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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Breyer
delivered the opinion of the Court.
Respondent Randy Lee Guzek was found guilty of capital murder and sentenced to death. On appeal, the Oregon Supreme Court affirmed the conviction but vacated the sentence and ordered a new sentencing proceeding. The question before the Court is whether the State may limit the innocence-related evidence he can introduce at that proceeding to the evidence he introduced at his original trial. We hold that the limitation does not violate the Constitution.
I
Oregon tried Guzek for the offense of capital murder. The evidence showed that Guzek and two associates decided to burglarize the Houser family home, that they entered the house, that an associate killed Rod Houser, and that Guzek then robbed and killed Lois Houser. After the police learned that Guzek held a special grudge against the Housers, they traced him and his associates. The associates confessed. And they testified at trial, painting Guzek as the ringleader.
Guzek’s defense rested in part upon an alibi. He presented two alibi witnesses, his grandfather and his mother, who testified that Guzek had been with the one or the other at the time of the crime. The jury disbelieved the alibi, it convicted Guzek, and it sentenced him to death.
Guzek appealed; the Oregon Supreme Court affirmed the conviction; but the. court ordered a new sentencing proceeding. Guzek was again sentenced to death; he again appealed; and the Oregon Supreme Court again ordered resen-tencing. Guzek was sentenced to death for the third time; he again appealed; and yet again the Oregon Supreme Court found the sentencing procedures faulty. 336 Ore. 424, 86 P. 3d 1106 (2004). Seeking to avoid further errors at the next (the fourth) sentencing proceeding, the Oregon Supreme Court also addressed the admissibility of certain evidence Guzek seeks to introduce at that proceeding, including live testimony from his mother about his alibi.
The Oregon Supreme Court held that the Eighth and Fourteenth Amendments provide Guzek a federal constitutional right to introduce this evidence at his upcoming sentencing proceeding. At Oregon’s request, we agreed to review that determination.
II
Before turning to the merits of Oregon’s claim, we consider a motion that Guzek made, asking us to dismiss the writ of certiorari as improvidently granted. The motion rests upon Guzek’s claim that, irrespective of federal law, state law gives him the right to introduce his mother’s live testimony — the additional alibi evidence here at issue. See Ore. Rev. Stat. § 138.012(2)(b) (2003). For this reason, he says, the Court lacks jurisdiction to hear this appeal, or, at the least, there is no good practical reason for us to decide the federal issue.
We cannot agree, however, that we lack jurisdiction to hear the case. We possess jurisdiction to review state-court determinations that rest upon federal law. 28 U. S. C. § 1257(a). And the Oregon Supreme Court here based its legal conclusion in relevant part on federal law. The court pointed out that state law permits the introduction (at a new sentencing hearing) of “ ‘evidence . . . relevant to [the] sentence including . . . mitigating evidence relevant to . . . [w]hether the defendant should receive a death sentence.’” App. to Pet. for Cert. 45 (quoting Ore. Rev. Stat. §§ 163.150(l)(a), (b) (2003); emphasis added and deleted). But it immediately added that the state law’s words “relevant .... mitigating evidence” refer (in the present context) only to evidence that the Federal Constitution grants a defendant the right to present. App. to Pet. for Cert. 45-52.
The Oregon court went on to discuss this Court’s statements to the effect that the Eighth and Fourteenth Amendments “ ‘require that the sentencer... not be precluded from considering, as a mitigating factor . . . any of the circumstances of the offense that the defendant proffers as a basis for a sentence less than death.’ ” Id., at 54 (quoting Lockett v. Ohio, 438 U. S. 586, 604 (1978) (plurality opinion); emphasis deleted); ef. App. to Pet. for Cert. 56 (recognizing that this aspect of Lockett was adopted by a majority of the Court in Eddings v. Oklahoma, 455 U. S. 104, 110 (1982)). And the Oregon court then interpreted this Court’s holding in Green v. Georgia, 442 U. S. 95 (1979) (per curiam), as including, within that federal admissibility requirement, evidence which, like the proffered alibi testimony, tends to show that the defendant did not commit the crime for which he has been convicted. Thus, it held that state law demanded “admissibility” solely for a federal reason. And we possess jurisdiction. See, e. g., South Dakota v. Neville, 459 U. S. 553, 556, n. 5 (1983); Delaware v. Prouse, 440 U. S. 648, 651-653 (1979).
Neither are we persuaded by Guzek’s argument that we should dismiss the case because irrespective of federal law and irrespective of the Oregon Supreme Court’s federal holding, Oregon law gives him the right to introduce witnesses who testified at the guilt phase; and his mother was such a witness (a fact, he says, that the Oregon Supreme Court overlooked). Guzek points in support to an Oregon capital-case resentencing statute that says,
“[a] transcript of all testimony and all exhibits and other evidence properly admitted in the prior trial ... are admissible in the new sentencing proceeding.” Ore. Rev. Stat. § 138.012(2)(b) (2003).
The provision adds that,
“[ejither party may recall any witness who testified at the prior trial. . . and may present additional relevant evidence.” Ibid.
We do not doubt that these provisions give Guzek the states law right to introduce a transcript of guilt-phase testimony. App. to Pet. for Cert. 43 (authorizing introduction of transcript of Guzek’s grandfather’s alibi testimony). But Guzek wishes to do more than introduce a transcript of his mother’s alibi evidence; he wishes to call his mother to the stand as a live witness and elicit additional alibi testimony. Tr. of Oral Arg. 37-39, 41, 55-56. The Oregon statute quoted above does not expressly say whether he may do so. It does give him the right to “recall any witness” who testified at the first trial and to “present additional relevant evidence.” (Emphasis added.) But is this additional evidence “relevant”? The Oregon Supreme Court thought so, but only because federal law insists upon its relevance. And its opinion suggests that, in the absence of federal compulsion, it would not fall within the scope of the state statutory word “relevant.” See supra, at 521.
At most, Guzek has shown that state law might, not that it does, independently give him the right to introduce this evidence. We have made clear that “a possible adequate and independent state ground” for a decision does not “bar [our] reaching the federal questions” where, as here, a “State Supreme Court quite clearly rested its [decision] solely on the Federal Constitution.” California v. Ramos, 463 U. S. 992, 997, n. 7 (1983); see also City of Revere v. Massachusetts Gen. Hospital, 463 U. S. 239, 242 (1983); United Air Lines, Inc. v. Mahin, 410 U. S. 623, 630-631 (1973). And we consequently deny the motion to dismiss the writ.
Ill
As our discussion in Part II, supra, makes clear, the federal question before us is a narrow one. Do the Eighth and Fourteenth Amendments grant Guzek a constitutional right to present evidence of the kind he seeks to introduce, namely, new evidence that shows he was not present at the scene of the crime. That evidence is inconsistent with Gu-zek’s prior conviction. It sheds no light on the manner in which he committed the crime for which he has been convicted. Nor is it evidence that Guzek contends was unavailable to him at the time of the original trial. And, to the extent it is evidence he introduced at that time, he is free to introduce it now, albeit in transcript form. Ore. Rev. Stat, § 138.012(2)(b) (2003). We can find nothing in the Eighth or Fourteenth Amendments that provides a capital defendant a right to introduce new evidence of this kind at sentencing.
We cannot agree with the Oregon Supreme Court that our previous cases have found in the Eighth Amendment a constitutional right broad enough to encompass the evidence here at issue. In Lockett v. Ohio, supra, a plurality of this Court decided that a defendant convicted of acting in concert with others to rob and to kill could introduce at the sentencing stage evidence that she had played a minor role in the crime, indeed, that she had remained outside the shop (where the killing took place) at the time of the crime. A plurality of the Court wrote that,
“the Eighth and Fourteenth Amendments require that the sentencer .. . not be precluded from considering, as a mitigating factor, any aspect of a defendant’s character or record and any of the circumstances of the offense that the defendant proffers as a basis for a sentence less than death.” Id., at 604 (emphasis added and deleted).
And in Eddings v. Oklahoma, 455 U. S. 104, the Court majority adopted this statement. See also McCleskey v. Kemp, 481 U. S. 279, 306 (1987); Bell v. Ohio, 438 U. S. 637, 642 (1978) (plurality opinion).
But the evidence at issue in these cases was traditional sentence-related evidence, evidence that tended to show how, not whether, the defendant committed the crime. Nor was the evidence directly inconsistent with the jury’s finding of guilt.
The Oregon Supreme Court thought that this latter distinction — the fact that the “alibi evidence was inconsistent with,” rather than “consistent with[,] the underlying convictions” — did not matter. App. to Pet. for Cert. 58. It said that this “factual distinction ... is of no consequence in light of the Supreme Court’s decision in Green v. Georgia.” Ibid. In Green, however, the Court focused upon a defendant convicted of murder, who sought to introduce at sentencing a statement his confederate made to a third party that he (the confederate) had alone committed the murder (1 e., without the defendant). The State opposed its use at the defendant’s sentencing hearing on the ground that, as to the defendant, it was hearsay. The Court, in a brief per curiam opinion, noted that the State had used the confession in the confederate’s trial, referred to an earlier case holding that the Constitution prohibits States from “ ‘mechanistically’ ” applying the hearsay rule “ ‘to defeat the ends of justice,’ ” and held that the Constitution prohibited the State from barring use of the confession; 442 U. S., at 97 (quoting Chambers v. Mississippi, 410 U. S. 284, 302 (1973)). The opinion focused only upon the hearsay problem, and it implicitly assumed that, in the absence of the hearsay problem, state law would not have blocked admission of the evidence.
In any event, subsequent to Green, this Court decided Franklin v. Lynaugh, 487 U. S. 164 (1988), and that case makes clear, contrary to the Oregon Supreme Court’s understanding, that this Court’s previous cases had not interpreted the Eighth Amendment as providing a capital defendant the right to introduce at sentencing evidence designed to cast “residual doubt” on his guilt of the basic crime of conviction. The Franklin plurality said it was “quité doubtful” that any such right existed. Id., at 173, n. 6. And two other Members of the Court added that “[o]ur cases” do not support any such “right to reconsideration by the sentencing body of lingering doubts about... guilt.” Id., at 187 (O’Con-nor, J., concurring in judgment). See also Penry v. Ly-naugh, 492 U. S. 302, 320 (1989) (characterizing Franklin as a case in which a majority “agreed that ‘residual doubt’ as to Franklin’s guilt was not a constitutionally mandated mitigating factor” (brackets omitted)).
Franklin did not resolve whether the Eighth Amendment affords capital defendants such a right, for the plurality held that the sentencing scheme at issue was constitutional “even if such a right existed.” 487 U. S., at 174. But the Court’s statements on the matter make clear that the Oregon Supreme Court erred in interpreting Green as providing a capital defendant with a constitutional right to introduce residual doubt evidence at sentencing.
In this case, we once again face a situation where we need not resolve whether such a right exists, for, even if it does, it could not extend so far as to provide this defendant with a right to introduce the evidence at issue. See, e. g., Alabama State Federation of Labor v. McAdory, 325 U. S. 450, 461-462 (1945). The Eighth Amendment insists upon “ ‘reliability in the determination that death is the appropriate punishment in a specific case.’” Penry, supra, at 328 (quoting Woodson v. North Carolina, 428 U. S. 280, 305 (1976) (plurality opinion)). The Eighth Amendment also insists that a sentencing jury be able “to consider and give effect to mitigating evidence” about the defendant’s “character or record or the circumstances of the offense.” Penry, supra, at 327-328. But the Eighth Amendment does not deprive the State of its authority to set reasonable limits upon the evidence a defendant can submit, and to control the manner in which it is submitted. Rather, “States are free to structure and shape consideration of mitigating evidence ‘in an effort to achieve a more rational and equitable administration of the death penalty.’” Boyde v. California, 494 U. S. 370, 377 (1990) (quoting Franklin, supra, at 181 (plurality opinion)); see, e. g., Johnson v. Texas, 509 U. S. 350, 362 (1993); California v. Brown, 479 U. S. 538, 543 (1987).
Three circumstances, taken together, convince us that the State possesses the authority to regulate, through exclusion, the evidence that Guzek seeks to present. First, sentencing traditionally concerns how, not whether, a defendant committed the crime. See United States Sentencing Commission, Guidelines Manual §1A1.1, editorial note, §4(a), p. 4 (Nov. 2004). But the evidence at issue here — alibi evidence — concerns only whether, not how, he did so.
Second, the parties previously litigated the issue to which the evidence is relevant — whether the defendant committed the basic crime. The evidence thereby attacks a previously determined matter in a proceeding at which, in principle, that matter is not at issue. The law typically discourages collateral attacks of this kind. Cf. Allen v. McCurry, 449 U. S. 90, 94 (1980) (“As this Court and other courts have often recognized, res judicata and collateral estoppel relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication”).
Third, the negative impact of a rule restricting defendant’s ability to introduce new alibi evidence is minimized by the fact that Oregon law gives the defendant the right to present to the sentencing jury all the evidence of innocence from the original trial regardless. That law permits the defendant to introduce at resentencing transcripts and exhibits from his prior trial. Ore. Rev. Stat. § 138.012(2)(b) (2003). The defendant here has not claimed that the evidence at issue was unavailable at the time of his original trial. Thus, he need only have introduced it at that time to guarantee its presentation (albeit through transcripts) to a resentencing jury as well.
The legitimacy of these trial management and evidentiary considerations, along with the typically minimal adverse impact that a restriction would have on a defendant’s ability to present his alibi claim at resentencing convinces us that the Eighth Amendment does not protect defendant’s right to present the evidence at issue here. We conclude that the Oregon court was wrong in holding to the contrary.
IV
Guzek also contends that, even if the Eighth and Fourteenth Amendments do not mandate the admission of his mother’s testimony, he is entitled to introduce that evidence to impeach his associates, whose earlier testimony the government intends to introduce at resentencing. The Oregon Supreme Court did not address this issue; nor do we believe it fairly encompassed within the question presented. The Oregon courts are free to consider it on remand should they believe it appropriate to do so.
V
For these reasons, we vacate the judgment of the Oregon Supreme Court, and we remand the case for proceedings not inconsistent with this opinion.
It is so ordered.
Justice Alito took no part in the consideration or decision of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The Court having heard oral argument by the Attorneys General of the States and having considered the printed briefs of counsel, the Court is of the opinion that the motion for leave to file the bill of complaint should be granted. The State of Maryland is directed to file an answer to the bill of complaint within 60 days and process is ordered to issue accordingly.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
Respondent filed his petition for naturalization in the United States District Court for the Northern District of California on September 13, 1967. The District Court granted the petition, rejecting the negative recommendation of the naturalization examiner appointed by the Attorney General pursuant to § 335 of the Immigration and Nationality Act, 66 Stat. 255, 8 U. S. C. § 1446. The Court of Appeals affirmed, 475 F. 2d 7 (CA9 1973), holding that even though the deadline fixed by Congress for the filing of applications such as respondent’s had expired more than 20 years earlier, petitioner was “estopped” from relying on this fact.
Respondent was born in Manila in 1917, and in February 1941 enlisted in the Philippine Scouts, a unit that was part of the United States Army. He was captured by the Japanese Armed Forces and released after six months’ internment. In April 1945 after the liberation of the Philippines by Allied Forces, he rejoined the Scouts and served until his discharge in December 1945.
Sections 701 and 702 of the Nationality Act of 1940, as amended, provided for the naturalization of non-citizens who served honorably in the Armed Forces of the United States during World War II. Section 701 exempted certain alien servicemen who served outside the continental limits of the United States from some of the usual requirements for naturalization, including those of a period of residence in the United States and literacy in English. An amendment to this section specified that all petitions filed under it had to be filed no later than December 31, 1946. Section 702 provided for the overseas naturalization of persons eligible for naturalization under § 701 who were not within the jurisdiction of any court authorized to naturalize aliens; naturalization under § 702 could take place only during active service in the Armed Forces. Section 705 authorized the Commissioner of Immigration and Naturalization, with the approval of the Attorney General, to make such rules and regulations as were necessary to carry into effect the provisions of the Act.
Respondent entered the United States for the first and only time on April 25, 1964, more than 17 years after the expiration of the time limit established by Congress for claiming naturalization under the “exemptions of the Act.” He entered on a visitor-for-business visa, which expired on June 30, 1964. His subsequent petition for naturalization was based on the assertion that the Government was estopped from relying on the statutory time limit which Congress had attached to the provisions under which he claimed. The estoppel was said to arise from petitioner’s failure to advise him, during the time he was eligible, of his right to apply for naturalization, and from petitioner’s failure to provide a naturalization representative in the Philippines during all of the time respondent and those in his class were eligible for naturalization. The District Court adopted respondent’s contention, and its conclusions were upheld by the Court of Appeals.
It is well settled that the Government is not in a position identical to that of a private litigant with respect to its enforcement of laws enacted by Congress.
“As a general rule laches or neglect of duty on the part of officers of the Government is no defense to a suit by it to enforce a public right or protect a public interest. ... A suit by the United States to enforce and maintain its policy respecting lands which it holds in trust for all the people stands upon a different plane in this and some other respects from the ordinary private suit to regain the title to real property or to remove a cloud from it.” Utah Power & Light Co. v. United States, 243 U. S. 389, 409 (1917).
Here the petitioner has been charged by Congress with administering an Act which both made available benefits of naturalization to persons in respondent’s class and established a cutoff date for the claiming of such benefits. Petitioner, in enforcing the cutoff date established by Congress, as well as in recognizing claims for the benefits conferred by the Act, is enforcing the public policy established by Congress.
While the issue of whether “affirmative misconduct” on the part of the Government might estop it from denying citizenship was left open in Montana v. Kennedy, 366 U. S. 308, 314, 315 (1961), no conduct of the sort there adverted to was involved here. We do not think that the failure to fully publicize the rights which Congress accorded under the Act of 1940, or the failure to have stationed in the Philippine Islands during all of the time those rights were available an authorized naturalization representative, can give rise to an estoppel against the Government.
Respondent’s effort to claim naturalization under a statute which by its terms had expired more than 20 years before he filed his lawsuit must therefore fail. The petition for certiorari is granted and the judgment of the Court of Appeals is reversed.
Sections 701, 702, and 705 of the Nationality Act of 1940, added by the Second War Powers Act, 1942, 56 Stat. 182, as amended, 8 U. S. C. §§ 1001, 1002, 1005 (1940 ed., Supp. V), provided in pertinent part:
Sec. 701. “[A]ny person not a citizen, regardless of age, who has served or hereafter serves honorably in the military or naval forces of the United States during the present war and [w]ho shall have been at the time of his enlistment or induction a resident thereof and who (a) was lawfully admitted into the United States, including its Territories and possessions, or (b) having entered the United States, including its Territories and possessions, prior to September 1, 1943, being unable to establish lawful admission into the United States serves honorably in such forces beyond the continental limits of the United States or has so served may be naturalized upon compliance with all the requirements of the naturalization laws except that (1) no declaration of intention, no certificate of arrival for those described in group (b) hereof, and no period of residence within the United States or any State shall be required; (2) the petition for naturalization may be filed in any court having naturalization jurisdiction regardless of the residence of the petitioner; (3) the petitioner shall not be required to speak the English language, sign his petition in his own handwriting, or meet any educational test; . . . Provided, however, That ... (3) the petition shall be filed not later than December 31, 1946. . . .”
Sec. 702. “During the present war, any person entitled to naturalization under section 701 of this Act, who while serving honorably in the military . . . forces of the United States is not within the jurisdiction of any court authorized to naturalize aliens, may be naturalized in accordance with all the applicable provisions of section 701 without appearing before a naturalization court. The petition for naturalization of any petitioner under this section shall be made and sworn to before, and filed with, a representative of the Immigration and Naturalization Service designated by the Commissioner or a Deputy Commissioner, which designated representative is hereby authorized to receive such petition in behalf of the Service, to conduct hearings thereon, to take testimony concerning any matter touching or in any way affecting the admissibility of any such petitioner for naturalization, to call witnesses, to administer oaths, including the oath of the petitioner and his witnesses to the petition for naturalization and the oath of renunciation and allegiance prescribed by section 335 of this Act, and to grant naturalization, and to issue certificates of citizenship . . . .”
Sec. 705. “The Commissioner, with the approval of the Attorney General, shall prescribe and furnish such forms, and shall make such rules and regulations, as may be necessary to carry into effect the provisions of this Act.”
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Breyer
delivered the opinion of the Court.
This ease concerns the timeliness of a complaint filed in a private securities fraud action. The complaint was timely if filed no more than two years after the plaintiffs “discover[ed] the facts constituting the violation.” 28 U. S. C. § 1658(b)(1). Construing this limitations statute for the first time, we hold that a cause of action accrues (1) when the plaintiff did in fact discover, or (2) when a reasonably diligent plaintiff would have discovered, “the facts constituting the violation” — whichever comes first. We also hold that the “facts constituting the violation” include the fact of scienter, “a mental state embracing intent to deceive, manipulate, or defraud,” Ernst & Ernst v. Hochfelder, 425 U. S. 185, 194, n. 12 (1976). Applying this standard, we affirm the Court of Appeals’ determination that the complaint filed here was timely.
I
The action before us involves a claim by a group of investors (the plaintiffs, respondents here) that Merck & Co. and others (petitioners here, hereinafter Merck) knowingly misrepresented the risks of heart attacks accompanying the use of Merck’s painkilling drug, Vioxx (leading to economic losses when the risks later became apparent). The plaintiffs brought an action for securities fraud under § 10(b) of the Securities Exchange Act of 1934. See 48 Stat. 891, as amended, 15 U. S.C. §78j(b); SEC Rule 10b-5, 17 CFR §240.10b-5(b) (2009); Dura Pharmaceuticals, Inc. v. Broudo, 544 U. S. 336, 341-342 (2005).
The applicable statute of limitations provides that a “private right of action” that, like the present action, “involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws... may be brought not later than the earlier of—
“(1) 2 years after the discovery of the facts constituting the violation; or
“(2) 5 years after such violation.” 28 U. S. C. § 1658(b).
The complaint in this case was filed on November 6, 2003, and no one doubts that it was filed within five years of the alleged violation. Therefore, the critical date for timeliness purposes is November 6, 2001 — two years before this complaint was filed. Merck claims that before this date the plaintiffs had (or should have) discovered the “facts constituting the violation.” If so, by the time the plaintiffs filed their complaint, the 2-year statutory period in § 1658(b)(1) had run. The plaintiffs reply that they had not, and could not have, discovered by the critical date those “facts," particularly not the facts related to scienter, and that their complaint was therefore timely.
A
We first set out the relevant pre-November 2001 facts, as we have gleaned them from the briefs, the record, and the opinions below.
1.1990’s. In the mid~1990’s, Merck developed Vioxx. In 1999, the Food and Drug Administration (FDA) approved it for prescription use. Vioxx suppresses pain by inhibiting the body’s production of an enzyme called COX-2 (cyclooxygenase-2). COX-2 is associated with pain and inflammation. Unlike some other anti-inflammatory drugs in its class like aspirin, ibuprofen, and naproxen, Vioxx does not inhibit production of a second enzyme called COX-1 (cyclooxygenase-1). COX-1 plays a part in the functioning of the gastrointestinal tract and also in platelet aggregation (associated with blood clots). App. 50-51.
2. March 2000. Merck announced the results of a study, called the “VIGOR” study. Id., at 291-294. The study compared Vioxx with another painkiller, naproxen. The study showed that persons taking Vioxx suffered fewer gastrointestinal side effects (as Merck had hoped). But the study also revealed that approximately 4 out of every 1,000 participants who took Vioxx suffered heart attacks, compared to only 1 per 1,000 participants who took naproxen. Id., at 296, 306; see Bombardier et al., Comparison of Upper Gastrointestinal Toxicity of Rofecoxib and Naproxen in Patients With Rheumatoid Arthritis, 343 New England J. Medicine 1520, 1523, 1526-1527 (2000).
Merck’s press release acknowledged VIGOR’S adverse cardiovascular data. But Merck said that these data were “consistent with naproxen’s ability to block platelet aggregation.” App. 291. Merck noted that, since “Vioxx, like all COX-2 selective medicines, does not block platelet aggregation^ it] would not be expected to have similar effects.” Ibid. And Merck added that “safety data from all other completed and ongoing clinical trials... showed no indication of a difference in the incidence of thromboembolic events between Vioxx” and either a placebo or comparable drugs. Id., at 293 (emphasis deleted).
This theory — that VIGOR’S troubling cardiovascular findings might be due to the absence of a benefit conferred by naproxen rather than due to a harm caused by Vioxx — later became known as the “naproxen hypothesis.” In advancing that hypothesis, Merck acknowledged that the naproxen benefit “had not been observed previously.” Id., at 291. Journalists and stock market analysts reported all of the above — the positive gastrointestinal results, the troubling cardiovascular finding, the naproxen hypothesis, and the fact that the naproxen hypothesis was unproved. See id., at 355-391, 508-557.
3. February 2001 to August 2001. Public debate about the naproxen hypothesis continued. In February 2001, the FDA’s Arthritis Advisory Committee convened to consider Merck’s request that the Vioxx label be changed to reflect VIGOR’S positive gastrointestinal findings. The VIGOR cardiovascular findings were also discussed. Id., at 392-395, 558-577. In May 2001, a group of plaintiffs filed a products-liability lawsuit against Merck, claiming that “Merck’s own research” had demonstrated that “users of Vioxx were four times as likely to suffer heart attacks as compared to other less expensive medications.” Id., at 869. In August 2001, the Journal of the American Medical Association wrote that the available data raised a “cautionary flag” and strongly urged that “a trial specifically assessing cardiovascular risk” be done. Id., at 331-332; Mukherjee, Nissen, & Topol, Risk of Cardiovascular Events Associated with Selective COX-2 Inhibitors, 286 JAMA 954 (2001). At about the same time, Bloomberg News quoted a Merck scientist who claimed that Merck had “additional data” that were “very, very reassuring,” and Merck issued a press release stating that it stood “behind the overall and cardiovascular safety profile... of Vioxx.” App. 434, 120 (emphasis deleted; internal quotation marks omitted).
U. September and October 2001. The FDA sent Merck a warning letter released to the public on September 21, 2001. It said that, in respect to cardiovascular risks, Merck’s Vioxx marketing was “false, lacking in fair balance, or otherwise misleading.” Id., at 339. At the same time, the FDA acknowledged that the naproxen hypothesis was a “possible explanation” of the VIGOR results. Id., at 340. But it found that Merck’s “promotional campaign selectively present[ed]” that hypothesis without adequately acknowledging “another reasonable explanation,” namely, “that Vioxx may have pro-thrombotic [i. e., adverse cardiovascular] properties.” Ibid. The FDA ordered Merck to send healthcare providers a corrective letter. Id., at 353.
After the FDA letter was released, more products-liability lawsuits were filed. See id., at 885-956. Merck’s share price fell by 6.6% over several days. See id., at 832. By October 1, the price rebounded. See ibid. On October 9, 2001, the New York Times said that Merck had reexamined its own data and “found no evidence that Vioxx increased the risk of heart attacks.” Id., at 504. It quoted the president of Merck Research Laboratories as positing “ ‘two possible interpretations’ “ ‘Naproxen lowers the heart attack rate, or Vioxx raises it.’” Ibid. Stock analysts, while reporting the warning letter, also noted that the FDA had not denied that the naproxen hypothesis remained an unproven but possible explanation. See id., at 614, 626, 628.
B
We next set forth three important events that occurred after the critical date.
1. October 2003. The Wall Street Journal published the results of a Merck-funded Vioxx study conducted at Boston’s Brigham and Women’s Hospital. After examining the medical records of more than 50,000 Medicare patients, researchers found that those given Vioxx for 30 to 90 days were 37% more likely to have suffered a heart attack than those given either a different painkiller or no painkiller at all. Id., at 164-165. (That is to say, if patients given a different painkiller or given no painkiller at all suffered 10 heart attacks, then the same number of patients given Vioxx would suffer 13 or 14 heart attacks.) Merck defended Vioxx and pointed to the study’s limitations. Id., at 165-167.
2. September SO, 2004. Merck withdrew Vioxx from the market. It said that a new study had found “an increased risk of confirmed cardiovascular events beginning after 18 months of continuous therapy.” Id., at 182 (internal quotation marks omitted). A Merck representative publicly described the results as “totally unexpected.” Id., at 186 (emphasis deleted). Merck’s shares fell by 27% the same day. Id., at 185,856.
S. November 1, 2004. The Wall Street Journal published an article stating that “internal Merck e-mails and marketing materials as well as interviews with outside scientists show that the company fought forcefully for years to keep safety concerns from destroying the drug’s commercial prospects.” Id., at 189-190. The article said that an early e-mail from Merck’s head of research had said that the VIGOR “results showed that the cardiovascular events 'are clearly there,’” that it was “ 'a shame but... a low incidence,’ ” and that it '"is mechanism based as we worried it was.’” Id., at 192. It also said that Merck had given its salespeople instructions to ‘"DODGE”’ questions about Vioxx's cardiovascular effects. Id., at 193.
C
The plaintiffs filed their complaint on November 6, 2003. As subsequently amended, the complaint alleged that Merck had defrauded investors by promoting the naproxen hypothesis, knowing the hypothesis was false. It said, for example, that Merck “knew, at least as early as 1996, of the serious safety issues with Vioxx,” and that a “1998 internal Merck clinical trial... revealed that... serious cardiovascular events... occurred six times more frequently in patients given Vioxx than in patients given a different arthritis drug or placebo.” Id., at 56, 58-59 (emphasis and capitalization deleted).
Merck, believing that the plaintiffs knew or should have known the “facts constituting the violation” at least two years earlier, moved to dismiss the complaint, saying it was filed too late. The District Court granted the motion. The court held that the (March 2001) VIGOR study, the (September 2001) FDA warning letter, and Merck's (October 2001) response should have alerted the plaintiffs to a “possibility that Merck had knowingly misrepresented material facts” no later than October 9, 2001, thus placing the plaintiffs on “inquiry notice” to look further. In re Merck & Co. Securities, Derivative & “ERISA” Litigation, 483 F. Supp. 2d 407, 423 (NJ 2007) (emphasis added). Finding that the plaintiffs had failed to “show that they exercised reasonable due diligence but nevertheless were unable to discover their injuries,” the court took October 9, 2001, as the date that the limitations period began to run and therefore found the complaint untimely. Id., at 424.
The Court of Appeals for the Third Circuit reversed. A majority held that the pre-November 2001 events, while constituting “storm warningts],” did not suggest much by way of scienter, and consequently did not put the plaintiffs on “inquiry notice,” requiring them to investigate further. In re Merck & Co. Securities, Derivative & “ERISA” Litigation, 543 F. 3d 150, 172 (2008). A dissenting judge considered the pre-November 2001 events sufficient to start the 2-year clock running. Id., at 173 (opinion of Roth, J.).
Merck sought review in this Court, pointing to disagreements among the Courts of Appeals. Compare Theoharous v. Fong, 256 F. 3d 1219, 1228 (CA11 2001) (limitations period begins to run when information puts plaintiffs on “inquiry notice” of the need for investigation), With Shah v. Meeker, 435 F. 3d 244, 249 (CA2 2006) (same; but if plaintiff does investigate, period runs “from the date such inquiry should have revealed the fraud” (internal quotation marks omitted)), and New England Health Care Employees Pension Fund v. Ernst & Young, LLP, 336 F. 3d 495, 501 (CA6 2003) (limitations period always begins to run only when a reasonably diligent plaintiff, after being put on “inquiry notice,” should have discovered facts constituting violation (internal quotation marks omitted)). We granted Merck’s petition.
II
Before turning to Merck’s arguments, we consider a more basic matter. The parties and the Solicitor General agree that § 165S(b)(l)’s word “discovery” refers not only to a plaintiff’s actual discovery of certain facts, but also to the facts that a reasonably diligent plaintiff would have discovered. We agree. But because the statute’s language does not make this interpretation obvious, and because we cannot answer the question presented without considering whether the parties are right about this matter, we set forth the reasons for our agreement in some detail.
We recognize that one might read the statutory words “after the discovery of the facts constituting the violation” as referring to the time a plaintiff actually discovered the relevant facts. But in the statute of limitations context, the word “discovery” is often used as a term of art in connection with the “discovery rule,” a doctrine that delays accrual of a cause of action until the plaintiff has “discovered” it. The rule arose in fraud cases as an exception to the general limitations rule that a cause of action accrues once a plaintiff has a “complete and present cause of action,” Bay Area Laundry and Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal, 522 U. S. 192, 201 (1997) (citing Clark v. Iowa City, 20 Wall. 583, 589 (1875); internal quotation marks omitted). This Court long ago recognized that something different was needed in the case of fraud, where a defendant’s deceptive conduct may prevent a plaintiff from even knowing that he or she has been defrauded. Otherwise, “the law which was designed to prevent fraud” could become “the means by which it is made successful and secure.” Bailey v. Glover, 21 Wall. 342, 349 (1875). Accordingly, “where a plaintiff has been injured by fraud and remains in ignorance of it without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered.” Holmberg v. Armbrecht, 327 U. S. 392, 397 (1946) (internal quotation marks omitted; emphasis added). And for more than a century, courts have understood that “[fjraud is deemed to be discovered... when, in the exercise of reasonable diligence, it could have been discovered.” 2 H. Wood, Limitation of Actions §276b(ll), p. 1402 (4th ed. 1916); see id., at 1401-1403, and nn. 74-84 (collecting cases and statutes); see, e.g., Holmberg, supra, at 397; Kirby v. Lake Shore & Michigan Southern R. Co., 120 U. S. 130, 138 (1887) (The rule “regard[s] the cause of action as having accrued at the time the fraud was or should have been discovered”).
More recently, both state and federal courts have applied forms of the “discovery rule” to claims other than fraud. See 2 C. Corman, Limitation of Actions §§ 11.1.2.1, 11.1.2.3, pp. 136-142, and nn. 6-13,18-23 (1991 and 1993 Supp.) (hereinafter Corman) (collecting cases); see, e. g., United States v. Kubrick, 444 U. S. 111 (1979). Legislatures have codified the discovery rule in various contexts. 2 Corman § 11.2, at 170-171, and nn. 1-9 (collecting statutes); see, e. g., 28 U. S. C. §2409a(g) (actions to quiet title against the United States). In doing so, legislators have written the word “discovery” directly into the statute. And when they have done so, state and federal courts have typically interpreted the word to refer not only to actual discovery, but also to the hypothetical discovery of facts a reasonably diligent plaintiff would know. See, e. g., Peacock v. Barnes, 142 N. C. 215, 217-220, 55 S. E. 99, 100 (1906); Davis v. Hibernia Sav. & Loan Soc., 21 Cal. App. 444, 448, 132 P. 462, 464 (1913); Roether v. National Union Fire Ins. Co., 51 N. D. 634, 640-642, 200 N. W. 818, 821 (1924); Goldenberg v. Bache & Co., 270 F. 2d 675, 681 (CA5 1959); Mobley v. Hall, 202 Mont. 227, 232, 657 P. 2d 604, 606 (1983); Tregenza v. Great American Communications Co., 12 F. 3d 717, 721-722 (CA7 1993); J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F. 3d 1245, 1254 (CA1 1996).
