were physically distributed by the distributors were covered by consignment and agency arrangements that had been developed to deal with particular problems of certain distributors Distributors acquired title only to those bicycles that they purchased as wholesalers; retailers, of course, acquired title to all of the bicycles ordered by them In the District Court, the United charged a continuing conspiracy by Schwinn and other alleged co-conspirators to fix prices, allocate exclusive territories to distributors, and confine Schwinn bicycles to franchised retailers Relying on United v Bausch & Lomb the Government argued that the nonprice restrictions were per se illegal as part of a scheme for fixing the retail prices of Schwinn bicycles The District Court rejected the price-fixing allegation because of a failure of proof and held that Schwinn's limitation of retail bicycle sales to franchised retailers was permissible under 1 The court found a 1 violation, however, in "a conspiracy to divide certain borderline or overlapping counties in the territories served by four Midwestern *44 cycle distributors" The court described the violation as a "division of territory by agreement between the distributors horizontal in nature," and held that Schwinn's participation did not change that basic characteristic The District Court limited its injunction to apply only to the territorial restrictions on the resale of bicycles purchased by the distributors in their roles as wholesalers Schwinn came to this Court on appeal by the United from the District Court's decision Abandoning its per se theories, the Government argued that Schwinn's prohibition against distributors' and retailers' selling Schwinn bicycles to nonfranchised retailers was unreasonable under 1 and that the District Court's injunction against exclusive distributor territories should extend to all such restrictions regardless of the form of the transaction The Government did not challenge the District Court's decision on price fixing, and Schwinn did not challenge the decision on exclusive distributor territories The Court acknowledged the Government's abandonment of its per se theories and stated that the resolution of the case would require an examination of "the specifics of the challenged practices and their impact upon the marketplace in order to make a judgment as to whether the restraint is or is not `reasonable' in the special sense in which 1 of the Sherman Act must be read for purposes of this type of inquiry" Despite this description |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | for purposes of this type of inquiry" Despite this description of its task, the Court proceeded to articulate the following "bright line" per se rule of illegality for vertical restrictions: "Under the Sherman Act, it is unreasonable without more for a manufacturer to seek to restrict and confine areas or persons with whom an article may be traded after the manufacturer has parted with dominion over it" But the Court expressly stated that the rule of reason governs when "the manufacturer retains title, dominion, and risk with *4 respect to the product and the position and function of the dealer in question are, in fact, indistinguishable from those of an agent or salesman of the manufacturer" Application of these principles to the facts of Schwinn produced sharply contrasting results depending upon the role played by the distributor in the distribution system With respect to that portion of Schwinn's sales for which the distributors acted as ordinary wholesalers, buying and reselling Schwinn bicycles, the Court held that the territorial and customer restrictions challenged by the Government were per se illegal But, with respect to that larger portion of Schwinn's sales in which the distributors functioned under the Schwinn Plan and under the less common consignment and agency arrangements, the Court held that the same restrictions should be judged under the rule of reason The only retail restriction challenged by the Government prevented franchised retailers from supplying nonfranchised retailers The Court apparently perceived no material distinction between the restrictions on distributors and retailers, for it held: "The principle is, of course, equally applicable to sales to retailers, and the decree should similarly enjoin the making of any sales to retailers upon any condition, agreement or understanding limiting the retailer's freedom as to where and to whom it will resell the products" Applying the rule of reason to the restrictions that were not imposed in conjunction with the sale of bicycles, the Court had little difficulty finding them all reasonable in light of the competitive situation in "the product market as a whole" B In the present case, it is undisputed that title to the television sets passed from Sylvania to Continental Thus, the Schwinn per se rule applies unless Sylvania's restriction on *46 locations falls outside Schwinn's prohibition against a manufacturer's attempting to restrict a "retailer's freedom as to where and to whom it will resell the products" As the Court of Appeals conceded, the language of Schwinn is clearly broad enough to apply to the present case Unlike the Court of Appeals, however, we are unable to find a principled basis |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | Appeals, however, we are unable to find a principled basis for distinguishing Schwinn from the case now before us Both Schwinn and Sylvania sought to reduce but not to eliminate competition among their respective retailers through the adoption of a franchise system Although it was not one of the issues addressed by the District Court or presented on appeal by the Government, the Schwinn franchise plan included a location restriction similar to the one challenged here These restrictions allowed Schwinn and Sylvania to regulate the amount of competition among their retailers by preventing a franchisee from selling franchised products from outlets other than the one covered by the franchise agreement To exactly the same end, the Schwinn franchise plan included a companion restriction, apparently not found in the Sylvania plan, that prohibited franchised retailers from selling Schwinn products to nonfranchised retailers In Schwinn the Court expressly held that this restriction was impermissible under the broad principle stated there In intent and competitive impact, the retail-customer restriction in Schwinn is indistinguishable from the location restriction in the present case In both cases the restrictions limited the freedom of the retailer to dispose of the purchased products as he desired The fact that one restriction was addressed to territory and the other to customers is irrelevant to functional antitrust analysis and, indeed, to the language and broad thrust of the opinion in Schwinn[12] As Mr Chief Justice Hughes stated in *47 Appalachian Coals, : "Realities must dominate the judgment The Anti-Trust Act aims at substance" III Sylvania argues that if Schwinn cannot be distinguished, it should be reconsidered Although Schwinn is supported by the principle of stare decisis, Illinois Brick v Illinois, we are convinced that the need for clarification of the law in this area justifies reconsideration Schwinn itself was an abrupt and largely unexplained departure from White Motor v United where only four years earlier the Court had refused to endorse a per se rule for vertical restrictions Since its announcement, Schwinn has been the subject of continuing controversy and confusion, both in the scholarly journals and in the federal courts The great weight of scholarly opinion *48 has been critical of the decision,[13] and a number of the federal courts confronted with analogous vertical restrictions have sought to limit its reach[14] In our view, the experience of the *49 past 10 years should be brought to bear on this subject of considerable commercial importance The traditional framework of analysis under 1 of the Sherman Act is familiar and does not require extended discussion Section 1 prohibits "[e]very contract, combination |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | not require extended discussion Section 1 prohibits "[e]very contract, combination or conspiracy, in restraint of trade or commerce" Since the early years of this century a judicial gloss on this statutory language has established the "rule of reason" as the prevailing standard of analysis Standard Oil v United 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[1]Per se rules of illegality *0 are appropriate only when they relate to conduct that is manifestly anticompetitive As the Court explained in Northern Pac R v United "there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use"[16] In essence, the issue before us is whether Schwinn's per se rule can be justified under the demanding standards of Northern Pac R The Court's refusal to endorse a per se rule in White Motor was based on its uncertainty as to whether vertical restrictions satisfied those standards Addressing this question for the first time, the Court stated: "We need to know more than we do about the actual impact of these arrangements on competition to decide whether they have such a `pernicious effect on competition and lack any redeeming virtue' (Northern Pac R v United p ) and therefore should *1 be classified as per se violations of the Sherman Act" Only four years later the Court in Schwinn announced its sweeping per se rule without even a reference to Northern Pac R and with no explanation of its sudden change in position[17] We turn now to consider Schwinn in light of Northern Pac R The market impact of vertical restrictions[18] is complex because of their potential for a simultaneous reduction of intrabrand competition and stimulation of interbrand competition[19]*2 Significantly, the Court in Schwinn did not distinguish among the challenged restrictions on the basis of their individual potential for intrabrand harm or interbrand benefit Restrictions that completely eliminated intrabrand competition among Schwinn distributors were analyzed no differently from those that merely moderated intrabrand competition among retailers The pivotal factor was the passage of title: All restrictions were held to be per se illegal where title had passed, and all were evaluated and sustained under the rule of reason where it had not The location restriction at issue here would be subject to the same pattern of analysis under |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | would be subject to the same pattern of analysis under Schwinn It appears that this distinction between sale and nonsale transactions resulted from the Court's effort to accommodate the perceived intrabrand harm and interbrand benefit of vertical restrictions The per se rule for sale transactions reflected the view that vertical restrictions are "so obviously destructive" of intrabrand competition[20] that their use would "open the door to exclusivity of outlets and limitation of territory *3 further than prudence permits" 388 US, -380[21] Conversely, the continued adherence to the traditional rule of reason for nonsale transactions reflected the view that the restrictions have too great a potential for the promotion of interbrand competition to justify complete prohibition[22]*4 The Court's opinion provides no analytical support for these contrasting positions Nor is there even an assertion in the opinion that the competitive impact of vertical restrictions is significantly affected by the form of the transaction Non-sale transactions appear to be excluded from the per se rule, not because of a greater danger of intrabrand harm or a greater promise of interbrand benefit, but rather because of the Court's unexplained belief that a complete per se prohibition would be too "inflexibl[e]" Vertical restrictions reduce intrabrand competition by limiting the number of sellers of a particular product competing for the business of a given group of buyers Location restrictions have this effect because of