Thus, treatise writers now describe “the discovery rule” as allowing a claim “to accrue when the litigant first knows' or with due diligence should know facts that will form the basis for an action.” 2 Corman § 11.1.1, at 134 (emphasis added); see also ibid., n. 1 (collecting cases); 37 Am. Jur. 2d, Fraud and Deceit §347, p. 354 (2001 and Supp. 2009) (noting that the various formulations of “discovery” all provide that “in addition to actual knowledge of the fraud, once a reasonably diligent party is in a position that they should have sufficient knowledge or information to have actually discovered the fraud, they are charged with discovery”); id., at 354-355, and nn. 2-11 (collecting cases).
Like the parties, we believe that Congress intended courts to interpret the word “discovery” in § 1658(b)(1) similarly. Before Congress enacted that statute, this Court, having found in the federal securities laws the existence of an implied private § 10(b) action, determined its governing limitations period by looking to other limitations periods in the federal securities laws. Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U. S. 350 (1991). Noting the existence of various formulations “differ[ing] slightly in terminology,” the Court chose the language in 15 U. S. C. § 78i(e), the statutory provision that governs securities price manipulation claims. 501 U. S., at 364, n. 9. And in doing so, the Court said that private § 10(b) actions “must be commenced within one year after the discovery of the facts constituting the violation and within three years after such violation.” Id., at 364 (emphasis added). (The Court listed among the various formulations the one in 15 U. S. C. § 77m, on which the concurrence relies. See post, at 656-658 (Scalia, J., concurring in part and concurring in judgment); Lampf, supra, at 360, and n. 7 (quoting § 77m).)
Subsequently, every Court of Appeals to decide the matter held that “discovery of the facts constituting the violation” occurs not only once a plaintiff actually discovers the facts, but also when a hypothetical reasonably diligent plaintiff would have discovered them. See, e. g., Law v. Medco Research, Inc., 113 F. 3d 781, 785-786 (CA7 1997); Dodds v. Cigna Securities, Inc., 12 F. 3d 346, 350, 353 (CA2 1993); see In re NAHC, Inc. Securities Litigation, 306 F. 3d 1314, 1325, n. 4 (CA3 2002) (collecting cases). Some of those courts noted that other limitations provisions in the federal securities laws explicitly provide that the period begins to run “ 'after the discovery of the untrue statement... or after such discovery should have been made by [the] exercise of reasonable diligence,”’ whereas the formulation adopted by the Court in Lampf from 15 U. S. C. § 78i(e) does not. Tregenza, supra, at 721 (quoting § 77m; emphasis added in Tregenza); see Lampf, supra, at 364, n. 9. But, courts reasoned, because the term “discovery” in respect to statutes of limitations for fraud has long been understood to include discoveries a reasonably diligent plaintiff would make, the omission of an explicit provision to that effect did not matter. Tregenza, supra, at 721; accord, New England Health Care, 336 F. 3d, at 499-500.
In 2002, when Congress enacted the present limitations statute, it repeated Lampf s critical language. The statute says that an action based on fraud “may be brought not later than the earlier of... 2 years after the discovery of the facts constituting the violation” (or “5 years after such violation”). § 804 of the Sarbanes-Oxley Act, 116 Stat. 801, codified at 28 U. S. C. § 1658(b) (emphasis added). (This statutory provision does not make the linguistic distinction that the concurrence finds in a different statute, § 77m, and upon which its argument rests. Cf. 29 U. S. C. § 1113(2) (statute in which Congress provided that an action be brought “three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation” (emphasis added)).) Not surprisingly, the Courts of Appeals unanimously have continued to interpret the word “discovery” in this statute as including not only facts a particular plaintiff knows, but also the facts any reasonably diligent plaintiff would know. See, e. g., Staehr v. Hartford Financial Servs. Group, Inc., 547 F. 3d 406, 411 (CA2 2008); Sudo Properties, Inc. v. Terrebonne Parish Consolidated Govt., 503 F. 3d 371, 376 (CA5 2007).
We normally assume that, when Congress enacts statutes, it is aware of relevant judicial precedent. See, e. g., Edelman v. Lynchburg College, 535 U. S. 106, 116-117, and n. 13 (2002); Commissioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 159 (1993). Given the history and precedent surrounding the use of the word “discovery” in the limitations context generally as well as in this provision in particular, the reasons for making this assumption are particularly strong here. We consequently hold that “discovery” as used in this statute encompasses not only those facts the plaintiff actually knew, but also those facts a reasonably diligent plaintiff would have known. And we evaluate Merck’s claims accordingly.
III
We turn now to Merck’s arguments in favor of holding that petitioners’ claims accrued before November 6,2001. First, Merck argues that the statute does not require “discovery” of scienter-related “facts.” See Brief for Petitioners 19-28. We cannot agree, however, that facts about scienter are unnecessary.
The statute says that the limitations period does not begin to run until “discovery of the facts constituting the violation.” 28 U. S. C. § 1658(b)(1) (emphasis added). Scienter is assuredly a “fact.” In a § 10(b) action, scienter refers to “a mental state embracing intent to deceive, manipulate, or defraud.” Ernst & Ernst, 425 U. S., at 194, n. 12. And the “ ‘state of a man’s mind is as much a fact as the state of his digestion.’ ” Postal Service Bd. of Governors v. Aikens, 460 U. S. 711, 716 (1983) (quoting Edgington v. Fitzmaurice, [1885] 29 Ch. Div. 459, 483).
And this “fact” of scienter “constitutes]” an important and necessary element of a § 10(b) “violation.” A plaintiff cannot recover without proving that a defendant made a material misstatement with an intent to deceive — not merely innocently or negligently. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U. S. 308, 319 (2007); Ernst & Ernst, supra. Indeed, Congress has enacted special heightened pleading requirements for the scienter element of § 10(b) fraud cases. See 15 U. S. C. § 78u-4(b)(2) (requiring plaintiffs to “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind” (emphasis added)). As a result, unless a § 10(b) plaintiff can set forth facts in the complaint showing that it is “at least as likely as” not that the defendant acted with the relevant knowledge or intent, the claim will fail. Tellabs, supra, at 328 (emphasis deleted). It would therefore frustrate the very purpose of the discovery rule in this provision — which, after all, specifically applies only in cases “involv[ing] a claim of fraud, deceit, manipulation, or contrivance,” § 1658(b) — if the limitations period began to run regardless of whether a plaintiff had discovered any facts suggesting scienter. So long as a defendant concealed for two years that he made a misstatement with an intent to deceive, the limitations period would expire before the plaintiff had actually “discover [ed]” the fraud.
We consequently hold that facts showing scienter are among those that “constitute] the violation.” In so holding, we say nothing about other facts necessary to support a private § 10(b) action. Cf. Brief for United States as Amicus Curiae 12, n. 1 (suggesting that facts concerning a plaintiff’s reliance, loss, and loss causation are not among those that constitute “the violation” and therefore need not be “discovered]” for a claim to accrue).
Second, Merck argues that, even if “discovery” requires facts related to scienter, facts that tend to show a materially false or misleading statement (or material omission) are ordinarily sufficient to show scienter as well. See Brief for Petitioners 22, 28-29. But we do not see how that is so. We recognize that certain statements are such that, to show them false is normally to show scienter as well. It is unlikely, for example, that someone would falsely say “I am not married” without being aware of the fact that his statement is false. Where § 10(b) is at issue, however, the relation of factual falsity and state of mind is more context specific. An incorrect prediction about a firm’s future earnings, by itself, does not automatically tell us whether the speaker deliberately lied or just made an innocent (and therefore nonactionable) error. Hence, the statute may require “discovery” of scienter-related facts beyond the facts that show a statement (or omission) to be materially false or misleading. Merck fears that this requirement will give life to stale claims or subject defendants to liability for acts taken long ago. But Congress’ inclusion in the statute of an unqualified bar on actions instituted “5 years after such violation,” § 1658(b)(2), giving defendants total repose after five years, should diminish that fear. Cf. Lampf, 501 U. S., at 363 (holding comparable bar not subject to equitable tolling).
Third, Merck says that the limitations period began to run prior to November 2001 because by that point the plaintiffs were on “inquiry notice.” Merck uses the term “inquiry notice” to refer to the point “at which a plaintiff possesses a quantum of information sufficiently suggestive of wrongdoing that he should conduct a further inquiry.” Brief for Petitioners 20. And some, but not all, Courts of Appeals have used the term in roughly similar ways. See, e. g., Franze v. Equitable Assurance, 296 F. 3d 1250, 1254 (CA11 2002) (“[I]nquiry notice [is] The term used for knowledge of facts that would lead a reasonable person to begin investigating the possibility that his legal rights had been infringed’ ”). Cf. Dodds, 12 F. 3d, at 350 (“duty of inquiry” arises once “circumstances would suggest to an investor of ordinary intelligence the probability that she had been defrauded”); Fujisawa Pharmaceutical Co. v. Kapoor, 115 F. 3d 1332, 1335-1336 (CA7 1997) (“The facts constituting [inquiry] notice must be sufficient]... to incite the victim to investigate” and “to enable him to tie up any loose ends and complete the investigation in time to file a timely suit”); Great Rivers Cooperative of Southeastern Iowa v. Farmland Industries, Inc., 120 F. 3d 893, 896 (CA8 1997) (“Inquiry notice exists when the victim is aware of facts that would lead a reasonable person to investigate and consequently acquire actual knowledge of the defendant's misrepresentations” (emphasis added)).
If the term “inquiry notice” refers to the point where the facts would lead a reasonably diligent plaintiff to investigate further, that point is not necessarily the point at which the plaintiff would already have discovered facts showing scienter or other “facts constituting the violation.” But the statute says that the plaintiff's claim accrues only after the “discovery” of those latter facts. Nothing in the text suggests that the limitations period can sometimes begin before “discovery” can take place. Merck points out that, as we have discussed, see supra, at 644-645, the court-created “discovery rule” exception to ordinary statutes of limitations is not generally available to plaintiffs who fail to pursue then-claims with reasonable diligence. But we are dealing here with a statute, not a court-created exception to a statute. Because the statute contains no indication that the limitations period should occur at some earlier moment before “discovery,” when a plaintiff would have begun investigating, we cannot accept Merck’s argument.
As a fallback, Merck argues that even if the limitations period does generally begin at “discovery,” it should nonetheless run from the point of “inquiry notice” in one particular situation, namely, where the actual plaintiff fails to undertake an investigation once placed on “inquiry notice.” In such circumstances, Merck contends, the actual plaintiff is not diligent, and the law should not “effectively excuse a plaintiff’s failure to conduct a further investigation” by placing that nondiligent plaintiff and a reasonably diligent plaintiff “in the same position.” Brief for Petitioners 48.
We cannot accept this argument for essentially the same reason we reject “inquiry notice” as the standard generally: We cannot reconcile it with the statute, which simply provides that “discovery” is the event that triggers the 2-year limitations period — for all plaintiffs. Cf. United States v. Mack, 295 U. S. 480, 489 (1935) (“Laches within the term of the statute of limitations is no defense at law”). Furthermore, the statute does not place all plaintiffs “in the same position” no matter whether they investigate when investigation is warranted. The limitations period puts plaintiffs who fail to investigate once on “inquiry notice” at a disadvantage because it lapses two years after a reasonably diligent plaintiff would have discovered the necessary facts. A plaintiff who fails entirely to investigate or delays investigating may well not have discovered those facts by that time or, at least, may not have found sufficient facts by that time to be able to file a § 10(b) complaint that satisfies the applicable heightened pleading standards. Cf. Young v. Lepone, 305 F. 3d 1, 9 (CA1 2002) (“[A] reasonably diligent investigation... may consume as little as a few days or as much as a few years to get to the bottom of the matter”).
Merck further contends that its proposed “inquiry notice” standard is superior, because determining when a hypothetical reasonably diligent plaintiff would have “discover[ed]” the necessary facts is too complicated for judges to undertake. But courts applying the traditional discovery rule have long had to ask what a reasonably diligent plaintiff would have known and done in myriad circumstances. And courts in at least five Circuits already ask this kind of question in securities fraud cases. See, e. g., Rothman v. Gregor, 220 F. 3d 81, 97 (CA2 200
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam:
The judgment is reversed and the case remanded to the District Court with directions to grant a new trial because of official intrusion into the privacy of the jury. Remmer v. United States, 350 U. S. 377; 347 U. S. 227. The fact that the intrusion was unintentional does not remove the effect of the-intrusion.
MR. Justice Reed, with whom Mr. Justice Burton and Mr. Justice Clark join, has filed a dissent. Mr. Justice Clark has filed a separate dissent.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Brennan
delivered the opinion of the Court.
The punishment for bank robbery of a fine of not more than $5,000 and imprisonment for not more than 20 years, or both, 18 U. S. C. § 2113 (a), may be enhanced to a fine of not more than $10,000 and imprisonment for not more than 25 years, or both, when the robbery is committed “by the use of a dangerous weapon or device,” 18 U. S. C. 12113(d). Another statute, 18 U. S. C. § 924 (c), provides that whoever “uses a firearm to commit any felony for which he may be prosecuted in a court of the United States . . . shall, in addition to the punishment provided for the commission of such felony, be sentenced to a term of imprisonment for not less than one year nor more than ten years,” and “[i]n the case of his second or subsequent conviction under this subsection,” to imprisonment for not less than 2 nor more than 25 years; “nor shall the term of imprisonment imposed under this subsection run concurrently with any term of imprisonment imposed for the commission of such felony.” Petitioners were convicted of two separate bank robberies committed with firearms. The question for decision is whether §§ 2113(d) and 924 (c) should be construed as intended by Congress to authorize, in the case of a bank robbery committed with firearms, not only the imposition of the increased penalty under § 2113 (d), but also the imposition of an additional consecutive penalty under § 924 (c).
On September 8, 1975, petitioners, using handguns to intimidate the bank’s employees, robbed some $40,000 from the East End Branch of the Commercial Bank of Middlesboro, Ky. App. 20. Less than two months later, on November 4, 1975, petitioners returned to Middlesboro and this time, again using handguns, robbed the West End Branch of the Commercial Bank of about the same amount.
Petitioners received a separate jury trial for each robbery. After the trial for the first robbery, they were convicted of both aggravated bank robbery, in violation of 18 U. S. C. §§ 2113 (a) and (d), and of using firearms to commit the robbery, in violation of 18 U. S. C. § 924 (c). They were sentenced to consecutive terms of 25 years’ imprisonment on the robbery count and 10 years’ imprisonment on the firearms count. After the trial for the second robbery, petitioners were again convicted of one count of aggravated bank robbery in violation of §§2113 (a) and (d) and of one count of using firearms to commit the crime in violation of § 924 (c); again each received a 25-year sentence for the robbery and a 10-year sentence for the firearms count, the sentences to run consecutively to each other and to the sentences previously imposed.
During the sentencing proceedings following each conviction, counsel for petitioners argued that the imposition of cumulative penalties for the two crimes was impermissible because the § 2113 (d) charge merged with the firearms offense for purposes of sentencing. The District Court disagreed, holding that “the statutes and the legislative history indicat [e] an intention [by § 924(c)] to impose an additional punishment.” App. 17. The Court of Appeals for the Sixth Circuit affirmed without a published opinion, 542 F. 2d 1177 (1976). We granted certiorari, 430 U. S. 964 (1977), to resolve an apparent conflict between the decision below and the decision of the Court of Appeals for the Eighth Circuit in United States v. Eagle, 539 F. 2d 1166 (1976). We reverse.
II
Quite clearly, §§ 924 (c) and 2113 (d) are addressed to the same concern and designed to combat the same problem: the use of dangerous weapons — most particularly firearms — to commit federal felonies. Although we agree with the Court of Appeals that § 924 (c) creates an offense distinct from the underlying federal felony, United States v. Ramirez, 482 F. 2d 807 (CA2 1973); United States v. Sudduth, 457 F. 2d 1198 (CA1 1972), we believe that this is the beginning and not the end of the analysis necessary to answer the question presented for decision.
In Blockburger v. United States, 284 U. S. 299 (1932), this Court set out the test for determining “whether two offenses are sufficiently distinguishable to permit the imposition of cumulative punishment.” Brown v. Ohio, 432 U. S. 161, 166 (1977). We held that “[t]he applicable rule is that where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not.” Blockburger v. United States, supra, at 304. See also Brown v. Ohio, supra, at 166; Ianelli v. United States, 420 U. S. 770 (1975); Gore v. United States, 357 U. S. 386 (1958). The Blockburger test has its primary relevance in the double jeopardy context, where it is a guide for determining when two separately defined crimes constitute the “same offense” for double jeopardy purposes. Brown v. Ohio, supra.
Cases in which the Government is able to prove violations of two separate criminal statutes with precisely the same factual showing, as here, raise the prospect of double jeopardy and the possible need to evaluate the statutes in light of the Blockburger test. That test, the Government argues, is satisfied in this litigation. We need not reach the issue. Before an examination is made to determine whether cumulative punishments for the two offenses are constitutionally permissible, it is necessary, following our practice of avoiding constitutional decisions where possible, to determine whether Congress intended to subject the defendant to multiple penalties for the single criminal transaction in which he engaged. Jeffers v. United States, 432 U. S. 137, 155 (1977). Indeed, the Government concedes that “there remains at least a possibility that Congress, although constitutionally free to impose additional penalties for violation of 18 U. S. C. § 924 (c) in a case like the present one, has otherwise disclosed its intention not to do so.” Brief for United States 11. We believe that several tools of statutory construction applied to the statutes “in a case like the present one” — where the Government relied on the same proofs to support the convictions under both statutes — require the conclusion that Congress cannot be said to have authorized the imposition of the additional penalty of § 924 (c) for commission of bank robbery with firearms already subject to enhanced punishment under § 2113 (d). Cf. Gore v. United States, supra.
Ill
First is the legislative history of § 924 (c). That provision, which was enacted as part of the Gun Control Act of 1968, was not included in the original Gun Control bill, but was offered as an amendment on the House floor by Representative Poff. 114 Cong. Rec. 22231 (1968). In his statement immediately following his introduction of the amendment, Representative Poff observed: 4
“For the sake of legislative history, it should be noted that my substitute is not intended to apply to title 18, sections 111, 112, or 113 which already define the penalties for the use of a firearm in assaulting officials, with sections 2113 or 2114 concerning armed robberies of the mail or banks, with section 2231 concerning armed assaults upon process servers or with chapter 44 which defines other firearm felonies.” Id., at 22232.
This statement is clearly probative of a legislative judgment that the purpose of § 924 (c) is already served whenever the substantive federal offense provides enhanced punishment for use of a dangerous weapon. Although these remarks are of course not dispositive of the issue of § 924 (c)’s reach, they are certainly entitled to weight, coming as they do from the provision’s sponsor. This is especially so because Representative Poff’s explanation of the scope of his amendment is in complete accord with, and gives full play to, the deterrence rationale of § 924 (c). United States v. Eagle, 539 F. 2d, at 1172. Subsequent events in the Senate and the Conference Committee pertaining to the statute buttress our conclusion that Congress’ view of the proper scope of § 924 (c) was that expressed by Representative Poff. Shortly after the House adopted the Poff amendment, the Senate passed an amendment to the Gun Control Act, introduced by Senator Dominick, that also provided for increased punishment whenever a firearm was used to commit a federal offense. 114 Cong. Rec. 27142 (1968). According to the analysis of its sponsor, the Senate amendment, contrary to Mr. Poff’s view of § 924 (c), would have permitted the imposition of an enhanced sentence for the use of a firearm in the commission of any federal crime, even where allowance was already made in the provisions of the substantive offense for augmented punishment where a dangerous weapon is used. Id., at 27143. A Conference Committee, with minor changes, subsequently adopted the Poff version of § 924 (c) in preference to the Dominick amendment. H. R. Conf. Rep. No. 1956, 90th Cong., 2d Sess., 31-32 (1968).
Second, to construe the statute to allow the additional sentence authorized by § 924 (c) to be pyramided upon a sentence already enhanced under § 2113 (d) would violate the established rule of construction that “ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity.” United States v. Bass, 404 U. S. 336, 347 (1971); Rewis v. United States, 401 U. S. 808, 812 (1971). See Adamo Wrecking Co. v. United States, 434 U. S. 275, 284-285 (1978). The legislative history of § 924 (c) is of course sparse, yet what there is — particularly Representative Poff’s statement and the Committee rejection of the Dominick amendment — points in the direction of a congressional view that the section was intended to be unavailable in prosecutions for violations of § 2113 (d). Even where the relevant legislative history was not nearly so favorable to the defendant as this, this Court has steadfastly insisted that “doubt will be resolved against turning a single transaction into multiple offenses.” Bell v. United States, 349 U. S. 81, 84 (1955); Ladner v. United States, 358 U. S. 169 (1958). See Prince v. United States, 352 U. S. 322 (1957). As we said in Ladner: “This policy of lenity means that the Court will not interpret a federal criminal statute so as to increase the penalty that it places on an individual when such an interpretation can be based on no more than a guess as to what Congress intended.” 358 U. S., at 178. If we have something “more than a guess” in this case, that something — Representative Poff’s commentary and the Conference Committee’s rejection of the Dominick amendment — is incremental knowledge that redounds to petitioners’ benefit, not the Government’s.
Finally, our result is supported by the principle that gives precedence to the terms of the more specific statute where a general statute and a specific statute speak to the same concern, even if the general provision was enacted later. See Preiser v. Rodriguez, 411 U. S. 475, 489-490 (1973). Cf. 2A C. Sands, Sutherland, Statutory Construction § 51.05 (4th ed. 1973). This guide to statutory construction has special cogency where a court is called upon to determine the extent of the punishment to which a criminal defendant is subject for his transgressions. In this context, the principle is a corollary of the rule of lenity, ah outgrowth of our reluctance to increase or multiply punishments absent a clear and definite legislative directive. Indeed, at one time, the Government was not insensitive to these concerns respecting the availability of the additional penalty under § 924 (c). In 1971, the Department of Justice found the interpretive preference for specific criminal statutes over general criminal statutes of itself sufficient reason to advise all United States Attorneys not to prosecute a defendant under §924 (c)(1) where the substantive statute the defendant was charged with violating already “provid [ed] for increased penalties where a firearm is used in the commission of the offense.” 19 U. S. Attys. Bull. 63 (U. S. Dept. of Justice, 1971).
Obviously, the Government has since changed its view of the relationship between §§ 924 (c) and 2113 (d). We think its original view was the better view of the congressional understanding as to the proper interaction between the two statutes. Accordingly, we hold that in a prosecution growing out of a single transaction of bank robbery with firearms, a defendant may not be sentenced under both § 2113 (d) and § 924 (c). The cases are therefore reversed and remanded to the Court of Appeals for proceedings consistent with this opinion.
It is so ordered.
Title 18 U. S. C. §§2113 (a) and (d) provide:
“(a) Whoever, by force and violence, or by intimidation, takes, or attempts to take, from the person or presence of another any property or money or any other thing of value belonging to, or in the care, custody, control, management, or possession of, any bank, credit union, or any savings and loan association; or
“Whoever enters or attempts to enter any bank, credit union, or any savings and loan association, or any building used in whole or in part as a bank, credit union, or as a savings and loan association, with intent to commit in such bank, credit union, or in such savings and loan association, or building, or part thereof, so used, any felony affecting such bank, credit union, or such savings and loan association and in violation of any statute of the United States, or any larceny—
“Shall be fined not more than $5,000 or imprisoned not more than twenty years, or both.
“(d) Whoever, in committing, or in attempting to commit, any offense defined in subsections (a) and (b) of this section, assaults any person, or puts in jeopardy the fife of any person by the use of a dangerous weapon or device, shall be fined not more than $10,000 or imprisoned not more than twenty-five years, or both.”
The complete text of 18 U. S. C. § 924 (c) provides:
“(c) Whoever—
“(1) uses a firearm to commit any felony for which he may be prosecuted in a court of the United States, or
“(2) carries a firearm unlawfully during the commission of any felony for which he may be prosecuted in a court of the United States,
“shall, in addition to the punishment provided for the commission of such felony, be sentenced to a term of imprisonment for not less than one year nor more than ten years. In the case of his second or subsequent conviction under this subsection, such person shall be sentenced to a term of imprisonment for not less than two nor more than twenty-five years and, notwithstanding any other provision of law, the court shall not suspend the sentence in the case of a second or subsequent conviction of such person or give him a probationary sentence, nor shall the term of imprisonment imposed under this subsection run concurrently with any term of imprisonment imposed for the commission of such felony.”
In agreement with the Court of Appeals for the Sixth Circuit in these cases are the Court of Appeals for the Fourth Circuit, United States v. Crew, 538 F. 2d 575 (1976), and the Court of Appeals for the Fifth Circuit, Perkins v. United States, 526 F. 2d 688 (1976).
Both the Senate and House Reports on the 1934 Bank Robbery Act, which first made bank robbery a federal offense and which included the provisions of § 2113 (d), state that the legislation was directed at the rash of “gangsterism” by which roving bandits in the Southwest and Northwest would rob banks and then elude capture by state authorities by crossing state lines. S. Rep. No. 537, 73d Cong., 2d Sess., 1 (1934); H. R. Rep. No. 1461, 73d Cong., 2d Sess., 2 (1934). The vast majority of such bank robberies were undoubtedly accomplished by the use of guns of various sorts. Indeed, as originally proposed, the provision that became § 2113 (d) covered only the use of “dangerous weapons.” The “or device” language was added in response to concern expressed on the House floor that the provision would not reach the conduct of a bank robber who walked into a bank with a bottle of nitroglycerin and threatened to blow it up unless his demands were met. 78 Cong. Rec. 8132-8133 (1934). Thus, although § 2113 (d) undoubtedly covers bank robberies with weapons and devices other than firearms, the use of guns to commit barde robbery was the primary evil § 2113 (d) was designed to deter.
On the other hand, although the overriding purpose of § 924 (c) was to combat the increasing use of guns to commit federal felonies, the ambit of that provision is broader. The section imposes increased penalties when a “firearm” is used to commit, or is unlawfully carried during the commission of any federal felony. Title 18 U. S. C. § 921 (a) (3) (D) defines “firearm” to include “any destructive device.” A “destructive device,” in turn, is defined by § 921 (a) (4) (A) to include “any explosive, incendiary, or poison gas — (i) bomb, (ii) grenade, (iii) rocket . . . , (iv) missile . . . , (v) mine, or (vi) device similar to any of the devices described in the preceding clauses.” See United States v. Melville, 309 F. Supp. 774 (SDNY 1970).
The Double Jeopardy Clause “protects against multiple punishments for the same offense,” North Carolina v. Pearce, 395 U. S. 711, 717 (1969), and prohibits multiple prosecutions for the “same offense,” Jeffers v. United States, 432 U. S. 137, 150-151 (1977).
In its attempt to demonstrate that §§924 (c) and 2113 (d) are distinct and separately punishable offenses under the Blockburger test, the Government apparently reads the phrase “by the use of a dangerous weapon or device” in § 2113 (d) to modify the word “assaults” as well as the phrase “puts in jeopardy the life of any person.” Brief for United States 9-10. The lower courts are divided on this issue. Those of the opinion that § 2113 (d) is to be read as the Government reads it include United States v. Crew, supra, at 577. See Perkins v. United States, supra; United States v. Waters, 461 F. 2d 248 (CA10 1972). Other courts read the provision disjunctively, and hold that the phrase “by the use of a dangerous weapon or device” modifies only the phrase “puts in jeopardy the life of any person” and not the word “assaults.” United States v. Beasley, 438 F. 2d 1279 (CA6 1971); United States v. Rizzo, 409 F. 2d 400 (CA7 1969). See United States v. Coulter, 474 F. 2d 1004 (CA9 1973). Although we have never authoritatively construed §2113 (d), we have implicitly given it the same gloss as the Government. Prince v. United States, 352 U. S. 322, 329 n. 11 (1957). We now expressly adopt this reading of the statute. As Judge McCree observed in Beasley: “[The language of §2113 (d)] clearly requires the commission of something more than the elements of the offense described in § 2113 (a). Subsection (a) punishes an attempt to take ‘from the person or presence of another any . . . thing of value ... in the . . . custody ... of any bank . . .’ when that taking is done ‘by force and violence, or by intimidation.’ Force and violence is the traditional language of assault, and something more than an assault must be present to authorize the additional five year penalty under § 2113 (d).
“. . . In order to give lawful meaning to Congress’ enactment of the aggravating elements in 18 TJ. S. C. § 2113 (d), the phrase ‘by the use of a dangerous weapon or device’ must be read, regardless of punctuation, as modifying both the assault provision and the putting in jeopardy provision.” 438 F. 2d, at 1283-1284 (concurring in part and dissenting in part).
Because the provision was passed on the same day it was introduced on the House floor, it is the subject of no legislative hearings or committee reports.
Title 18 U. S. C. §§ 111, 112, and 2231 provide for an increased maximum penalty where a “deadly or dangerous weapon” is used to commit the substantive offense. Title 18 U. S. C. §§ 113 (c) and 2114 enhance the punishment available for commission of the substantive offense when the defendant employs a “dangerous weapon.”
The prohibitions on suspended sentences and probation were made applicable only to second and subsequent convictions, and restrictions on concurrent sentences were eliminated. Title II of the Omnibus Crime Control Act of 1970, 84 Stat. 1889, amended § 924 (c) by reimposing the restriction that no sentence under that section could be served concurrently with any term imposed for the underlying felony. The amendment also reduced the minimum mandatory sentence of imprisonment for repeat offenders from five to two years.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Douglas
delivered the opinion of the Court.
In these cases the Interstate Commerce Commission undertook to prescribe just, reasonable, and equitable divisions of joint rates pursuant to § 15 (6) of the Interstate Commerce Act, 24 Stat. 384, as amended. The Commission found that existing divisions violated § 15 (6) because they allocated to Northern lines a lesser share of the revenues from the joint rates than would be warranted by their share of the expenditures made in providing the joint service. 325 I. C. C. 1, 50.
The Southern lines brought suit before a three-judge District Court to enjoin and to set aside the Commission’s order. The District Court set aside the Commission’s order and remanded the case for further proceedings. 270 F. Supp. 695. We noted probable jurisdiction. 390 U. S. 940.
Both Northern and Southern lines used Rail Form A as their basic formula, that form being a rail freight formula for determining freight service costs which utilizes the expenses and statistics for a given year as reported to the Commission by the carriers and supplemented by special studies of the'carriers.
The Southern lines proposed 12 adjustments, five of which the Commission accepted and seven of which it rejected. The year 1956 was the one both Southern and Northern lines used in the final cost analysis. The cost level for that year, said the Commission, was higher in the North than in the South for like services; and it concluded that that situation would most likely continue in the immediate future. In that year the Northern lines received 44.64% of the revenues while incurring 46.35318% of the fully distributed costs. Accordingly, the Commission prescribed new divisions based on the fully distributed costs and divided the revenues in the same proportion to those costs. The shift in revenues resulting from the new divisions was approximately $8,000,000 a year, giving the Northern lines an overall increase in revenues from the traffic involved of 3.5% and reducing the revenues of Southern lines by about 3%.
When the Southern lines sued to set aside the new divisions, the Northern lines intervened as defendants. The District Court held that the Commission’s order was not supported by substantial evidence and reasoned findings within the meaning of §§ 8 (b) and 10 (e) of the Administrative Procedure Act and, as noted, remanded the case for further proceedings.
The present problem of divisions deals only with North-South traffic which represents 6% of the total traffic of the North and 21.4% of the total traffic of the South. The costs of that North-South traffic are not isolated in the findings. The average costs used relate to all Northern traffic and to all Southern traffic. Nearly 80% of the total Northern traffic is intra-territorial and handled entirely in the North, and it is therefore argued that that traffic has the dominant influence on the Northern average. As the District Court said, it is difficult to maintain that these intra-territorial Northern costs are the same or approximately the same as Northern costs in handling traffic between North and South. In another divisions case, the Commission ruled that territorial average costs are entitled to little weight in determining the costs of handling particular movements. Increased Freight Rates, 1967, 332 I. C. C. 280, 303. The use of “unsifted averages” of costs does not necessarily establish greater costs either in rate cases (ICC v. Mechling, 330 U. S. 567, 583) or in divisions cases. The ruling of the District Court was, not that territorial average costs were irrelevant or that Rail Form A was not a usable and useful tool for cost determination, but that territorial average costs could not be used consistently with the statutory requirements for precise and relevant findings without any evidence relating the territorial average costs to North-South trafile. While Southern lines had offered evidence showing the costs of handling North-South traffic in the South, there was not always any such Northern offer; nor did the Commission always exercise its undoubted authority to gather it on its own.
On the question whether territorial average costs represent costs of the North-South traffic, the Commission only replies that where particular traffic uses physical facilities and employees’ services in common with other traffic “and has been shown to have no distinguishing characteristics,” the application of Rail Form A costs is proper. Yet the Commission stated “its exclusive standard” for resolving this divisions question to be “the relevant cost of handling the specific freight traffic to which the divisions apply.” 270 F. Supp., at 710.
We agree with the District Court that there is no substantial evidence that territorial average costs are necessarily the same as the comparative costs incurred in handling North-South freight traffic. If we were to reverse the District Court, we would in effect be saying that the expertise of the Commission is so great that when it says that average territorial costs fairly represent the costs of North-South traffic, the controversy is at an end, even though the record does not reveal what the nature of that North-South traffic is. The requirement for administrative decisions based on substantial evidence and reasoned findings — which alone make effective judicial review possible — would become lost in the haze of so-called expertise. Administrative expertise would then be on its way to becoming “ ‘a monster which rules with no practical limits on its discretion.’ ” Burlington Truck Lines v. United States, 371 U. S. 156, 167. That is impermissible under the Administrative Procedure Act. If indeed that lax procedure were sanctioned in a North-South divisions case, whose solution turns solely on costs, the class rate discrimination in favor of the North and against the South which we condemned in New York v. United States, 331 U. S. 284, could well flourish in another form.
Rail Form A was used in Chicago & N. W. R. Co. v. Atchison, T. & S. F. R. Co., 387 U. S. 326, and we approved its use. Moreover, ever since the New England Divisions Case, 261 U. S. 184, at 196-197, it has been held that mathematical exactness in dividing each rate of each carrier is not necessary, because practical necessities demand otherwise. In addition we repeat what we said in Chicago & N. W. R. Co. v. Atchison, T. & S. F. R. Co., supra, at 358, that there are no “mechanical restrictions on the range of remedies from which the Commission may choose” in solving a divisions case or making its expert judgment as to what scale of costs should be used in making the allocation. Precision and exactitude in the mathematical sense are not possible. Yet the nature and volume of the traffic in question must be known and exposed, if the costs of other traffic are to govern a division of rates. Moreover, where Rail Form A costs are shown to be a distortion when applied to the particular traffic over which the divisions dispute arises, some effort must be exerted to make an adjustment which fairly reflects the difference in the costs or to make clear that there is in fact no basic, material difference. The Commission states to us that it cannot be expected to know whether peculiar characteristics may exist respecting the traffic involved in the divisions dispute or whether special studies may be needed. Yet if that is true, the Commission’s expertise is not equal to the task and the opposed carriers must be directed to expose the various versions of the conflict so that the Commission may make its informed decision. That was done on aspects of the present cases (325 I. C. C., at 25) and no reason is apparent why it cannot be done on other aspects of the controversy.