practical constraints on the effective marketing area of retail outlets Although intrabrand competition may be reduced, the ability of retailers to exploit the resulting market may be limited both by the ability of consumers to travel to other franchised locations and, perhaps more importantly, to purchase the competing products of other manufacturers None of these key variables, however, is affected by the form of the transaction by which a manufacturer conveys his products to the retailers Vertical restrictions promote interbrand competition by allowing the manufacturer to achieve certain efficiencies in the distribution of his products These "redeeming virtues" are implicit in every decision sustaining vertical restrictions under the rule of reason Economists have identified a number * of ways in which manufacturers can use such restrictions to compete more effectively against other manufacturers See, e g, Preston, Restrictive Distribution Arrangements: Economic Analysis and Public Policy Standards, 30 Law & Contemp Prob 06, 11 [23] For example, new 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 Established manufacturers can use |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | of products unknown to the consumer Established manufacturers can use them to induce retailers to engage in promotional activities or to provide service and repair facilities necessary to the efficient marketing of their products Service and repair are vital for many products, such as automobiles and major household appliances The availability and quality of such services affect a manufacturer's goodwill and the competitiveness of his product Because of market imperfections such as the so-called "free rider" effect, these services might not be provided by retailers in a purely competitive situation, despite the fact that each retailer's benefit would be greater if all provided the services than if none did Posner, at 28; cf P Samuelson, Economics 06-07 *6 Economists also have argued that manufacturers have an economic interest in maintaining as much intrabrand competition as is consistent with the efficient distribution of their products Bork, The Rule of Reason and the Per Se Concept: Price Fixing and Market Division [II], 7 Yale L J 373, 403 (1966); Posner, at 283, 287-288[24] Although the view that the manufacturer's interest necessarily corresponds with that of the public is not universally shared, even the leading critic of vertical restrictions concedes that Schwinn's distinction between sale and nonsale transactions is essentially unrelated to any relevant economic impact Comanor, Vertical Territorial and Customer Restrictions: White Motor and Its Aftermath, [2] Indeed, to the extent that the form of the transaction is related to interbrand benefits, the Court's distinction is inconsistent with its articulated concern for the ability of smaller firms to compete effectively with larger ones Capital requirements and administrative expenses may prevent smaller firms from using the exception for nonsale transactions See, e g, at 38; Phillips, Schwinn Rules and the "New Economics" of Vertical *7 Relation, 44 Antitrust L J 73, 76 (197); at 610[26] We conclude that the distinction drawn in Schwinn between sale and nonsale transactions is not sufficient to justify the application of a per se rule in one situation and a rule of reason in the other The question remains whether the per se rule stated in Schwinn should be expanded to include nonsale transactions or abandoned in favor of a return to the rule of reason We have found no persuasive support for expanding the per se rule As noted above, the Schwinn Court recognized the undesirability of "prohibit[ing] all vertical restrictions of territory and all franchising " 388 US, -380[27] And even Continental does not urge us to hold that all such restrictions are per se illegal We revert to the standard articulated in Northern Pac R |
Justice Powell | 1,977 | 17 | majority | Continental TV, Inc. v. GTE Sylvania Inc. | https://www.courtlistener.com/opinion/109716/continental-tv-inc-v-gte-sylvania-inc/ | We revert to the standard articulated in Northern Pac R and reiterated in White Motor, for determining whether vertical restrictions must be "conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use" 36 US, at Such restrictions, in varying forms, are widely used in our free market economy As indicated above, there is substantial scholarly and judicial authority *8 supporting their economic utility There is relatively little authority to the contrary[28] Certainly, there has been no showing in this case, either generally or with respect to Sylvania's agreements, that vertical restrictions have or are likely to have a "pernicious effect on competition" or that they "lack any redeeming virtue" [29] Accordingly, we conclude that the per se rule stated in Schwinn must be overruled[30] In so holding we do not foreclose the possibility that particular applications of vertical restrictions might justify per se prohibition under Northern Pac R But we do make clear that departure from the rule-of-reason standard *9 must be based upon demonstrable economic effect rather thanas in Schwinnupon formalistic line drawing In sum, we conclude that the appropriate decision is to return to the rule of reason that governed vertical restrictions prior to Schwinn When anticompetitive effects are shown to result from particular vertical restrictions they can be adequately policed under the rule of reason, the standard traditionally applied for the majority of anticompetitive practices challenged under 1 of the Act Accordingly, the decision of the Court of Appeals is Affirmed MR JUSTICE REHNQUIST took no part in the consideration or decision of this case MR JUSTICE WHITE, concurring in the judgment |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | When the young men and women of Hazelwood East High School registered for Journalism II, they expected a civics lesson. Spectrum, the newspaper they were to publish, "was not just a class exercise in which students learned to prepare papers and hone writing skills, it was a forum established to give students an opportunity to express their views while gaining an appreciation of their rights and responsibilities under the First Amendment to the United States Constitution" "[A]t the beginning of each school year," the student journalists published a Statement of Policy tacitly approved each year by school authorities announcing their expectation that "Spectrum, as a student-press publication, accepts all rights implied by the First Amendment Only speech that `materially and substantially interferes with the requirements of appropriate discipline' can be found unacceptable and therefore prohibited." App. 26 ).[1] The school board itself affirmatively guaranteed the students of Journalism II an atmosphere conducive to fostering such an appreciation and exercising the full panoply of rights associated with a free student press. "School sponsored student publications," it vowed, "will not restrict free expression or diverse viewpoints within the rules of responsible journalism." App. 22 (Board Policy 348.51). *278 This case arose when the Hazelwood East administration breached its own promise, dashing its students' expectations. The school principal, without prior consultation or explanation, excised six articles comprising two full pages of the May 13, 1983, issue of Spectrum. He did so not because any of the articles would "materially and substantially interfere with the requirements of appropriate discipline," but simply because he considered two of the six "inappropriate, personal, sensitive, and unsuitable" for student consumption. In my view the principal broke more than just a promise. He violated the First Amendment's prohibitions against censorship of any student expression that neither disrupts classwork nor invades the rights of others, and against any censorship that is not narrowly tailored to serve its purpose. I Public education serves vital national interests in preparing the Nation's youth for life in our increasingly complex society and for the duties of citizenship in our democratic Republic. See The public school conveys to our young the information and tools required not merely to survive in, but to contribute to, civilized society. It also inculcates in tomorrow's leaders the "fundamental values necessary to the maintenance of a democratic political system" All the while, the public educator nurtures students' social and moral development by transmitting to them an official dogma of " `community values.' " Board of (citation omitted). The public educator's task is weighty and delicate indeed. |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | omitted). The public educator's task is weighty and delicate indeed. It demands particularized and supremely subjective choices among diverse curricula, moral values, and political stances to teach or inculcate in students, and among various methodologies for doing so. Accordingly, we have traditionally reserved *279 the "daily operation of school systems" to the States and their local school boards. ; see Board of at 863-. We have not, however, hesitated to intervene where their decisions run afoul of the Constitution. See e. g., ; Board of ; ; West Virginia Board of ; Free student expression undoubtedly sometimes interferes with the effectiveness of the school's pedagogical functions. Some brands of student expression do so by directly preventing the school from pursuing its pedagogical mission: The young polemic who stands on a soapbox during calculus class to deliver an eloquent political diatribe interferes with the legitimate teaching of calculus. And the student who delivers a lewd endorsement of a student-government candidate might so extremely distract an impressionable high school audience as to interfere with the orderly operation of the school. See Bethel School Dist. No. Other student speech, however, frustrates the school's legitimate pedagogical purposes merely by expressing a message that conflicts with the school's, without directly interfering with the school's expression of its message: A student who responds to a political science teacher's question with the retort, "socialism is good," subverts the school's inculcation of the message that capitalism is better. *280 Even the maverick who sits in class passively sporting a symbol of protest against a government policy, cf. or the gossip who sits in the student commons swapping stories of sexual escapade could readily muddle a clear official message condoning the government policy or condemning teenage sex. Likewise, the student newspaper that, like Spectrum, conveys a moral position at odds with the school's official stance might subvert the administration's legitimate inculcation of its own perception of community values. If mere incompatibility with the school's pedagogical message were a constitutionally sufficient justification for the suppression of student speech, school officials could censor each of the students or student organizations in the foregoing hypotheticals, converting our public schools into "enclaves of totalitarianism," that "strangle the free mind at its source," West Virginia Board of The First Amendment permits no such blanket censorship authority. While the "constitutional rights of students in public school are not automatically coextensive with the rights of adults in other settings," students in the public schools do not "shed their constitutional rights to freedom of speech or expression at the schoolhouse gate," Just as the public on the |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | at the schoolhouse gate," Just as the public on the street corner must, in the interest of fostering "enlightened opinion," tolerate speech that "tempt[s] [the listener] to throw [the speaker] off the street," public educators must accommodate some student expression even if it offends them or offers views or values that contradict those the school wishes to inculcate. In this Court struck the balance. We held that official censorship of student expression there the suspension of several students until they removed their armbands protesting the Vietnam war is unconstitutional unless the *281 speech "materially disrupts classwork or involves substantial disorder or invasion of the rights of others" 393 U.S., at School officials may not suppress "silent, passive expression of opinion, unaccompanied by any disorder or disturbance on the part of" the speaker. The "mere desire to avoid the discomfort and unpleasantness that always accompany an unpopular viewpoint," or an unsavory subject, does not justify official suppression of student speech in the high school. This Court applied the test just a Term ago in upholding an official decision to discipline a student for delivering a lewd speech in support of a student-government candidate. The Court today casts no doubt on 's vitality. Instead it erects a taxonomy of school censorship, concluding that applies to one category and not another. On the one hand is censorship "to silence a student's personal expression that happens to occur on the school premises." Ante, at 271. On the other hand is censorship of expression that arises in the context of "school-sponsored. expressive activities that students, parents, and members of the public might reasonably perceive to bear the imprimatur of the school." The Court does not, for it cannot, purport to discern from our precedents the distinction it creates. One could, I suppose, readily characterize the students' symbolic speech in as "personal expression that happens to [have] occur[red] on school premises," although did not even hint that the personal nature of the speech was of any (much less dispositive) relevance. But that same description could not by any stretch of the imagination fit 's speech. He did not just "happen" to deliver his lewd speech to an ad hoc gathering on the playground. As the second paragraph of evinces, if ever a forum for student expression was "school-sponsored," 's was: *282 " delivered a speech nominating a fellow student for student elective office. Approximately 600 high school students attended the assembly. Students were required to attend the assembly or to report to the study hall. The assembly was part of a school-sponsored educational program |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | hall. The assembly was part of a school-sponsored educational program in self-government." 478 U. S., at 6 Yet, from the first sentence of its analysis, see faithfully applied Nor has this Court ever intimated a distinction between personal and school-sponsored speech in any other context. Particularly telling is this Court's heavy reliance on in two cases of First Amendment infringement on state college campuses. See ; One involved the expulsion of a student for lewd expression in a newspaper that she sold on campus pursuant to university authorization, see and the other involved the denial of university recognition and concomitant benefits to a political student organization, see Tracking 's analysis, the Court found each act of suppression unconstitutional. In neither case did this Court suggest the distinction, which the Court today finds dispositive, between school-sponsored and incidental student expression. II Even if we were writing on a clean slate, I would reject the Court's rationale for abandoning in this case. The Court offers no more than an obscure tangle of three excuses to afford educators "greater control" over school-sponsored speech than the test would permit: the public educator's prerogative to control curriculum; the pedagogical interest in shielding the high school audience from objectionable viewpoints and sensitive topics; and the school's need *283 to dissociate itself from student expression. Ante, at 271. None of the excuses, once disentangled, supports the distinction that the Court draws. fully addresses the first concern; the second is illegitimate; and the third is readily achievable through less oppressive means. A The Court is certainly correct that the First Amendment permits educators "to assure that participants learn whatever lessons the activity is designed to teach" Ante, at 271. That is, however, the essence of the test, not an excuse to abandon it. Under school officials may censor only such student speech as would "materially disrup[t]" a legitimate curricular function. Manifestly, student speech is more likely to disrupt a curricular function when it arises in the context of a curricular activity one that "is designed to teach" something than when it arises in the context of a noncurricular activity. Thus, under the school may constitutionally punish the budding political orator if he disrupts calculus class but not if he holds his tongue for the cafeteria. See Consolidated Edison That is not because some more stringent standard applies in the curricular context. (After all, this Court applied the same standard whether the students in wore their armbands to the "classroom" or the "cafeteria.") It is because student speech in the noncurricular context is less likely to disrupt |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | speech in the noncurricular context is less likely to disrupt materially any legitimate pedagogical purpose. I fully agree with the Court that the First Amendment should afford an educator the prerogative not to sponsor the publication of a newspaper article that is "ungrammatical, poorly written, inadequately researched, biased or prejudiced," or that falls short of the "high standards for student speech that is disseminated under [the school's] auspices." Ante, at 271-272. But we need not abandon *284 to reach that conclusion; we need only apply it. The enumerated criteria reflect the skills that the curricular newspaper "is designed to teach." The educator may, under constitutionally "censor" poor grammar, writing, or research because to reward such expression would "materially disrup[t]" the newspaper's curricular purpose. The same cannot be said of official censorship designed to shield the audience or dissociate the sponsor from the expression. Censorship so motivated might well serve (although, as I demonstrate infra, at 285-289, cannot legitimately serve) some other school purpose. But it in no way furthers the curricular purposes of a student newspaper, unless one believes that the purpose of the school newspaper is to teach students that the press ought never report bad news, express unpopular views, or print a thought that might upset its sponsors. Unsurprisingly, Hazelwood East claims no such pedagogical purpose. The Court relies on bits of testimony to portray the principal's conduct as a pedagogical lesson to Journalism II students who "had not sufficiently mastered those portions of the curriculum that pertained to the treatment of controversial issues and personal attacks, the need to protect the privacy of individuals, and `the legal, moral, and ethical restrictions imposed upon journalists' " Ante, at 276. In that regard, the Court attempts to justify censorship of the article on teenage pregnancy on the basis of the principal's judgment that (1) "the [pregnant] students' anonymity was not adequately protected," despite the article's use of aliases; and (2) the judgment that "the article was not sufficiently sensitive to the privacy interests of the students' boyfriends and parents" Ante, at 274. Similarly, the Court finds in the principal's decision to censor the divorce article a journalistic lesson that the author should have given the father of one student an "opportunity to defend himself" against her charge that (in the Court's words) he "chose *285 `playing cards with the guys' over home and family" Ante, at 275. But the principal never consulted the students before censoring their work. "[T]hey learned of the deletions when the paper was released" Further, he explained the deletions only in the broadest of generalities. |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | he explained the deletions only in the broadest of generalities. In one meeting called at the behest of seven protesting Spectrum staff members (presumably a fraction of the full class), he characterized the articles as " `too sensitive' for `our immature audience of readers,' " and in a later meeting he deemed them simply "inappropriate, personal, sensitive and unsuitable for the newspaper," The Court's supposition that the principal intended (or the protesters understood) those generalities as a lesson on the nuances of journalistic responsibility is utterly incredible. If he did, a fact that neither the District Court nor the Court of Appeals found, the lesson was lost on all but the psychic Spectrum staffer. B The Court's second excuse for deviating from precedent is the school's interest in shielding an impressionable high school audience from material whose substance is "unsuitable for immature audiences." Ante, at 271 (footnote omitted). Specifically, the majority decrees that we must afford educators authority to shield high school students from exposure to "potentially sensitive topics" (like "the particulars of teenage sexual activity") or unacceptable social viewpoints (like the advocacy of "irresponsible se[x] or conduct otherwise inconsistent with `the shared values of a civilized social order' ") through school-sponsored student activities. Ante, at 272 (citation omitted). teaches us that the state educator's undeniable, and undeniably vital, mandate to inculcate moral and political values is not a general warrant to act as "thought police" stifling discussion of all but state-approved topics and advocacy of all *286 but the official position. See also ; Otherwise educators could transform students into "closed-circuit recipients of only that which the State chooses to communicate," 393 U. S., and cast a perverse and impermissible "pall of orthodoxy over the classroom," Thus, the State cannot constitutionally prohibit its high school students from recounting in the locker room "the particulars of [their] teen-age sexual activity," nor even from advocating "irresponsible se[x]" or other presumed abominations of "the shared values of a civilized social order." Even in its capacity as educator the State may not assume an Orwellian "guardianship of the public mind," The mere fact of school sponsorship does not, as the Court suggests, license such thought control in the high school, whether through school suppression of disfavored viewpoints or through official assessment of topic sensitivity.