The Commission in its argument before us said that Rail Form A territorial average costs were “adjusted” to reflect the costs attributable to the North-South traffic issue, which is true as respects five of the 12 adjustments proposed by the Southern lines.
On remand of the cases to the Commission we think specific findings must be made on the several items of so-called “adjustment” of average territorial costs to which we now turn.
One is the question of commuter deficits, which swell the average territorial costs in the North while they are less important in the South that does not yet have substantial commuter operations. Passenger deficits generally are considered as part of the costs of providing freight service, since the common facilities that support each must be maintained for both types of service. There is, however, evidence that in some territories as much as one-half of the track facilities are maintained solely because of the company’s suburban service and even a larger proportion of other facilities such as stations, terminals, coach yards, and repair shops is maintained exclusively for commuter service.
The Commission, however, ruled that costs of commuter service include “common costs which must be incurred to provide freight service or intercity passenger service” and that the deficit from suburban operations was properly included in “the constant costs.” The Commission on the other hand found that “many individual items of suburban service can be considered solely related ... to suburban service.” 325 I. C. C., at 78. How these two findings can be reconciled is not apparent. The Commission in its argument before us rests primarily on revenue needs — -“Such losses must be recovered from railroad freight operations if railroads are to remain solvent.” Section 15 (6) makes plain that revenue needs come into focus in divisions cases. Revenue problems under § 15 (6) at times have resulted in putting a part of one area’s transportation costs upon other sections of the country. See New England Divisions Case, 261 U. S. 184, 191-195. But that issue is not presented in these cases. The issue in the present cases was costs, not revenue. The allocation either to the North or to the South of costs peculiar to its territorial traffic is a task with which the Commission is familiar. Thus in these very cases it excluded certain platform deficits incurred by the Northern lines because they were not related to North-South freight traffic. 325 I. C. C., at 56. There is no apparent reason why costs related solely to commuter service in the North cannot be determined.
As to the costs of interchanging cars in North-South traffic at territorial border points, there is evidence in the record that the interchange operations performed by Northern lines are no more costly than those performed by Southern lines. Yet the Commission allowed the Northern lines a border interchange cost that is 58% higher than the one allowed the Southern lines. That apparently was done solely because Rail Form A showed higher interchange costs when all territorial interchanges were considered. We cannot bridge the gap by blind reliance on expertise which in this instance would be a mere assertion that no difference means a substantial difference.
The empty freight car return ratios is another example of deficient findings. There is evidence that higher costs of Northern lines result from the Commission’s use of higher Northern territorial average empty return ratios. There was no attempt made to show that the latter were at all applicable to North-South traffic. The problem arises in the North by reason of boxcars on shuttle from Detroit to automobile plants, most of which are in the North. These shuttle boxcars return empty to Detroit. We know from the record that this is a major cost item as 800,000 carloads of automobile parts move out of Detroit each year. The record does not show the extent to which these empty returns swell the territorial average costs in the North, though it does show that Northern use of these shuttle boxcars is substantially higher than the Southern proportion. The District Court concluded the territorial average boxcar empty return ratios could not be said, absent specific findings, to reflect the costs of the North-South freight traffic relevant to this problem of divisions.
There are other proposed adjustments on which we think the Commission’s findings are adequate.
The judgment of the District Court is modified and as modified it is
Affirmed.
49 U. S. C. §15 (6) provides in relevant part:
“Whenever . . . the Commission is of opinion that the divisions of joint rates, fares, or charges, applicable to the transportation of passengers or property, are or will be unjust, unreasonable, inequitable, or unduly preferential . . . the Commission shall by order prescribe the just, reasonable, and equitable divisions thereof to be received by the several carriers .... In so prescribing and determining the divisions of joint rates, fares, and charges, the Commission shall give due consideration, among other things, to the efficiency with which the carriers concerned are operated, the amount of revenue required to pay their respective operating expenses, taxes, and a fair return on their railway property held for and used in the service of transportation, and the importance to the public of the transportation services of such carriers; and also whether any particular participating carrier is an originating, intermediate, or delivering line, and any other fact or circumstance which would ordinarily, without regard to the mileage haul, entitle one carrier to a greater or less proportion than another carrier of the joint rate, fare, or charge.”
Section 8 (b), 60 Stat. 242, now 5 U. S. C. §567 (c) (1964 eel., Supp. Ill), provides in relevant part:
“The record shall show the ruling on each finding, conclusion, or exception presented. All decisions, including initial, recommended, and tentative decisions, are a part of the record and shall include a statement of—
“(A) findings and conclusions, and the reasons or basis therefor, on all the material issues of fact, law, or discretion presented on the record; and
“(B) the appropriate rule, order, sanction, relief, or denial thereof.”
Section 10 (e), 60 Stat. 243, now 5 U. S. C. §706 (1964 ed., Supp. Ill), provides in relevant part:
“The reviewing court shall . . .
“(2) hold unlawful and set aside agency action, findings, and conclusions found to be . . .
“(E) unsupported by substantial evidence . . . .”
These five constituted way and through train separation, platform costs, switching and terminal companies, short lines (Class II railroads), train tonnage adjustment — all as discussed in Appendix B to the Commission’s opinion. 325 I. C. C., at 55 et seq.
On revenue needs the Commission said:
“We find that no affirmative reasons appear in this record which would warrant any adjustment of the divisions in question over and above the relative costs of service, either on the grounds of greater revenue needs or otherwise.” 325 I. C. C., at 49.
Car costs. The Southern lines sought to substitute average car costs for the entire country in lieu of Rail Form A territorial average. The Commission concluded that the “use of a national average car cost conceals territorial differences in cost which are important in the consideration of divisions between the two involved territories.” 325 I. C. C., at 64.
Cars interchanged between rail and water carriers at ports. The Southern and Northern lines submitted opposed evidence and views and the Commission concluded that the count of cars in Rail Form A was warranted. 325 I. C. C., at 58-60.
Transit commodities. They move under a single published rate and receive some kind of storage or processing in transit and the rate covers the movement of the raw material into and the movement of the finished product beyond the transit or processing point. The Southern lines would include deficits on pulpwood and wet phosphate rock which they claim to be related in transit to the outbound movement of paper products and dry phosphate rock. But these were intraterritorial costs of the Southern lines which the Commission found were not properly transferable to the interterritorial costs, the only costs pertinent to this divisions case. 325 I. C. C., at 80.
Switching costs. The Southern lines made special studies of switching costs which the Commission reviewed at length. 325 I. C. C., at 71-77. The Northern lines sought to discredit the studies and the sample on which they rested. The Commission took Rail Form A territorial average switching costs as the most accurate measure of the relative switching costs, saying:
“Territorial average costs are particularly appropriate to the traffic in this case because it is a large and varied body of traffic moving to and coming from terminals in all parts of both territories. In our opinion, and we so find, the depressing effect, if any, of volume switching commodities on the average would affect both territories and, for purposes of comparison, would be largely offsetting.” 325 I. C. C., at 76. Contrary to the District Court, we believe these are adequate findings.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice BREYER delivered the opinion of the Court.
Company A sues Company B for patent infringement. The two companies settle under terms that require (1) Company B, the claimed infringer, not to produce the patented product until the patent's term expires, and (2) Company A, the patentee, to pay B many millions of dollars. Because the settlement requires the patentee to pay the alleged infringer, rather than the other way around, this kind of settlement agreement is often called a "reverse payment" settlement agreement. And the basic question here is whether such an agreement can sometimes unreasonably diminish competition in violation of the antitrust laws. See, e.g., 15 U.S.C. § 1 (Sherman Act prohibition of " restraint[s] of trade or commerce"). Cf. Palmer v. BRG of Ga., Inc., 498 U.S. 46, 111 S.Ct. 401, 112 L.Ed.2d 349 (1990) (per curiam ) (invalidating agreement not to compete).
In this case, the Eleventh Circuit dismissed a Federal Trade Commission (FTC) complaint claiming that a particular reverse payment settlement agreement violated the antitrust laws. In doing so, the Circuit stated that a reverse payment settlement agreement generally is "immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent." FTC v. Watson Pharmaceuticals, Inc., 677 F.3d 1298, 1312 (2012). And since the alleged infringer's promise not to enter the patentee's market expired before the patent's term ended, the Circuit found the agreement legal and dismissed the FTC complaint. Id., at 1315. In our view, however, reverse payment settlements such as the agreement alleged in the complaint before us can sometimes violate the antitrust laws. We consequently hold that the Eleventh Circuit should have allowed the FTC's lawsuit to proceed.
I
A
Apparently most if not all reverse payment settlement agreements arise in the context of pharmaceutical drug regulation, and specifically in the context of suits brought under statutory provisions allowing a generic drug manufacturer (seeking speedy marketing approval) to challenge the validity of a patent owned by an already-approved brand-name drug owner. See Brief for Petitioner 29; 12 P. Areeda &
H. Hovenkamp, Antitrust Law ¶ 2046, p. 338 (3d ed. 2012) (hereinafter Areeda); Hovenkamp, Sensible Antitrust Rules for Pharmaceutical Competition, 39 U.S.F.L.Rev. 11, 24 (2004). We consequently describe four key features of the relevant drug-regulatory framework established by the Drug Price Competition and Patent Term Restoration Act of 1984, 98 Stat. 1585, as amended. That Act is commonly known as the Hatch-Waxman Act.
First, a drug manufacturer, wishing to market a new prescription drug, must submit a New Drug Application to the federal Food and Drug Administration (FDA) and undergo a long, comprehensive, and costly testing process, after which, if successful, the manufacturer will receive marketing approval from the FDA. See 21 U.S.C. § 355(b)(1) (requiring, among other things, "full reports of investigations" into safety and effectiveness; "a full list of the articles used as components"; and a "full description" of how the drug is manufactured, processed, and packed).
Second, once the FDA has approved a brand-name drug for marketing, a manufacturer of a generic drug can obtain similar marketing approval through use of abbreviated procedures. The Hatch-Waxman Act permits a generic manufacturer to file an Abbreviated New Drug Application specifying that the generic has the "same active ingredients as," and is "biologically equivalent" to, the already-approved brand-name drug. Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, 566 U.S. ----, ----, 132 S.Ct. 1670, 1676, 182 L.Ed.2d 678 (2012) (citing 21 U.S.C. §§ 355(j)(2)(A)(ii), (iv) ). In this way the generic manufacturer can obtain approval while avoiding the "costly and time-consuming studies" needed to obtain approval "for a pioneer drug." See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). The Hatch-Waxman process, by allowing the generic to piggy-back on the pioneer's approval efforts, "speed[s] the introduction of low-cost generic drugs to market," Caraco, supra, at ----, 132 S.Ct., at 1676, thereby furthering drug competition.
Third, the Hatch-Waxman Act sets forth special procedures for identifying, and resolving, related patent disputes. It requires the pioneer brand-name manufacturer to list in its New Drug Application the "number and the expiration date" of any relevant patent. See 21 U.S.C. § 355(b)(1). And it requires the generic manufacturer in its Abbreviated New Drug Application to " assure the FDA" that the generic "will not infringe" the brand-name's patents. See Caraco, supra, at ----, 132 S.Ct., at 1676.
The generic can provide this assurance in one of several ways. See 21 U.S.C. § 355(j)(2)(A)(vii). It can certify that the brand-name manufacturer has not listed any relevant patents. It can certify that any relevant patents have expired. It can request approval to market beginning when any still-in-force patents expire. Or, it can certify that any listed, relevant patent "is invalid or will not be infringed by the manufacture, use, or sale" of the drug described in the Abbreviated New Drug Application. See § 355(j)(2)(A)(vii)(IV). Taking this last-mentioned route (called the "paragraph IV" route), automatically counts as patent infringement, see 35 U.S.C. § 271(e)(2)(A) (2006 ed., Supp. V), and often "means provoking litigation." Caraco, supra, at ----, 132 S.Ct., at 1677. If the brand-name patentee brings an infringement suit within 45 days, the FDA then must withhold approving the generic, usually for a 30-month period, while the parties litigate patent validity (or infringement) in court. If the courts decide the matter within that period, the FDA follows that determination; if they do not, the FDA may go forward and give approval to market the generic product. See 21 U.S.C. § 355(j)(5)(B)(iii).
Fourth, Hatch-Waxman provides a special incentive for a generic to be the first to file an Abbreviated New Drug Application taking the paragraph IV route. That applicant will enjoy a period of 180 days of exclusivity (from the first commercial marketing of its drug). See § 355(j)(5)(B)(iv) (establishing exclusivity period). During that period of exclusivity no other generic can compete with the brand-name drug. If the first-to-file generic manufacturer can overcome any patent obstacle and bring the generic to market, this 180-day period of exclusivity can prove valuable, possibly "worth several hundred million dollars." Hemphill, Paying for Delay: Pharmaceutical Patent Settlement as a Regulatory Design Problem, 81 N.Y.U. L.Rev. 1553, 1579 (2006). Indeed, the Generic Pharmaceutical Association said in 2006 that the " 'vast majority of potential profits for a generic drug manufacturer materialize during the 180-day exclusivity period.' " Brief for Petitioner 6 (quoting statement). The 180-day exclusivity period, however, can belong only to the first generic to file. Should that first-to-file generic forfeit the exclusivity right in one of the ways specified by statute, no other generic can obtain it. See § 355(j)(5)(D).
B
1
In 1999, Solvay Pharmaceuticals, a respondent here, filed a New Drug Application for a brand-name drug called AndroGel. The FDA approved the application in 2000. In 2003, Solvay obtained a relevant patent and disclosed that fact to the FDA, 677 F.3d, at 1308, as Hatch-Waxman requires. See § 355(c)(2) (requiring, in addition, that FDA must publish new patent information upon submission).
Later the same year another respondent, Actavis, Inc. (then known as Watson Pharmaceuticals), filed an Abbreviated New Drug Application for a generic drug modeled after AndroGel. Subsequently, Paddock Laboratories, also a respondent, separately filed an Abbreviated New Drug Application for its own generic product. Both Actavis and Paddock certified under paragraph IV that Solvay's listed patent was invalid and their drugs did not infringe it. A fourth manufacturer, Par Pharmaceutical, likewise a respondent, did not file an application of its own but joined forces with Paddock, agreeing to share the patent litigation costs in return for a share of profits if Paddock obtained approval for its generic drug.
Solvay initiated paragraph IV patent litigation against Actavis and Paddock. Thirty months later the FDA approved Actavis' first-to-file generic product, but, in 2006, the patent-litigation parties all settled. Under the terms of the settlement Actavis agreed that it would not bring its generic to market until August 31, 2015, 65 months before Solvay's patent expired (unless someone else marketed a generic sooner). Actavis also agreed to promote AndroGel to urologists. The other generic manufacturers made roughly similar promises. And Solvay agreed to pay millions of dollars to each generic-$12 million in total to Paddock; $60 million in total to Par; and an estimated $19-$30 million annually, for nine years, to Actavis. See App. 46, 49-50, Complaint ¶¶ 66, 77. The companies described these payments as compensation for other services the generics promised to perform, but the FTC contends the other services had little value. According to the FTC the true point of the payments was to compensate the generics for agreeing not to compete against AndroGel until 2015. See id., at 50-53, Complaint ¶¶ 81-85.
2
On January 29, 2009, the FTC filed this lawsuit against all the settling parties, namely, Solvay, Actavis, Paddock, and Par. The FTC's complaint (as since amended)
alleged that respondents violated § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, by unlawfully agreeing "to share in Solvay's monopoly profits, abandon their patent challenges, and refrain from launching their low-cost generic products to compete with AndroGel for nine years." App. 29, Complaint ¶ 5. See generally FTC v. Indiana Federation of Dentists, 476 U.S. 447, 454, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986) (Section 5 "encompass[es]... practices that violate the Sherman Act and the other antitrust laws"). The District Court held that these allegations did not set forth an antitrust law violation. In re Androgel Antitrust Litigation (No. II), 687 F.Supp.2d 1371, 1379 (N.D.Ga.2010). It accordingly dismissed the FTC's complaint. The FTC appealed.
The Court of Appeals for the Eleventh Circuit affirmed the District Court. It wrote that "absent sham litigation or fraud in obtaining the patent, a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent." 677 F.3d, at 1312. The court recognized that "antitrust laws typically prohibit agreements where one company pays a potential competitor not to enter the market." Id., at 1307 (citing Valley Drug Co. v. Geneva Pharmaceuticals, Inc., 344 F.3d 1294, 1304 (C.A.11 2003) ). See also Palmer, 498 U.S., at 50, 111 S.Ct. 401 (agreement to divide territorial markets held "unlawful on its face"). But, the court found that "reverse payment settlements of patent litigation presen[t] atypical cases because one of the parties owns a patent." 677 F.3d, at 1307 (internal quotation marks and second alteration omitted). Patent holders have a "lawful right to exclude others from the market," ibid. (internal quotation marks omitted); thus a patent "conveys the right to cripple competition." Id., at 1310 (internal quotation marks omitted). The court recognized that, if the parties to this sort of case do not settle, a court might declare the patent invalid. Id., at 1305. But, in light of the public policy favoring settlement of disputes (among other considerations) it held that the courts could not require the parties to continue to litigate in order to avoid antitrust liability. Id., at 1313-1314.
The FTC sought certiorari. Because different courts have reached different conclusions about the application of the antitrust laws to Hatch-Waxman-related patent settlements, we granted the FTC's petition. Compare, e.g., id., at 1312 (case below) (settlements generally "immune from antitrust attack"); In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323, 1332-1337 (C.A.Fed.2008)
(similar); In re Tamoxifen Citrate Antitrust Litigation, 466 F.3d 187, 212-213 (C.A.2 2006) (similar), with In re K-Dur Antitrust Litigation, 686 F.3d 197, 214-218 (C.A.3 2012) (settlements presumptively unlawful).
II
A
Solvay's patent, if valid and infringed, might have permitted it to charge drug prices sufficient to recoup the reverse settlement payments it agreed to make to its potential generic competitors. And we are willing to take this fact as evidence that the agreement's "anticompetitive effects fall within the scope of the exclusionary potential of the patent." 677 F.3d, at 1312. But we do not agree that that fact, or characterization, can immunize the agreement from antitrust attack.
For one thing, to refer, as the Circuit referred, simply to what the holder of a valid patent could do does not by itself answer the antitrust question. The patent here may or may not be valid, and may or may not be infringed. "[A] valid patent excludes all except its owner from the use of the protected process or product," United States v. Line Material Co., 333 U.S. 287, 308, 68 S.Ct. 550, 92 L.Ed. 701 (1948) (emphasis added). And that exclusion may permit the patent owner to charge a higher-than-competitive price for the patented product. But an invalidated patent carries with it no such right. And even a valid patent confers no right to exclude products or processes that do not actually infringe. The paragraph IV litigation in this case put the patent's validity at issue, as well as its actual preclusive scope. The parties' settlement ended that litigation. The FTC alleges that in substance, the plaintiff agreed to pay the defendants many millions of dollars to stay out of its market, even though the defendants did not have any claim that the plaintiff was liable to them for damages. That form of settlement is unusual. And, for reasons discussed in Part II-B, infra, there is reason for concern that settlements taking this form tend to have significant adverse effects on competition.
Given these factors, it would be incongruous to determine antitrust legality by measuring the settlement's anticompetitive effects solely against patent law policy, rather than by measuring them against procompetitive antitrust policies as well. And indeed, contrary to the Circuit's view that the only pertinent question is whether "the settlement agreement... fall[s] within" the legitimate "scope" of the patent's "exclusionary potential," 677 F.3d, at 1309, 1312, this Court has indicated that patent and antitrust policies are both relevant in determining the "scope of the patent monopoly"-and consequently antitrust law immunity-that is conferred by a patent.
Thus, the Court in Line Material explained that "the improper use of [a patent] monopoly," is "invalid" under the antitrust laws and resolved the antitrust question in that case by seeking an accommodation "between the lawful restraint on trade of the patent monopoly and the illegal restraint prohibited broadly by the Sherman Act." 333 U.S., at 310, 68 S.Ct. 550. To strike that balance, the Court asked questions such as whether "the patent statute specifically gives a right" to restrain competition in the manner challenged; and whether "competition is impeded to a greater degree" by the restraint at issue than other restraints previously approved as reasonable. Id., at 311, 68 S.Ct. 550. See also United States v. United States Gypsum Co., 333 U.S. 364, 390-391, 68 S.Ct. 525, 92 L.Ed. 746 (1948) (courts must "balance the privileges of [the patent holder] and its licensees under the patent grants with the prohibitions of the Sherman Act against combinations and attempts to monopolize"); Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 174, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965) ("[E]nforcement of a patent procured by fraud" may violate the Sherman Act). In short, rather than measure the length or amount of a restriction solely against the length of the patent's term or its earning potential, as the Court of Appeals apparently did here, this Court answered the antitrust question by considering traditional antitrust factors such as likely anticompetitive effects, redeeming virtues, market power, and potentially offsetting legal considerations present in the circumstances, such as here those related to patents. See Part II-B, infra. Whether a particular restraint lies "beyond the limits of the patent monopoly" is a conclusion that flows from that analysis and not, as THE CHIEF JUSTICE suggests, its starting point. Post, at 2239, 2241 - 2242 (dissenting opinion).
For another thing, this Court's precedents make clear that patent-related settlement agreements can sometimes violate the antitrust laws. In United States v. Singer Mfg. Co., 374 U.S. 174, 83 S.Ct. 1773, 10 L.Ed.2d 823 (1963), for example, two sewing machine companies possessed competing patent claims; a third company sought a patent under circumstances where doing so might lead to the disclosure of information that would invalidate the other two firms' patents. All three firms settled their patent-related disagreements while assigning the broadest claims to the firm best able to enforce the patent against yet other potential competitors. Id., at 190-192, 83 S.Ct. 1773. The Court did not examine whether, on the assumption that all three patents were valid, patent law would have allowed the patents' holders to do the same. Rather, emphasizing that the Sherman Act "imposes strict limitations on the concerted activities in which patent owners may lawfully engage," id., at 197, 83 S.Ct. 1773, it held that the agreements, although settling patent disputes, violated the antitrust laws. Id., at 195, 197, 83 S.Ct. 1773. And that, in important part, was because "the public interest in granting patent monopolies" exists only to the extent that "the public is given a novel and useful invention" in "consideration for its grant." Id., at 199, 83 S.Ct. 1773 (White, J., concurring). See also United States v. New Wrinkle, Inc., 342 U.S. 371, 378, 72 S.Ct. 350, 96 L.Ed. 417 (1952) (applying antitrust scrutiny to patent settlement); Standard Oil Co. (Indiana) v. United States, 283 U.S. 163, 51 S.Ct. 421, 75 L.Ed. 926 (1931) (same).
Similarly, both within the settlement context and without, the Court has struck down overly restrictive patent licensing agreements-irrespective of whether those agreements produced supra-patent-permitted revenues. We concede that in United States v. General Elec. Co., 272 U.S. 476, 489, 47 S.Ct. 192, 71 L.Ed. 362 (1926), the Court permitted a single patentee to grant to a single licensee a license containing a minimum resale price requirement. But in Line Material, supra, at 308, 310-311, 68 S.Ct. 550, the Court held that the antitrust laws forbid a group of patentees, each owning one or more patents, to cross-license each other, and, in doing so, to insist that each licensee maintain retail prices set collectively by the patent holders. The Court was willing to presume that the single-patentee practice approved in General Electric was a "reasonable restraint" that "accords with the patent monopoly granted by the patent law," 333 U.S., at 312, 68 S.Ct. 550, but declined to extend that conclusion to multiple-patentee agreements: "As the Sherman Act prohibits agreements to fix prices, any arrangement between patentees runs afoul of that prohibition and is outside the patent monopoly." Ibid. In New Wrinkle, 342 U.S., at 378, 72 S.Ct. 350, the Court held roughly the same, this time in respect to a similar arrangement in settlement of a litigation between two patentees, each of which contended that its own patent gave it the exclusive right to control production. That one or the other company (we may presume) was right about its patent did not lead the Court to confer antitrust immunity. Far from it, the agreement was found to violate the Sherman Act. Id., at 380, 72 S.Ct. 350.
Finally in Standard Oil Co. (Indiana), the Court upheld cross-licensing agreements among patentees that settled actual and impending patent litigation, 283 U.S., at 168, 51 S.Ct. 421, which agreements set royalty rates to be charged third parties for a license to practice all the patents at issue (and which divided resulting revenues).
But, in doing so, Justice Brandeis, writing for the Court, warned that such an arrangement would have violated the Sherman Act had the patent holders thereby "dominate [d]" the industry and "curtail[ed] the manufacture and supply of an unpatented product." Id., at 174, 51 S.Ct. 421. These cases do not simply ask whether a hypothetically valid patent's holder would be able to charge, e.g., the high prices that the challenged patent-related term allowed. Rather, they seek to accommodate patent and antitrust policies, finding challenged terms and conditions unlawful unless patent law policy offsets the antitrust law policy strongly favoring competition.
Thus, contrary to the dissent's suggestion, post, at 2239 - 2241, there is nothing novel about our approach. What does appear novel are the dissent's suggestions that a patent holder may simply "pa[y] a competitor to respect its patent" and quit its patent invalidity or noninfringement claim without any antitrust scrutiny whatever, post, at 2239, and that "such settlements... are a well-known feature of intellectual property litigation," post, at 2243. Closer examination casts doubt on these claims. The dissent does not identify any patent statute that it understands to grant such a right to a patentee, whether expressly or by fair implication. It would be difficult to reconcile the proposed right with the patent-related policy of eliminating unwarranted patent grants so the public will not "continually be required to pay tribute to would-be monopolists without need or justification." Lear, Inc. v. Adkins, 395 U.S. 653, 670, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969). And the authorities cited for this proposition (none from this Court, and none an antitrust case) are not on point. Some of them say that when Company A sues Company B for patent infringement and demands, say, $100 million in damages, it is not uncommon for B (the defendant) to pay A (the plaintiff) some amount less than the full demand as part of the settlement-$40 million, for example. See Schildkraut, Patent-Splitting Settlements and the Reverse Payment Fallacy, 71 Antitrust L.J. 1033, 1046 (2004) (suggesting that this hypothetical settlement includes "an implicit net payment" from A to B of $60 million-i.e., the amount of the settlement discount).
The cited authorities also indicate that if B has a counterclaim for damages against A, the original infringement plaintiff, A might end up paying B to settle B's counterclaim. Cf. Metro-Goldwyn Mayer, Inc. v. 007 Safety Prods., Inc., 183 F.3d 10, 13 (C.A.1 1999) (describing trademark dispute and settlement). Insofar as the dissent urges that settlements taking these commonplace forms have not been thought for that reason alone subject to antitrust liability, we agree, and do not intend to alter that understanding. But the dissent appears also to suggest that reverse payment settlements-e.g., in which A, the plaintiff, pays money to defendant B purely so B will give up the patent fight-should be viewed for antitrust purposes in the same light as these familiar settlement forms. See post, at 2242 - 2243. We cannot agree. In the traditional examples cited above, a party with a claim (or counterclaim) for damages receives a sum equal to or less than the value of its claim. In reverse payment settlements, in contrast, a party with no claim for damages (something that is usually true of a paragraph IV litigation defendant) walks away with money simply so it will stay away from the patentee's market. That, we think, is something quite different. Cf. Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408, 124 S.Ct. 872, 157 L.Ed.2d 823 (2004) ( "[C]ollusion" is "the supreme evil of antitrust").
Finally, the Hatch-Waxman Act itself does not embody a statutory policy that supports the Eleventh Circuit's view. Rather, the general procompetitive thrust of the statute, its specific provisions facilitating challenges to a patent's validity, see Part I-A, supra, and its later-added provisions requiring parties to a patent dispute triggered by a paragraph IV filing to report settlement terms to the FTC and the Antitrust Division of the Department of Justice, all suggest the contrary. See §§ 1112-1113, 117 Stat. 2461-2462. Those interested in legislative history may also wish to examine the statements of individual Members of Congress condemning reverse payment settlements in advance of the 2003 amendments. See, e.g., 148 Cong. Rec. 14437 (2002) (remarks of Sen. Hatch) ("It was and is very clear that the [Hatch-Waxman Act] was not designed to allow deals between brand and generic companies to delay competition"); 146 Cong. Rec. 18774 (2000) (remarks of Rep. Waxman) (introducing bill to deter companies from "strik[ing] collusive agreements to trade multimillion dollar payoffs by the brand company for delays in the introduction of lower cost, generic alternatives").
B
The Eleventh Circuit's conclusion finds some degree of support in a general legal policy favoring the settlement of disputes. 677 F.3d, at 1313-1314. See also Schering-Plough Corp. v. FTC, 402 F.3d 1056, 1074-1075 (C.A.11 2005) (same); In re Tamoxifen Citrate, 466 F.3d, at 202 (noting public's "'strong interest in settlement' " of complex and expensive cases). The Circuit's related underlying practical concern consists of its fear that antitrust scrutiny of a reverse payment agreement would require the parties to litigate the validity of the patent in order to demonstrate what would have happened to competition in the absence of the settlement. Any such litigation will prove time consuming, complex, and expensive. The antitrust game, the Circuit may believe, would not be worth that litigation candle.
We recognize the value of settlements and the patent litigation problem. But we nonetheless conclude that this patent-related factor should not determine the result here. Rather, five sets of considerations lead us to conclude that the FTC should have been given the opportunity to prove its antitrust claim.
First, the specific restraint at issue has the "potential for genuine adverse effects on competition." Indiana Federation of Dentists, 476 U.S., at 460-461, 106 S.Ct. 2009 (citing 7 Areeda ¶ 1511, at 429 (1986)). The payment in effect amounts to a purchase by the patentee of the exclusive right to sell its product, a right it already claims but would lose if the patent litigation were to continue and the patent were held invalid or not infringed by the generic product. Suppose, for example, that the exclusive right to sell produces $50 million in supracompetitive profits per year for the patentee. And suppose further that the patent has 10 more years to run. Continued litigation, if it results in patent invalidation or a finding of noninfringement, could cost the patentee $500 million in lost revenues, a sum that then would flow in large part to consumers in the form of lower prices.
We concede that settlement on terms permitting the patent challenger to enter the market before the patent expires would also bring about competition, again to the consumer's benefit. But settlement on the terms said by the FTC to be at issue here-payment in return for staying out of the market-simply keeps prices at patentee-set levels, potentially producing the full patent-related $500 million monopoly return while dividing that return between the challenged patentee and the patent challenger. The patentee and the challenger gain; the consumer loses. Indeed, there are indications that patentees sometimes pay a generic challenger a sum even larger than what the generic would gain in profits if it won the paragraph IV litigation and entered the market. See Hemphill, 81 N.Y.U. L.Rev., at 1581. See also Brief for 118 Law, Economics, and Business Professors et al. as Amici Curiae 25 (estimating that this is true of the settlement challenged here). The rationale behind a payment of this size cannot in every case be supported by traditional settlement considerations. The payment may instead provide strong evidence that the patentee seeks to induce the generic challenger to abandon its claim with a share of its monopoly profits that would otherwise be lost in the competitive market.
But, one might ask, as a practical matter would the parties be able to enter into such an anticompetitive agreement? Would not a high reverse payment signal to other potential challengers that the patentee lacks confidence in its patent, thereby provoking additional challenges, perhaps too many for the patentee to "buy off?" Two special features of Hatch-Waxman mean that the answer to this question is "not necessarily so." First, under Hatch-Waxman only the first challenger gains the special advantage of 180 days of an exclusive right to sell a generic version of the brand-name product. See Part I-A, supra. And as noted, that right has proved valuable-indeed, it can be worth several hundred million dollars. See Hemphill, supra, at 1579; Brief for Petitioner 6. Subsequent challengers cannot secure that exclusivity period, and thus stand to win significantly less than the first if they bring a successful paragraph IV challenge. That is, if subsequent litigation results in invalidation of the patent, or a ruling that the patent is not infringed, that litigation victory will free not just the challenger to compete, but all other potential competitors too (once they obtain FDA approval). The potential reward available to a subsequent challenger being significantly less, the patentee's payment to the initial challenger (in return for not pressing the patent challenge) will not necessarily provoke subsequent challenges. Second, a generic that files a paragraph IV after learning that the first filer has settled will (if sued by the brand-name) have to wait out a stay period of (roughly) 30 months before the FDA may approve its application, just as the first filer did. See 21 U.S.C. § 355(j)(5)(B)(iii). These features together mean that a reverse payment settlement with the first filer (or, as in this case, all of the initial filers) "removes from consideration the most motivated challenger, and the one closest to introducing competition." Hemphill, supra, at 1586. The dissent may doubt these provisions matter, post, at 2234 - 2236, but scholars in the field tell us that "where only one party owns a patent, it is virtually unheard of outside of pharmaceuticals for that party to pay an accused infringer to settle the lawsuit." 1 H. Hovenkamp, M. Janis, M. Lemley, & C. Leslie, IP and Antitrust § 15.3, p. 15-45, n. 161 (2d ed. Supp. 2011). It may well be that Hatch-Waxman's unique regulatory framework, including the special advantage that the 180-day exclusivity period gives to first filers, does much to explain why in this context, but not others, the patentee's ordinary incentives to resist paying off challengers (i.e., the fear of provoking myriad other challengers) appear to be more frequently overcome. See 12 Areeda ¶ 2046, at 341 (3d ed. 2010) (noting that these provisions, no doubt unintentionally, have created special incentives for collusion).
Second, these anticompetitive consequences will at least sometimes prove unjustified. See 7 id., ¶ 1504, at 410-415 (3d ed. 2010); California Dental Assn. v. FTC, 526 U.S. 756, 786-787, 119 S.Ct. 1604, 143 L.Ed.2d 935 (1999) (BREYER, J., concurring in part and dissenting in part). As the FTC admits, offsetting or redeeming virtues are sometimes present. Brief for Petitioner 37-39. The reverse payment, for example, may amount to no more than a rough approximation of the litigation expenses saved through the settlement. That payment may reflect compensation for other services that the generic has promised to perform-such as distributing the patented item or helping to develop a market for that item. There may be other justifications. Where a reverse payment reflects traditional settlement considerations, such as avoided litigation costs or fair value for services, there is not the same concern that a patentee is using its monopoly profits to avoid the risk of patent invalidation or a finding of noninfringement. In such cases,
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice KENNEDY delivered the opinion of the Court.
The Constitution promises libertyto all within its reach, a liberty that includes certain specific rights that allow persons, within a lawful realm, to define and express their identity. The petitioners in these cases seek to find that liberty by marrying someone of the same sex and having their marriages deemed lawful on the same terms and conditions as marriages between persons of the opposite sex.
I
These cases come from Michigan, Kentucky, Ohio, and Tennessee, States that define marriage as a union between one man and one woman. See, e.g., Mich. Const., Art. I, § 25 ; Ky. Const. § 233A ; Ohio Rev.Code Ann. § 3101.01 (Lexis 2008) ; Tenn. Const., Art. XI, § 18. The petitioners are 14 same-sex couples and two men whose same-sex partners are deceased. The respondents are state officials responsible for enforcing the laws in question. The petitioners claim the respondents violate the Fourteenth Amendment by denying them the right to marry or to have their marriages, lawfully performed in another State, given full recognition.