[2] The former would constitute unabashed and unconstitutional viewpoint *287 discrimination, see Board of -879 as well as an impermissible infringement of the students' " `right to receive information and ideas,' " (citations omitted); see First National[3] Just as a school board may not purge its state-funded library of all |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | school board may not purge its state-funded library of all books that " `offen[d] [its] social, political and moral tastes,' " -859 (citation omitted), school officials may not, out of like motivation, discriminatorily excise objectionable ideas from a student publication. The State's prerogative to dissolve the student newspaper entirely (or to limit its subject matter) no more entitles it to dictate which viewpoints students may express on its pages, than the State's prerogative to close down the schoolhouse entitles it to prohibit the nondisruptive expression of antiwar sentiment within its gates. Official censorship of student speech on the ground that it addresses "potentially sensitive topics" is, for related reasons, equally impermissible. I would not begrudge an educator the authority to limit the substantive scope of a school-sponsored publication to a certain, objectively definable topic, such as literary criticism, school sports, or an overview of the school year. Unlike those determinate limitations, "potential topic sensitivity" is a vaporous nonstandard like " `public welfare, peace, safety, health, decency, good order, morals or convenience,' " or " `general welfare of citizens,' " that invites manipulation to achieve ends that cannot permissibly be achieved through blatant viewpoint discrimination and chills student speech to which school officials might not *288 object. In part because of those dangers, this Court has consistently condemned any scheme allowing a state official boundless discretion in licensing speech from a particular forum. See, e. g., at -151, and n. 2; ; at -324. The case before us aptly illustrates how readily school officials (and courts) can camouflage viewpoint discrimination as the "mere" protection of students from sensitive topics. Among the grounds that the Court advances to uphold the principal's censorship of one of the articles was the potential sensitivity of "teenage sexual activity." Ante, at 272. Yet the District Court specifically found that the principal "did not, as a matter of principle, oppose discussion of said topi[c] in Spectrum." That much is also clear from the same principal's approval of the "squeal law" article on the same page, dealing forthrightly with "teenage sexuality," "the use of contraceptives by teenagers," and "teenage pregnancy," App. 4-5. If topic sensitivity were the true basis of the principal's decision, the two articles should have been equally objectionable. It is much more likely that the objectionable article was objectionable because of the viewpoint it expressed: It might have been read (as the majority apparently does) to advocate "irresponsible sex." See ante, at 272. C The sole concomitant of school sponsorship that might conceivably justify the distinction that the Court draws between sponsored and |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | justify the distinction that the Court draws between sponsored and nonsponsored student expression is the risk "that the views of the individual speaker [might be] erroneously attributed to the school." Ante, at 271. Of course, the risk of erroneous attribution inheres in any student expression, including "personal expression" that, like the armbands in "happens to occur on the school premises," ante, at 271. Nevertheless, the majority is certainly correct that indicia of school sponsorship increase the likelihood *289 of such attribution, and that state educators may therefore have a legitimate interest in dissociating themselves from student speech. But " `[e]ven though the governmental purpose be legitimate and substantial, that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved.' " ). Dissociative means short of censorship are available to the school. It could, for example, require the student activity to publish a disclaimer, such as the "Statement of Policy" that Spectrum published each school year announcing that "[a]ll editorials appearing in this newspaper reflect the opinions of the Spectrum staff, which are not necessarily shared by the administrators or faculty of Hazelwood East," App. 26; or it could simply issue its own response clarifying the official position on the matter and explaining why the student position is wrong. Yet, without so much as acknowledging the less oppressive alternatives, the Court approves of brutal censorship. III Since the censorship served no legitimate pedagogical purpose, it cannot by any stretch of the imagination have been designed to prevent "materia[l] disrup[tion of] classwork," 393 U. S., at Nor did the censorship fall within the category that described as necessary to prevent student expression from "inva[ding] the rights of others," If that term is to have any content, it must be limited to rights that are protected by law. "Any yardstick less exacting than [that] could result in school officials curtailing speech at the slightest fear of disturbance," a prospect that would be completely at odds with this Court's pronouncement that the "undifferentiated fear or apprehension of disturbance is not enough [even in the public school context] to overcome the right to freedom of expression." *290 And, as the Court of Appeals correctly reasoned, whatever journalistic impropriety these articles may have contained, they could not conceivably be tortious, much less criminal. See -1376. Finally, even if the majority were correct that the principal could constitutionally have censored the objectionable material, I would emphatically object to the brutal manner in which he did so. Where "[t]he separation of legitimate from illegitimate speech calls for more |
Justice Brennan | 1,988 | 13 | dissenting | Hazelwood School Dist. v. Kuhlmeier | https://www.courtlistener.com/opinion/111979/hazelwood-school-dist-v-kuhlmeier/ | "[t]he separation of legitimate from illegitimate speech calls for more sensitive tools" 357 U.S. ; see the principal used a paper shredder. He objected to some material in two articles, but excised six entire articles. He did not so much as inquire into obvious alternatives, such as precise deletions or additions (one of which had already been made), rearranging the layout, or delaying publication. Such unthinking contempt for individual rights is intolerable from any state official. It is particularly insidious from one to whom the public entrusts the task of inculcating in its youth an appreciation for the cherished democratic liberties that our Constitution guarantees. IV The Court opens its analysis in this case by purporting to reaffirm 's time-tested proposition that public school students "do not `shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.' " Ante, at 266 (quoting ). That is an ironic introduction to an opinion that denudes high school students of much of the First Amendment protection that itself prescribed. Instead of "teach[ing] children to respect the diversity of ideas that is fundamental to the American system," Board of and "that our Constitution is a living reality, not parchment preserved under glass," the Court today "teach[es] youth to discount important principles of our government as mere platitudes." West Virginia Board of 319 U. S., The young men and women of Hazelwood East expected a civics lesson, but not the one the Court teaches them today. I dissent. |
Justice O'Connor | 1,995 | 14 | concurring | Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. | https://www.courtlistener.com/opinion/117900/jerome-b-grubart-inc-v-great-lakes-dredge-dock-co/ | I concur in the Court's judgment and opinion. The Court properly holds that, when a court is faced with a case involving multiple tortfeasors, some of whom may not be maritime actors, if one of the putative tortfeasors was engaged in traditional maritime activity alleged to have proximately caused the incident, then the supposedly wrongful activity "involves" traditional maritime activity. The possible involvement of other, nonmaritime parties does not affect the jurisdictional inquiry as to the maritime party. Ante, at 541. I do not, however, understand the Court's opinion to suggest that, having found admiralty jurisdiction over a particular claim against a particular party, a court must then exercise admiralty jurisdiction over all the claims and parties involved in the case. Rather, the court should engage in the usual supplemental jurisdiction and impleader inquiries. See 28 U.S. C. 17 (1988 ed., Supp. V); Fed. Rule Civ. Proc. 14; see also ante, at 531. I find nothing in the Court's opinion to the contrary. *549 Justice Thomas, with whom Justice Scalia joins, concurring in the judgment. I agree with the majority's conclusion that 28 U.S. C. 1333(1) grants the District Court jurisdiction over the great Chicago flood of 1992. But I write separately because I cannot agree with the test the Court applies to determine the boundaries of admiralty and maritime jurisdiction. Instead of continuing our unquestioning allegiance to the multifactor approach of I would restore the jurisdictional inquiry to the simple question whether the tort occurred on a vessel on the navigable waters of the United States. If so, then admiralty jurisdiction exists. This clear, bright-line rule, which the Court applied until recently, ensures that judges and litigants will not waste their resources in determining the extent of federal subject-matter jurisdiction. I This action requires the Court to redefine once again the line between federal admiralty jurisdiction and state power due to an ambiguous balancing test. The fact that we have had to revisit this question for the third time in a little over 10 years indicates the defects of the Court's current approach. The faults of balancing tests are clearest, and perhaps most destructive, in the area of jurisdiction. Vague and obscure rules may permit judicial power to reach beyond its constitutional and statutory limits, or they may discourage judges from hearing disputes properly before them. Such rules waste judges' and litigants' resources better spent on the merits, as this action itself demonstrates. It is especially unfortunate that this has occurred in admiralty, an area that once provided a jurisdictional rule almost as clear as the 9th and 10th |
Justice O'Connor | 1,995 | 14 | concurring | Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. | https://www.courtlistener.com/opinion/117900/jerome-b-grubart-inc-v-great-lakes-dredge-dock-co/ | jurisdictional rule almost as clear as the 9th and 10th verses of Genesis: "And God said, Let the waters under the heaven be gathered together unto one place, and let the dry land appear: and it was so. And God *550 called the dry land Earth; and the gathering together of the waters called he Seas: and God saw that it was good." The Holy Bible, Genesis 1:9-10 (King James Version). As recently as 1972, courts and parties experienced little difficulty in determining whether a case triggered admiralty jurisdiction, thanks to the simple "situs rule." In The Plymouth, this Court articulated the situs rule thus: "Every species of tort, however occurring, and whether on board a vessel or not, if upon the high seas or navigable waters, is of admiralty cognizance." This simple, clear test, which Justice Story pronounced while riding circuit, see (No. 13,902) (CC Me. 1813), did not require alteration until 1948, when Congress included within the admiralty jurisdiction torts caused on water, but whose effects were felt on land. See Extension of Admiralty Jurisdiction Act, 46 U.S. C. App. 740. The simplicity of this test was marred by modern cases that tested the boundaries of admiralty jurisdiction with ever more unusual facts. In Executive Jet Aviation, we held that a plane crash in Lake Erie was not an admiralty case within the meaning of 1333(1) because the tort did not "bear a significant relationship to traditional maritime activity." at 268. What subsequent cases have failed to respect, however, is Executive Jet `s clear limitation to torts involving aircraft. As we said: "One area in which locality as the exclusive test of admiralty tort jurisdiction has given rise to serious problems in application is that of aviation. [W]e have concluded that maritime locality alone is not a sufficient predicate for admiralty jurisdiction in aviation tort cases." Our identification of the "significant relationship" factor occurred wholly in the context of a discussion of the difficulties *551 that aircraft posed for maritime law. In fact, while we recognized the extensive criticism of the strict locality rule, we noted that "for the traditional types of maritime torts, the traditional test has worked quite satisfactorily." Thus, Executive Jet, properly read, holds that if a tort occurred on board a vessel on the navigable waters, the situs test applies, but if the tort involved an airplane, then the "significant relationship" requirement is added. Although it modified the strict locality test, Executive Jet still retained a clear rule that I could apply comfortably to the main business of the admiralty court. Nonetheless, the simplicity |
Justice O'Connor | 1,995 | 14 | concurring | Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. | https://www.courtlistener.com/opinion/117900/jerome-b-grubart-inc-v-great-lakes-dredge-dock-co/ | the main business of the admiralty court. Nonetheless, the simplicity and clarity of this approach met its demise in Foremost Ins. That case involved the collision of two pleasure boats on the navigable waters, a tort that some commentators had argued did not fall within the admiralty jurisdiction because it did not implicate maritime See, e. g., Stolz, Pleasure Boating and Admiralty: Erie at Sea, The Court could have resolved the case and found jurisdiction simply by applying the situs test. Instead, responding to the arguments that admiralty jurisdiction was limited to commercial maritime activity, the Court found that the tort's "significant connection with traditional maritime activity" and the accident's "potential disruptive impact" on maritime commerce prompted an exercise of federal jurisdiction. -675. It is clear that Foremost overextended Executive Jet, which had reserved the significant relationship inquiry for aviation torts. As Justice Scalia noted in Executive Jet is better "understood as resting on the quite simple ground that the tort did not involve a vessel, which had traditionally been thought required by the leading scholars in the field." 497 U.S., at 9-370 Executive Jet did not in the least seek to alter the strict locality test for torts involving waterborne vessels. Foremost, however, converted Executive Jet `s exception into *552 the rule. In addition to examining situs, Foremost required federal courts to ask whether the tort bore a significant relationship to maritime commerce, and whether the accident had a potential disruptive impact on maritime -675. The lower courts adopted different approaches as they sought to apply Foremost `s alteration of the Executive Jet test. See 497 U. S., at 5, n. 4 (citing cases). then affirmed the inherent vagueness of the Foremost test. involved a marina fire that was caused by a faulty washer/dryer unit on a pleasure yacht. The fire destroyed the yacht and damaged several vessels in addition to the marina. In finding admiralty jurisdiction, the Court held that the federal judicial power would extend to such cases only if: (1) in addition to situs, (2) the "incident" poses a potential hazard to maritime commerce, and (3) the "activity" giving rise to the incident bears a substantial relationship to traditional maritime activity. 497 U.S., at 2-4. The traditional situs test also would have sustained a finding of jurisdiction because the fire started on board a vessel on the waterways. Thus, what was once a simple question did the tort occur on the navigable watershad become a complicated, multifactor analysis. The disruption and confusion created by the Foremost approach is evident from the post- decisions of the lower |
Justice O'Connor | 1,995 | 14 | concurring | Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. | https://www.courtlistener.com/opinion/117900/jerome-b-grubart-inc-v-great-lakes-dredge-dock-co/ | approach is evident from the post- decisions of the lower courts and from the majority opinion itself. Faced with the task of determining what is an "incident" or "activity" for purposes, the Fourth, Fifth, and Ninth Circuits simply reverted to the multifactor test they had employed before See 135-1 ; ; Delta Country Ventures, The District Court's opinion in this action is typical: While nodding to the court focused its entire attention on a totality-ofthe-circumstances test, which includes factors such as "the *553 functions and roles of the parties" and the "traditional concepts of the role of admiralty law." App. to Pet. for Cert. in No. 93-1094, p. 32a. Such considerations have no place in the test and should have no role in any jurisdictional inquiry. The dangers of a totality-of-the-circumstances approach to jurisdiction should be obvious. An undefined test requires courts and litigants to devote substantial resources to determine whether a federal court may hear a specific case. Such a test also introduces undesirable uncertainty into the affairs of private actorseven those involved in common maritime activitieswho cannot predict whether or not their conduct may justify the exercise of admiralty jurisdiction. Although the majority makes an admirable attempt to clarify what obscures, I am afraid that its analysis cannot mitigate the confusion of the test. Thus, faced with the "potential to disrupt maritime commerce" prong, ante, at 538, the majority must resort to "an intermediate level of possible generality" to determine the "`general features' " of the incident here, The majority does not explain the origins of "levels of generality," nor, to my knowledge, do we employ such a concept in other areas of jurisdiction. We do not use "levels of generality" to characterize residency or amount in controversy for diversity purposes, or to determine the presence of a federal question. Nor does the majority explain why an "intermediate" level of generality is appropriate. It is even unclear what an intermediate level of generality is, and we cannot expect that district courts will apply such a concept uniformly in similar cases. It is far from obvious how the undefined intermediate level of generality indicates that the "incident" for purposes is that of a vessel damaging an underwater structure. The majority also applies levels of generality to the next prong of whether the tortfeasor is engaged in "activity" that shows a "substantial relationship to traditional *554 maritime activity." The majority decides that the activity is repair work by a vessel on a navigable waterway. But, as the petitioners rightly argue, the "activity" very well could be bridge repair or |
Justice O'Connor | 1,995 | 14 | concurring | Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. | https://www.courtlistener.com/opinion/117900/jerome-b-grubart-inc-v-great-lakes-dredge-dock-co/ | argue, the "activity" very well could be bridge repair or pile driving. One simply cannot tell due to the ambiguities intrinsic to and to the uncertainty as to the meaning of levels of generality. The majority's response implicitly acknowledges the vagueness inherent in : "Although there is inevitably some play in the joints in selecting the right level of generality when applying the test, the inevitable imprecision is not an excuse for whimsy." Ante, at 542. The Court cannot provide much guidance to district courts as to the correct level of generality; instead, it can only say that any level is probably sufficient so long as it does not lead to "whimsy." When it comes to these issues, I prefer a clearer rule, which this Court has demanded with respect to federal question or diversity jurisdiction. Indeed, the "play in the joints" and "imprecision" that the Court finds "inevitable" easily could be avoided by returning to the test that prevailed before Foremost. In its effort to create an elegant, general test that could include all maritime torts, has only disrupted what was once a simple inquiry. II It should be apparent that this Court does not owe the benefit of stare decisis. As shown above, and Foremost themselves overextended Executive Jet and deviated from a long tradition of admiralty jurisprudence. More importantly, the new test of and Foremost did not produce greater clarity or simplicity in exchange for departing from a century of undisturbed practice. Instead, as discussed earlier, the two cases have produced only confusion and disarray in the lower courts and in this Court as well. It would seem that in the area of federal subject-matter jurisdiction, vagueness and ambiguity are grounds enough to revisit an unworkable prior decision. *555 In place of I would follow the test described at the outset. When determining whether maritime jurisdiction exists under 1333(1), a federal district court should ask if the tort occurred on a vessel on the navigable waters. This approach won the approval of two Justices in see Although Justice Scalia's concurrence retained a "normal maritime activities" component, it recognized that anything a vessel does in the navigable waters would meet that requirement, and that "[i]t would be more straightforward to jettison the `traditional maritime activity' analysis entirely." at 374. I wholly agree and have chosen the straightforward approach, which, for all of its simplicity, would have produced the same results the Court arrived at in Executive Jet, Foremost, and this action. Although this approach "might leave within admiralty jurisdiction a few unusual actions," such freakish cases will occur |
Justice O'Connor | 1,995 | 14 | concurring | Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co. | https://www.courtlistener.com/opinion/117900/jerome-b-grubart-inc-v-great-lakes-dredge-dock-co/ | jurisdiction a few unusual actions," such freakish cases will occur rarely. In any event, the resources needed to resolve them "will be saved many times over by a clear jurisdictional rule that makes it unnecessary to decide" what is a traditional maritime activity and what poses a threat to maritime at 374-375. In this action, a straightforward application of the proposed test easily produces a finding of admiralty jurisdiction. As the majority quite ably demonstrates, the situs requirement is satisfied because the tort was caused by a "spud barge" on the Chicago River. Ante, at 534-5. Although the accident's effects were felt on land, the Extension of Admiralty Jurisdiction Act brings the event within 1333(1). While I agree with the majority's analysis of this question, I disagree with its decision to continue on to other issues. A simple application of the situs test would yield the same result the Court reaches at the end of its analysis. This Court pursues clarity and efficiency in other areas of federal subject-matter jurisdiction, and it should demand no less in admiralty and maritime law. The test I have proposed *556 would produce much the same results as the analysis without the need for wasteful litigation over threshold jurisdictional questions. Because departed from a century of precedent, is unworkable, and is easily replaced with a bright-line rule, I concur only in the judgment. |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | In this case we decide whether Rule 11 of the Federal Rules of Civil Procedure imposes an objective standard of reasonable inquiry on represented parties who sign pleadings, motions, or other papers. I Business Guides, Inc., a subsidiary of a leading publisher of trade magazines and journals, publishes directories for 18 specialized areas of retail trade. In an effort to protect its directories against copying, Business Guides deliberately plants in them bits of false information, known as "seeds." Some seeds consist of minor alterations in otherwise accurate listingstransposed numbers in an address or zip code, or a misspelled namewhile others take the form of wholly fictitious listings describing nonexistent businesses. Business Guides considers the presence of seeds in a competitor's directory to be evidence of copyright infringement.