Petitioners filed these suits in United States District Courts in their home States. Each District Court ruled in their favor. Citations to those cases are in Appendix A, infra. The respondents appealed the decisions against them to the United States Court of Appeals for the Sixth Circuit. It consolidated the cases and reversed the judgments of the District Courts. DeBoer v. Snyder, 772 F.3d 388 (2014). The Court of Appeals held that a State has no constitutional obligation to license same-sex marriages or to recognize same-sex marriages performed out of State.
The petitioners sought certiorari. This Court granted review, limited to two questions. 574 U.S. ----, --- S.Ct. ----, --- L.Ed.2d ---- (2015). The first, presented by the cases from Michigan and Kentucky, is whether the Fourteenth Amendment requires a State to license a marriage between two people of the same sex. The second, presented by the cases from Ohio, Tennessee, and, again, Kentucky, is whether the Fourteenth Amendment requires a State to recognize a same-sex marriage licensed and performed in a State which does grant that right.
II
Before addressing the principles and precedents that govern these cases, it is appropriate to note the history of the subject now before the Court.
A
From their beginning to their most recent page, the annals of human history reveal the transcendent importance of marriage. The lifelong union of a man and a woman always has promised nobility and dignity to all persons, without regard to their station in life. Marriage is sacred to those who live by their religions and offers unique fulfillment to those who find meaning in the secular realm. Its dynamic allows two people to find a life that could not be found alone, for a marriage becomes greater than just the two persons. Rising from the most basic human needs, marriage is essential to our most profound hopes and aspirations.
The centrality of marriage to the human condition makes it unsurprising that the institution has existed for millennia and across civilizations. Since the dawn of history, marriage has transformed strangers into relatives, binding families and societies together. Confucius taught that marriage lies at the foundation of government. 2 Li Chi: Book of Rites 266 (C. Chai & W. Chai eds., J. Legge transl. 1967). This wisdom was echoed centuries later and half a world away by Cicero, who wrote, "The first bond of society is marriage; next, children; and then the family." See De Officiis 57 (W. Miller transl. 1913). There are untold references to the beauty of marriage in religious and philosophical texts spanning time, cultures, and faiths, as well as in art and literature in all their forms. It is fair and necessary to say these references were based on the understanding that marriage is a union between two persons of the opposite sex.
That history is the beginning of these cases. The respondents say it should be the end as well. To them, it would demean a timeless institution if the concept and lawful status of marriage were extended to two persons of the same sex. Marriage, in their view, is by its nature a gender-differentiated union of man and woman. This view long has been held-and continues to be held-in good faith by reasonable and sincere people here and throughout the world.
The petitioners acknowledge this history but contend that these cases cannot end there. Were their intent to demean the revered idea and reality of marriage, the petitioners' claims would be of a different order. But that is neither their purpose nor their submission. To the contrary, it is the enduring importance of marriage that underlies the petitioners' contentions. This, they say, is their whole point. Far from seeking to devalue marriage, the petitioners seek it for themselves because of their respect-and need-for its privileges and responsibilities. And their immutable nature dictates that same-sex marriage is their only real path to this profound commitment.
Recounting the circumstances of three of these cases illustrates the urgency of the petitioners' cause from their perspective. Petitioner James Obergefell, a plaintiff in the Ohio case, met John Arthur over two decades ago. They fell in love and started a life together, establishing a lasting, committed relation. In 2011, however, Arthur was diagnosed with amyotrophic lateral sclerosis, or ALS. This debilitating disease is progressive, with no known cure. Two years ago, Obergefell and Arthur decided to commit to one another, resolving to marry before Arthur died. To fulfill their mutual promise, they traveled from Ohio to Maryland, where same-sex marriage was legal. It was difficult for Arthur to move, and so the couple were wed inside a medical transport plane as it remained on the tarmac in Baltimore. Three months later, Arthur died. Ohio law does not permit Obergefell to be listed as the surviving spouse on Arthur's death certificate. By statute, they must remain strangers even in death, a state-imposed separation Obergefell deems "hurtful for the rest of time." App. in No. 14-556 etc., p. 38. He brought suit to be shown as the surviving spouse on Arthur's death certificate.
April DeBoer and Jayne Rowse are co-plaintiffs in the case from Michigan. They celebrated a commitment ceremony to honor their permanent relation in 2007. They both work as nurses, DeBoer in a neonatal unit and Rowse in an emergency unit. In 2009, DeBoer and Rowse fostered and then adopted a baby boy. Later that same year, they welcomed another son into their family. The new baby, born prematurely and abandoned by his biological mother, required around-the-clock care. The next year, a baby girl with special needs joined their family. Michigan, however, permits only opposite-sex married couples or single individuals to adopt, so each child can have only one woman as his or her legal parent. If an emergency were to arise, schools and hospitals may treat the three children as if they had only one parent. And, were tragedy to befall either DeBoer or Rowse, the other would have no legal rights over the children she had not been permitted to adopt. This couple seeks relief from the continuing uncertainty their unmarried status creates in their lives.
Army Reserve Sergeant First Class Ijpe DeKoe and his partner Thomas Kostura, co-plaintiffs in the Tennessee case, fell in love. In 2011, DeKoe received orders to deploy to Afghanistan. Before leaving, he and Kostura married in New York. A week later, DeKoe began his deployment, which lasted for almost a year. When he returned, the two settled in Tennessee, where DeKoe works full-time for the Army Reserve. Their lawful marriage is stripped from them whenever they reside in Tennessee, returning and disappearing as they travel across state lines. DeKoe, who served this Nation to preserve the freedom the Constitution protects, must endure a substantial burden.
The cases now before the Court involve other petitioners as well, each with their own experiences. Their stories reveal that they seek not to denigrate marriage but rather to live their lives, or honor their spouses' memory, joined by its bond.
B
The ancient origins of marriage confirm its centrality, but it has not stood in isolation from developments in law and society. The history of marriage is one of both continuity and change. That institution-even as confined to opposite-sex relations-has evolved over time.
For example, marriage was once viewed as an arrangement by the couple's parents based on political, religious, and financial concerns; but by the time of the Nation's founding it was understood to be a voluntary contract between a man and a woman. See N. Cott, Public Vows: A History of Marriage and the Nation 9-17 (2000); S. Coontz, Marriage, A History 15-16 (2005). As the role and status of women changed, the institution further evolved. Under the centuries-old doctrine of coverture, a married man and woman were treated by the State as a single, male-dominated legal entity. See 1 W. Blackstone, Commentaries on the Laws of England 430 (1765). As women gained legal, political, and property rights, and as society began to understand that women have their own equal dignity, the law of coverture was abandoned. See Brief for Historians of Marriage et al. as Amici Curiae 16-19. These and other developments in the institution of marriage over the past centuries were not mere superficial changes. Rather, they worked deep transformations in its structure, affecting aspects of marriage long viewed by many as essential. See generally N. Cott, Public Vows; S. Coontz, Marriage; H.
Hartog, Man & Wife in America: A History (2000).
These new insights have strengthened, not weakened, the institution of marriage. Indeed, changed understandings of marriage are characteristic of a Nation where new dimensions of freedom become apparent to new generations, often through perspectives that begin in pleas or protests and then are considered in the political sphere and the judicial process.
This dynamic can be seen in the Nation's experiences with the rights of gays and lesbians. Until the mid-20th century, same-sex intimacy long had been condemned as immoral by the state itself in most Western nations, a belief often embodied in the criminal law. For this reason, among others, many persons did not deem homosexuals to have dignity in their own distinct identity. A truthful declaration by same-sex couples of what was in their hearts had to remain unspoken. Even when a greater awareness of the humanity and integrity of homosexual persons came in the period after World War II, the argument that gays and lesbians had a just claim to dignity was in conflict with both law and widespread social conventions. Same-sex intimacy remained a crime in many States. Gays and lesbians were prohibited from most government employment, barred from military service, excluded under immigration laws, targeted by police, and burdened in their rights to associate. See Brief for Organization of American Historians as Amicus Curiae 5-28.
For much of the 20th century, moreover, homosexuality was treated as an illness. When the American Psychiatric Association published the first Diagnostic and Statistical Manual of Mental Disorders in 1952, homosexuality was classified as a mental disorder, a position adhered to until 1973. See Position Statement on Homosexuality and Civil Rights, 1973, in 131 Am. J. Psychiatry 497 (1974). Only in more recent years have psychiatrists and others recognized that sexual orientation is both a normal expression of human sexuality and immutable. See Brief for American Psychological Association et al. as Amici Curiae 7-17.
In the late 20th century, following substantial cultural and political developments, same-sex couples began to lead more open and public lives and to establish families. This development was followed by a quite extensive discussion of the issue in both governmental and private sectors and by a shift in public attitudes toward greater tolerance. As a result, questions about the rights of gays and lesbians soon reached the courts, where the issue could be discussed in the formal discourse of the law.
This Court first gave detailed consideration to the legal status of homosexuals in Bowers v. Hardwick, 478 U.S. 186, 106 S.Ct. 2841, 92 L.Ed.2d 140 (1986). There it upheld the constitutionality of a Georgia law deemed to criminalize certain homosexual acts. Ten years later, in Romer v. Evans, 517 U.S. 620, 116 S.Ct. 1620, 134 L.Ed.2d 855 (1996), the Court invalidated an amendment to Colorado's Constitution that sought to foreclose any branch or political subdivision of the State from protecting persons against discrimination based on sexual orientation. Then, in 2003, the Court overruled Bowers, holding that laws making same-sex intimacy a crime "demea [n] the lives of homosexual persons." Lawrence v. Texas, 539 U.S. 558, 575, 123 S.Ct. 2472, 156 L.Ed.2d 508.
Against this background, the legal question of same-sex marriage arose. In 1993, the Hawaii Supreme Court held Hawaii's law restricting marriage to opposite-sex couples constituted a classification on the basis of sex and was therefore subject to strict scrutiny under the Hawaii Constitution. Baehr v. Lewin, 74 Haw. 530, 852 P.2d 44. Although this decision did not mandate that same-sex marriage be allowed, some States were concerned by its implications and reaffirmed in their laws that marriage is defined as a union between opposite-sex partners. So too in 1996, Congress passed the Defense of Marriage Act (DOMA), 110 Stat. 2419, defining marriage for all federal-law purposes as "only a legal union between one man and one woman as husband and wife." 1 U.S.C. § 7.
The new and widespread discussion of the subject led other States to a different conclusion. In 2003, the Supreme Judicial Court of Massachusetts held the State's Constitution guaranteed same-sex couples the right to marry. See Goodridge v. Department of Public Health, 440 Mass. 309, 798 N.E.2d 941 (2003). After that ruling, some additional States granted marriage rights to same-sex couples, either through judicial or legislative processes. These decisions and statutes are cited in Appendix B, infra. Two Terms ago, in United States v. Windsor, 570 U.S. ----, 133 S.Ct. 2675, 186 L.Ed.2d 808 (2013), this Court invalidated DOMA to the extent it barred the Federal Government from treating same-sex marriages as valid even when they were lawful in the State where they were licensed. DOMA, the Court held, impermissibly disparaged those same-sex couples "who wanted to affirm their commitment to one another before their children, their family, their friends, and their community." Id., at ----, 133 S.Ct., at 2689.
Numerous cases about same-sex marriage have reached the United States Courts of Appeals in recent years. In accordance with the judicial duty to base their decisions on principled reasons and neutral discussions, without scornful or disparaging commentary, courts have written a substantial body of law considering all sides of these issues. That case law helps to explain and formulate the underlying principles this Court now must consider. With the exception of the opinion here under review and one other, see Citizens for Equal Protection v. Bruning, 455 F.3d 859, 864-868 (C.A.8 2006), the Courts of Appeals have held that excluding same-sex couples from marriage violates the Constitution. There also have been many thoughtful District Court decisions addressing same-sex marriage-and most of them, too, have concluded same-sex couples must be allowed to marry. In addition the highest courts of many States have contributed to this ongoing dialogue in decisions interpreting their own State Constitutions. These state and federal judicial opinions are cited in Appendix A, infra.
After years of litigation, legislation, referenda, and the discussions that attended these public acts, the States are now divided on the issue of same-sex marriage. See Office of the Atty. Gen. of Maryland, The State of Marriage Equality in America, State-by-State Supp. (2015).
III
Under the Due Process Clause of the Fourteenth Amendment, no State shall "deprive any person of life, liberty, or property, without due process of law." The fundamental liberties protected by this Clause include most of the rights enumerated in the Bill of Rights. See Duncan v. Louisiana, 391 U.S. 145, 147-149, 88 S.Ct. 1444, 20 L.Ed.2d 491 (1968). In addition these liberties extend to certain personal choices central to individual dignity and autonomy, including intimate choices that define personal identity and beliefs. See, e.g., Eisenstadt v. Baird, 405 U.S. 438, 453, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972) ; Griswold v. Connecticut, 381 U.S. 479, 484-486, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965).
The identification and protection of fundamental rights is an enduring part of the judicial duty to interpret the Constitution. That responsibility, however, "has not been reduced to any formula." Poe v. Ullman, 367 U.S. 497, 542, 81 S.Ct. 1752, 6 L.Ed.2d 989 (1961) (Harlan, J., dissenting). Rather, it requires courts to exercise reasoned judgment in identifying interests of the person so fundamental that the State must accord them its respect. See ibid. That process is guided by many of the same considerations relevant to analysis of other constitutional provisions that set forth broad principles rather than specific requirements. History and tradition guide and discipline this inquiry but do not set its outer boundaries. See Lawrence, supra, at 572, 123 S.Ct. 2472. That method respects our history and learns from it without allowing the past alone to rule the present.
The nature of injustice is that we may not always see it in our own times. The generations that wrote and ratified the Bill of Rights and the Fourteenth Amendment did not presume to know the extent of freedom in all of its dimensions, and so they entrusted to future generations a charter protecting the right of all persons to enjoy liberty as we learn its meaning. When new insight reveals discord between the Constitution's central protections and a received legal stricture, a claim to liberty must be addressed.
Applying these established tenets, the Court has long held the right to marry is protected by the Constitution. In Loving v. Virginia, 388 U.S. 1, 12, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967), which invalidated bans on interracial unions, a unanimous Court held marriage is "one of the vital personal rights essential to the orderly pursuit of happiness by free men." The Court reaffirmed that holding in Zablocki v. Redhail, 434 U.S. 374, 384, 98 S.Ct. 673, 54 L.Ed.2d 618 (1978), which held the right to marry was burdened by a law prohibiting fathers who were behind on child support from marrying. The Court again applied this principle in Turner v. Safley, 482 U.S. 78, 95, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1987), which held the right to marry was abridged by regulations limiting the privilege of prison inmates to marry. Over time and in other contexts, the Court has reiterated that the right to marry is fundamental under the Due Process Clause. See, e.g., M.L.B. v. S.L.J., 519 U.S. 102, 116, 117 S.Ct. 555, 136 L.Ed.2d 473 (1996) ; Cleveland Bd. of Ed. v. LaFleur, 414 U.S. 632, 639-640, 94 S.Ct. 791, 39 L.Ed.2d 52 (1974) ; Griswold, supra, at 486, 85 S.Ct. 1678 ; Skinner v. Oklahoma ex rel. Williamson, 316 U.S. 535, 541, 62 S.Ct. 1110, 86 L.Ed. 1655 (1942) ; Meyer v. Nebraska, 262 U.S. 390, 399, 43 S.Ct. 625, 67 L.Ed. 1042 (1923).
It cannot be denied that this Court's cases describing the right to marry presumed a relationship involving opposite-sex partners. The Court, like many institutions, has made assumptions defined by the world and time of which it is a part. This was evident in Baker v. Nelson, 409 U.S. 810, 93 S.Ct. 37, 34 L.Ed.2d 65, a one-line summary decision issued in 1972, holding the exclusion of same-sex couples from marriage did not present a substantial federal question.
Still, there are other, more instructive precedents. This Court's cases have expressed constitutional principles of broader reach. In defining the right to marry these cases have identified essential attributes of that right based in history, tradition, and other constitutional liberties inherent in this intimate bond. See, e.g., Lawrence, 539 U.S., at 574, 123 S.Ct. 2472 ; Turner, supra, at 95, 107 S.Ct. 2254 ; Zablocki, supra, at 384, 98 S.Ct. 673 ; Loving, supra, at 12, 87 S.Ct. 1817 ; Griswold, supra, at 486, 85 S.Ct. 1678. And in assessing whether the force and rationale of its cases apply to same-sex couples, the Court must respect the basic reasons why the right to marry has been long protected. See, e.g., Eisenstadt, supra, at 453-454, 92 S.Ct. 1029 ; Poe, supra, at 542-553, 81 S.Ct. 1752 (Harlan, J., dissenting).
This analysis compels the conclusion that same-sex couples may exercise the right to marry. The four principles and traditions to be discussed demonstrate that the reasons marriage is fundamental under the Constitution apply with equal force to same-sex couples.
A first premise of the Court's relevant precedents is that the right to personal choice regarding marriage is inherent in the concept of individual autonomy. This abiding connection between marriage and liberty is why Loving invalidated interracial marriage bans under the Due Process Clause. See 388 U.S., at 12, 87 S.Ct. 1817 ; see also Zablocki, supra, at 384, 98 S.Ct. 673 (observing Loving held "the right to marry is of fundamental importance for all individuals"). Like choices concerning contraception, family relationships, procreation, and childrearing, all of which are protected by the Constitution, decisions concerning marriage are among the most intimate that an individual can make. See Lawrence, supra, at 574, 123 S.Ct. 2472. Indeed, the Court has noted it would be contradictory "to recognize a right of privacy with respect to other matters of family life and not with respect to the decision to enter the relationship that is the foundation of the family in our society." Zablocki, supra, at 386, 98 S.Ct. 673.
Choices about marriage shape an individual's destiny. As the Supreme Judicial Court of Massachusetts has explained, because "it fulfils yearnings for security, safe haven, and connection that express our common humanity, civil marriage is an esteemed institution, and the decision whether and whom to marry is among life's momentous acts of self-definition." Goodridge, 440 Mass., at 322, 798 N.E.2d, at 955.
The nature of marriage is that, through its enduring bond, two persons together can find other freedoms, such as expression, intimacy, and spirituality. This is true for all persons, whatever their sexual orientation. See Windsor, 570 U.S., at ----, 133 S.Ct., at 2693-2695. There is dignity in the bond between two men or two women who seek to marry and in their autonomy to make such profound choices. Cf. Loving, supra, at 12, 87 S.Ct. 1817 ("[T]he freedom to marry, or not marry, a person of another race resides with the individual and cannot be infringed by the State").
A second principle in this Court's jurisprudence is that the right to marry is fundamental because it supports a two-person union unlike any other in its importance to the committed individuals. This point was central to Griswold v. Connecticut, which held the Constitution protects the right of married couples to use contraception. 381 U.S., at 485, 85 S.Ct. 1678. Suggesting that marriage is a right "older than the Bill of Rights," Griswold described marriage this way:
"
Marriage is a coming together for better or for worse, hopefully enduring, and intimate to the degree of being sacred. It is an association that promotes a way of life, not causes; a harmony in living, not political faiths; a bilateral loyalty, not commercial or social projects. Yet it is an association for as noble a purpose as any involved in our prior decisions." Id., at 486, 85 S.Ct. 1678.
And in Turner, the Court again acknowledged the intimate association protected by this right, holding prisoners could not be denied the right to marry because their committed relationships satisfied the basic reasons why marriage is a fundamental right. See 482 U.S., at 95-96, 107 S.Ct. 2254. The right to marry thus dignifies couples who "wish to define themselves by their commitment to each other." Windsor, supra, at ----, 133 S.Ct., at 2689. Marriage responds to the universal fear that a lonely person might call out only to find no one there. It offers the hope of companionship and understanding and assurance that while both still live there will be someone to care for the other.
As this Court held in Lawrence, same-sex couples have the same right as opposite-sex couples to enjoy intimate association. Lawrence invalidated laws that made same-sex intimacy a criminal act. And it acknowledged that "[w]hen sexuality finds overt expression in intimate conduct with another person, the conduct can be but one element in a personal bond that is more enduring." 539 U.S., at 567, 123 S.Ct. 2472. But while Lawrence confirmed a dimension of freedom that allows individuals to engage in intimate association without criminal liability, it does not follow that freedom stops there. Outlaw to outcast may be a step forward, but it does not achieve the full promise of liberty.
A third basis for protecting the right to marry is that it safeguards children and families and thus draws meaning from related rights of childrearing, procreation, and education. See Pierce v. Society of Sisters, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070 (1925) ; Meyer, 262 U.S., at 399, 43 S.Ct. 625. The Court has recognized these connections by describing the varied rights as a unified whole: "[T]he right to'marry, establish a home and bring up children' is a central part of the liberty protected by the Due Process Clause." Zablocki, 434 U.S., at 384, 98 S.Ct. 673 (quoting Meyer, supra, at 399, 43 S.Ct. 625 ). Under the laws of the several States, some of marriage's protections for children and families are material. But marriage also confers more profound benefits. By giving recognition and legal structure to their parents' relationship, marriage allows children "to understand the integrity and closeness of their own family and its concord with other families in their community and in their daily lives." Windsor, supra, at ----, 133 S.Ct., at 2694-2695. Marriage also affords the permanency and stability important to children's best interests. See Brief for Scholars of the Constitutional Rights of Children as Amici Curiae 22-27.
As all parties agree, many same-sex couples provide loving and nurturing homes to their children, whether biological or adopted. And hundreds of thousands of children are presently being raised by such couples. See Brief for Gary J. Gates as Amicus Curiae 4. Most States have allowed gays and lesbians to adopt, either as individuals or as couples, and many adopted and foster children have same-sex parents, see id., at 5. This provides powerful confirmation from the law itself that gays and lesbians can create loving, supportive families.
Excluding same-sex couples from marriage thus conflicts with a central premise of the right to marry. Without the recognition, stability, and predictability marriage offers, their children suffer the stigma of knowing their families are somehow lesser. They also suffer the significant material costs of being raised by unmarried parents, relegated through no fault of their own to a more difficult and uncertain family life. The marriage laws at issue here thus harm and humiliate the children of same-sex couples. See Windsor, supra, at ----, 133 S.Ct., at 2694-2695.
That is not to say the right to marry is less meaningful for those who do not or cannot have children. An ability, desire, or promise to procreate is not and has not been a prerequisite for a valid marriage in any State. In light of precedent protecting the right of a married couple not to procreate, it cannot be said the Court or the States have conditioned the right to marry on the capacity or commitment to procreate. The constitutional marriage right has many aspects, of which childbearing is only one.
Fourth and finally, this Court's cases and the Nation's traditions make clear that marriage is a keystone of our social order. Alexis de Tocqueville recognized this truth on his travels through the United States almost two centuries ago:
"There is certainly no country in the world where the tie of marriage is so much respected as in America... [W]hen the American retires from the turmoil of public life to the bosom of his family, he finds in it the image of order and of peace.... [H]e afterwards carries [that image] with him into public affairs." 1 Democracy in America 309 (H. Reeve transl., rev. ed. 1990).
In Maynard v. Hill, 125 U.S. 190, 211, 8 S.Ct. 723, 31 L.Ed. 654 (1888), the Court echoed de Tocqueville, explaining that marriage is "the foundation of the family and of society, without which there would be neither civilization nor progress." Marriage, the Maynard Court said, has long been " 'a great public institution, giving character to our whole civil polity.' " Id., at 213, 8 S.Ct. 723. This idea has been reiterated even as the institution has evolved in substantial ways over time, superseding rules related to parental consent, gender, and race once thought by many to be essential. See generally N. Cott, Public Vows. Marriage remains a building block of our national community.
For that reason, just as a couple vows to support each other, so does society pledge to support the couple, offering symbolic recognition and material benefits to protect and nourish the union. Indeed, while the States are in general free to vary the benefits they confer on all married couples, they have throughout our history made marriage the basis for an expanding list of governmental rights, benefits, and responsibilities. These aspects of marital status include: taxation; inheritance and property rights; rules of intestate succession; spousal privilege in the law of evidence; hospital access; medical decisionmaking authority; adoption rights; the rights and benefits of survivors; birth and death certificates; professional ethics rules; campaign finance restrictions; workers' compensation benefits; health insurance; and child custody, support, and visitation rules. See Brief for United States as Amicus Curiae 6-9; Brief for American Bar Association as Amicus Curiae 8-29. Valid marriage under state law is also a significant status for over a thousand provisions of federal law. See Windsor, 570 U.S., at ---- - ----, 133 S.Ct., at 2690-2691. The States have contributed to the fundamental character of the marriage right by placing that institution at the center of so many facets of the legal and social order.
There is no difference between same- and opposite-sex couples with respect to this principle. Yet by virtue of their exclusion from that institution, same-sex couples are denied the constellation of benefits that the States have linked to marriage. This harm results in more than just material burdens. Same-sex couples are consigned to an instability many opposite-sex couples would deem intolerable in their own lives. As the State itself makes marriage all the more precious by the significance it attaches to it, exclusion from that status has the effect of teaching that gays and lesbians are unequal in important respects. It demeans gays and lesbians for the State to lock them out of a central institution of the Nation's society. Same-sex couples, too, may aspire to the transcendent purposes of marriage and seek fulfillment in its highest meaning.
The limitation of marriage to opposite-sex couples may long have seemed natural and just, but its inconsistency with the central meaning of the fundamental right to marry is now manifest. With that knowledge must come the recognition that laws excluding same-sex couples from the marriage right impose stigma and injury of the kind prohibited by our basic charter.
Objecting that this does not reflect an appropriate framing of the issue, the respondents refer to Washington v. Glucksberg, 521 U.S. 702, 721, 117 S.Ct. 2258, 138 L.Ed.2d 772 (1997), which called for a " 'careful description' " of fundamental rights. They assert the petitioners do not seek to exercise the right to marry but rather a new and nonexistent "right to same-sex marriage." Brief for Respondent in No. 14-556, p. 8. Glucksberg did insist that liberty under the Due Process Clause must be defined in a most circumscribed manner, with central reference to specific historical practices. Yet while that approach may have been appropriate for the asserted right there involved (physician-assisted suicide), it is inconsistent with the approach this Court has used in discussing other fundamental rights, including marriage and intimacy. Loving did not ask about a "right to interracial marriage"; Turner did not ask about a "right of inmates to marry"; and Zablocki did not ask about a "right of fathers with unpaid child support duties to marry." Rather, each case inquired about the right to marry in its comprehensive sense, asking if there was a sufficient justification for excluding the relevant class from the right. See also Glucksberg, 521 U.S., at 752-773, 117 S.Ct. 2258 (Souter, J., concurring in judgment); id., at 789-792, 117 S.Ct. 2258 (BREYER, J., concurring in judgments).
That principle applies here. If rights were defined by who exercised them in the past, then received practices could serve as their own continued justification and new groups could not invoke rights once denied. This Court has rejected that approach, both with respect to the right to marry and the rights of gays and lesbians. See Loving, 388 U.S., at 12, 87 S.Ct. 1817 ; Lawrence, 539 U.S., at 566-567, 123 S.Ct. 2472.
The right to marry is fundamental as a matter of history and tradition, but rights come not from ancient sources alone. They rise, too, from a better informed understanding of how constitutional imperatives define a liberty that remains urgent in our own
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | D | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Stevens
delivered the opinion of the Court.
Section 106(3) of the Copyright Act of 1976 (Act), 17 U. S. C. § 106(3), gives the owner of a copyright the exclusive right to distribute copies of a copyrighted work. That exclusive right is expressly limited, however, by the provisions of §§ 107 through 120. Section 602(a) gives the copyright owner the right to prohibit the unauthorized importation of copies. The question presented by this ease is whether the right granted by § 602(a) is also limited by §§ 107 through 120. More narrowly, the question is whether the “first sale” doctrine endorsed in § 109(a) is applicable to imported copies.
I
Respondent, L’anza Research International, Inc. (L’anza), is a California corporation engaged in the business of manufacturing and selling shampoos, conditioners, and other hair care products. L’anza has copyrighted the labels that are affixed to those products. In the United States, L’anza sells exclusively to domestic distributors who have agreed to resell within limited geographic areas and then only to authorized retailers such as barber shops, beauty salons, and professional hair care colleges. L’anza has found that the American “public is generally unwilling to pay the price charged for high quality products, such as L’anza’s products, when they are sold along with the less expensive lower quality products that are generally carried by supermarkets and drug stores.” App! 54 (declaration of Robert Hall). L’anza promotes the domestic sales of its products with extensive advertising in various trade magazines and at point of sale, and by providing special training to authorized retailers.
L’anza also sells its products in foreign markets. In those markets, however, it does not engage in comparable advertising or promotion; its prices to foreign distributors are 35% to 40% lower than the prices charged to domestic distributors. In 1992 and 1993, L’anza’s distributor in the United Kingdom arranged the sale of three shipments to a distributor in Malta; each shipment contained several tons of L’anza products with copyrighted labels affixed. The record does not establish whether the initial purchaser was the distributor in the United Kingdom or the distributor in Malta, or whether title passed when the goods were delivered to the carrier or when they arrived at their destination, but it is undisputed that the goods were manufactured by L’anza and first sold by L’anza to a foreign purchaser.
It is also undisputed that the goods found their way back to the United States without the permission of L’anza and were sold in California by unauthorized retailers who had purchased them at discounted prices from Quality King Distributors, Inc. (petitioner). There is some uncertainty about the identity of the actual importer, but for the purpose of our decision we assume that petitioner bought all three shipments from the Malta distributor, imported them, and then resold them to retailers who were not in L’anza’s authorized chain of distribution.
After determining the source of the unauthorized sales, L’anza brought suit against petitioner and several other defendants. The complaint alleged that the importation and subsequent distribution of those products bearing copyrighted labels violated Lanza’s “exclusive rights under 17 U. S. C. §§ 106, 501 and 602 to reproduce and distribute the copyrighted material in the United States.” App. 32. The District Court rejected petitioner’s defense based on the “first sale” doctrine recognized by §109 and entered summary judgment in favor of L’anza. Based largely on its conclusion that § 602 would be “meaningless” if § 109 provided a defense in a case of this kind, the Court of Appeals affirmed. 98 F. 3d 1109, 1114 (CA9 1996). Because its decision created a conflict with the Third Circuit, see Sebastian Int’l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F. 2d 1093 (1988), we granted the petition for certiorari. 520 U. S. 1250 (1997).
II
This is an unusual copyright case because L’anza does not claim that anyone has made unauthorized copies of its copyrighted labels. Instead, L’anza is primarily interested in protecting the integrity of its method of marketing the products to which the labels are affixed. Although the labels themselves have only a limited creative component, our interpretation of the relevant statutory provisions would apply equally to a case involving more familiar copyrighted materials such as sound recordings or books. Indeed, we first endorsed the first sale doctrine in a ease involving a claim by a publisher that the resale of its books at discounted prices infringed its copyright on the books. Bobbs-Merrill Co. v. Straus, 210 U. S. 339 (1908).
In that case, the publisher, Bobbs-Merrill, had inserted a notice in its books that any retail sale at a price under $1 would constitute an infringement of its copyright. The defendants, who owned Maey’s department store, disregarded the notice and sold the books at a lower price without Bobbs-Merrill’s consent. We held that the exclusive statutory right to “vend” applied only to the first sale of the copyrighted work:
“What does the statute mean in granting ‘the sole right of vending the same’? Was it intended to create a right which would permit the holder of the copyright to fasten, by notice in a book or upon one of the articles mentioned within the statute, a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it and had given a satisfactory price for it? It is not denied that one who has sold a copyrighted article, without restriction, has parted with all right to control the sale of it. The purchaser of a book, once sold by authority of the owner of the copyright, may sell it again, although he could not publish a new edition of it.
“In this ease the stipulated facts show that the books sold by the appellant were sold at wholesale, and purchased by those who made no agreement as to the control of future sales of the book, and took upon themselves no obligation to enforce the notice printed in the book, undertaking to restrict retail sales to a price of one dollar per copy.” Id., at 349-350.
The statute in force when Bobbs-Merrill was decided provided that the copyright owner had the exclusive right to “vend” the copyrighted work. Congress subsequently codified our holding in Bobbs-Merrill that the exclusive right to “vend” was limited to first sales of the work. Under the 1976 Act, the comparable exclusive right granted in 17 U. S. C. § 106(3) is the right “to distribute copies ... by sale or other transfer of ownership.” The comparable limitation on that right is provided not by judicial interpretation, but by an express statutory provision. Section 109(a) provides:
“Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord....”
The Bobbs-Merrill opinion emphasized the critical distinction between statutory rights and contract rights. In this ease, L’anza relies on the terms of its contracts with its domestic distributors to limit their sales to authorized retail outlets. Because the basic holding in Bobbs-Merrill is now codified in § 109(a) of the Act, and because those domestic distributors are owners of the products that they purchased from L’anza (the labels of which were “lawfully made under this title”), L’anza does not, and could not, claim that the statute would enable L’anza to treat unauthorized resales by its domestic distributors as an infringement of its exclusive right to distribute copies of its labels. L’anza does claim, however, that contractual provisions are inadequate to protect it from the actions of foreign distributors who may resell L’anza’s products to American vendors unable to buy from L’anza’s domestic distributors, and that § 602(a) of the Act, properly construed, prohibits such unauthorized competition. To evaluate that submission, we must, of course, consider the text of § 602(a).
Ill
The most relevant portion of § 602(a) provides:
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonoreeords of a work that have been acquired outside the United States is an infringement of the exelu-sive right to distribute copies or phonorecords under section 106, actionable under section 501....”
It is significant that this provision does not categorically prohibit the unauthorized importation of copyrighted materials. Instead, it provides that such importation is an infringement of the exclusive right to distribute copies “under section 106.” Like the exclusive right to “vend” that was construed in Bobbs-Merrill, the exclusive right to distribute is a limited right. The introductory language in §106 expressly states that all of the exclusive rights granted by that section — including, of course, the distribution right granted by subsection (3) — are limited by the provisions of §§107 through 120. One of those limitations, as we have noted, is provided by the terms of § 109(a), which expressly permit the owner of a lawfully made copy to sell that copy “[n]ot-withstanding the provisions of section 106(3).”
After the first sale of a copyrighted item “lawfully made under this title,” any subsequent purchaser, whether from a domestic or from a foreign reseller, is obviously an “owner” of that item. Read literally, § 109(a) unambiguously states that such an owner “is entitled, without the authority of the copyright owner, to sell” that item. Moreover, since § 602(a) merely provides that unauthorized importation is an infringement of an exclusive right “under section 106,” and since that limited right does not encompass resales by lawful owners, the literal text of § 602(a) is simply inapplicable to both domestic and foreign owners of L’anza’s products who decide to import them and resell them in the United States.
Notwithstanding the clarity of the text of §§ 106(3), 109(a), and 602(a), L’anza argues that the language of the Act supports a construction of the right granted by § 602(a) as “distinct from the right under Section 106(3) standing alone,” and thus not subject to § 109(a). Brief for Respondent 15. Otherwise, L’anza argues, both the § 602(a) right itself and its exceptions would be superfluous. Moreover, supported by various amici curiae, including the Solicitor General of the United States, L’anza contends that its construction is supported by important policy considerations. We consider these arguments separately.