[] On October 31, 1986, Business Guides, through its counsel Finley, Kumble, Wagner, Heine, Unterberg, Manley, Myerson, and Casey (Finley, Kumble), filed an action in the United States District Court for the Northern District of *536 California against Chromatic Communications Enterprises, Inc., claiming copyright infringement, conversion, and unfair competition, and seeking a temporary restraining order (TRO). The TRO application was signed by a Finley, Kumble attorney and by Business Guides' president on behalf of the corporation. Business Guides submitted under seal affidavits in support of the application. These affidavits charged Chromatic with copying, as evidenced by the presence of 10 seeds in Chromatic's directory. One affidavit, that of sales representative Victoria Burdick, identified the 10 listings in Business Guides' directory that had allegedly been copied, but did not pinpoint the seed in each listing. A hearing on the TRO was scheduled for November 7, 1986. Three days before the hearing, the District Judge's law clerk phoned Finley, Kumble and asked it to specify what was incorrect about each listing. Finley, Kumble relayed this request to Business Guides' Director of Research, Michael Lambe. This was apparently the first time the law firm asked its client for details about the 10 seeds. Based on Lambe's response, Finley, Kumble informed the court that Business Guides was retracting its claims of copying as to three of the seeds. The District Court considered this suspicious and so conducted its own investigation into the allegations of copying. The District Judge's law clerk spent one hour telephoning the businesses named in the "seeded" listings, only to discover that 9 of the 10 listings contained no incorrect information. Unaware of the District Court's discovery, Finley, Kumble prepared a supplemental affidavit of Michael Lambe, identifying seven listings in Chromatic's directory and explaining precisely what part of each listing supposedly contained seeded information. Lambe |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | what part of each listing supposedly contained seeded information. Lambe signed this affidavit on the morning of the November 7 hearing. Before doing so, however, Lambe crossed out reference to a fourth seed that he had determined did not in fact reflect any incorrect information but which Finley, Kumble had not retracted. *537 At the hearing, the District Court, based on its discovery that 9 of the original 10 listings contained no incorrect information, denied the application for a TRO. More importantly, the judge stayed further proceedings and referred the matter to a Magistrate to determine whether Rule 11 sanctions should be imposed. The Magistrate conducted two evidentiary hearings, at which he instructed Business Guides and Finley, Kumble to explain why 9 of its 10 charges of copying were meritless. Both claimed it was a coincidence. Doubting the good faith of these representations, the Magistrate recommended that both the law firm and the client be sanctioned. See App. to Pet. for Cert. 64a-75a. Later, claiming to have uncovered the true source of the errors, the parties asked for and received a third hearing. Business Guides explained that in compiling its "master seed list," it had departed from its normal methodology. Usually, letters and numbers were transposed deliberately and recorded on the seed list before the directory was published. In this case, the company had compiled the master seed list after publication by looking for unintended typographical errors in the directory. To locate such errors, sales representative Victoria Burdick had compared the final version of the directory against initial questionnaires that had been submitted to Business Guides by businesses that wanted to be listed. When Burdick discovered a disparity between a questionnaire and the final directory, she included it on the seed list. She assumed, without investigating, that the information on the questionnaires was accurate. As it turned out, the questionnaires themselves sometimes contained transposed numbers or misspelled names, which other employees had corrected when proofreading the directory prior to publication. Consequently, many of the seeds appearing on the master list contained no false information. The presence of identical listings in a competitor's directory thus would not indicate copying, but rather accurate research. *538 The Magistrate accepted this explanation, but determined that sanctions were nonetheless appropriate. at 48a. First, he found that Business Guides, in filing the initial TRO application, had "failed to conduct a proper inquiry, resulting in the presentation of unreasonable and false information to the court." 3a. The Magistrate did not recommend that Finley, Kumble be sanctioned for the initial application, however, as the firm had been led |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | the initial application, however, as the firm had been led to believe that there was an urgent need to act quickly and thus relied on the information provided by its sophisticated corporate client. 4a-55a. Next, the Magistrate recommended that both Business Guides and Finley, Kumble be sanctioned for having failed to inquire into the accuracy of the remaining seeds following Michael Lambe's discovery, based on only a few minutes of investigation, that 3 of the 10 were invalid. 5a-56a. Finally, the Magistrate recommended that both the law firm and its client be sanctioned for their conduct at the first two evidentiary hearings. Instead of investigating the cause of the errors in the seed list, Business Guides and Finley, Kumble had relied on a "coincidence" defense. 1a. The Magistrate determined that "[n]o reasonable person would have been satisfied with these explanations. Finley, Kumble and Business Guides did not need this court to point out the blatant errors in the logic of their representations." 9a. The District Court agreed with the Magistrate, stating: "The standard of conduct under Rule 11 is one of objective reasonableness. Applying this standard to the circumstances of this case, it is clear that both Business Guides and Finley Kumble have violated the Rule." 119 F. R. D. 685, 688-689 (ND Cal. 1988). The court reiterated the Magistrate's conclusion that: (1) Business Guides violated Rule 11 by filing the initial TRO application; (2) Business Guides and Finley, Kumble violated the Rule by failing to conduct a reasonable inquiry once they were put on notice of several inaccuracies; and (3) Business Guides and Finley, Kumble violated *539 the Rule in their arguments to the Magistrate at the first two evidentiary hearings. Rather than impose sanctions at that time, the District Court unsealed the proceedings and invited Chromatic to file a motion requesting particular sanctions. Chromatic brought a motion for sanctions against both Business Guides and Finley, Kumble. It later moved to withdraw the motion with respect to Finley, Kumble, after learning that the law firm had recently dissolved and that all proceedings against the firm were stayed under 362 of the Bankruptcy Code. 121 F. R. D. 402, 403 (ND Cal. 1988). The District Court accepted this withdrawal and issued its ruling without prejudice to Chromatic's right to pursue sanctions against Finley, Kumble at a later date. Before ruling on the motion for sanctions against Business Guides, the District Court made additional factfindings. It observed that of the 10 seeds that had originally been alleged to be present in Chromatic's directory, only one actually contained false information. This seed |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | Chromatic's directory, only one actually contained false information. This seed was a wholly fictitious listing for a company that did not exist. Chromatic denied that it had copied this listing from Business Guides' directory; it offered an alternative explanationthat Business Guides had "planted" the fake listing in Chromatic's directory. A Business Guides employee had requested a copy of Chromatic's directory, filled out a questionnaire providing information about the nonexistent company, and mailed this questionnaire to Chromatic intending that the company publish the false listing in its directory. Business Guides did not deny the truth of these charges, and the District Court found that petitioner's silence amounted to a "tacit admission." In light of this finding, the court had no choice but to conclude: "Business Guides' entire lawsuit has no basis in fact." "[T]here was, and is, no evidence of copyright infringement." The court then ruled on Chromatic's motion for sanctions. Citing "the rather remarkable circumstances of this case, and *540 the serious consequences of Business Guides' improper conduct," it dismissed the action with prejudice. Additionally, it imposed $13,865.66 in sanctions against Business Guides, the amount of Chromatic's legal expenses and out-of-pocket costs. The Court of Appeals for the Ninth Circuit affirmed the District Court's holdings that Business Guides was subject to an objective standard of reasonable inquiry into the factual basis of papers submitted to the court, and that Business Guides had failed to conduct a reasonable inquiry before (1) signing the initial TRO application, and (2) submitting Michael Lambe's supplemental declaration. The court relied on the plain language of Rule 11, which "draws no distinction between the state of mind of attorneys and parties. On the contrary, the rule, by requiring any `signer' of a paper (attorney or party) to conduct a `reasonable inquiry,' would appear to prescribe similar standards for attorneys and represented parties." The Court of Appeals reversed, however, the District Court's holding that oral representations and testimony before the Magistrate violated Rule 11. Because it reversed one of the three bases on which Business Guides had been sanctioned, the Court of Appeals vacated the order of sanctions and remanded to the District Court for reconsideration. -814. We granted certiorari to determine whether the Court of Appeals properly held Business Guides to an objective standard of reasonable inquiry. Subsequently, the District Court issued an order reaffirming the dismissal and monetary sanctions. App. to Pet. for Cert. 1a-2a. II A "We give the Federal Rules of Civil Procedure their plain meaning." Pavelic & As with a statute, our inquiry *541 is complete if we find the text of |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | inquiry *541 is complete if we find the text of the Rule to be clear and unambiguous. Rule 11 provides in relevant part: "The signature of an attorney or party constitutes a certificate by the signer that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact If a pleading, motion, or other paper is signed in violation of this rule, the court shall impose upon the person who signed it an appropriate sanction" Thus viewed, the meaning of the Rule seems plain: A party who signs a pleading or other paper without first conducting a reasonable inquiry shall be sanctioned. Business Guides argues, however, that the Rule's meaning is not so clear when one reads the full text. Accordingly, we reproduce below the full text of Rule 11, adding bracketed numbers before each sentence to clarify the discussion that follows: "[1] Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in the attorney's individual name, whose address shall be stated. [2] A party who is not represented by an attorney shall sign the party's pleading, motion, or other paper and state the party's address. [3] Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. [4] The rule in equity that the averments of an answer under oath must be overcome by the testimony of two witnesses or of one witness sustained by corroborating circumstances is abolished. [5] The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such *542 as to harass or to cause unnecessary delay or needless increase in the cost of litigation. [6] If a pleading, motion, or other paper is not signed, it shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader or movant. [7] If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney's fee." We find nothing in the full text of the Rule that detracts from the plain meaning of the relevant portion quoted initially. Rule 11 is "aimed at curbing abuses of the judicial system." Cooter & To this end, it sets up a means by which litigants certify to the court, by signature, that any papers filed are well founded. The first three sentences of the Rule explain in what instances a signature is mandatory. Sentence [1] states that where a party is represented by counsel, the party's attorney must sign any motion, pleading, or other paper filed with the court. Sentence [2] provides that where a party is proceeding pro se, the unrepresented party must sign the documents. Sentence [3] acknowledges that in some situations represented parties are required by rule or statute to verify pleadings or sign affidavits. Sentence [4] explains that certification by signature replaces some older forms of oath and attestation. The heart of Rule 11 is sentence [5], which explains in detail the message conveyed by the signing of a document. A signature certifies to the court that the signer has read the document, has conducted a reasonable inquiry into the facts and the law and is satisfied that the document is well grounded in both, and is acting without any improper motive. *543 See 5A C. Wright & A. Miller, Federal Practice and Procedure 1335, pp. 57-58 (hereinafter Wright & Miller). This sentence, by its terms, governs any signature of "an attorney or party," thereby making it applicable not only to signatures required by sentences [1], [2], and [3], but also to signatures that are not required but nevertheless present. "The certification requirement now mandates that all signers consider their behavior in terms of the duty they owe to the court system to conserve its resources and avoid unnecessary proceedings." 1331, at 21 The final two sentences describe the means by which the Rule is enforced. Sentence [6] dictates that where a required signature is missing and the omission is not corrected promptly, the document will be stricken. Sentence [7] requires that sanctions be imposed where a signature is present but fails to satisfy the certification standard. Business Guides proposes an alternative interpretation of the text. As mentioned, sentence [1] indicates that a party who is represented by counsel is not itself |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | a party who is represented by counsel is not itself required to sign most papers or pleadings; generally, only the signature of the attorney is mandated. Business Guides concludes from this that a represented party may, if it wishes, sign a document, but that this signature need not comply with the certification standard described in sentence [5]. Because a client's signature is not normally required by Rule 11, the occasional presence of one cannot run afoul of the Rule. In short, Business Guides maintains that a represented party is free to sign frivolous or vexatious documents with impunity because its signature on a document carries with it no additional risk of sanctions. This reading is inconsistent with both the langnage and the purpose of Rule 11. As an initial matter, it is not relevant that represented parties rarely sign filed documents, because Business Guides did sign in this case. Indeed, it was required to do so. Rule 65(b) of the Federal Rules of Civil Procedure provides specifically that a TRO application must be *544 accompanied by an affidavit or verified complaint that sets forth the facts. A TRO application is thus one of the situations provided for in sentence [3], where a party's verification or signed affidavit is mandatory. Even if Business Guides had not been required to sign the TRO application but did so voluntarily, the language of Rule 11 would still require that the signature satisfy the certification requirement. Sentence [1] may not require a represented party to sigu papers and pleadings, but neither does it prohibit a represented party from attesting to the merit of documents filed on its behalf. "When a party is represented by counsel, it is unnecessary, but not improper, for the represented party to sign as well." Wright & Miller 1333, at 47. Accordingly, sentence [5] declares that the signature of a party conveys precisely the same message as that of an attorney: "The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that it is well grounded in fact and is warranted by existing law." (Emphasis added.) It seems plain that the voluntary siguature of a represented party, no less than the mandatory signature of an attorney, is capable of violating the Rule. The only way that Business Guides can avoid having to satisfy the certification standard is if we read "attorney or party" as used in sentence [5] to mean "attorney or unrepresented party." Only then would the signature of a represented party fall outside the scope |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | the signature of a represented party fall outside the scope of the Rule. We decline to adopt this unnatural reading, as there is no indication that this is what the Advisory Committee intended. Just the opposite is true. Prior to its amendment in 1983, sentence [5] referred solely to "[t]he signature of an attorney" on a "pleading." The 1983 amendments deliberately expanded the coverage of the Rule. Wright & Miller 1331, at 21. Sentence [5] was amended to refer broadly to "[t]he signature of an attorney or party" on a "pleading, motion, or other paper" Represented parties, despite having counsel, *545 routinely sign certain papersdeclarations, affidavits, and the likeduring the course of litigation. Business Guides, for example, submitted to the District Court no fewer than five signed papers in support of its TRO application. The amended language of sentence [5] leaves little room for doubt that the signatures of the "party" on these "other papers" must satisfy the certification requirement. Had the Advisory Committee intended to limit the application of the certification standard to parties proceeding pro se, it would surely have said so. Elsewhere in the text, the Committee demonstrated its ability to distinguish between represented and unrepresented parties. Sentence [1] refers specifically to "a party represented by an attorney," while sentence [2] applies to "[a] party who is not represented by an attorney" Sentence [5], however, draws no such distinction; it lumps together the two types of parties. By using the more expansive term "party," the Committee called for more expansive coverage. The natural reading of this language is that any party who signs a document, whether or not the party was required to do so, is subject to the certification standard of Rule 11. Leading scholars are in accord. Professors James Wm. Moore and Jo Desha Lucas, authors of Moore's Federal Practice, state: "The current Rule places an affirmative duty on the attorney or party to investigate the facts and the law prior to the subscription and submission of any pleading, motion or paper. The rule applies to attorneys, parties represented by attorneys, and parties who appear pro se." 2A J. Moore & J. Lucas, Moore's Federal Practice ¶ 11.02[3], pp. 11-15 to 11-17 (footnotes omitted). Professors Charles Alan Wright and Arthur R. Miller describe in their treatise on Federal Practice and Procedure "seven major alterations" of Rule 11 practice occasioned by the 1983 amendments, one of which is that "the range of people covered by the certification requirement has been expanded. Now, all signers, not just attorneys, are on notice *546 that their signature constitutes a |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | attorneys, are on notice *546 that their signature constitutes a certification as to the contents of the document." Wright & Miller 1331, at 21 "The expansion of the scope of the certification requirement to include non-attorney signers was accomplished by changing `signature of an attorney' in the fifth sentence of the rule to `signature of an attorney or party.'" In addition to being the most natural reading, it is an eminently sensible one. The essence of Rule 11 is that signing is no longer a meaningless act; it denotes merit. A signature sends a message to the district court that this document is to be taken seriously. This case is illustrative. Business Guides sought a TRO on the strength of an initial application accompanied by five signed statements to the effect that Chromatic was pirating its directory. Because these documents were filed under seal, the District Court had to determine the credibility of the allegations without the benefit of hearing the other side's view. The court might plausibly have attached some incremental significance to the fact that Business Guides itself risked being sanctioned if the factual allegations contained in these signed statements proved to be baseless. Business Guides asks that we construe Rule 11 in a way that would render the signatures on these statements risk free. Because this construction is at odds with the Rule's general admonition that signing denotes merit, we are loath to do so absent a compelling indication in the text that the Advisory Committee intended such a result. Because we find no such indication, compelling or otherwise, we conclude that the word "party" in sentence [5] means precisely what it appears to mean. The dissent contends that this conclusion is inconsistent with our decision last Term in Pavelic & See post, 56, 562-564. Just the opposite is true; our decision today follows naturally from Pavelic & We held in Pavelic & that Rule 11 contemplates sanctions against the particular individual who signs his or her name, not against *547 the law firm of which that individual is a member, because "the purpose of Rule 11 as a whole is to bring home to the individual signer his personal, nondelegable responsibility. to validate the truth and legal reasonableness of the papers filed." This is entirely consistent with our decision here that a represented party who signs his or her name bears a personal, nondelegable responsibility to certify the truth and reasonableness of the document. The dissent agrees that a party proceeding without the benefit of legal assistance bears this responsibility, but insists that a party represented |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | assistance bears this responsibility, but insists that a party represented by counseleven one whose signature is mandatory is absolved from any duty to vouch for the truth of papers he or she signs because he or she has delegated this responsibility to counsel. See post, 56. The dissent's dichotomy between represented and unrepresented parties is particularly troubling given that it has no basis in the text of the Rule. Sentence [5] refers to "[t]he signature of an attorney or party" We emphasized in Pavelic & that this Court will not reject the natural reading of a rule or statute in favor of a less plausible reading, even one that seems to us to achieve a better result. -127. Yet JUSTICE KENNEDY proposes that we construe "party" to mean "unrepresented party"notwithstanding the Advisory Committee's ability, demonstrated only three sentences earlier, to distinguish between represented and unrepresented parties because he thinks it unwise to punish clients. See post, 56-558. The dissent also criticizes us for treating the signatures of Business Guides' president and director of research as signatures of the company. JUSTICE KENNEDY suggests that this is "in square conflict" with our holding in Pavelic & that "`the person who signed'" was the individual attorney, not the law firm. Post, 63. The dissent overlooks an important distinction. In Pavelic & we relied in part on Rule 11's unambiguous statement that papers must be signed by an attorney "in the attorney's individual name." * A corporate entity, of course, cannot itself sign anything; it can act only through its agents. It would be anomalous to determine that an individual who is represented by counsel falls within the scope of Rule 11, but that a corporate client does not because it cannot itself sign a document. In any event, the question need not be resolved definitely here; Business Guides concedes that it did not raise this argument in the courts below. Brief for Petitioner 35, n. 38. B Having concluded that Rule 11 applies to represented parties, we must next determine whether the certification standard for a party is the same as that for an attorney. The plain language of the Rule again provides the answer. It speaks of attorneys and parties in a single breath and applies to them a single standard: "The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation." As the Court of Appeals correctly observed: "[T]he rule draws no distinction between the state of mind of attorneys and parties." 