IV
L’anza advances two primary arguments based on the text of the Act: (1) that § 602(a), and particularly its three exceptions, are superfluous if limited by the first sale doctrine; and (2) that the text of § 501 defining an “infringer” refers separately to violations of § 106, on the one hand, and to imports in violation of §602. The short answer to both of these arguments is that neither adequately explains why the words “under section 106” appear in § 602(a). The Solicitor General makes an additional textual argument: he contends that the word “importation” in § 602(a) describes an act that is not protected by the language in § 109(a) authorizing a subsequent owner “to sell or otherwise dispose of the possession of” a copy. Each of these arguments merits separate comment.
The Coverage of § 602(a)
Prior to the enactment of § 602(a), the Act already prohibited the importation of “piratical,” or unauthorized, copies. Moreover, that earlier prohibition is retained in § 602(b) of the present Act. L’anza therefore argues (as do the Solicitor General and other amici curiae) that § 602(a) is superfluous unless it covers nonpiratical (“lawfully made”) copies sold by the copyright owner, because importation nearly always implies a first sale. There are several flaws in this argument.
First, even if § 602(a) did apply only to piratical copies, it at least would provide the copyright holder with a private remedy against the importer, whereas the enforcement of § 602(b) is vested in the Customs Service. Second, because the protection afforded by § 109(a) is available only to the “owner” of a lawfully made copy (or someone authorized by the owner), the first sale doctrine would not provide a defense to a § 602(a) action against any nonowner such as a bailee, a licensee, a consignee, or one whose possession of the copy was unlawful. Third, § 602(a) applies to a category of copies that are neither piratical nor “lawfully made under this title.” That category encompasses copies that were “lawfully made” not under the United States Copyright Act, but instead, under the law of some other country.
The category of copies produced lawfully under a foreign copyright was expressly identified in the deliberations that led to the enactment of the 1976 Act. We mention one example of such a comment in 1961 simply to demonstrate that the category is not a merely hypothetical one. In a report to Congress, the Register of Copyrights stated, in'part:
“When arrangements are made for both a U. S. edition and a foreign edition of the same work, the publishers frequently agree to divide the international markets. The foreign publisher agrees not to sell his edition in the United States, and the U. S. publisher agrees not to sell his edition in certain foreign countries. It has been suggested that the import ban on piratical copies should be extended to bar the importation of the foreign edition in contravention of such an agreement.” Copyright Law Revision: Report of the Register of Copyrights on the General Revision of the ,U. S. Copyright Law, 87th Cong., 1st Sess., 125-126 (H. R. Judiciary Comm. Print 1961).
Even in the absence of a market allocation agreement between, for example, a publisher of the United States edition and a publisher of the British edition of the same work, each such publisher could make lawful copies. If the author of the work gave the exclusive United States distribution rights — enforceable under the Act — to the publisher of the United States edition and the exclusive British distribution rights to the publisher of the British edition, however, presumably only those made by the publisher of the United States edition would be “lawfully made under this title” within the meaning of § 109(a). The first sale doctrine would not provide the publisher of the British edition who decided to sell in the American market with a defense to an action under § 602(a) (or, for that matter, to an action under § 106(3), if there was a distribution of the copies).
The argument that the statutory exceptions to § 602(a) are superfluous if the first sale doctrine is applicable rests on the assumption that the coverage of that section is coextensive with the coverage of § 109(a). But since it is, in fact, broader because it encompasses copies that are not subject to the first sale doctrine — e. g., copies that are lawfully made under the law of another country — the exceptions do protect the traveler who may have made an isolated purchase of a copy of a work that could not be imported in bulk for purposes of resale. As we read the Act, although both the first sale doctrine embodied in § 109(a) and the exceptions in § 602(a) may be applicable in some situations, the former does not subsume the latter; those provisions retain significant independent meaning.
Section 501’s Separate References to §§106 and 602
The text of §501 does lend support to L’anza’s submission. In relevant part, it provides:
“(a) Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be....”
The use of the words “or who imports,” rather than words such as “including one who imports,” is more consistent with an interpretation that a violation of § 602 is distinct from a violation of § 106 (and thus not subject to the first sale doctrine set out in § 109(a)) than with the view that it is a species of such a violation. Nevertheless, the force of that inference is outweighed by other provisions in the statutory text.
Most directly relevant is the fact that the text of § 602(a) itself unambiguously states that the prohibited importation is an infringement of the exclusive distribution right “under section 106, actionable under section 501,” Unlike that phrase, which identifies §602 violations as a species of § 106 violations, the text of § 106A, which is also cross-referenced in § 501, uses starkly different language. It states that the author’s right protected by §106A is “independent of the exclusive rights provided in Section 106.” The contrast between the relevant language in § 602 and that in § 106A strongly implies that only the latter describes an independent right.
Of even greater importance is the fact that the § 106 rights are subject not only to the first sale defense in § 109(a), but also to all of the other provisions of “sections 107 through 120.” If § 602(a) functioned independently, none of those sections would limit its coverage. For example, the “fair use” defense embodied in § 107 would be unavailable to importers if § 602(a) created a separate right not subject to the limitations on the § 106(3) distribution right. Under L’anza’s interpretation of the Act, it presumably would be unlawful for a distributor to import copies of a British newspaper that contained a book review quoting excerpts from an American novel protected by a United States copyright. Given the importance of the fair use defense to publishers of scholarly works, as well as to publishers of periodicals, it is difficult to believe that Congress intended to impose an absolute ban on the importation of all such works containing any copying of material protected by a United States copyright.
In the context of this ease, involving copyrighted labels, it seems unlikely that an importer could defend an infringement as a “fair use” of the label. In construing the statute, however, we must remember that its principal purpose was to promote the progress of the “useful Arts,” U. S. Const., Art. I, §8, cl. 8, by rewarding creativity, and its principal function is the protection of original works, rather than ordinary commercial products that use copyrighted material as a marketing aid. It is therefore appropriate to take into account the impact of the denial of the fair use defense for the importer.of foreign publications. As applied to such publications, L’anza’s construction of §602 “would merely inhibit access to ideas without any countervailing benefit.” Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417, 450-451 (1984).
Does an importer “sell or otherwise dispose” of copies as those words are used in § 109(a)?
Whether viewed from the standpoint of the importer or from that of the copyright holder, the textual argument advanced by the Solicitor General — that the act of “importation” is neither a sale nor a disposal of a copy under § 109(a) — is unpersuasive. Strictly speaking, an importer could, of course, carry merchandise from one country to another without surrendering custody of it. In a typical commercial transaction, however, the shipper transfers “possession, custody, control and title to the products” to a different person, and Lianza assumes that petitioner's importation of the lianza shipments included such a transfer. An ordinary interpretation of the statement that a person is entitled “to sell or otherwise dispose of the possession” of an item surely includes the right to ship it to another person in another country.
More important, the Solicitor General’s cramped reading of the text of the statutes is at odds not only with § 602(a)’s more flexible treatment of unauthorized importation as an infringement of the distribution right (even when there is no literal “distribution”), but also with the necessarily broad reach of § 109(a). The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution. As we have recognized, the codification of that doctrine in § 109(a) makes it clear that the doctrine applies only to copies that are “lawfully made under this title,” but that was also true of the copies involved in the Bobbs-Merrill case, as well as those involved in the earlier eases applying the doctrine. There is no reason to assume that Congress intended either § 109(a) or the earlier codifications of the doctrine to limit its broad scope.
In sum, we are not persuaded by either L’anza’s or the Solicitor General’s textual arguments.
V
The parties and their amici have debated at length the wisdom or unwisdom of governmental restraints on what is sometimes described as either the “gray market” or the practice of “parallel importation.” In Kmart Corp. v. Cartier, Inc., 486 U. S. 281 (1988), we used those terms to refer to the importation of foreign-manufaetured goods bearing a valid United States trademark without the consent of the trademark holder. Id., at 285-286. We are not at all sure that those terms appropriately describe the consequences of an American manufacturer’s decision to limit its promotional efforts to the domestic market and to sell its products abroad at discounted prices that are so low that its foreign distributors can compete in the domestic market. But even if they do, whether or not we think it would be wise policy to provide statutory protection for such price discrimination is not a matter that is relevant to our duty to interpret the text of the Copyright Act.
Equally irrelevant is the fact that the Executive Branch of the Government has entered into at least five international trade agreements that are apparently intended to protect domestic copyright owners from the unauthorized importation of copies of their works sold in those five countries. The earliest of those agreements was made in 1991; none has been ratified by the Senate. Even though they are of course consistent with the position taken by the Solicitor General in this litigation, they shed no light on the proper interpretation of a statute that was enacted in 1976.
The judgment of the Court of Appeals is reversed.
It is so ordered.
See App. 64 (declaration of Robert De Lanza).
See id., at 70-83.
L’anza’s claims against the retailer defendants were settled. The Malta distributor apparently never appeared in this action and a default judgment was entered against it.
The doctrine had been consistently applied by other federal courts in earlier cases. See Kipling v. G. P. Putnam’s Sons, 120 F. 631, 634 (CA2 1903); Doan v. American Book Co., 105 F. 772, 776 (CA7 1901); Harrison v. Maynard, Merrill & Co., 61 F. 689, 691 (CA2 1894); Bobbs-Merrill Co. v. Snellenburg, 131 F. 530, 532 (ED Pa. 1904); Clemens v. Estes, 22 F. 899, 900 (Mass. 1885); Stowe v. Thomas, 23 F. Cas. 201, 206-207 (ED Pa. 1853).
In 1908, when Bobbs-Merrill was decided, the copyright statute provided that copyright owners had “the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending” their copyrighted works. Copyright Act of 1891, § 4952, 26 Stat. 1107 (emphasis added).
See n. 5, supra.
Congress codified the first sale doctrine in §41 of the Copyright Act of 1909, eh. 320, 35 Stat. 1084, and again in § 27 of the 1947 Act, ch. 391, 61 Stat. 660.
The full text of § 106 reads as follows:
Ҥ 106. Exclusive rights in copyrighted works
“Subject to sections 107 through 120, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
“(1) to reproduce the copyrighted work in copies or phonorecords;
“(2) to prepare derivative works based upon the copyrighted work;
“(3) to distribute eopies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
“(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
“(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
“(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.” 17 U. S. C. § 106 (1994 ed., Supp. I).
The comparable section in the 1909 and 1947 Acts provided that “nothing in this Act shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been ¡awfully obtained.” Copyright Act of 1909, ch. 320, § 41, 35 Stat. 1084; see also Copyright Act of 1947, ch. 391, §27, 61 Stat. 660. It is noteworthy that § 109(a) of the 1978 Act does not apply to “any copy”; it applies only to a copy that was “lawfully made under this title.”
“We do not think the statute can be given such a construction, and it is to be remembered that this is purely a question of statutory construction. There is no claim in this case of contract limitation, nor license agreement controlling the subsequent sales of the book.” Bobbs-Merrill Co. v. Straus, 210 U. S. 339, 350 (1908).
The remainder of § 602(a) reads as follows:
“This subsection does not apply to—
“(1) importation of copies or phonorecords under the authority or for the use of the Government of the United States or of any State or political subdivision of a State, but not including copies or phonorecords for use in schools, or copies of any audiovisual work imported for purposes other than archival use;
“(2) importation, for the private use of the importer and not for distribution, by any person with respect to no more than one copy or phonorec-ord of any one work at any one time, or by any person arriving from outside the United States with respect to copies or phonorecords forming part of such person’s personal baggage; or
“(3) importation by or for an organization operated for scholarly, educational, or religious purposes and not for private gain, with respect to no more than one copy of an audiovisual work solely for its archival purposes, and no more than five copies or phonorecords of any other work for its library lending or archival purposes, unless the importation of such copies or phonorecords is part of an activity consisting of systematic reproduction or distribution, engaged in by such organization in violation of the provisions of section 108(g)(2).”
See n. 8, supra.
See text accompanying n. 9, supra.
Despite L’anza’s contention to the contrary, see Brief for Respondent 26-27, the owner of goods lawfully made under the Act is entitled to the protection of the first sale doctrine in an action in a United States court even if the first sale occurred abroad. Such protection does not require the extraterritorial application of the Act any more than § 602(a)’s “acquired abroad” language does.
See n. 11, supra.
See 17 U. S. C. §§106, 107 (1970).
Section 602(b) provides in relevant part: “In a case where the making of the copies or phonorecords would have constituted an infringement of copyright if this title had been applicable, their importation is prohibited....” The first sale doctrine of § 109(a) does not protect owners of piratical copies, of course, because such copies were not “lawfully made.”
See n. 17, supra.
In its opinion in this case, the Court of Appeals quoted a statement by a representative of the music industry expressing the need for protection against the importation of stolen motion picture prints: “We’ve had a similar situation with respect to motion picture prints, which are sent all over the world — legitimate prints made from the authentic negative. These prints get into illicit hands. They’re stolen, and there’s no contractual relationship_Now those are not piratical copies.” Copyright Law Revision Part 2: Discussion and Comments on Report of the Register of Copyrights on General Revision of the U. S. Copyright Law, 88th Cong., 1st Sess., 213 (H. R. Judiciary Comm. Print 1963) (statement of Mr. Sargoy), quoted in 98 F. 3d 1109, 1116 (CA9 1996).
A participant in a 1964 panel discussion expressed concern about this particular situation. Copyright Law Revision Part 4: Further Discussion and Comments on Preliminary Draft for Revised U. S. Copyright Law, 88th Cong,, 2d Sess., 119 (H. R. Judiciary Comm. Print 1964) (statement of Mrs. Pilpel) (“For example, if someone were to import a copy of the British edition of an American book and the author had transferred exclusive United States and Canadian rights to an American publisher, would that British edition be in violation so that this would constitute an infringement under this section?”); see also id., at 209 (statement of Mr. Manges) (describing similar situation as “a troublesome problem that confronts U. S. book publishers frequently”).
The strength of the implication created by the relevant language in §106A is not diminished by the fact that Congress enacted §106A more recently than § 602(a), which is part of the Copyright Act of 1976. Section 106A was passed as part of the Visual Artists Rights Act of 1990 in order to protect the moral rights of certain visual artists. Section 106A is analogous to Article 6bis of the Berne Convention for the Protection of Literary and Artistic Works, but its coverage is more limited. See 2 P. Goldstein, Copyright §5.12, p. 5:225 (2d ed. 1996) (§106A encompasses aspects of the moral rights guaranteed by Article Sbis of the Berne Convention, “but effectively gives these rights a narrow subject matter and scope”).
Title 17 U. S. C. § 107 provides as follows:
Ҥ 107. Limitations on exclusive rights: Fair use
“Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
“(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
“(2) the nature of the copyrighted work;
“(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
“(4) the effect of the use upon the potential market for or value of the copyrighted work.
“The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.”
The § 602(a) exceptions, which are substantially narrower than §107, would not permit such importation. See n. 11, supra.
L’anza’s reliance on §602(a)(3)’s reference to § 108(g)(2), see n. 11, supra, to demonstrate that all of the other limitations set out in §§ 107 through 120 — including the first sale and fair use doctrines — do not apply to imported copies is unavailing for the same reasons.
See also Brief for Recording Industry Association of America et al. 19-21.
App. 87.
See, e. g., H. R. Rep. No. 1476, 94th Cong., 2d Sess., 79 (1979) (“Section 109(a) restates and confirms” the first sale doctrine established by prior ease law); S. Rep. No. 473, 94th Cong., 1st Sess., 71 (1975) (same).
Compare, for example, Gorelick & Little, The Case for Parallel Importation, 11 N. C. J. Int’l L. & Comm. Reg. 205 (1986), with Gordon, Gray Market Is Giving Hair-Produet Makers Gray Hair, N. Y. Times, July 13, 1997, section 1, p. 28, col. 1.
Presumably L’anza, for example, could have avoided the consequences of that competition either (1) by providing advertising support abroad and charging higher prices, or (2) if it was satisfied to leave the promotion of the product in foreign markets to its foreign distributors, to sell its products abroad under a different name,
The Solicitor General advises us that such agreements have been made with Cambodia, Trinidad and Tobago, Jamaica, Ecuador, and Sri Lanka.
We also note that in 1991, when the first of the five agreements was signed, the Third Circuit had already issued its opinion in Sebastian Int’l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F. 2d 1093 (1988), adopting a position contrary to that subsequently endorsed by the Executive Branch.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Souter
delivered the opinion of the Court.
In Colorado Republican Federal Campaign Comm. v. Federal Election Comm’n, 518 U. S. 604 (1996) (Colorado I), we held that spending limits set by the Federal Election Campaign Act were unconstitutional as applied to the Colorado Republican Party’s independent expenditures in connection with a senatorial campaign. We remanded for consideration of the party’s claim that all limits on expenditures by a political party in connection with congressional campaigns are facially unconstitutional and thus unenforceable even as to spending coordinated with a candidate. Today we reject that facial challenge to the limits on parties’ coordinated expenditures.
I
We first examined the Federal Election Campaign Act of 1971 in Buckley v. Valeo, 424 U. S. 1 (1976) (per curiam), where we held that the Act’s limitations on contributions to a candidate’s election campaign were generally constitutional, but that limitations on election expenditures were not. Id., at 12-59. Later cases have respected this line between contributing and spending. See, e. g., Nixon v. Shrink Missouri Government PAC, 528 U. S. 377, 386-388 (2000); Colorado I, supra, at 610, 614-615; Federal Election Comm’n v. Massachusetts Citizens for Life, Inc., 479 U. S. 238, 259-260 (1986).
The simplicity of the distinction is qualified, however, by the Act’s provision for a functional, not formal, definition of “contribution,” which includes “expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents,” 2 U. S. C. §441a(a) (7XBXÍ). Expenditures coordinated with a candidate, that is, are contributions under the Act.
The Federal Election Commission (FEC or Commission) originally took the position that any expenditure by a political party in connection with a particular election for federal office was presumed to be coordinated with the party’s candidate. See Federal Election Comm’n v. Democratic Senatorial Campaign Comm., 454 U. S. 27, 28-29, n. 1 (1981); Brief for Petitioner 6-7. The Commission thus operated on the assumption that all expenditure limits imposed on political parties were, in essence, contribution limits and therefore constitutional. Brief for Respondent in Colorado I, O. T. 1995, No. 95-489, pp. 28-30. Such limits include 2 U. S. C. § 441a(d)(3), which provides that in elections for the United States Senate, each national or state party committee is limited to spending the greater of $20,000 (adjusted for inflation, §441a(c)) or two cents multiplied by the voting age population of the State in which the election is held, § 441a(d)(3)(A).
Colorado I was an as-applied challenge to §441a(d)(3) (which we spoke of as the Party Expenditure Provision), occasioned by the Commission’s enforcement action against the Colorado Republican Federal Campaign Committee (Party) for exceeding the campaign spending limit through its payments for radio advertisements attacking Democratic Congressman and senatorial candidate Timothy Wirth. 518 U.S., at 612-613. 'The Party defended in part with the claim that the party expenditure limitations violated the First Amendment, and the principal opinion in Colorado I agreed that the limitations were unconstitutional as applied to the advertising expenditures at issue. Unlike the Commission, the Members of the Court who joined the principal opinion thought the payments were “independent expenditures” as that term had been used in our prior cases, owing to the facts that the Party spent the money before selecting its own senatorial candidate and without any arrangement with potential nominees. Id., at 613-614 (opinion of Breyer, J.).
The Party’s broader claim remained: that although prior decisions of this Court had upheld the constitutionality of limits on coordinated expenditures by political speakers other than parties, the congressional campaign expenditure limitations on parties themselves are facially unconstitutional, and so are incapable of reaching party spending even when coordinated with a candidate. Id., at 62S-626. We remanded that facial challenge, which had not been fully briefed or considered below. Ibid. On remand the District Court held for the Party, 41 F. Supp. 2d 1197 (1999), and a divided panel of the Court of Appeals for the Tenth Circuit affirmed, 213 F. 3d 1221 (2000). We granted certiorari to resolve the question left open by Colorado I, see 531 U. S. 923 (2000), and we now reverse.
hH
Spending for political ends and contributing to political candidates both fall within the First Amendment’s protection of speech and political association. Buckley, 424 U. S., at 14-23. But ever since we first reviewed the 1971 Act, we have understood that limits on political expenditures deserve closer scrutiny than restrictions on political contributions. Ibid.; see also, e. g., Shrink Missouri, 528 U. S., at 386-388; Colorado I, supra, at 610, 614-615; Massachusetts Citizens for Life, supra, at 259-260. Restraints on expenditures generally curb more expressive and associational activity than limits on contributions do. Shrink Missouri, supra, at 386-388; Colorado I, supra, at 615; Buckley, supra, at 19-23. A further reason for the distinction is that limits on contributions are more clearly justified by a link to political corruption than limits on other kinds of unlimited political spending are (corruption being understood not only as quid pro quo agreements, but also as undue influence on an officeholder’s judgment, and the appearance of such influence, Shrink Missouri, supra, at 388-389). At least this is so where the spending is not coordinated with a candidate or his campaign. Colorado I, supra, at 615; Buckley, 424 U. S., at 47. In Buckley we said that:
“[ujnlike contributions,... independent expenditures may well provide little assistance to the candidate’s campaign and indeed may prove counterproductive. The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.” Ibid.
Given these differences, we have routinely struck down limitations on independent expenditures by candidates, other individuals, and groups, see Federal Election Comm’n v. National Conservative Political Action Comm., 470 U. S. 480, 490-501 (1985) (political action committees); Buckley, supra, at 39-58 (individuals, groups, candidates, and campaigns), while repeatedly upholding contribution limits, see Shrink Missouri, supra (contributions by political action committees); California Medical Assn. v. Federal Election Comm’n, 453 U. S. 182, 193-199 (1981) (contributions by individuals and associations); Buckley, supra, at 23-36 (contributions by individuals, groups, and political committees).
The First Amendment line between spending and donating is easy to draw when it falls between independent expenditures by individuals or political action committees (PACs) without any candidate’s approval (or wink or nod), and contributions in the form of cash gifts to candidates. See, e. g., Shrink Missouri, supra, at 386-388; Buckley, supra, at 19-23. But facts speak less clearly once the independence of the spending cannot be taken for granted, and money spent by an individual or PAC according to an arrangement with a candidate is therefore harder to classify. As already seen, Congress drew a functional, not a formal, line between contributions and expenditures when it provided that coordinated expenditures by individuals and nonparty groups are subject to the Act’s contribution limits, 2 U. S. C. §441a(a)(7)(B)(i); Colorado I, 518 U. S., at 611. In Buckley, the Court acknowledged Congress’s functional classification, 424 U. S., at 46-47, and n. 53, and observed that treating coordinated expenditures as contributions “prevents] attempts to circumvent the Act through prearranged or coordinated expenditures amounting to disguised contributions,” id., at 47. Buckley, in fact, enhanced the significance of this functional treatment by striking down independent expenditure limits on First Amendment grounds while upholding limitations on contributions (by individuals and nonparty groups), as defined to include coordinated expenditures, id., at 23-59.
Colorado I addressed the FEC’s effort to stretch the functional treatment of coordinated expenditures further than the plain application of the statutory definition. As we said, the FEC argued that parties and candidates are coupled so closely that all of a party’s expenditures on an election campaign are coordinated with its candidate; because Buckley had treated some coordinated expenditures like contributions and upheld their limitation, the argument went, the Party Expenditure Provision should stand as applied to all party election spending. See Brief for Respondent in Colorado I, O. T. 1995, No. 95-489, at 28-30; see also Colorado I, supra, at 619-623. Colorado I held, otherwise, however, the principal opinion’s view being that some party expenditures could be seen as “independent” for constitutional purposes. 518 U. S., at 614. The principal opinion found no reason to see these expenditures as more likely to serve or be seen as instruments of corruption than independent expenditures by anyone else. So there was no justification for subjecting party election spending across the board to the kinds of limits previously invalidated when applied to individuals and nonparty groups. The principal opinion observed that “[t]he independent expression of a political party’s views is ‘core’ First Amendment activity no less than is the independent expression of individuals, candidates, or other political committees.” Id., at 616. Since the FEC did not advance any other convincing reason for refusing to draw the independent-coordinated line accepted since Buckley, see National Conservative Political Action Comm., 470 U. S., at 497-498; Buckley, supra, at 46-47, that was the end of the case so far as it concerned independent spending. Colorado I, supra, at 617-623.
But that still left the question whether the First Amendment allows coordinated election expenditures by parties to be treated functionally as contributions, the way coordinated expenditures by other entities are treated. Colorado I found no justification for placing parties at a disadvantage when spending independently; but was there a case for leaving them entirely free to coordinate unlimited spending with candidates when others could not? The principal opinion in Colorado I noted that coordinated expenditures “share some of the constitutionally relevant features of independent expenditures.” 518 U. S., at 624. But it also observed that “many [party coordinated expenditures] are... virtually indistinguishable from simple contributions.” Ibid. Coordinated spending by a party, in other words, covers a spectrum of activity, as does coordinated spending by other political actors. The issue in this case is, accordingly, whether a party is otherwise in a different position from other political speakers, giving it a claim to demand a generally higher standard of scrutiny before its coordinated spending can be limited. The issue is posed by two questions: does limiting coordinated spending impose a unique burden on parties, and is there reason to think that coordinated spending by a party would raise the risk of corruption posed when others spend in coordination w;ith a candidate? The issue is best viewed through the positions developed by the Party and the Government in this case.
Ill
The Party’s argument that its coordinated spending, like its independent spending, should be left free from restriction under the Buckley line of cases boils down to this: because a party’s most important speech is aimed at electing candidates and is itself expressed through those candidates, any limit on party support for a candidate imposes a unique First Amendment burden. See Brief for Respondent 26-31. The point of organizing a party, the argument goes, is to run a successful candidate who shares the party’s policy goals. Id., at 26. Therefore, while a campaign contribution is only one of several ways that individuals and nonparty groups speak and associate politically, see Shrink Missouri, 528 U. S., at 386-387; Buckley, supra, at 20-22, financial support of candidates is essentiál to the nature of political parties as we know them. And coordination with a candidate is a party’s natural way of operating, not merely an option that can easily be avoided. Brief for Respondent 26. Limitation of any party expenditure coordinated with a candidate, the Party contends, is therefore a serious, rather than incidental, imposition on the party’s speech and associative purpose, and that justifies a stricter level of scrutiny than we have applied to analogous limits on individuals and nonparty groups. But whatever level of scrutiny is applied, the Party goes oh to argue, the burden on a party reflects a fatal mismatch between the effects of limiting coordinated party expenditures and the prevention of corruption or the appearance of it. Brief for Respondent 20-22, 25-32; see also 213. F. 3d, at 1227.
The Government’s argument for treating coordinated spending like contributions goes back to Buckley. There, the rationale for endorsing Congress’s equation of coordinated expenditures and contributions was that the equation “prevent[s] attempts to circumvent the Act through prearranged or coordinated expenditures amounting to disguised contributions.” 424 U. S., at 47. The idea was that coordinated expenditures are as useful to the candidate as cash, and that such “disguised contributions” might be given “as a quid pro quo for improper commitments from the candidate” (in contrast to independent expenditures, which are poor sources of leverage for a spender because they might be duplicative or counterproductive from a candidate’s point of view). Ibid. In effect, therefore, Buckley subjected limits on coordinated expenditures by individuals and nonparty groups to the same scrutiny it applied to limits on their cash contributions. The standard of scrutiny requires the limit to be “ ‘closely drawn’ to match a ‘sufficiently important interest,’... though the dollar amount of the limit need not be ‘fine tun[ed],’ ” Shrink Missouri, supra, at 387-388 (quoting Buckley, supra, at 25, 30).
The Government develops this rationale a step further in applying it here. Coordinated spending by a party should be limited not only because it is like a party contribution, but for a further reason. A party’s right to make unlimited expenditures coordinated with a candidate would induce individual and other nonparty contributors to give to the party in order to finance coordinated spending for a favored candidate beyond the contribution limits binding on them. The Government points out that a degree of circumvention is occurring under present law (which allows unlimited independent spending and some coordinated spending). Individuals and nonparty groups who have reached the limit of direct contributions to a candidate give to a party with the understanding that the contribution to the party will produce increased party spending for the candidate’s benefit. The Government argues that if coordinated spending were unlimited, circumvention would increase: because coordinated spending is as effective as direct contributions in supporting a candidate, an increased opportunity for coordinated spending would aggravate the use of a party to funnel money to a candidate from individuals and nonparty groups, who would thus bypass the contribution limits that Buckley upheld.
IV
Each of the competing positions is plausible at first blush. Our evaluation of the arguments, however, leads us to reject the Party’s claim to suffer a burden unique in any way that should make a categorical difference under the First Amendment. On the other side, the Government’s contentions are ultimately borne out by evidence, entitling it to prevail in its characterization of party coordinated spending as the functional equivalent of contributions.
A
In assessing the Party’s argument, we start with a word about what the Party is not saying. First, we do not understand the Party to be arguing that the line between independent and coordinated expenditures is conceptually unsound when applied to a political party instead of an individual or other association. See, e. g., Brief for Respondent 29 (describing “independent party speech”). Indeed, the good sense of recognizing the distinction between independence and coordination was implicit in the principal opinion in Colorado I, which did not accept the notion of a “metaphysical identity” between party and candidate, 518 U. S., at 622-623, but rather decided that some of a party’s expenditures could be understood as being independent and therefore immune to limitation just as an individual’s independent expenditure would be, id., at 619-623.,
Second, we do not understand the. Party to be arguing that associations in general or political parties in particular may claim a variety of First Amendment protection that is different in kind from the speech and associational rights of their members. The Party’s point, rather, is best understood as a factual one: coordinated spending is essential to parties because “a party and its candidate are joined at the hip,” Brief for Respondent 31, owing to the very conception of the party as an organization formed to elect candidates. Parties, thus formed, have an especially strong working relationship with their candidates, id., at 26, and the speech this special relationship facilitates is much more effective than independent speech, id., at 29.
There are two basic arguments here. The first turns on the relationship of a party to a candidate: a coordinated relationship between them so defines a party that it cannot function as such without coordinated spending, the object of which is a candidate’s election. We think political history and political reality belie this argument. The second argument turns on the nature of a party as uniquely able to spend in ways that promote candidate success. We think that this argument is a double-edged sword, and one hardly limited to political parties.
1
The assertion that the party is so joined at the hip to candidates that most of its spending must necessarily be coordinated spending is a statement at odds with the history of nearly 30 years under the Act. It is well to remember that ever since the Act was amended in 1974, coordinated spending by a party committee in a given race has been limited by the provision challenged here (or its predecessor). See 18 U. S. C. § 608(f) (1970 ed., Supp. IV); see also Buckley, 424 U. S., at 194 (reprinting then-effective Party Expenditure Provision). It was not until 1996 and the decision in Colorado I that any spending was allowed above that amount, and since then only independent spending has been unlimited. As a consequence, the Party’s claim that coordinated spending beyond the limit imposed by the Act is essential to its very function as a party amounts implicitly to saying that for almost three decades political parties have not been functional or have been functioning in systematic violation of the law. The Party, of course, does not in terms make either statement, and we cannot accept either implication. There is no question about the closeness of candidates to parties and no doubt that the Act affected parties’ roles and their exercise of power. But the political scientists who have weighed in on this litigation observe that “there is little evidence to suggest that coordinated party spending limits adopted by Congress have frustrated the ability of political parties to exercise their First Amendment rights to support their candidates,” and that “[i]n reality, political parties are dominant players, second only to the candidates themselves, in federal elections.” Brief for Paul Allen Beck et al as Amici Curiae 5-6. For the Party to claim after all these years of strictly limited coordinated spending that unlimited coordinated spending is essential to the nature and functioning of parties is in reality to assert just that “metaphysical identity,” 518 U. S., at 623, between free-spending party and candidate that we could not accept in Colorado 7.
2
There is a different weakness in the seemingly unexceptionable premise that parties are organized for the purpose of electing candidates, Brief for Respondent 26 (“Parties exist precisely to elect candidates that share the goals of their party”), so that imposing on the way parties serve that function is uniquely burdensome. The fault here is not so much metaphysics as myopia, a refusal to see how the power of money actually works in the political structure.
When we look directly at a party’s function in getting and spending money, it would ignore reality to think that the party role is adequately described by speaking generally of electing particular candidates. The money parties spend comes from contributors with their own personal interests. PACs, for example, are frequent party contributors who (according to one of the Party’s own experts) “do not pursue the same objectives in electoral politics” that parties do. App. 180 (statement of Professor Anthony Corrado). PACs “are most concerned with advancing their narrow interest[s]” and therefore “provide support to candidates who share their views, regardless of party affiliation.” Ibid. In fact, many PACs naturally express their narrow interests by contributing to both parties during the same electoral cycle, and sometimes even directly to two competing candidates in the same election, L. Sabato, PAC Power, Inside the World of Political Action Committees 88 (1984). Parties are thus necessarily the instruments of some contributors whose object is not to support the party’s message or to elect party candidates across the board, but rather to support a specific candidate for the sake of a position on one narrow issue, or even to support any candidate who will be obliged to the contributors.
Parties thus perform functions more complex than simply electing candidates; whether they like it or not, they act as agents for spending on behalf of those who seek to produce obligated officeholders. It is this party role, which functionally unites parties with other self-interested political actors, that the Party Expenditure Provision targets. This party role, accordingly, provides good reason to view limits on coordinated spending by parties through the same lens applied to such spending by donors, like PACs, that can use parties as conduits for contributions meant to place candidates under obligation.
3
Insofar as the Party suggests that its strong working relationship with candidates and its unique ability to speak in coordination with them should be taken into account in the First Amendment analysis, we agree. It is the accepted understanding that a party combines its members’ power to speak by aggregating contributions and broadcasting messages more widely than individual contributors generally could afford to do, and the party marshals this power with greater sophistication than individuals generally could, using such mechanisms as speech coordinated with a candidate. In other words, the party is efficient in generating large sums to spend and in pinpointing effective ways to spend them. Cf. Colorado I, 518 U. S., at 637 (Thomas, J., concurring in judgment and dissenting in part) (“Political associations allow citizens to pool their resources and make their advocacy more effective”).
It does not, however, follow from a party’s efficiency in getting large sums and spending intelligently that limits on a party’s coordinated spending should be scrutinized under an unusually high standard, and in fact any argument from sophistication and power would cut both ways. On the one hand, one can seek the benefit of stricter scrutiny of a law capping party coordinated spending by emphasizing the heavy burden imposed by limiting the most effective mechanism of sophisticated spending. And yet it is exactly this efficiency culminating in coordinated spending that (on the Government’s view) places a party in a position to be used to circumvent contribution limits that apply to individuals and PACs, and thereby to exacerbate the threat of corruption and apparent corruption that those contribution limits are aimed at reducing. As a consequence, what the Party calls an unusual burden imposed by regulating its spending is not a simple premise for arguing for tighter scrutiny of limits on a party; it is the premise for a question pointing in the opposite direction. If the coordinated spending of other, less efficient and perhaps less practiced political actors,can be limited consistently with the Constitution, why would the Constitution forbid regulation aimed at a party whose very efficiency in channeling benefits to candidates threatens to undermine the contribution (and hence coordinated spending) limits to which those others are unquestionably subject?
4
The preceding question assumes that parties enjoy a power and experience that sets them apart from other political spenders. But in fact the assumption is too crude. While parties command bigger spending budgets than most individuals, some individuals could easily rival party committees in spending. Rich political activists crop up, and the United States has known its Citizens Kane. Their money speaks loudly, too, and they are therefore burdened by restrictions on its use just as parties are. And yet they are validly subject to coordinated spending limits, Biickley, 424 U. S., at 46-47, and so are PACs, id., at 35-36, 46-47, which may amass bigger treasuries than most party members can spare for politics.
Just as rich donors, media executives, and PACs have the means to speak as loudly as parties do, they would also have the capacity to work effectively in tandem with a candidate, just as a party can do. While a candidate has no way of coordinating spending with every contributor, there is nothing hard about coordinating with someone with a fortune to donate, any more than a candidate would have difficulty in coordinating spending with an inner circle of personal political associates or with his own family. Yet all of them are subject to coordinated spending limits upheld in Buckley, supra, at 53, n. 59. A party, indeed, is now like some of these political actors in yet another way: in its right, under Colorado I to spend money in support of a candidate without legal limit so long as it spends independently. A party may spend independently every cent it can raise wherever it thinks its candidate 'will shine, on every subject and any viewpoint.
A party is not, therefore, in a unique position. It is in the same position as some individuals and PACs, as to whom coordinated spending limits have already been held valid, Buckley, supra, £t 46-47; and, indeed, a party is better off, for a party has the special privilege the others do not enjoy, of making coordinated expenditures up to the limit of the Party Expenditure Provision.
5
The Party’s arguments for being treated differently from other political actors subject to limitation on political spending under the Act do not pan out. Despite decades of limitation on coordinated spending, parties have not been rendered useless. In reality, parties continue to organize to elect candidates, and also function for the benefit of donors whose object is to place candidates under obligation, a fact that parties cannot escape. Indeed, parties’ capacity to concentrate power to elect is the very capacity that apparently opens them to exploitation as channels for circumventing contribution and coordinated spending limits binding on other political players. And some of these players could marshal the same power and sophistication for the same electoral objectives as political parties themselves.
We accordingly apply to a party’s coordinated spending limitation the same scrutiny we have applied to the other political actors, that is, scrutiny appropriate for a contribution limit, enquiring whether the restriction is “closely drawn” to match what we have recognized as the “sufficiently important” government interest in combating political corruption. Shrink Missouri, 528 U. S., at 387-388 (quoting Buckley, supra, at 25, 30). With the standard thus settled, the issue remains whether adequate eviden-tiary grounds exist to sustain the limit under that standard, on the theory that unlimited coordinated spending by a party raises the risk of corruption (and its appearance) through circumvention of valid contribution limits. Indeed, all Members of the Court agree that circumvention is a valid theory of corruption; the remaining bone of contention is evidentiary.
B
Since there is no recent experience with unlimited coordinated spending, the question is whether experience under the present law confirms a serious threat of abuse from the unlimited coordinated party spending as the Government contends. Cf. Burson v. Freeman, 504 U. S. 191, 208 (1992) (opinion of Blackmun, J.) (noting difficulty of mustering evidence to support long-enforced statutes). It clearly does. Despite years of enforcement of the challenged limits, substantial evidence demonstrates how candidates, donors, and parties test the limits of the current law, and it shows beyond serious doubt how contribution limits would be eroded if inducement to circumvent them were enhanced by declaring parties’ coordinated spending wide open.
Under the Act, a donor is limited to $2,000 in contributions to one candidate in a given election cycle. The same donor may give as much as another $20,000 each year to a national party committee supporting the candidate. What a realist would expect to occur has occurred. Donors give to the party with the tacit understanding that the favored candidate will benefit. See App. 247 (declaration of Robert Hick-mott, former Democratic fundraiser and National Finance Director for Timothy Wirth’s Senate campaign) (“We... told contributors who had made the maximum allowable contribution to the Wirth campaign but who wanted to do more that they could raise money for the DSCC so that we could get our maximum [Party Expenditure Provision] allocation from the DSCC”); id., at 274 (declaration of Timothy Wirth) (“I understood that when I raised funds for the DSCC, the donors expected that I would receive the amount of their donations multiplied by a certain number that the DSCC had determined in advance, assuming the DSCC has raised other funds”); id., at 166 (declaration of Leon G. Billings, former Executive Director of the Democratic Senatorial Campaign Committee (DSCC)) (“People often contribute to party committees because they have given the maximum amount to a candidate, and want to help the candidate indirectly by contributing to the party”); id., at 99-100 (fundraising letter from Congressman Wayne Allard, dated Aug. 27, 1996, explaining to contributor that “you are at the limit of what you can directly contribute to my campaign,” but “you can further help my campaign by assisting the Colorado Republican Party”).
Although the understanding between donor and party may involve no definite commitment and may be tacit on the donor’s part, the frequency of the practice and the volume of money involved has required some manner of informal bookkeeping by the recipient. In the Democratic Party, at least, the method is known as “tallying,” a system that helps to connect donors to candidates through the accommodation of a party. See App. 246-247 (Hickmott declaration) (“[The tally system] is an informal agreement between the DSCC and the candidates’ campaigns that if you help the DSCC raise contributions, we will turn around and help your campaign”); id., at 268 (declaration of former Senator Paul Simon) (“Donors would be told the money they contributed could be credited to any Senate candidate. The callers would make clear that this was not a direct contribution, but it was fairly close to direct”); id., at 165-166 (Billings declaration) (“There appeared to be an understanding between the DSCC and the Senators that the amount of money they received from the DSCC was related to how much they raised for the Committee”).
Such is the state of affairs under the current law, which requires most party spending on a candidate’s behalf to be done independently, and thus less desirably from the point of view of a donor and his favored candidate. If suddenly every dollar of spending could be coordinated with the candidate, the inducement to circumvent would almost certainly intensify. Indeed, if a candidate could be assured that donations through a party could result in funds passed through to him for spending on virtually identical items as his own campaign funds, a candidate enjoying the patronage of affluent contributors would have a strong incentive not merely to direct donors to his party, but to promote circumvention as a step toward reducing the number of donors requiring time-consuming cultivation. If a candidate could arrange for a party committee to foot his bills, to be paid with $20,000 contributions to the party by his supporters, the number of donors necessary to raise $1,000,000 could be reduced from 500 (at $2,000 per cycle) to 46 (at $2,000 to the candidate and $20,000 to the party, without regard to donations outside the election year).
V
While this evidence rules out denying the potential for corruption by circumvention, the Party does try to minimize the threat. It says that most contributions to parties are small, with negligible corrupting momentum to be carried through the party conduit. Brief for Respondent 14. But some contributions are not small; they can go up to $20,000, 2 U. S. C. §441a(a)(1)(B), and the record shows that even under present law substantial donations turn the parties into matchmakers whose special meetings and receptions give the donors the chance to get their points across to the candidates. The Party again discounts the threat of outflanking contribution limits on individuals and nonparty groups by stressing that incumbent candidates give more excess campaign funds to parties than parties spend on coordinated expenditures. Brief for Respondent 34. But the fact that parties may do well for themselves off incumbents does not defuse concern over circumvention; if contributions to a party were not used as a funnel from donors to candidates, there would be no reason for using the tallying system the way the witnesses have described it.
Finally, the Party falls back to claiming that, even if there is a threat of circumvention, the First Amendment demands a response better tailored to that threat than a limitation on spending, even coordinated spending. Id., at 46-48. The Party has two suggestions.
First, it says that better crafted safeguards are in place already, in particular the earmarking rule of §441a(a)(8), which provides that contributions that “are in any way earmarked or otherwise directed through an intermediary or conduit to [a] candidate” are treated as contributions to the candidate. The Party says that this provision either suffices to address any risk of circumvention or would suffice if clarified to cover practices like tallying. Id., at 42, 47; see also 213 F. 3d, at 1232. This position, however, ignores the practical difficulty of identifying and directly combating circumvention under actual political conditions. Donations are made to a party by contributors who favor the party’s candidates in races that affect them; donors are (of course) permitted to express their views and preferences to party officials; and the party is permitted (as we have held it must be) to spend money in its own right. When this is the environment for contributions going into a general party treasury, and candidate-fundraisers are rewarded with something less obvious than dollar-for-dollar pass-throughs (distributed through contributions and party spending), circumvention is obviously very hard to trace. The earmarking provision, even if it dealt directly with tallying, would reach only the most clumsy attempts to pass contributions through to candidates. To treat the earmarking provision as the outer limit of acceptable tailoring would disarm any serious effort to limit the corrosive effects of what Chief Judge Seymour called “‘understandings’ regarding what donors give what amounts to the party, which candidates are to receive what funds from the party, and what interests particular donors are seeking to promote,” id., at 1241 (dissenting opinion); see also Briffault, Political Parties and Campaign Finance Reform, 100 Colum. L. Rev. 620, 652 (2000) (describing “web of relations linking major donors, party committees, and elected officials”).
The Party’s second preferred prescription for the threat of an end run calls for replacing limits on coordinated expenditures by parties with limits on contributions to parties, the latter supposedly imposing a lesser First Amendment burden. Brief for Respondent 46-48. The Party thus invokes the general rule that contribution limits take a lesser First Amendment toll, expenditure limits a greater one. That was one strand of the reasoning in Buckley itself, which rejected the argument that limitations on independent expenditures by individuals, groups, and candidates were justifiable in order to avoid circumvention of contribution limitations. 424 U. S., at 44. It was also one strand of the logic of the Colorado I principal opinion in rejecting the Party Expenditure Provision’s application to independent party expenditures. 518 U. S., at 617.
In
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | C | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Burton
delivered the opinion of the Court.
The respondent, Kansas City Life Insurance Company, obtained judgment in the Court of Claims against the United States for $22,519.60, with interest from August 8, 1938. 109 Ct. Cl. 555, 74 F. Supp. 653. This sum was awarded as just compensation for the destruction of the agricultural value of respondent’s farm land by the United States in artificially maintaining the Mississippi River in that vicinity continuously at ordinary high-water level. The land was not in any sense within the bed of the river. It was one and one-half miles from the river on a nonnavigable tributary creek. Its surface was a few feet above the ordinary high-water level of both the river and the creek. The United States, however, contended that because it maintained the river at this level in the interest of navigation it need not pay for the resulting destruction of the value of the respondent’s land. We granted certiorari because of the importance of the constitutional questions raised. 334 U. S. 810. The case was argued at the 1948 Term and reargued at this Term.
Two principal issues are presented. The first is whether the United States, in the exercise of its power to regulate commerce, may raise a navigable stream to its ordinary high-water mark and maintain it continuously at that level in the interest of navigation, without liability for the effects of that change upon private property beyond the bed of the stream. If the United States may not do so, without such liability, we reach the other issue: Whether the resulting destruction of the agricultural value of the land affected, without actually overflowing it, is a taking of private property within the meaning of the Fifth Amendment to the Constitution of the United States. We decide both issues in favor of the respondent, the first in the negative, the second in the affirmative.
The material facts found by the court below include the following:
Respondent is the owner of 1,710 acres of farm land in Missouri, having an elevation of 422.7 to 428 feet above sea level. The land borders on Dardenne Creek, a nonnavigable tributary entering the navigable Mississippi River one and one-half miles below the farm. The agricultural value of the land has been largely destroyed by the construction and operation by the United States of Lock and Dam No. 26 on the Mississippi at Alton, Illinois, 25 miles below Dardenne Creek. The United States has operated this dam since August 8, 1938, as part of a system of river improvements to provide a navigable channel in the Mississippi between Minneapolis and the mouth of the Missouri. The effect of the dam has been to raise the level of the Mississippi at the mouth of Dardenne Creek to a permanent stage of 420.4 feet above sea level. This was its previously ascertained ordinary high-water mark.
Before the effect of the dam was felt, the respondent’s land drained adequately through its subsoil and a simple system of ditches and pipes emptying into the creek. It was highly productive. When, however, the dam raised the river and the creek to 420.4 feet and maintained the water continuously at that level, this destroyed the agricultural value of the respondent’s land at surface elevations between 423.5 and 425 feet. The damage was caused by the underflowing of the land. This undersurface invasion was substantially as destructive as if the land had been submerged. The water table was raised both by the percolation of the water which rose and fell with the river and by the resulting blockade of the drainage of the land’s surface and subsurface water. The reduction of $22,519.60 in the market value of the land is not disputed.
It is well settled that, under the Commerce Clause, U. S. Const. Art. I, § 8, Cl. 3, the United States has the power to improve its navigable waters in the interest of navigation without liability for damages resulting to private property within the bed of the navigable stream.
“The dominant power of the federal Government, as has been repeatedly held, extends to the entire bed of a stream, which includes the lands below ordinary high-water mark. The exercise of the power within these limits is not an invasion of any private property right in such lands for which the United States must make compensation. [Citing cases.] The damage sustained results not from a taking of the riparian owner’s property in the stream bed, but from the lawful exercise of a power to which that property has always been subject.” United States v. Chicago, M., St. P. & P. R. Co., 312 U. S. 592, 596-597.
The ordinary high-water mark has been accepted as the limit of the bed of the stream. In United States v. Willow River Power Co., 324 U. S. 499, 509, where com-: pensation was denied, this Court said: “High-water mark bounds the bed of the river. Lands above it are fast lands and to flood them is a taking for which compensation must be paid. But the award here does not purport to compensate a flooding of fast lands or impairment of their value. Lands below that level are subject always to a dominant servitude in the interests of navigation and its exercise calls for no compensation.”
These cases point the way to our decision in the instant case. In the Chicago case, supra, the United States instituted condemnation proceedings to acquire the right to back the waters of the Mississippi over a right of way and against an embankment owned by the respondent railroad and telegraph companies. The precise issue was the Government’s liability "for damage done to that embankment by raising the waters of the river to and above their ordinary high-water mark. The respondents contended that the damage even to that part of the embankment which stood on land within the bed of the river was compensable and the Court of Appeals so held. 113 F. 2d 919. This Court reversed that judgment for the reason that all land within the bed of a navigable stream is subject to a servitude in favor of the United States, relieving it from liability for damages to such land resulting from governmental action in the interest of navigation. In addition, this Court remanded the case for determination of the disputed claim of the respondents that three other segments of their embankment were on land which was above the ordinary high-water mark of the river and that two of those segments abutted not on the Mississippi River but on a nonnavigable tributary. 312 U. S. at p. 599. The order to determine that question indicates that the basis of the decision was that the navigation servitude does not extend to land beyond the bed of the navigable river.
The opinion in the Chicago case also sheds light upon the earlier cases. It limits the decisions in United States v. Lynah, 188 U. S. 445, and United States v. Cress, 243 U. S. 316, so that they do not conflict with the Government’s dominant servitude when it is applied to the bed of a navigable stream. In the Kelly case, which is reported with the Cress case, the land in question was on a nonnavigable tributary of the navigable Kentucky River. The Government’s dam raised the waters of the river which, in turn, raised those of the tributary across which Kelly had built a mill dam. This Court upheld the judgment requiring the United States to pay Kelly for the loss of his power head at his mill which resulted from this change in the level of the tributary. Similarly, in the Cress case itself, this Court assumed that a tributary of the Cumberland River was not navigable. It then allowed recovery for the destruction of the value of the land and of a ford across the tributary. All of this destruction was caused by the Government’s dam on the river but was done at points beyond the bed of that river. In the Chicago case, this Court’s view of the Cress decision was expressed as follows:
“What was said in the Cress case must be confined to the facts there disclosed. In that case, the Government’s improvement in a navigable stream resulted in the flooding of the plaintiff’s land in and adjacent to a non-navigable stream. The owners of the land along and under the bed of the [nonnavigable] stream were held entitled to compensation for the damage to their lands. The question here presented was not discussed in the opinion.” 312 U. S. at p. 597.
The extent of the Government’s paramount power over the bed of navigable streams was further clarified in United States v. Willow River Power Co., supra. The respondent there claimed compensation for the reduction of a power head, which reduction was caused by a Government dam which raised the level of the navigable river into which the respondent dropped the water from its dam built on a nonnavigable tributary. Compensation was denied on the ground that because the loss of power to the respondent occurred within the bed of the navigable river, such loss was covered by the Government’s dominant power to change the river’s level in the interest of navigation. This Court said:
“We are of opinion that the Cress case does not govern this one and that there is no warrant for applying it, as the claimant asks, or for overruling it, as the Government intimates would be desirable. ... In the former case the navigation interest was held not to be a dominant one at the property damaged; here dominance of the navigation interest at the St. Croix [the navigable river] is clear.” 324 U. S. at p. 506.
It is not the broad constitutional power to regulate commerce, but rather the servitude derived from that power and narrower in scope, that frees the Government from liability in these cases. When the Government exercises this servitude, it is exercising its paramount power in the interest of navigation, rather than taking the private property of anyone. The owner’s use of property riparian to a navigable stream long has been limited by the right of the public to use the stream in the interest of navigation. See Gould on Waters, c. IV, §§ 86-90 (1883); I Farnham, Waters and Water Rights, c. Ill, § 29 (1904). This has applied to the stream and to the land submerged by the stream. There thus has been ample notice over the years that such property is subject to a dominant public interest. This right of the public has crystallized in terms of a servitude over the bed of the stream. The relevance of the high-water level of the navigable stream is that it marks its bed. Accordingly, it is consistent with the history and reason of the rule to deny compensation where the claimant’s private title is burdened with this servitude but to award compensation where his title is not so burdened.
The next question is whether or not the Government’s destruction of the agricultural value of the respondent’s land in this case amounted to a taking of private property for public use within the meaning of the Fifth Amendment.
This case comes within the principle that the destruction of privately owned land by flooding is “a taking” to the extent of the destruction caused. The decisions in Pumpelly v. Green Bay Co., 13 Wall. 166; United States v. Lynah, supra; United States v. Williams, 188 U. S. 445, and same case, 104 F. 50, 53; United States v. Welch, 217 U. S. 333; and United States v. Cress, supra, illustrate the development of that principle. Although they have been limited by later decisions in some respects, the above cases have been accepted and followed in this respect. United States v. Chicago, M., St. P. & P. R. Co., supra, at pp. 597-598; United States v. Commodore Park, 324 U. S. 386; United States v. Willow River Power Co., supra; and see United States v. Causby, 328 U. S. 256.
The findings in the instant case show that the land was permanently invaded by the percolation of the waters from both the river and its tributary. The percolation raised the water table and soaked the land sufficiently to destroy its agricultural value. The continuous presence of this raised water table also blocked the drainage of the surface and subsurface water in a manner which helped to destroy the productivity of the land. Whether the prevention of the use of the land for agricultural purposes was due to its invasion by water from above or from below, it was equally effective. The destruction of land value, without some actual invasion of the land and solely by preventing the escape of its own surface water, is not before us. Even such a situation would come within the Cress case if it were established under Missouri law that the owner of land on a nonnavigable stream has a right to the unobstructed drainage of that land.
One point remains. The Government contends that the findings of the court below do not properly describe the interest taken. That court found:
“29. The privilege exercised by the Government, for which the plaintiff is given compensation in this suit, is the privilege of permanently maintaining Lock and Dam No. 26 at their present height, and operating them in such a manner as to fulfill the purposes of their construction and other purposes which may develop in the future and do not greatly vary from present purposes.” 109 Ct. Cl. at p. 572.
The above statement, read in its context, permits the United States to maintain the level of the river and its tributary at 420.4 feet above sea level with the effect on the respondent’s land that has been described. This meets the requirements for a valid description of the interest taken as indicated in United States v. Causby, 328 U. S. 256, 267.
The judgment of the Court of Claims accordingly is
Affirmed.
Mr. Justice Douglas,
with whom
Mr. Justice Black, Mr. Justice Reed, and Mr. Justice Minton concur, dissenting.
What respondent here purports to claim is a property right in the unfettered flow of Dardenne Creek in its natural state. But what respondent in substance claims is a property right in the unfettered flow of the Mississippi in its natural state. The two are necessarily the same, for water seeks its own level. No such right accrues to one who owns the shore and bed of the great river, until that river is raised above high-water mark. And we think that one who is riparian to a tributary has no greater claim upon the flow of the Mississippi. For this Court has held it to be “inconceivable” that “the running water in a great navigable stream is capable of private ownership.” United States v. Chandler-Dunbar Co., 229 U. S. 53, 69. It would be incongruous to deny compensation to owners adjacent to navigable rivers and require it for others bordering their tributaries for like injuries caused by the single act of lifting the river’s mean level to the high-water mark. Because water seeks its own level, raising the level of the river necessarily raises that of the tributary at their conjunction and as far upstream on each as the effects of the lifting may go. These facts are equally apparent to both types of owners. We think they should be anticipated by both, and that the one has no more power to obstruct or burden the power of Congress in its control of the river’s bed in the interest of navigation than the other. Neither has any greater right to have the river flow in its natural state than the other.
Basically the problem in this case is to locate a workable and reasonable boundary between Congress’ power to control navigation in the public interest and the rights of landowners adjacent to navigable streams and their tributaries to compensation for injuries flowing from the exercise of that power. The Constitution does not require compensation for all injuries inflicted by the exercise of Congress’ power. Neither is the power unlimited. The line therefore must be drawn in accommodation of the two interests. This could be done, as it was in United States v. Cress, 243 U. S. 316, by allowing compensation for all injuries inflicted by any change in the natural level and flow of the stream; it can be done, as in United States v. Chicago, M., St. P. & P. R. Co., 312 U. S. 592 and United States v. Willow River Co., 324 U. S. 499, by allowing change in the natural flow to the extent of lifting the mean level to high-water mark without liability for constitutional compensation; it could be done by applying the latter rule to owners riparian to the navigable stream, the former to those riparian to nonnavigable tributaries.
There is no sound reason for treating the two types of owners differently. Congress has power to regulate commerce by raising the level of a navigable stream to high-water mark without liability for compensation to any riparian owner. The effect upon the riparian owner of the river’s tributaries, whether navigable or nonnavigable, is the same as that upon the owner riparian to the river itself. So is the congressional power and the dominant servitude. In this view no vested private right is given to anyone, as against the public interest, in the full utilization and control of the river’s bed for navigation or in the flow of the stream within it. If Congress acts beyond this limit, then the Amendment will come into play to protect the landowner’s interest.
This view requires the overruling of the Cress case. But until today’s ruling the Cress case had been largely destroyed by intervening decisions. See United States v. Chicago, M., St. P. & P. R. Co., supra; United States v. Willow River Co., supra. I would complete the process and allow the United States the full use of its dominant servitude in a navigable stream.
I am indebted to the late Mr. Justice Rutledge for much of the phraseology and content of this dissent.
46 Stat. 918, 927; 49 Stat. 1028, 1034. As to the same system of improvement, see United States v. Chicago, M., St. P. & P. R. Co., 312 U. S. 592.
Before August 8, 1938, during about 75% of each year, the river did not exceed a stage of 419.6 feet at Dardenne Creek. From 1930 to 1937, between June 21 and September 21, it averaged 413.9 feet. For several months at the beginning and end of a year, its stage was 410 feet or less. The bed of the creek at respondent’s farm was 410 to 413 feet above sea level. The water in the creek created a stage of 412 to 416 feet.
Although, as stated in the text, the Mississippi River, at 420.4 feet, destroyed the agricultural value of certain parts of the respondent’s land, it did not perceptibly change the value of the respondent's wet land below 423.5 feet or of its dry land above 425 feet. No compensation was allowed for the 602.04 acres so located.
The court below made extended findings as to the expectation of the Army Engineers that damages, comparable to those which did occur, would result to respondent’s land. The Engineers recommended that the United States purchase the land. House Committee on Rivers and Harbors, Doc. No. 34, 73d Cong., 2d Sess. (1934), and House Committee on Rivers and Harbors, Doc. No. 34, 75th Cong., 1st Sess. 14, 55-56 (1937). The project was authorized by Congress and power to condemn the land was given to the Secretary of War August 26, 1937, 50 Stat. 844, 848. However, the court below concluded correctly that — ■
“The Government did not, in fact, purchase or acquire by eminent domain a portion of the plaintiff’s land, as the Army Engineers had recommended, or ditch and tile another portion, as they had recommended. It just went ahead and built its lock and dam. The plaintiff still owns its land. We think that the legislation quoted above, while it might have constituted an authorization to acquire some of the plaintiff’s land by eminent domain, and to spend money in tiling and ditching another part of it, does not constitute a Congressional waiver of immunity from suit or confession of liability for the consequences of building the dam.” 109 Ct. Cl. at p. 574, 74 F. Supp. at p. 654.
See Mitchell v. United States, 267 U. S. 341, 345; United States v. Alexander, 148 U. S. 186, 188-190.
The Court of Claims found that—
“16. Underneath the clay soil on plaintiff’s land, there is a stratum of water-bearing sand, the top elevation of which varies from 412 to 414 feet above mean sea level. The water in the sand is affected by the rise and fall of the Mississippi River and the water table under the land rises and falls in response to high or low water conditions in the river. The water level in the underground strata is also affected by rainfall on the land, because the sand stratum acts as a reservoir for water which drains vertically from the surface of the ground.
“18. The average pool elevation which has been maintained at the mouth of Dardenne Creek by operation of Dam 26 is 420.4 feet, and the elevation of the water in Dardenne Creek adjacent to plaintiff's farm has been raised from six to seven feet above the previous normal level. As a result of the operation of the dam, the surface of the water in the creek has been raised so that the creek water now backs into some of the outlet pipes in the plaintiff’s levee, thereby obstructing and delaying the drainage of surface water from plaintiff’s land. In addition, by maintaining the surface of the water in the creek to an elevation of 420 feet or more above sea level, the drainage of the underground water from a large portion of the plaintiff’s farm has been almost entirely shut off. Prior to the construction of the dam this underground water drained through the sand strata under the land into the creek, which was normally only 2 or 3 feet deep at that time.
“19. . . . Since the dam has been in operation, the conditions and the period of time, formerly available for draining the land and drying the soil, no longer exist.
“20. As a result of the river stage being controlled by the operation of the dam, the water table under plaintiff’s land is from four to five feet higher than it was during the low stages of the Mississippi prior to the erection of the dam. Under controlled river conditions, the water table beneath plaintiff’s land has been raised to an elevation varying from 420.5 feet to 422 feet, or an average of from one to two feet higher than the controlled river stage at Dixon’s Landing. [The elevation of the river at Dixon’s Landing was about the same as at the mouth of Dardenne Creek.] The drainage of the underground water from beneath a large area of plaintiff’s land has almost ceased. On some portions of the land, vertical drainage from the surface to the underlying sand stratum has been cut off and on other portions it has been greatly retarded as a result of the increased height of the water table.
“21. The effects of the operation of the dam became apparent within a short time after the full pool stage was obtained on August 8, 1938. After a rain, the surface of the soil dried out much more slowly than before and the drainage ditches did not carry off the water as readily. Excessive moisture was retained in the soil and the planting of crops was delayed. Even when the surface appeared to be dry, the ground underneath was wet and would not support tractors and other farm machinery, which became mired down and had to cease operations. Seed planted on some portions of the land failed to germinate and would rot. It was not possible to follow a proper crop rotation program. Because the soil was often too wet for planting some crops, it was necessary to substitute other crops which mature in a shorter time.” 109 Ct. Cl. at pp. 565-569.
In its opinion, the Court of Claims concluded that—
“The construction of Lock and Dam No. 26 raised the level of the water in the river and the creek, when the pool behind the dam was filled in 1938, to 420.4 feet above mean sea level, which was approximately the altitude of ordinary high water level before the construction of the lock and dam. We have found that the consequence of this raising of the water level in the creek has been to shut off the flow of some of the tubes leading through the levee and thereby prevent the surface water from draining off some of the land. A more serious consequence, however, has been that it has prevented water in the strata underneath the plaintiff’s land from draining away, thus keeping the underground water within one, two, or three feet from the surface of different portions of the plaintiff’s land, thereby impairing its value for farming.” Id. at p. 573, 74 F. Supp. at p. 653.
Willink v. United States, 240 U. S. 572; Greenleaf Johnson Lumber Co. v. Garrison, 237 U. S. 251; Lewis Blue Point Oyster Cultivation Co. v. Briggs, 229 U. S. 82. Loss of access to a navigable stream is not compensable. Scranton v. Wheeler, 179 U. S. 141; Gibson v. United States, 166 U. S. 269. See also, United States v. Commodore Park, 324 U. S. 386. A change in the flow of a navigable stream does not deprive the private user of that stream, for power purposes, of a compensable right. United States v. Willow River Power Co., 324 U. S. 499; United States v. Chandler-Dunbar Water Power Co., 229 U. S. 53.
This is clearly illustrated in United, States v. Chicago, M., St. P. & P. R. Co., supra. The United States raised the level of the navigable river above its ordinary high-water mark. This Court then declined to allow compensation for the damage caused to the segment of the respondent’s embankment which concededly was located on land within the bed of the river. On the other hand, the lower court awarded compensation for the damage done to such segments of the embankment as concededly were on land above the bed of the river. No appeal was taken from that award. Finally, as to three other segments with regard to which there was a disagreement as to whether or not they were on land within the bed of the river, this Court remanded the case to the District Court to resolve that factual issue.
In interpreting a like provision in the Constitution of Wisconsin, this Court held that continuous flooding amounted to a taking of the land flooded. It said :
“. . .it remains true that where real estate is actually invaded by superinduced additions of water, earth, sand, or other material, or by having any artificial structure placed on it, so as to effectually destroy or impair its usefulness, it is a taking, within the meaning of the Constitution, and that this proposition is not in conflict with the weight of judicial authority in this country, and certainly not with sound principle.” Pumpelly v. Green Bay Co., supra, at p. 181.
The above case was quoted with approval in Scranton v. Wheeler, 179 U. S. 141, 154, and in United States v. Lynah, supra, at p. 469. The last named case involved seepage, percolation and some flooding which turned the land into a bog.
In the Cress case, after discussing and approving the reasoning in the Green Bay and Lynah cases, the Court said:
“There is no difference of kind, but only of degree, between a permanent condition of continual overflow by back-water and a permanent liability to intermittent but inevitably recurring overflows; and, on principle, the right to compensation must arise in the one case as in the other. If any substantial enjoyment of the land still remains to the owner, it may be treated as a partial instead of a total divesting of his property in the land. The taking by condemnation of an interest less than the fee is familiar in the law of eminent domain.” 243 U. S. at pp. 328-329.
In the Chicago case this Court overruled the Lynah case, supra, insofar as it upheld compensation “for injury or destruction of a riparian owner's property located in the bed of a navigable stream.” 312 U. S. at p. 598. The Court, however, expressly mentioned that case as an authority on the point that the flooding of land, as there done, amounted to a compensable taking of it.
See note 5, supra.
Based upon the law of Kentucky, upholding the right of a landowner on a nonnavigable creek to have the benefit of the unobstructed flow of that creek, this Court allowed the landowner compensation in the Kelly case, which is reported with the Cress ease. The Court there said: “The right to have the water flow away from the mill dam unobstructed, except as in the course of nature, is not a mere easement or appurtenance, but exists by the law of nature as an inseparable part of the land.” 243 U. S. at p. 330.
Although the court below reached no express conclusion on the right of respondent to drain its land into Dardenne Creek, there is no indication that such drainage was not a lawful incident of the property ownership. Under Missouri law, the owner of land bordering on a nonnavigable stream has title to the bed of the stream to its center, unless the instruments of title show a contrary intent. Brown v. Wilson, 348 Mo. 658, 665, 155 S. W. 2d 176, 179. Also, a downstream riparian owner has no right to dam the stream so as to cause it to accumulate water and flow it back on the land of upstream riparian owners. Keener v. Sharp, 341 Mo. 1192, 111 S. W. 2d 118, and see Greisinger v. Klinhardt, 321 Mo. 186, 193, 9 S. W. 2d 978, 980-981.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | D | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Black
delivered the opinion of the Court.
The questions presented in this case relate to the power and discretion of a United States district court to tax as costs against the loser in a civil lawsuit expenses incurred by the winner in carrying on the litigation.
Howard Farmer, a physician from Texas specializing in ophthalmology, started this litigation against the Arabian American Oil Company in a New York state court, claiming $4,000 damages for breach of an employment contract. The complaint alleged that in April 1955 the company entered into an agreement to employ Farmer as an. ophthalmologist in Saudi Arabia at an annual salary of $16,000 plus a $4,000 living allowance per year, so long as the company continued its oil-well operations there, and that although he began work and properly performed his duties, the company wrongfully discharged him in March 1956. On the company’s motion the case was removed to federal court because of diversity. The company admitted that it had employed Farmer but defended on the grounds that the discharge was not wrongful both because he had been employed at will rather than for a definite term, and because he had been discharged for good cause. At the trial Farmer attempted to show that the company discharged him because he had found that a number of Americans employed by the company in Arabia had contracted trachoma, a much dreaded tropical eye disease which may lead to blindness, and that although urged by the company’s medical staff to falsify, or suppress his findings, he had refused to do so. The company’s evidence tended to disprove this charge and to show that Farmer had been discharged because he had operated on a young Arabian boy’s eye, without first having received and examined a urinalysis and blood test report. This the company alleged to be in violation of a written company rule and standard surgical practice. Such tests had in fact been completed before Dr. Farmer performed the operation, but whether he had known of the tests or their results* and whether there actually had been a company rule requiring that he have the. test' results were in sharp dispute.
The company, in prder to refute Farmer’s charge, brought three witnesses from Saudi Arabia to New York to testify in support of its version of the dispute. The jury failed to agree, after which District Judge Palmieri granted the company’s motion for a directed verdict, 176 F. Supp. 45, and approved the clerk’s taxation of costs against Farmer in the amount of $6,601.08, which included among other things transportation expenses for the witnesses from Arabia and costs of daily stenographic transcripts of the trial record furnished to the company’s lawyers at their request. Holding that a verdict should not have been directed, the Court of Appeals reversed aiid remanded the case for a new trial, thereby upsetting the judgment and the taxation of costs. 277 F. 2d 46.
On remand to the District Court, the company obtained an order directing Farmer to put up security for costs in the sum of $6,000. Because Farmer was unable to post so large a bond, Judge MacMahon dismissed the case. The Court of Appeals reversed in an opinion that strongly indicated its belief that the costs already taxed were exorbitant and that to require Farmer to give the bond would “for all practical purposes” deny him his day in court. 285 F. 2d 720. On a second trial, this time before District Judge Weinfeld, the jury found for the company and no appeal was taken. The clerk then taxed $11,900.12 against Farmer as the aggregate cost of both trials; but on review Judge Weinfeld found these costs “staggering” for so uncomplicated a case and reduced them to $831.60. In making this reduction, Judge Wein-feld lowered the cost bill approved by Judge Palmieri in the first trial from $6,601.08 to $496.05. He did this chiefly by eliminating the transportation expenses of the witnesses from Arabia and the costs of supplying the company’s counsel with overnight transcripts of the daily trial proceedings. Judge Weinfeld also refused to require Farmer to reimburse the company for its similar expenses in the second trial. 31 F. R. D. 191. Sitting en banc, the Court of Appeals, by a vote of 5-4, affirmed Judge Weinfeld’s cost taxation for the second trial, but held that he had failed to give proper deference to Judge Palmieri’s taxation of costs for the first trial and so reversed that part of his order. The Court of Appeals itself, however, directed that Judge Palmieri’s cost allowance be reduced by $2,064 for transportation of two of the witnesses from Arabia, who had “occupied otherwise empty space in company planes on regularly scheduled flights to and from Saudi Arabia, so that as to them there was no actual travel expense incurred by the company and none should have been allowed.” '324 F. 2d 359, 364.