892 F.2d, Rather, it states unambiguously that any signer must conduct a "reasonable inquiry" or face sanctions. Business Guides devotes much of its brief to arguing that subjective bad faith, not failure to conduct a reasonable inquiry, should be the touchstone for sanctions on represented parties. It points with approval to Rule 56(g) of the Federal Rules of Civil Procedure, which appears to subject affidavits in the summary judgment context to a subjective good faith standard. This argument is misdirected, as this Court is not *549 acting on a clean slate; our task is not to decide what the rule should be, but rather to determine what it is. Once we conclude that Rule 11 speaks to the matter at issue, our inquiry is complete. See Pavelic & As originally drafted, Rule 11 set out a subjective standard, but the Advisory Committee determined that this standard was not working. See Cooter & -393. Accordingly, the Committee deleted the subjective standard at the same time that it expanded the rule to cover parties. See Wright & Miller 1335, 8-60. That the Advisory Committee did not also amend Rule 56(g) hardly matters. Rather than fashion a standard specific to summary judgment proceedings, the Committee chose to amend Rule 11, thereby establishing a more stringent standard for all affidavits and other papers. Even if we were convinced that a subjective bad faith standard would more effectively promote the goals of Rule 11, we would not be free to implement this standard outside of the rulemaking process. "Our task is to apply the text, not to improve upon it." Pavelic & Nor are we convinced that, as a policy matter, represented parties should not be held to a reasonable inquiry standard. Quite often it is the client, not the attorney, who is better positioned to investigate the facts supporting a paper or pleading. This case is a perfect example. Business Guides brought the matter to Finley, Kumble and requested the law firm to obtain an immediate injunction against Chromatic. Given the apparent urgency, the District Court reasoned that the firm could not be blamed for relying on the factual representations of its |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | be blamed for relying on the factual representations of its experienced corporate client. Rather, the blameand the sanctionsproperly fell on Business Guides: "This case illustrates well the dangers of a party's failure to act reasonably in commencing litigation. Here Business Guides, a sophisticated corporate entity, hired a large, powerful and nationally known law firm to file suit against a competitor for copyright infringement. *550 This competitor happened to be a one-man company operating out of a garage in California. Two years later, after extensive time and effort on the part of the court, the various counsel for Business Guides, as well as various counsel for Business Guides' counsel, it turns out there was no evidence of infringement. The entire lawsuit was a mistake. In the meantime, the objects of this lawsuit have spent thousands of dollars of attorney's fees and have suffered potentially irreparable damage to their business. This entire scenario could have been avoided if, prior to filing the suit, Business Guides simply had spent an hour, like the court's law clerk did, and checked the accuracy of the purported seeds." 121 F. R. D., Where a represented party appends its signature to a document that a reasonable inquiry into the facts would have revealed to be without merit, we see no reason why a district court should be powerless to sanction the party in addition to, or instead of, the attorney. See Wright & Miller 1336, at 104. A contrary rule would establish a safe harbor such that sanctions could not be imposed where an attorney, pressed to act quickly, reasonably relies on a client's careless misrepresentations. Of course, represented parties may often be less able to investigate the legal basis for a paper or pleading. But this is not invariably the case. Many corporate clients, for example, have in-house counsel who are fully competent to make the necessary inquiry. Other party litigants may have a great deal of practical litigation experience. Indeed, Business Guides itself is no stranger to the courts; it is a sophisticated corporate entity that has been prosecuting copyright infringement actions since 1948. App. 105-106. The most that can be said is that the legal inquiry that can reasonably be expected from a party may vary from case to case. Put another way, "what is objectively reasonable for a client may differ from what is objectively reasonable for an attorney." *551 892 F. 2d, 10. The Advisory Committee was well aware of this when it amended Rule 11. Thus, the certification standard, while "more stringent than the original good-faith formula," is not inflexible. "The |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | stringent than the original good-faith formula," is not inflexible. "The standard is one of reasonableness under the circumstances" Advisory Committee's Note to Fed. Rule Civ. Proc. 11, 28 U.S. C. App., p. 576. This formulation "has been embraced in all thirteen circuits." Wright & Miller 1335, at 61-62. This is a far more sensible rule than that proposed by Business Guides, which would hold parties proceeding pro se to an objective standard, while applying a lesser subjective standard to represented parties. As noted by the Court of Appeals: "We fail to see why represented parties should be given the benefit of a subjective bad faith standard whereas pro se litigants, who do not enjoy the aid of counsel, are held to a higher objective standard." 892 F.2d, at Giving the text its plain meaning, we hold that it imposes on any party who signs a pleading, motion, or other paper whether the party's signature is required by the Rule or is provided voluntarilyan affirmative duty to conduct a reasonable inquiry into the facts and the law before filing, and that the applicable standard is one of reasonableness under the circumstances. III One issue remains: Business Guides asserts that imposing sanctions against a represented party that did not act in bad faith violates the Rules Enabling Act, 28 U.S. C. 2072. The Act authorizes the Court "to prescribe general rules of practice and procedure," but provides that such rules "shall not abridge, enlarge, or modify any substantive right." Business Guides argues that Rule 11, to the extent that it imposes on represented parties an objective standard of reasonableness, exceeds the limits of the Court's power in two ways: (1) It authorizes fee shifting in a manner not approved by Congress; and (2) it effectively creates a federal tort *552 of malicious prosecution, thereby encroaching upon various state law causes of action. We begin by noting that any Rules Enabling Act challenge to Rule 11 has a large hurdle to get over. The Federal Rules of Civil Procedure are not enacted by Congress, but "Congress participates in the rulemaking process." Wright & Miller 1332, at 40, and n. 74, citing Amendments to the Rules of Civil Procedure for the United States District Courts, H. R. Doc. No. 54, 98th Cong., 1st Sess., 3-25 (1983). Additionally, the Rules do not go into effect until Congress has had at least seven months to look them over. See 28 U.S. C. 2074. A challenge to Rule 11 can therefore succeed "only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | this Court, and Congress erred in their prima facie judgment that the Rule. transgresses neither the terms of the Enabling Act nor constitutional restrictions." This Court's decision in Burlington Northern R. presents another hurdle. There, the Court considered the Act's proscription against interference with substantive rights and held, in a unanimous decision, that "Rules which incidentally affect litigants' substantive rights do not violate this provision if reasonably necessary to maintain the integrity of that system of rules." There is little doubt that Rule 11 is reasonably necessary to maintain the integrity of the system of federal practice and procedure, and that any effect on substantive rights is incidental. See We held as much only last Term in Cooter & : "It is now clear that the central purpose of Rule 11 is to deter baseless filings in district court and thus, consistent with the Rule Enabling Act's grant of authority, streamline the administration and procedure of the federal courts." Petitioner's challenges do not clear these substantial hurdles. In arguing that the monetary sanctions in this case constitute impermissible fee shifting, Business Guides relies *553 on the Court's statement in Alyeska Pipeline Service that, in the absence of legislative guidance, courts do not have the power "to reallocate the burdens of litigation" by awarding costs to the losing party in a civil rights suit; they have only the power to sanction a party for bad faith. See The initial difficulty with this argument is that Alyeska dealt with the courts' inherent powers, not the Rules Enabling Act. Rule 11 sanctions do not constitute the kind of fee shifting at issue in Alyeska. Rule 11 sanctions are not tied to the outcome of litigation; the relevant inquiry is whether a specific filing was, if not successful, at least well founded. Nor do sanctions shift the entire cost of litigation; they shift only the cost of a discrete event. Finally, the Rule calls only for "an appropriate sanction" attorney's fees are not mandated. As we explained in Cooter & : "Rule 11 is not a fee-shifting statute `A movant under Rule 11 has no entitlement to fees or any other sanction."' quoting American Judicature Society, Rule 11 in Transition, The Report of the Third Circuit Task Force on Federal Rule of Civil Procedure 11, p. 49 Also without merit is Business Guides' argument that Rule 11 creates a federal common law of malicious prosecution. We rejected a similar claim in Cooter & But see -412 The main objective of the Rule is not to reward parties who are victimized by litigation; it is |
Justice O'Connor | 1,991 | 14 | majority | Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. | https://www.courtlistener.com/opinion/112539/business-guides-inc-v-chromatic-communications-enterprises-inc/ | to reward parties who are victimized by litigation; it is to deter baseless filings and curb abuses. See Imposing monetary sanctions on parties that violate the Rule may confer a benefit on other litigants, but the Rules Enabling Act is not violated by such incidental effects on substantive rights. See 8. Additionally, we are confident that district courts will resist the temptation to use sanctions as substitutes for tort damages. This case is a good example. Chromatic asked that the sanctions award include consequential damages, but the District Court refused. "[W]hile sympathetic to [Chromatic's] *554 plight," the court was "not persuaded that such compensation is within the purview of Rule 11." 121 F. R. D., In the event that a district court misapplies the Rule in a particular case, the error can be corrected on appeal. "But misapplications do not themselves provide a basis for concluding that Rule 11 was the result of distinct errors in prima facie judgment during the development and promulgation of the rule." Wright & Miller 1332, at 40. In sum, we hold today that Rule 11 imposes an objective standard of reasonable inquiry on represented parties who sign papers or pleadings. We have no occasion to determine whether or under what circumstances a nonsigning party may be sanctioned. The District Court found that Business Guides failed to conduct a reasonable inquiry before signing the initial TRO application and before submitting the signed declaration of its Director of Research, Michael Lambe. Consequently, the District Court imposed $13,865.66 in sanctions against Business Guides and dismissed the action with prejudice. The Court of Appeals affirmed each of these rulings. For the reasons stated herein, the judgment of the Court of Appeals is Affirmed. |
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