Farmer petitioned for certiorari to review the Court of Appeals’ refusal to affirm Judge Weinfeld’s taxation of costs. The company sought certiorari to review those parts of the Court of Appeals’ judgment refusing to allow all costs taxed by Judge Palmieri on the first trial and refusing to allow transportation costs incurred in transporting its witnesses from Arabia for the second trial. We granted both petitions, 376 U. S. 942. For reasons to be stated, which are not wholly the grounds relied on by Farmer, we agree with him that Judge Weinfeld’s order should have been upheld in its entirety.
I.
We deal first with Farmer’s contention that the District Court was wholly without power to tax costs against him to reimburse the company for expenses incurred in bringing the witnesses from Arabia to this country. His argument runs this way. It has long been the law. in this country, as now set out in Rule 45 (e) of the Federal Rules of Civil Procedure, that, with exceptions' not here releyant, subpoenas requiring the attendance of witnesses at a trial cannot be served outside the judicial district more than 100 miles from the place of trial. Many decisions of district courts and courts of appeals have held that since witnesses cannot be compelled under this rule to travel more than 100 miles, a party who persuades them to do so by paying their transportation expenses cannot have those expenses taxed as costs against his adversary. This was the view of three of the dissenting judges below. 324 F. 2d 359, 365. The majority, however, while recognizing that the great bulk of judicial authority supports the 100-mile rule, nevertheless held that district courts do have discretionary power to tax such costs under 28 U. S. C. § 1920 (3) (1958 ed.), which provides that “[a] judge or clerk . . . may tax as costs .. . [¶] ees and disbursements for ... witnesses ....” The majority also thought the prior 100-mile rule had been undercut by the 1949 congressional amendment to 28 U. S. C. § 1821 (1958 ed.), which provides that “witnesses who are required to travel ... to and from the continental United States, shall be entitled to the actual expenses of travel . . . .”
We cannot accept either the extreme position of the company that the old 100-mile rule has no vitality for any purpose or Farmer’s argument that a federal district court can never under any circumstances tax as costs expenses for transporting witnesses more than 100 miles. In this case, however, where taxation of such expenses is being denied, we need not set out the specific circumstances under which such costs can be taxed nor mark precisely the limits of a district court’s power to tax them. It is sufficient here to point to Federal Rule of Civil Procedure 54 (d), which provides that “Except when express provision therefor is made either in a statute of the United States or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs While this Rule could be far more definite as to what “costs shall be allowed,” the words “unless the court otherwise directs” quite plainly vest some power in the court to allow some “costs.” We therefore hold that Judge Weinfeld was correct in treating this case, as an appeal to his discretion.
II.
The Court of Appeals held, and the company argues here, that, even if Judge Weinfeld did have discretion, it was nevertheless error for him to undertake “an independent determination de novo of the costs allowed at a prior trial.” 324 F. 2d, at 364. We cannot agree. Since Judge Palmieri’s judgment and his taxation of costs were both upset by the Court of Appeals’ reversal of the first trial judgment, it became the duty of the clerk to tax costs for both trials only when judgment was finally entered for the company. The fact that the clerk accepted Judge Palmieri’s former cost taxation put no duty on Judge Weinfeld to accept the same figures. On review of the clerk’s assessment, it was Judge Weinfeld’s responsibility to decide the cost question himself, and so far as an exercise of discretion was called for, it was then his discretion and not Judge Palmieri’s that had to control. True, any judge in a like situation would almost surely hope to agree with his brother judge’s prior opinion, but we cannot accept the idea that he is compelled to do so. Judge Weinfeld was aware of intervening circumstances of which Judge Palmieri could not have known, as for example the Court of Appeals’ two opinions following the first trial, one of which mentioned cost questions. And Judge Weinfeld in lowering the prior assessment reached a result not greatly different from that of the Court of Appeals, which itself reduced Judge Palmieri’s cost allowance more than $2,000.
III.
Finally, we think that Judge Weinfeld’s taxation of costs as to both trials was an appropriate exercise of his discretion and should have been allowed to stand. The two disputed expenses that are most important in principle and largest in amount are (a) approximately $3,000 for stenographers’ fees in supplying company counsel with daily transcripts of the trial, and (b) approximately $7,000 for expenses incurred in transporting. witnesses from and back to Arabia.
(a) In denying the allowance for daily transcripta, Judge Weinfeld pointed out that while these might have added to the convenience of counsel for the company, and perhaps even have made the task of the trial judges easier, the transcripts were by no means indispensable. The judge’s conclusion was based on his personal knowledge that this was not a complicated or extended trial where lawyers were required to submit briefs and proposed findings. As to the company’s argument that the transcript costs were justified because the jury read them, Judge Weinfeld correctly pointed out that the same result could have been accomplished without this expense by following the common practice of calling on the stenographer to read from his notes. We think Judge Wein-feld’s refusal to make Farmer pay for these overnight transcripts, which were ordered by the company’s counsel, was proper and should not have been disturbed by the Court of Appeals.
(b) Judge Weinfeld “in the exercise of discretion” refused to tax the actual transportation expenses of the witnesses from Arabia, limiting those costs to the per 'diem fees fixed by law and to expenses for travel for a distance not to exceed 100 miles to and from the courthouse. He undoubtedly was influenced to some extent by the longstanding 100-mile rule. That rule, we think, is a proper and necessary consideration in exercising discretion in this field. The century-and-a-half-old special statutory provision relating to service of subpoenas more than 100 miles from the courthouse is designed not only to protect witnesses from the harassment of long, tiresome trips but also, in line with our national policy, to minimize the costs of litigation, which policy is strongly emphasized in the Federal Rules of Civil Procedure. Here the company oil its own, without prior notice to the court, brought its foreign witnesses to court at its own expense. With reference to this, Judge Weinfeld said:
“Upon an appropriate motion, the means of obtaining the testimony of the witness would have rested with the Court which, in its discretion, could have imposed conditions with respect to which party initially was to bear the expense and provided for its ultimaté taxation in favor of the prevailing party.” 31 F. R. D. 191, 195.
Having failed to bring this problem to the court’s attention in any manner, the company went ahead and. piled up what Judge Weinfeld quite understandably referred to as this “huge bill of costs.” We think , that1, under the circumstances, Judge Weinfeld could hot bé' charged with any improper exercise of the discretion vested in him by Rule 54(d). We do not read that Rule as giving district judges unrestrained discretion to tax costs to reimburse a winning litigant for every expense he has seen fit to incur in the conduct of his case. Items proposed by winning parties as costs should always be given careful scrutiny. Any other practice would be too great a movement in the direction of some systems of jurisprudence that are willing, if not indeed anxious, to allow litigation costs so high as to discourage litigants from bringing lawsuits, ho matter how meritorious they might in good faith believe their claims to be. Therefore, the discretion given district judges to tax costs should be sparingly exercised with reference to expenses not specifically allowed by statute. Such a restrained administration of the Rule is in harmony with our national policy of reducing insofar as possible the burdensome cost of litigation. We therefore hold that Judge Weinfeld’s order assessing only appropriate expenses should have been affirmed by the Court of Appeals. That court’s judgment is accordingly reversed and the judgment of the District Court is affirmed.
It is so ordered.
By two successive amendments made several years later, the complaint was amended to claim, first, $59,683, and finally, $160,000.
Rule 45 (e) provides in part that:
“A subpoena requiring the attendance of a witness at a hearing or trial may be served at any place within the district, or at any place without the district that is within 100 miles of the place of the hearing or trial specified in the subpoena.. . . .”
See cases cited in the opinion of the court below, 324 F. 2d, at 362, and the dissent, 324 F. 2d, at 366, as well as cases collected in 28 U. S. C. A. § 1821, n. 4, and 28 Fed. Code Ann. § 1821.
1 Stat. 88 (1789); 1 Stat. 335 (1793).
See, e. g., Rule 1 of the Federal Rules of Civil Procedure which provides that all the Rules “shall be construed to secure the just, .speedy, and inexpensive determination of every action.” (Emphasis supplied.)
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Blackmun
delivered the opinion of the Court.
In this case we must address the scienter requirement of the Mail Order Drug Paraphernalia Control Act, Pub. L. 99-570, Tit. I, §1822, 100 Stat. 3207-51, formerly codified, as amended, at 21 U. S. C. § 857, and the question whether the Act is unconstitutionally vague as applied to petitioners.
I
In 1977, petitioner Lana Christine Acty formed petitioner Posters ‘N’ Things, Ltd. (Posters), an Iowa corporation. The corporation operated three businesses, a diét-aid store, an art gallery, and a general merchandise outlet originally called “Forbidden Fruit,” but later renamed “World Wide Imports.” Law enforcement authorities received complaints that the merchandise outlet was selling drug paraphernalia. Other officers investigating drug cases found drug diluents (chemicals used to “cut” or dilute illegal drugs) and other drug paraphernalia that had been purchased from Forbidden Fruit.
In March 1990, officers executed warrants to search petitioners’ business premises and Acty’s residence. They seized various items, including pipes, bongs, scales, roach clips, and drug diluents including mannitol and inositol. The officers also seized cash, business records, and catalogs and advertisements describing products sold by petitioners. The advertisements offered for sale such products as “Coke Kits,” “Free Base Kits,” and diluents sold under the names “PseudoCaine” and “Procaine.”
Indictments on a number of charges relating to the sale of drug paraphernalia eventually were returned against petitioners and George Michael Moore, Acty’s husband. A joint trial took place before a jury in the United States District Court for the Southern District of Iowa.
Petitioners were convicted of using an interstate conveyance as part of a scheme to sell drug paraphernalia, in violation of former 21 U. S. C. § 857(a)(1), and of conspiring to commit that offense, in violation of 18 U. S. C. § 371. Petitioner Acty also was convicted of aiding and abetting the manufacture and distribution of cocaine, in violation of 21 U. S. C. § 841(a)(1); investing income derived from a drug offense, in violation of 21 U. S. C. § 854; money laundering, in violation of 18 U. S. C. § 1956(a)(1); and engaging in monetary transactions with the proceeds of unlawful activity, in violation of 18 U. S. C. § 1957. Acty was sentenced to imprisonment for 108 months, to be followed by a 5-year term of supervised release, and was fined $150,000. Posters was fined $75,000.
The United States Court of Appeals for the Eighth Circuit affirmed the convictions. 969 F. 2d 652 (1992). Because of an apparent conflict among the Courts of Appeals as to the nature of the scienter requirement of former 21 U. S. C. § 857, we granted certiorari. 507 U. S. 971 (1993).
II
Congress enacted the Mail Order Drug Paraphernalia Control Act as part of the Anti-Drug Abuse Act of 1986, Pub. L. 99-570, 100 Stat. 3207. As originally enacted, and as applicable in this case, the statute, 21 U. S. C. § 857(a), provides:
“It is unlawful for any person—
“(1) to make use of the services of the Postal Service or other interstate conveyance as part of a scheme to sell drug paraphernalia;
“(2) to offer for sale and transportation in interstate or foreign commerce drug paraphernalia; or
“(3) to import or export drug paraphernalia.”
Section 857(b) provides that anyone convicted under the statute shall be imprisoned for not more than three years and fined not more than $100,000.
A
Section 857(a) does not contain an express scienter requirement. Some courts, however, have located a scienter requirement in the statute’s definitional provision, § 857(d), which defines the term “drug paraphernalia” as “any equipment, product, or material of any kind which is primarily intended or designed for use” with illegal drugs. Petitioners argue that the term “primarily intended” in this provision establishes a subjective-intent requirement on the part of the defendant. We disagree, and instead adopt the Government’s position that § 857(d) establishes objective standards for determining what constitutes drug paraphernalia.
Section 857(d) identifies two categories of drug paraphernalia: items “primarily intended ... for use” with controlled substances and items “designed for use” with such substances. This Court’s decision in Hoffman Estates v. Flip-side, Hoffman Estates, Inc., 455 U. S. 489, 500 (1982), governs the “designed for use” prong of § 857(d). In that case, the Court considered an ordinance requiring a license for the sale of items “designed or marketed for use with illegal cannabis or drugs,” and concluded that the alternative “designed ... for use” standard referred to “the design of the manufacturer, not the intent of the retailer or customer.” Id., at 501. An item is “designed for use,” this Court explained, if it “is principally used with illegal drugs by virtue of its objective features, i. e., features designed by the manufacturer.” Ibid.
The objective characteristics of some items establish that they are designed specifically for use with controlled substances. Such items, including bongs, cocaine freebase kits, and certain kinds of pipes, have no other use besides contrived ones (such as use of a bong as a flower vase). Items that meet the “designed for use” standard constitute drug paraphernalia irrespective of the knowledge or intent of one who sells or transports them. See United States v. Mishra, 979 F. 2d 301, 308 (CA3 1992); United States v. Schneider-man, 968 F. 2d 1564,1567 (CA2 1992), cert, denied, 507 U. S. 921 (1993). Accordingly, the “designed for use” element of § 857(d) does not establish a scienter requirement with respect to sellers such as petitioners.
The “primarily intended ... for use” language of § 857(d) presents a more difficult problem. The language might be understood to refer to the state of mind of the defendant (here, the seller), and thus to require an intent on the part of the defendant that the items at issue be used with drugs. Some Courts of Appeals have adopted this construction, see Mishra, 979 F. 2d, at 307; United States v. Murphy, 977 F. 2d 503, 506 (CA10 1992); Schneiderman, 968 F. 2d, at 1567; United States v. 57,261 Items of Drug Paraphernalia, 869 F. 2d 955, 957 (CA6), cert, denied, 493 U. S. 933 (1989), and this Court in Hoffman Estates interpreted the arguably parallel phrase “marketed for use” as describing “a retailer’s intentional display and marketing of merchandise,” 455 U. S., at 502, and thus requiring scienter. On the other hand, there is greater ambiguity in the phrase “primarily intended . . . for use” than in the phrase “marketed for use.” The term “primarily intended” could refer to the intent of non-defendants, including manufacturers, distributors, retailers, buyers, or users. Several considerations lead us to conclude that “primarily intended ... for use” refers to a product’s likely use rather than to the defendant’s state of mind.
First, the structure of the statute supports an objective interpretation of the “primarily intended ... for use” standard. Section 857(d) states that drug paraphernalia “includes items primarily intended or designed for use in” consuming specified illegal drugs, “such as ...,” followed by a list of 15 items constituting per se drug paraphernalia. The inclusion of the “primarily intended” term along with the “designed for use” term in the introduction to the list of per se paraphernalia suggests that at least some of the per se items could be “primarily intended” for use with illegal drugs irrespective of a particular defendant’s intent — that is, as an objective matter. Moreover, § 857(e) lists eight objective factors that may be considered “in addition to all other logically relevant factors” in “determining whether an item constitutes drug paraphernalia.” These factors generally focus on the actual use of the item in the community. Congress did not include among the listed factors a defendant’s statements about his intent or other factors directly establishing subjective intent. This omission is significant in light of the fact that the parallel list contained in the Drug Enforcement Administration’s Model Drug Paraphernalia Act, on which § 857 was based, includes among the relevant factors “[statements by an owner . . . concerning [the object’s] use” and “[d]irect or circumstantial evidence of the intent of an owner ... to deliver it to persons whom he knows, or should reasonably know, intend to use the object to facilitate a violation of this Act.”
An objective construction of the definitional provision also finds support in § 857(f), which establishes an exemption for items “traditionally intended for use with tobacco products.” An item’s “traditional” use is not based on the subjective intent of a particular defendant. In 1988, Congress added the word “traditionally” in place of “primarily” in the § 857(f) exemption in order to “clarif[yj” the meaning of the exemption. Pub. L. 100-690, Tit. VI, §6485, 102 Stat. 4384. Congress’ characterization of the amendment as merely “clarifying” the law suggests that the original phrase — “primarily intended” — was not a reference to the fundamentally different concept of a defendant’s subjective intent.
Finally, an objective construction of the phrase “primarily intended” is consistent with the natural reading of similar language in definitional provisions of other federal criminal statutes.. See 18 U. S. C. § 921(a)(17)(B) (“armor piercing ammunition” excludes any projectile that is “primarily intended” to be used for sporting purposes, as found by the Secretary of the Treasury); 21 U. S. C. § 860(d)(2) (1988 ed., Supp. V) (“youth center” means a recreational facility “intended primarily for use by persons under 18 years of age”).
We conclude that the term “primarily intended ... for use” in § 857(d) is to be understood objectively and refers generally to an item’s likely use. Rather than serving as the basis for a subjective scienter requirement, the phrase “primarily intended or designed for use” in the definitional provision establishes objective standards for determining what constitutes drug paraphernalia.
B
Neither our conclusion that Congress intended an objective construction of the “primarily intended” language in § 857(d), nor the fact that Congress did not include the word “knowingly” in the text of § 857, justifies the conclusion that Congress intended to dispense entirely with a scienter requirement. This Court stated in United States v. United States Gypsum Co., 438 U. S. 422, 438 (1978): “Certainly far more than the simple omission of the appropriate phrase from the statutory definition is necessary to justify dispensing with an intent requirement.” Even statutes creating public welfare offenses generally require proof that the defendant had knowledge of sufficient facts to alert him to the probability of regulation of his potentially dangerous conduct. See Staples v. United States, post, at 607, and n. 3; United States v. Dotterweich, 320 U. S. 277, 281 (1943). We conclude that §857 is properly construed as containing a scienter requirement.
We turn to the nature of that requirement in this statute. In United States v. Bailey, 444 U. S. 394, 404 (1980), this Court distinguished between the mental states of “‘purpose’ ” and “ ‘knowledge,’ ” explaining, id., at 408, that, “except in narrow classes of offenses, proof that the defendant acted knowingly is sufficient to support a conviction.” In Bailey, the Court read into the federal escape statute, 18 U. S. C. § 751(a), a requirement that “an escapee knew his actions would result in his leaving physical confinement without permission,” rejecting a heightened mens rea that would have required “‘an intent to avoid confinement.’” 444 U. S., at 408. Similarly, in United States v. United States Gypsum Co., 438 U. S., at 444, the Court addressed the question whether a criminal violation of the Sherman Act “requires, in addition to proof of anticompetitive effects, a demonstration that the disputed conduct was undertaken with the ‘conscious object’ of producing such effects, or whether it is sufficient that the conduct is shown to have been undertaken with knowledge that the proscribed effects would most likely follow.” The Court concluded that “action undertaken with knowledge of its probable consequences ... can be a sufficient predicate for a finding of criminal liability under the antitrust laws.” Ibid.
As in Bailey and United States Gypsum, we conclude that a defendant must act knowingly in order to be liable under §857. Requiring that a seller of drug paraphernalia act with the “purpose” that the items be used with illegal drugs would be inappropriate. The purpose of a seller of drug paraphernalia is to sell his product; the seller is indifferent as to whether that product ultimately is used in connection with illegal drugs or otherwise. If § 857 required a purpose that the items be used with illegal drugs, individuals could avoid liability for selling bongs and cocaine freebase kits simply by establishing that they lacked the “conscious object” that the items be used with illegal drugs.
Further, we do not think that the knowledge standard in this context requires knowledge on the defendant’s part that a particular customer actually will use an item of drug paraphernalia with illegal drugs. It is sufficient that the defendant be aware that customers in general are likely to use the merchandise with drugs. Therefore, the Government must establish that the defendant knew that the items at issue are likely to be used with illegal drugs. Cf. United States Gypsum, 488 U. S., at 444 (knowledge of “probable consequences” sufficient for conviction). A conviction under § 857(a)(1), then, requires the Government to prove that the defendant knowingly made use of an interstate conveyance as part of a scheme to sell items that he knew were likely to be used with illegal drugs.
Finally, although the Government must establish that the defendant knew that the items at issue are likely to be used with illegal drugs, it need not prove specific knowledge that the items are “drug paraphernalia” within the meaning of the statute. Cf. Hamling v. United States, 418 U. S. 87 (1974) (statute prohibiting mailing of obscene materials does not require proof that defendant knew the materials at issue met the legal definition of “obscenity”). As in Hamling, it is sufficient for the Government to show that the defendant “knew the character and nature of the materials” with which he dealt. Id., at 123.
In light of the above, we conclude that the jury instructions given by the District Court adequately conveyed the legal standards for petitioners’ convictions under §857.
III
Petitioners argue that § 857 is unconstitutionally vague as applied to them in this case. “[T]he void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement.” Kolender v. Lawson, 461 U. S. 352, 357 (1983); see also Grayned v. Rockford, 408 U. S. 104, 108-109 (1972). Whatever its status as a general matter, we cannot say that § 857 is unconstitutionally vague as applied in this case.
First, the list of items in § 857(d) constituting per se drug paraphernalia provides individuals and law enforcement officers with relatively clear guidelines as to prohibited conduct. With respect to the listed items, there can be little doubt that the statute is sufficiently determinate to meet constitutional requirements. Many items involved in this case — including bongs, roach clips, and pipes designed for use with illegal drugs — are among the items specifically listed in § 857(d).
Second, § 857(e) sets forth objective criteria for assessing whether items constitute drug paraphernalia. These factors minimize the possibility of arbitrary enforcement and assist in defining the sphere of prohibited conduct under the statute. See Mishra, 979 F. 2d, at 309; Schneiderman, 968 F. 2d, at 1568. Section 857(f)’s exemption for tobacco-related products further limits the scope of the statute and precludes its enforcement against legitimate sellers of lawful products.
Finally, the scienter requirement that we have inferred in §857 assists in avoiding any vagueness problem. “[T]he Court has recognized that a scienter requirement may mitigate a law’s vagueness, especially with respect to the adequacy of notice . . . that [the] conduct is proscribed.” Hoffman Estates, 455 U. S., at 499.
Section 857’s application to multiple-use items — such as scales, razor blades, and mirrors — may raise more serious concerns. Such items may be used for legitimate as well as illegitimate purposes, and “a certain degree of ambiguity necessarily surrounds their classification.” Mishra, 979 F. 2d, at 309. This case, however, does not implicate vagueness or other due process concerns with respect to such items. Petitioners operated a full-scale “head shop,” a business devoted substantially to the sale of products that clearly constituted drug paraphernalia. The Court stated in Hoffman Estates: “The theoretical possibility that the village will enforce its ordinance against a paper clip placed next to Rolling Stone magazine ... is of no due process significance unless the possibility ripens into a prosecution.” 455 U. S., at 503-504, n. 21. Similarly here, we need not address the possible application of § 857 to a legitimate merchant engaging in the sale of only multiple-use items.
IV
Petitioner Acty’s other contentions are not properly before the Court. First, she argues that she was improperly convicted of aiding and abetting the manufacture and distribution of cocaine because the jury instructions created a “presumption” that certain items of drug paraphernalia “were intended for manufacturing with a controlled substance.” Brief for Petitioners 17. This argument was neither raised in nor addressed by the Court of Appeals. See Lawn v. United States, 355 U. S. 339, 362-363, n. 16 (1958). Second, Acty asserts that her convictions for money laundering, investing income derived from a drug offense, and engaging in monetary transactions with the proceeds of unlawful activity must be reversed. These contentions were not presented in the petition for writ of certiorari, and therefore they are not properly raised here. See this Court’s Rule 14.1(a). Finally, the petition presented the question whether the proof was adequate to support Acty’s conviction for aiding and abetting the manufacture and distribution of cocaine; but petitioners’ brief on the merits fails to address the issue and therefore abandons it. See Russell v. United States, 369 U. S. 749, 754, n. 7 (1962).
Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
A “bong” is a “water pipe that consists of a bottle or a vertical tube partially filled with liquid and a smaller tube ending in a bowl, used often in smoking narcotic substances.” American Heritage Dictionary 215 (3d ed. 1992).
The statute defines “roach clips” as “objects used to hold burning material, such as a marihuana cigarette, that has become too small or too short to be held in the hand.” 21 U. S. C. § 857(d)(5).
The term “freebase” means “[t]o purify (cocaine) by dissolving it in a heated solvent and separating and drying the precipitate” or “[t]o use (cocaine purified in this way) by burning it and inhaling the fumes.” American Heritage Dictionary 723 (3d ed. 1992).
Compare the decision of the Eighth Circuit in this case with United States v. Mishra, 979 F. 2d 301 (CA3 1992); United States v. Murphy, 977 F. 2d 503 (CA10 1992); United States v. Schneiderman, 968 F. 2d 1564 (CA2 1992), cert, denied, 507 U. S. 921 (1993); and United States v. 57,261 Items of Drug Paraphernalia, 869 F. 2d 955 (CA6), cert, denied, 493 U. S. 933 (1989).
In 1990, Congress repealed §857 and replaced it with 21 U. S. C. §863 (1988 ed., Supp. IV). See Crime Control Act of 1990, Pub. L. 101-647, § 2401,104 Stat. 4858. The language of § 863 is identical to that of former §857 except in the general description of the offense. Section 863(a) makes it unlawful for any person “(1) to sell or offer for sale drug paraphernalia; (2) to use the mails or any other facility of interstate commerce to transport drug paraphernalia; or (3) to import or export drug paraphernalia.”
Section 857(d) provides in full:
“The term ‘drug paraphernalia’ means any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under the Controlled Substances Act (title II of Public Law 91-513) [21 U. S. C. §§ 801 et seq.]. It includes items primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana, cocaine, hashish, hashish oil, PCP, or amphetamines into the human body, such as—
“(1) metal, wooden, acrylic, glass, stone, plastic, or ceramic pipes with or without screens, permanent screens, hashish heads, or punctured metal bowls;
“(2) water pipes;
“(3) carburetion tubes and devices;
“(4) smoking and carburetion masks;
“(5) roach clips: meaning objects used to hold burning material, such as a marihuana cigarette, that has become too small or too short to be held in the hand;
“(6) miniature spoons with level capacities of one-tenth cubic centimeter or less;
“(7) chamber pipes;
“(8) carburetor pipes;
“(9) electric pipes;
“(10) air-driven pipes;
“(11) chillums;
“(12) bongs;
“(13) ice pipes or chillers;
“(14) wired cigarette papers; or
“(15) cocaine freebase kits.”
Section 857(e) provides:
“In determining whether an item constitutes drug paraphernalia, in addition to all other logically relevant factors, the following may be considered:
“(1) instructions, oral or written, provided with the item concerning its use;
“(2) descriptive materials accompanying the item which explain or depict its use;
“(3) national and local advertising concerning its use;
“(4) the manner in which the item is displayed for sale;
“(5) whether the owner, or anyone in control of the item, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products;
“(6) direct or circumstantial evidence of the ratio of sales of the item(s) to the total sales of the business enterprise;
“(7) the existence and scope of legitimate uses of the item in the community; and
“(8) expert testimony concerning its use.”
See Schneiderman, 968 F. 2d, at 1566.
See Brief for United States 6a-7a. The Model Act lists 14 factors to be considered in addition to all other logically relevant factors in determining whether an object is drug paraphernalia. Several of the factors are similar or identical to those listed in § 857(e).
Section 857(f) provides:
“This section shall not apply to—
“(1) any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items; or
“(2) any item that, in the normal lawful course of business, is imported, exported, transported, or sold through the mail or by any other means, and traditionally intended for use with tobacco products, including any pipe, paper, or accessory.”
Although we describe the definition of “primarily intended” as “objective,” we note that it is a relatively particularized definition, reaching beyond the category of items that are likely to be used with drugs by virtue of their objective features. Among the factors that are relevant to whether an item constitutes drug paraphernalia are “instructions, oral or written, provided with the item concerning its use,” § 857(e)(1), and “the maimer in which the item is displayed for sale,” § 857(e)(4). Thus, while scales or razor blades as a general class may not be designed specifically for use with drugs, a subset of those items in a particular store may be “primarily intended” for use with drugs by virtue of the circumstances of their display and sale.
We disagree with Justice Scalia insofar as he would hold that a box of paper clips is converted into drug paraphernalia by the mere fact that a customer mentions to the seller that the paper clips will make excellent roach clips. Section 857(d) states that items “primarily intended” for use with drugs constitute drug paraphernalia, indicating that it is the likely use of customers generally, not any particular customer, that can render a multiple-use item drug paraphernalia.
The legislative history of the Mail Order Drug Paraphernalia Control Act consists of one House subcommittee hearing. See Hearing on H. R. 1625 before the Subcommittee on Crime of the House Committee on the Judiciary, 99th Cong., 2d Sess. (1986). We recognize that a colloquy with the principal House sponsor of the Act during this hearing lends some support to a subjective interpretation of the “primarily intended” language of § 857(d). When asked to whose intent this language referred, Rep. Levine initially stated: “The purpose of the language... is to identify as clearly as possible the intent of manufacturer and the seller to market a particular item as drug paraphernalia, subject to the interpretation of a trial court.” Id,., at 48. When pressed further, he stated: “[I]t would be the intent on the part of the defendant in a particular trial.” Ibid. Given the language and structure of the statute, we are not persuaded that these comments of a single member at a subcommittee hearing are sufficient to show a desire on the part of Congress to locate a scienter requirement in the definitional provision of §857.
The knowledge standard thát we adopt parallels the standard applied by those courts that have based § 857’s scienter requirement on the “primarily intended” language of the definitional provision. See Miskra, 979 F. 2d, at 307 (Government must prove that defendant “contemplated, or reasonably expected under the circumstances, that the item sold or offered for sale would be used with illegal drugs”); Schneiderman, 968 F. 2d, at 1567 (Government must prove that defendant “knew there was a strong probability the items would be so used”); 57,261 Items of Drug Paraphernalia, 869 F. 2d, at 957 (Government must prove defendant’s “knowledge that there is a strong probability that the items will be used” with illegal drugs). The scienter requirement that we have inferred applies with respect to all items of drug paraphernalia, while at least some of the lower courts appear to have confined their scienter requirement to those items “primarily intended” (but not “designed”) for use with illegal drugs. See, e. g., Schneiderman, 968 F. 2d, at 1567.
The District Court instructed the jury that, in order to find petitioners guilty, it was required to find that they “made use of [an] interstate conveyance knowingly as part of a scheme to sell drug paraphernalia,” that “the items in question constitute drug paraphernalia,” defined as items “primarily intended or designed for use” with illegal drugs, and that petitioners “knew the nature and character of the items.” The District Court elaborated on the knowledge requirement, describing it as “knowledge of the defendants as to the nature, character, and use of the items being sold or offered for sale at the store.” App. 16-35. We think that the instructions adequately informed the jury that it could convict petitioners only if it found that they knew that the items at issue were likely to be used with illegal drugs.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The motion for leave to proceed in forma pauperis is granted. The petition for a writ of certiorari is also granted. Petitioner, a prisoner in an Ohio penitentiary, filed an application for a writ of habeas corpus in the District Court for the Northern District of Ohio. Among other claims, the petitioner alleged that the Ohio Supreme Court did not provide him, as an indigent criminal defendant, an adequate remedy for the prosecution of an appeal from his conviction without payment of docket fees. This deficiency was urged, as we read this lay petitioner’s informal pro se application for the writ, as a violation of the Federal Constitution’s guarantee of the equal protection of the laws. See Burns v. Ohio, 360 U. S. 252. The writ of habeas corpus was in effect denied by the District Court, that court denying petitioner, for want of merit, leave to proceed in forma pauperis before it. The District Court further denied a motion for leave to appeal in forma pauperis and the Court of Appeals sustained this action on the renewal of the motion before it.
We hold that petitioner’s allegations in the application for the writ made out a case of deprivation of his constitutional right to the equal protection of the laws by Ohio in respect to his appeal from the conviction in the criminal prosecution against him. Clearly federal habeas corpus is an appropriate remedy under these circumstances. See Johnson v. Zerbst, 304 U. S. 458, 467-468; Burns v. Ohio, supra, at 262 (dissenting opinion). In view of our decision in Burns as to the validity of the former Ohio practice, and Ohio’s conformance, as we are advised, to the requirements of that decision, we think that the District Court should suspend a hearing on the writ for a reasonable time to allow petitioner to reapply to the Ohio Supreme Court for consideration of his appeal. Upon that court’s action thereon, the District Court should proceed, upon hearing, to make such appropriate order in the premises, as under the circumstances “law and justice require.” 28 U. S. C. § 2243. It may at that time consider, in the posture in which the case then stands, petitioner’s other claims as to the constitutional adequacy of Ohio’s appellate procedure in respect of his original conviction and his application for state collateral relief. To this end, the judgment is reversed and the cause is remanded to the District Court.
Mr. Justice Stewart took no part in the consideration or decision of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Me. Chief Justice Vinson
delivered the opinion of the Court.
The sole question before the Court in this case concerns the content of the term “through route” as used in the Interstate Commerce Act.
The question arises out of a controversy as to the shipment of grain to market from points in Kansas on the Central Branch of the Missouri Pacific Railroad. From Lenora, Kansas, a typical origin point, grain may be shipped eastward to the Kansas City market over Missouri Pacific lines via Atchison, Kansas, at a rate of 19 cents per hundred pounds. The Missouri Pacific also provides service from Lenora to Omaha, Nebraska, via Atchison, at the rate of 25.5 cents. Midway between Lenora and Atchison, at Concordia, Kansas, the Missouri Pacific connects with a line of the Chicago, Burlington & Quincy Railroad running in a northeasterly direction to Omaha. Concordia is listed by the carriers as a point for interchange of traffic and there is evidence that the Missouri Pacific and the Burlington offer through transportation via Concordia from Lenora to points on the Burlington line short of Omaha. But there is no evidence that any shipment has ever been made from Lenora to Omaha via the Burlington line or that the carriers have ever offered through service over that route, although the haul from Lenora to Omaha via the Burlington is approximately the same length as the haul from Lenora to Kansas City over the lines of the Missouri Pacific.
The Omaha Grain Exchange complained to the Interstate Commerce Commission that the rates published by appellant, Trustee for the Missouri Pacific, on grain shipped from Lenora and other Kansas origins are unreasonable and discriminate against Omaha in violation of Sections 1 and 3 of the Interstate Commerce Act. In the complaint it was contended that the route to Omaha via Concordia and the Burlington line “is a practicable through route as provided in Section 15 of the Interstate Commerce Act, and that the rates to the market of Omaha should be no greater than the rates to the market of Kansas City.”
Section 15 (3) of the Act provides that—
“The Commission may, and it shall whenever deemed by it to be necessary or desirable in the public interest, after full hearing upon complaint or upon its own initiative without complaint, establish through routes, joint classifications, and joint rates, fares, or charges, applicable to the transportation of passengers or property by carriers subject to this part, . . . 54 Stat. 911, 49 U. S. C. § 15 (3).
The Commission’s power to establish through routes is limited by a provision of Section 15 (4), quoted in the margin, whenever such action would require a carrier to short haul itself. Under that Section, a carrier may be required to short haul itself only where its own line makes the existing through route “unreasonably long as compared with another practicable through route which could otherwise be established,” or where the Commission makes special findings that a proposed through route “is needed in order to provide adequate, and more efficient or more economic, transportation.” Establishment of a new through route from Lenora to Omaha, via the Burlington, would compel the Missouri Pacific to permit use of the Lenora-Concordia portion of its line in the new through route to Omaha in competition with the Missouri Pacific’s own route from Lenora to Omaha via Atchison. As a result, establishment of a new through route as requested by the Omaha Grain Exchange admittedly invokes the restriction against short hauling in Section 15 (4).
The parties dispute whether, on the record in this case, there is sufficient basis for making the findings required by Section 15 (3) and (4) for the establishment of a through route. We do not reach this question because there was no attempt to make the inquiry and findings required by Section 15, the Commission finding that a through route from Lenora to Omaha via Concordia and the Burlington line was already in existence and, therefore, did not have to be “established.” The Commission granted relief to the complainant Omaha Grain Exchange by finding that the sum of the local rate from Lenora to Concordia published by appellant and the local rate from Concordia to Omaha published by the Burlington (totaling 30 cents per hundred pounds) is an “unreasonable” rate over the route from Lenora to Omaha via the Burlington. Appellant was ordered to provide transportation of grain from Lenora to Omaha at rates not exceeding the rates charged by the Missouri Pacific on like traffic to Kansas City (19 cents). The Commission did not consider the reasonableness of the rate published by appellant for the route from Lenora to Omaha via Atchison, nor is there any finding that the local rate from Lenora to Concordia published by appellant is itself either unreasonable or discriminatory. 278 I. C. C. 519, affirming Division 2,272 I. C. C. 368.
Appellant sued in the District Court to enjoin enforcement of the Commission’s order on the sole ground that the Commission erred in finding the existence of a through route from Lenora to Omaha via the Burlington with the result that the order, in effect, establishes a new through route without complying with the requirements of Section 15 (3) and (4) of the Act. A three-judge District Court, one judge dissenting, sustained the Commission’s order and dismissed appellant’s complaint. The District Court concluded that “evidence of physical interchange connection at Concordia, plus long established joint rates to some points on the Burlington short of Omaha, plus combination rates to Omaha,” furnished sufficient evidentiary basis for the Commission’s finding of the existence of a through route. 101 F. Supp. 48. The case is here on direct appeal. 28 U. S. C. (Supp. IV) § 1253.
Under the Interstate Commerce Act, a carrier must not only provide transportation service at reasonable rates over its own lines but has the additional duty “to establish reasonable through routes with other such carriers, and just and reasonable rates . . . applicable thereto.” Through routes may be, and ordinarily are, established by the voluntary action of connecting carriers. Since 1906, through routes may also be established by order of the Interstate Commerce Commission. In that year, Congress authorized the Commission to establish through routes “provided no reasonable or satisfactory through route exists.” In 1910, Congress first empowered the Commission to establish alternate through routes but restricted this power by adding the forerunner of present Section 15 (4) to prevent the Commission from establishing any through route requiring a carrier to short haul itself unless the existing route was unreasonably long compared to the proposed route.
The Commission’s effort to limit by construction the impact of the short-hauling restriction on its power to establish through routes was rejected by this Court in United States v. Missouri Pacific R. Co., 278 U. S. 269 (1929). Following this decision, the Commission asked Congress to delete completely the short-hauling restriction. In the Transportation Act of 1940, Congress refused to eliminate the restriction against short hauling, but adopted a compromise under which the restriction against short hauling was retained subject to a new exception applicable only where the Commission makes the special findings listed in the amended Section 15 (4).
Confronted with this consistent legislative refusal to eliminate the short-hauling restriction on its power to establish through routes, the Commission justifies its order on the ground that a "through route” from Lenora to Omaha via the Burlington was already in existence. If the Commission has correctly applied the term “through route” in this case, the Commission’s restricted power to “establish” through routes under Section 15 (3) and (4) is not relevant to this case. The statutory term “through route,” used throughout the Interstate Commerce Act, has been defined by this Court as follows:
“A ‘through route’ is an arrangement, express or implied, between connecting railroads for the continuous carriage of goods from the originating point on the line of one carrier to destination on the line of another. Through carriage implies a ‘through rate.’ This ‘through rate’ is not necessarily a ‘joint rate.’ It may be merely an aggregation of separate rates fixed independently by the several carriers forming the ‘through route’; as where the ‘through rate’ is ‘the sum of the locals’ on the several connecting lines or is the sum of lower rates otherwise separately established by them for through transportation. Through Routes and Through Rates, 12 I. C. C. 163,166.”
The Commission decision cited by the Court was summarized as follows in the Commission’s 21st Annual Report to Congress:
“A through route is a continuous line of railway formed by an arrangement, express or implied, between connecting carriers. . . . Existence of a through route is to be determined by the incidents and circumstances of the shipment, such as the billing, the transfer from one carrier to another, the collection and division of transportation charges, or the use of a proportional rate to or from junction points or basing points. These incidents named are not to be regarded as exclusive of others which may tend to establish a carrier’s course of business with respect to through shipments.”
In short, the test of the existence of a “through route” is whether the participating carriers hold themselves out as offering through transportation service. Through carriage implies the existence of a through route whatever the form of the rates charged for the through service.
In this case there is no evidence that any through transportation service has ever been offered from Lenora to Omaha via the Burlington. The carriers’ course of business negatives the existence of any such through route. The fact that appellant’s line connects with the Burlington at Concordia does not aid the Commission in proving the existence of a through route, since the power to establish through routes under Section 15 (3) and (4) also presupposes such physical connection. And the showing that appellant publishes a local rate from Lenora to Concordia and that the Burlington publishes a local rate from Concordia to Omaha proves only that each carrier complies with the statutory duty to publish rates for transportation service between points on its own lines.
The only remaining evidence urged in support of the Commission’s finding that a through route from Lenora to Omaha via the Burlington already exists is the showing that the Missouri Pacific and the Burlington offer through service from Lenora to points on the Burlington line short of Omaha. Under Section 1 (4) of the Interstate Commerce Act, the Missouri Pacific is required to establish reasonable through routes. In conformity with that Section, the Missouri Pacific furnishes through service from Lenora to Omaha on its own lines via Atchison and, since its own lines do not serve points on the Burlington line short of Omaha, it offers through service to such points in conjunction with the Burlington. Through service to points short of Omaha cannot be used as evidence of the existence of a through route to Omaha unless we are to hold that compliance with Section 1 (4) causes the Missouri Pacific to lose its right to serve Omaha via its own lines, a right guaranteed by Section 15 (4). We reject the Commission’s argument that the existence of through routes from Lenora to points on the Burlington line short of Omaha proves the existence of a through route to Omaha via the Burlington as requiring an unwarranted distortion of the statutory pattern.
The United States, having joined in defense of the Commission’s order in the District Court and on motion to affirm in this Court, has filed a memorandum conceding that the Commission erred in finding that through routes over the Burlington line already exist. The Commission continues to support its order, but the logical conclusion of the theory advanced by the Commission is that through routes exist between all points throughout the country wherever physical rail connections are available. If there is no through carriage over any combination of connecting carriers, the Commission under its present theory would never have to establish through routes under Section 15 (3) and (4) but could divert traffic to any route between two points by ordering reduction of the sum of the local rates over that route. Acceptance of this argument would mean that Congress’ insistence on protecting carriers from being required to short haul themselves could be evaded whenever the Commission chose to alter the form of its order. The Commission, by using the form of order employed in this case, could also divert traffic from existing through routes to the lines of a weak carrier solely to assist that carrier to meet its financial needs, thereby evading completely the applicable prohibition of Section 15 (4), before the Court in United States v. Great Northern R. Co., 343 U. S. 562 (decided this day). In short, acceptance of the Commission’s argument would mean that the acts of Congress since 1906 granting the Commission only a carefully restricted power to establish through routes have been unnecessary surplusage.
We hold that the Commission’s efforts to support its finding that a through route from Lenora to Omaha via the Burlington line already exists are inconsistent with the meaning of the term “through route” as used in the Interstate Commerce Act. Since there is admittedly no evidence that the Missouri Pacific ever offered through transportation service over the route in question, the Commission’s order is without evidentiary support under the accepted tests for determining the existence of a through route. Accordingly, the judgment of the District Court dismissing appellant’s complaint must be
Reversed.
49 U. S. C. § 1 et seq.
See 49 U. S. C. §§ 1 (5) (a), 3 (1).
“In establishing any such through route the Commission shall not (except as provided in section 3, and except where one of the carriers is a water line) require any carrier by railroad, without its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith, which lies between the termini of such proposed through route, (a) unless such inclusion of lines would make the through route unreasonably long as compared with another practicable through route which could otherwise be established, or (b) unless the Commission finds that the through route proposed to be established is needed in order to provide adequate, and more efficient or more economic, transportation: Provided, however, That in prescribing through routes the Commission shall, so far as is consistent with the public interest, and subject to the foregoing limitations in clauses (a) and (b), give reasonable preference to the carrier by railroad which originates the traffic. . . .” 54 Stat. 911-912, 49 U. S. C. § 15 (4).
The short-hauling provisions are discussed and applied in Pennsylvania R. Co. v. United States, 323 U. S. 588 (1945).
49 U. S. C. §1 (4).
34 Stat. 584, 590. In I. C. C. v. Northern Pacific R. Co., 216 U. S. 538 (1910), this Court held that the restrictions on the Commission’s power to establish through routes were judicially enforceable.
36 Stat. 539, 552. See S. Rep. No. 355, 61st Cong., 2d Sess. 9-10 (1910).
The Commission first asked Congress to" adopt the narrow construction of the short-hauling restriction rejected by this Court in United States v. Missouri Pacific R. Co., supra. Ann. Rep. I. C. C. (1929) 89; id. (1930) 97; id. (1931) 83-84, 121; id. (1932) 102. When the Federal Transportation Coordinator recommended that the short-hauling restriction be eliminated, S. Doc. No. 152, 73d Cong., 2d Sess. 92-94 (1934), the Commission urged Congress to follow the Coordinator's recommendation. Ann. Rep. I. C. C. (1937) 106; id. (1938) 122.
In the 74th Congress, S. 1636 and H. R. 5364 were introduced to enact the Commission’s recommendation, the Senate bill was reported favorably, S. Rep. No. 1970, 74th Cong., 2d Sess. (1936), but no further action was taken. In the 75th Congress, similar bills were introduced, S. 1261 and H. R. 4341, the Senate bill was reported favorably, S. Rep. No. 404, 75th Cong., 1st Sess. (1937), and was passed by the Senate, 81 Cong. Rec. 8603 (1937), but no further action was taken.
In the 76th Congress, bills to delete the short-hauling restriction were again introduced, S. 1085 and H. R. 3400. At the same time, the extensive revision of the Interstate Commerce Act which became the Transportation Act of 1940 was being considered. S. 2009. A Senate Committee included in its over-all revision the “through-routes provision long advocated by the Commission,” S. Rep. No. 433, 76th Cong., 1st Sess. 6, 21-22 (1939), and the Transportation Act, so amended, was passed by the Senate. The Transportation Act as passed by the House did not provide for any change in Section 15 (4). The present form of Section 15 (4) emerged as Section 10 (b) of the Transportation Act of 1940. 54 Stat. 898, 911-912. See Conference Reports: H. R. Rep. No. 2016, 76th Cong., 3d Sess. 64r-65 (1940); H. R. Rep. No. 2832, 76th Cong., 3d Sess. 70-71 (1940).
49 U. S. C. §§ 1 (4), 6 (1), 15 (3) (4) (8); 49 U. S. C. (Supp. IV) § 5b (4).
St. Louis Southwestern R. Co. v. United States, 245 U. S. 136, 139, note 2 (1917). See also Great Northern R. Co. v. United States, 81 F. Supp. 921, 924 (D. Del. 1948), affirmed, 336 U. S. 933 (1949).
Ann. Rep. I. C. C. (1907) 75-76.
Compare Beaman Elevator Co. v. Chicago & N. W. R. Co., 155 I. C. C. 313 (1929), where the Commission held that proof of one shipment on a through bill of lading over a certain route was not sufficient to show the existence of a through route because that one shipment was not representative of the carriers’ course of business.
49 U. S. C. §6 (1).
The District Court indicated that such through service was offered on joint rates, but appellant states in this Court that such through service was offered on a through rate made up of a combination of the applicable local rates. We need not pause over this conflict since “through routes” from Lenora to points on the Burlington short of Omaha are implied from the fact of through carriage, and are not dependent upon the form of the rates charged. See St. Louis Southwestern R. Co. v. United States, note 11, supra, and United States v. Great Northern R. Co., 343 U. S. 562 (decided this day).
49 U. S. C. § 1 (4).
For example, in United States v. Missouri Pacific R. Co., supra, the Missouri Pacific furnished through traffic over its own lines from Memphis westward to Ft. Smith, Arkansas, and beyond. The Ft. Smith, Subiaeo & R. I. R. Co., desirous of obtaining additional traffic, asked the Commission to establish a through route from Memphis to Ft. Smith via the connecting lines of the Rock Island Railroad, the Subiaco and a line of the Missouri Pacific. The Commission ordered the establishment of, the through route with through rates at the same level as the rates then charged over the existing through route between Memphis and Ft. Smith. This Court held the order invalid as infringing upon the rights of the Missouri Pacific under the short-hauling provisions of Section 15 (4). If the Commission is correct in this case, it could have accomplished the forbidden result merely by altering the form of its order — i. e., instead of ordering establishment of a new through route, the Commission could have assumed the existence of a through route from Memphis to Ft. Smith via the lines of the Rock Island, the Subiaco and the Missouri Pacific and accomplished the identical result by ordering reduction of the sum of the local rates over each portion of the route to the level of the rate over the existing through route.
Virginian R. Co. v. United States, 272 U. S. 658 (1926), is inapposite since through routes were there found to be in existence but commercially closed solely because of unreasonable and discriminatory rates charged by the Virginian over its portion of the route. In this case, there is no finding that the local rate charged by the Missouri Pacific from Lenora to Concordia is either unreasonable or discriminatory. Similarly, the decision in Atchison, T. & S. F. R. Co. v. United States, 279 U. S. 768 (1929), is not applicable to the facts of this case.
The Commission’s argument that appellant’s rates discriminate against Omaha in violation of Section 3 (1) of the Act and thereby cause appellant to lose the protection of Section 15 (4) is without substance because the Commission did not consider whether the rates charged by the Missouri Pacific over its own lines are discriminatory, much less make any finding to that effect.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment is vacated and the case is remanded to the Supreme Court of Arizona for further consideration in light of Chambers v. Maroney, ante, p. 42.
Mr. Justice Harlan would vacate the judgment and remand the case to the Supreme Court of Arizona for the reasons stated in his separate opinion in Chambers v. Maroney, ante, p. 55.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Blackmun
delivered the opinion of the Court.
In this case, we are confronted with the question of the constitutionality of a franchise tax credit afforded by the State of New York to certain income of Domestic International Sales Corporations.
H
The tax credit in issue was enacted as part of the New York Legislature’s response to additions to and changes in the United States Internal Revenue Code of 1954 effectuated by the Revenue Act of 1971, Pub. L. 92-178, §§501-507, 85 Stat. 535. In an effort to “provide tax incentives for U. S. firms to increase their exports,” H. R. Rep. No. 92-533, p. 9 (1971); S. Rep. No. 92-437, p. 12 (1971), Congress gave special recognition to a corporate entity it described as a “Domestic International Sales Corporation” or “DISC.” §§ 991-997 of the Code, 26 U. S. C. §§ 991-997. A corporation qualifies as a DISC if substantially all its assets and gross receipts are export-related. §§ 992(a), 993. Under federal law, a DISC is not taxed on its income. §991. Instead, a portion of the DISC’S income — labeled “deemed distributions” — is attributed to the DISC’s shareholders on a current basis, whether or not that portion is actually paid or distributed to them. § 995. Under the statutory provisions in effect during the calendar years 1972 and 1973 (the tax years in question in this case), 50% of a DISC’S income was deemed distributed to its shareholders. 85 Stat. 544. Taxes on the remaining income of the DISC — labeled “accumulated DISC income” — are deferred until either that accumulated income is actually distributed to the shareholders or the DISC no longer qualifies for special tax treatment. § 996 of the Code, 26 U. S. C. §996.
Enactment of the federal DISC legislation caused revenue officials in the State of New York some concern. New York does not generally impose its franchise tax on distributions received by a parent from a subsidiary; instead, the subsidiary is taxed directly to the extent it does business in the State. See N. Y. Tax Law §208.9(a)(1) (McKinney 1966). Given the State's tax structure, had New York followed the federal lead in not taxing DISCs, a DISC’S income would not have been taxed by the State. See New York State Division of the Budget, Report on A. 12108-A and S. 10544, pp. 1, 5-6 (May 23, 1972), reprinted in Bill Jacket of 1972 N. Y. Laws, ch. 778, pp. 13, 17-18 (Budget Report). A budget analyst reported to the legislature that if no provision were made to tax DISCs, New York might suffer revenue losses of as much as $20-$30 million annually. Id., at 20. On the other hand, the analyst warned that state taxation of DISCs would discourage their formation in New York and also discourage the manufacture of export goods within the State. Id., at 18.
With these conflicting considerations in mind, New York enacted legislation pertaining to the taxation of DISCs. 1972 N. Y. Laws, chs. 778 and 779 (McKinney), codified as N. Y. Tax Law §§208 to 219-a (McKinney Supp. 1983-1984). The enacted provisions require the consolidation of the receipts, assets, expenses, and liabilities of the DISC with those of its parent. § 208.9(i)(B). The franchise tax is then assessed against the parent on the basis of the consolidated amounts. In an attempt to “provide a positive incentive for increased business activity in New York State,” however, the legislature provided a “partially offsetting tax credit.” Budget Report, at 18. The result of the credit is to lower the effective tax rate on the accumulated DISC income reflected in the consolidated return to 30% of the otherwise applicable franchise tax rate. The DISC credit, significantly, is limited to gross receipts from export products “shipped from a regular place of business of the taxpayer within [New York].” §210.13(a)(2). The credit is computed by (1) dividing the gross receipts of the DISC derived from export property shipped from a regular place of business within New York by the DISC’S total gross receipts derived from the sale of export property; (2) multiplying that quotient (the DISC’S New York export ratio) by the parent’s New York business allocation percentage; (3) multiplying that product by the New York tax rate applicable to the parent; (4) multiplying that product by 70%; and (5) multiplying that product by the parent’s attributable share of the accumulated income of the DISC for the year. §§ 210.13(a)(2) to (5).
M
The basic facts are stipulated. Appellant Westinghouse Electric Corporation (Westinghouse) is a Pennsylvania corporation engaged in the manufacture and sale of electrical equipment, parts, and appliances. Westinghouse is qualified to do business in New York, and it regularly pays corporate income and franchise taxes to that State. Among Westinghouse’s subsidiaries is Westinghouse Electric Export Corporation (Westinghouse Export), a Delaware corporation wholly owned by Westinghouse, that qualifies as a federally tax-exempt DISC. Westinghouse Export acts as a commission agent on behalf of both Westinghouse and Westinghouse’s other affiliates for export sales of products manufactured in the United States and services related to those products. All of Westinghouse Export’s income in 1972 and 1973 consisted of commissions on export sales. On both its 1972 and 1973 federal income and New York State franchise tax returns, Westinghouse included as income, and paid taxes on, an amount of deemed distributed income equal to about half of Westinghouse Export’s income. In 1972, Westinghouse Export’s income was about $26 million, and Westinghouse included in its consolidated return approximately $13 million of income deemed distributed from Westinghouse Export. In 1973, the income of Westinghouse Export was approximately $58 million; Westinghouse reported almost $30 million of that amount as deemed distributed income. Westinghouse, however, did not include the DISC’S accumulated income in its consolidated returns.
The appellees, as the New York State Tax Commission (Tax Commission), sought to include in Westinghouse’s consolidated income the accumulated DISC income; that is, the Tax Commission computed Westinghouse’s taxable income by first combining all of Westinghouse Export’s income with that of Westinghouse, pursuant to N. Y. Tax Law §208.9(i) (B) (McKinney Supp. 1983-1984). The Commission gave Westinghouse the benefit of the DISC export credit for the approximately 5% of Westinghouse Export’s receipts each year that could be attributed to New York shipments. After applying the relevant allocation and tax percentages, the Tax Commission asserted deficiencies in Westinghouse’s franchise tax of $73,970 (later corrected to $71,970) plus interest for 1972 and $151,437 plus interest for 1973. App. 42, 46.
Westinghouse filed a petition for redetermination of the proposed deficiencies. By its petition, as later perfected, Westinghouse contended that by requiring it to compute its franchise tax liability on a consolidated basis with Westinghouse Export, the Tax Commission was taxing income that did not have a jurisdictional nexus to the State, in violation of the Commerce and Due Process Clauses of the United States Constitution. Westinghouse further contended that limiting the tax benefit of the DISC export credit to gross receipts from shipments attributable to a New York place of business violated the Commerce, Due Process, and Equal Protection Clauses. The Commission declined to entertain Westinghouse’s contentions, on the ground that, as an administrative agency, it lacked jurisdiction to pass upon “the constitutionality of the laws of the State of New York.” Id., at 47.
Westinghouse then brought suit in the New York Supreme Court for review of the tax determination, again raising its constitutional claims. The case was transferred to the Appellate Division. That court, by a 3-to-2 vote, found the portion of the law that requires accumulated income of the DISC to be added to the consolidated return, §208.9(i)(B), to be an unconstitutional burden on foreign commerce. 82 App. Div. 2d 988, 440 N. Y. S. 2d 397 (1981). The Appellate Division based its holding on the fact that Congress intended to exempt DISC income from current taxation. Id., at 989, 440 N. Y. S. 2d, at 399-400. This decision made it unnecessary for the court to consider the constitutionality of New York’s geographical limitation on the DISC export credit, because the credit applies only to accumulated DISC income. The Appellate Division, however, went on to reject Westinghouse’s constitutional challenges to New York’s taxation of deemed distributed income. Ibid., 440 N. Y. S. 2d, at 400.
The Tax Commission took an appeal to the New York Court of Appeals from that portion of the Appellate Division’s judgment invalidating §208.9(i)(B), and Westinghouse cross-appealed from that portion of the judgment upholding the taxation of deemed distributions. Westinghouse again made the constitutional arguments it had raised below. In a unanimous opinion, the Court of Appeals reinstated the determination of the Tax Commission. 55 N. Y. 2d 364, 434 N. E. 2d 1044 (1982). The Court of Appeals first held that Congress’ decision not to tax DISCs at the federal level did not pre-empt a State from taxing a DISC. Id., at 372-373, 434 N. E. 2d, at 1047-1048. The court also rejected Westinghouse’s argument that the State lacked the jurisdictional nexus necessary to satisfy the minimal due process standards on which the right to tax must be predicated. Finally, the court rejected Westinghouse’s claim that the credit provided for in §210.13(a) impermissibly subjected Westinghouse’s export sales from a non-New York place of business to a higher tax rate than that on comparable sales shipped from a regular place of business in New York. The court noted that the credit was devised by the State to provide shareholders of DISCs with state-tax incentives akin to those enacted by Congress. The only difference was that, while Congress had chosen to provide the benefit in the form of a tax deferral, the New York Legislature had elected to use a credit. Id., at 374-376, 434 N. E. 2d, at 1049-1050.
The court acknowledged that the credit was intended to ensure that New York would not lose its competitive position vis-á-vis other States, since other States were also expected to offer tax benefits to DISCs. It traced the steps required in calculating the tax credit and concluded: “Obviously, the business allocation percentage plays an integral role in computing the tax credit.” Id., at 375, 434 N. E. 2d, at 1050. Use of the business allocation percentage, the court reasoned, ensures that in taxing DISC income, the State is taxing only that DISC income that has a jurisdictional nexus with the State. The credit simply forgives a portion of the tax New York has a right to levy. Id., at 376, 434 N. E. 2d, at 1050. The portion of the tax to be forgiven is determined by reference to shipments of export property from a regular place of business in New York. The court was of the opinion that this method satisfies due process and that any effect on interstate commerce is too indirect to run afoul of the Commerce Clause. Ibid.
We noted probable jurisdiction only with respect to the question of the constitutionality of the DISC tax credit, 459 U. S. 1144 (1983), and we now reverse the judgment of the New York Court of Appeals in that respect.
III
The Tax Commission seeks to convince us that the DISC tax credit forgives merely a portion of the tax that New York has jurisdiction to levy. All the accumulated income of a DISC is attributed to its parent for tax purposes. Under unitary tax principles, however, if the parent has a regular place of business outside New York, the State will not actually tax the full amount of the accumulated income. Only a portion of the parent’s net income (which includes the accumulated DISC income) will be subject to tax in New York. That portion is determined by reference to a business allocation percentage determined by averaging the percentages of in-state property, payroll, and receipts. See N. Y. Tax Law § 210.3 (McKinney Supp. 1983-1984). This Court long has upheld, subject to certain restraints, the use of a formula-apportionment method to determine the percentage of a business’ income taxable in a given jurisdiction. Container Corp. v. Franchise Tax Board, 463 U. S. 159, 169-171 (1983); see Illinois Central R. Co. v. Minnesota, 309 U. S. 157 (1940); Hans Rees' Sons, Inc. v. North Carolina ex rel. Maxwell, 283 U. S. 123 (1931); Bass, Ratcliff & Gretton, Ltd. v. State Tax Comm’n, 266 U. S. 271 (1924); Underwood Typewriter Co. v. Chamberlain, 254 U. S. 113 (1920).
The Tax Commission’s argument that New York employs a constitutionally acceptable allocation formula, in our view, serves only to obscure the issue in this case. The acceptability of the allocation formula employed by the State of New York is not relevant to the question before us. The fact that New York is attempting to tax only a fairly apportioned percentage of a DISC’S accumulated income does not insulate from constitutional challenge the State’s method of allowing the DISC export credit. New York’s apportionment procedure determines what portion of a business’ income is within the jurisdiction of New York. Nothing about the apportionment process releases the State from the constitutional restraints that limit the way in which it exercises its taxing power over the income within its jurisdiction.
Here, Westinghouse argues that the State of New York has sought to exercise its taxing power over accumulated DISC income in a manner that offends the Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment. This challenge is not foreclosed by our holding that New York’s allocation of DISC income is constitutionally acceptable. See 459 U. S. 1144 (1983) (dismissing for want of a substantial federal question Westinghouse’s challenge to method of allocating DISC income to parent). “Fairly apportioned” and “nondiscriminatory” are not synonymous terms. It is to the question whether the method of allowing the credit is discriminatory in a manner that violates the Commerce Clause that we now turn.
The Tax Commission argues that multiplying the allowable credit by the New York export ratio of the DISC merely ensures that the State is not allowing a parent corporation to claim a tax credit with respect to DISC income that is not taxable by the State of New York. This argument ignores the fact that the percentage of the DISC’S accumulated income that is subject to New York franchise tax is determined by the parent’s business allocation percentage, not by the export ratio. In computing the allowable credit, the statute requires the parent to factor in its business allocation percentage. §210.13(a). This procedure alleviates the State’s fears that it will be overly generous with its tax credit, for once the adjustment of multiplying the allowable DISC export credit by the parent’s business allocation percentage has been accomplished, the tax credit has been fairly apportioned to apply only to the amount of the accumulated DISC income taxable to New York. From the standpoint of fair apportionment of the credit, the additional adjustment of the credit to reflect the DISC’S New York export ratio is both inaccurate and duplicative.
It is this second adjustment, made only to the credit and not to the base taxable income figure, that has the effect of treating differently parent corporations that are similarly situated in all respects except for the percentage of their DISCs’ shipping activities conducted from New York. This adjustment has the effect of allowing a parent a greater tax credit on its accumulated DISC income as its subsidiary DISC moves a greater percentage of its shipping activities into the State of New York. Conversely, the adjustment decreases the tax credit allowed to the parent for a given amount of its DISC’S shipping activity conducted from New York as the DISC increases its shipping activities in other States. Thus, not only does the New York tax scheme “provide a positive incentive for increased business activity-in New York State,” Budget Report, at 18, but also it penalizes increases in the DISC’S shipping activities in other States.
In determining whether New York’s method of allowing a DISC export credit violates the Commerce Clause, the foundation of our analysis is the basic principle that “ ‘[t]he very purpose of the Commerce Clause was to create an area of free trade among the several States.’” Boston Stock Exchange v. State Tax Comm’n, 429 U. S. 318, 328 (1977), quoting McLeod v. J. E. Dilworth Co., 322 U. S. 327, 330 (1944); accord, Great Atlantic & Pacific Tea Co. v. Cottrell, 424 U. S. 366 (1976). The undisputed corollary of that principle is that “‘the Commerce Clause was not merely an authorization to Congress to enact laws for the protection and encouragement of commerce among the States, but by its own force created an area of trade free from interference by the States.... [T]he Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States,’” including the States’ power to tax. Boston Stock Exchange, 429 U. S., at 328, quoting Freeman v. Hewit, 329 U. S. 249, 252 (1946). For that reason, “[n]o State, consistent with the Commerce Clause, may ‘impose a tax which discriminates against interstate commerce... by providing a direct commercial advantage to local business.’ ” Boston Stock Exchange, 429 U. S., at 329, quoting Northwestern States Portland Cement Co. v. Minnesota, 358 U. S. 450, 458 (1959). See also Halliburton Oil Well Cementing Co. v. Reily, 373 U. S. 64 (1963); Nippert v. Richmond, 327 U. S. 416 (1946); I. M. Darnell & Son Co. v. Memphis, 208 U. S. 113 (1908); Guy v. Baltimore, 100 U. S. 434 (1880); Welton v. Missouri, 91 U. S. 275 (1876).
We have acknowledged that the delicate balancing of the national interest in free and open trade and a State’s interest in exercising its taxing powers requires a case-by-case analysis and that such analysis has left “‘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 taxation.’” Boston Stock Exchange, 429 U. S., at 329, quoting Northwestern States, 358 U. S., at 457. In light of our decision in Boston Stock Exchange, however, we think that there is little room for such “controversy and confusion” in the present litigation. The lessons of that case, as explicated further in Maryland v. Louisiana, 451 U. S. 725 (1981), are controlling.
In both Maryland v. Louisiana and Boston Stock Exchange, the Court struck down state tax statutes that encouraged the development of local industry by means of taxing measures that imposed greater burdens on economic activities taking place outside the State than were placed on similar activities within the State. In Maryland v. Louisiana, the Court held that Louisiana’s “First-Use” tax — which imposed a tax on natural gas brought into the State while giving local users a series of exemptions and credits — violated the Commerce Clause because it “unquestionably discriminate[d] against interstate commerce in favor of local interests.” 451 U. S., at 756. Similarly, in Boston Stock Exchange, the Court held unconstitutional a New York stock-transfer tax that reduced the tax payable by nonresidents when the tax involved an in-state (rather than an out-of-state) sale and applied a maximum limit to the tax payable on any in-state (but not out-of-state) sale. See 429 U. S., at 332. The stock-transfer tax was declared unconstitutional because it violated the principle that “no State may discriminatorily tax the products manufactured or the business operations performed in any other State.” Id., at 337. The tax schemes rejected by this Court in both Maryland v. Louisiana and Boston Stock Exchange involved transactional taxes rather than taxes on general income. That distinction, however, is irrelevant to our analysis. The franchise tax is a tax on the income of a business from its aggregated business transactions. It cannot be that a State can circumvent the prohibition of the Commerce Clause against placing burdensome taxes on out-of-state transactions by burdening those transactions with a tax that is levied in the aggregate — as is the franchise tax — rather than on individual transactions.
Nor is it relevant that New York discriminates against business carried on outside the State by disallowing a tax credit rather than by imposing a higher tax. The discriminatory economic effect of these two measures would be identical. New York allows a 70% credit against tax liability for all shipments made from within the State. This provision is indistinguishable from one that would apply to New York shipments a tax rate that is 30% of that applied to shipments from other States. We have declined to attach any constitutional significance to such formal distinctions that lack economic substance. See, e. g., Maryland v. Louisiana, 451 U. S., at 756 (tax scheme imposing tax at uniform rate on in-state and out-of-state sales held to be unconstitutional because discrimination against interstate commerce was “the necessary result of various tax credits and exclusions” that benefited only in-state consumers of gas).
The Tax Commission contends that the DISC export credit is a subsidy to American export business generally, and as such, is consistent with congressional intent in establishing DISCs and with the Commerce Clause. We find no merit in this argument. While the Federal Government may seek to increase domestic employment and improve our balance-of-payments by offering tax advantages to those who produce in the United States rather than abroad, a State may not encourage the development of local industry by means of taxing measures that “invite a multiplication of preferential trade areas” within the United States, in contravention of the Commerce Clause. Dean Milk Co. v. Madison, 340 U. S. 349, 356 (1951). We note, also, that if the credit were truly intended to promote exports from the United States in general, there would be no reason to limit it to exports from within New York.
The Tax Commission argues that even if the tax is discriminatory, the burden it places on interstate commerce is not of constitutional significance. It points to the facts that New York is a State with a relatively high franchise tax and that the actual effect of the credit, when viewed in terms of the whole New York tax scheme, is slight. It argues that the credit was not intended to divert new activity into New York, but, rather, to prevent the loss of economic activity already in the State at the time the tax on accumulated DISC income was enacted. Whether the discriminatory tax diverts new business into the State or merely prevents current business from being diverted elsewhere, it is still a discriminatory tax that “forecloses tax-neutral decisions and... creates... an advantage” for firms operating in New York by placing “a discriminatory burden on commerce to its sister States.” Boston Stock Exchange, 429 U. S., at 331. The State has violated the prohibition in Boston Stock Exchange against using discriminatory state taxes to burden commerce in other States in an attempt to induce “ ‘business operations to be performed in the home State that could more efficiently be performed elsewhere/” id., at 336, quoting Pike v. Bruce Church, Inc., 397 U. S. 137, 145 (1970), and to “‘impose an artificial rigidity on the economic pattern of the industry/” id., at 146, quoting Toomer v. Witsell, 334 U. S. 385, 404 (1948). When a tax, on its face, is designed to have discriminatory economic effects, the Court “need not know how unequal the Tax is before concluding that it unconstitutionally discriminates.” Maryland v. Louisiana, 451 U. S., at 760.
The manner in which New York allows corporations a tax credit on the accumulated income of their subsidiary DISCs discriminates against export shipping from other States, in violation of the Commerce Clause. The contrary judgment of the New York Court of Appeals is therefore reversed.
It is so ordered.
Specifically, § 992(a)(1) provides that a corporation qualifies for DISC treatment for any taxable year in which it
“is incorporated under the laws of any State and satisfies the following conditions for the taxable year:
“(A) 95 percent or more of the gross receipts (as defined in section 993(f)) of such corporation consist of qualified export receipts (as defined in section 993(a)),
“(B) the adjusted basis of the qualified export assets (as defined in section 993(b)) of the corporation at the close of the taxable year equals or exceeds 95 percent of the sum of the adjusted basis of all assets of the corporation at the close of the taxable year,
“(C) such corporation does not have more than one class of stock and the par or stated value of its outstanding stock is at least $2,500 on each day of the taxable year, and
“(D) the corporation has made an election pursuant to subsection (b) to be treated as a DISC and such election is in effect for the taxable year.” Under § 993(a)(1), “the qualified export receipts of a corporation are—
“(A) gross receipts from the sale, exchange, or other disposition of export property,
“(B) gross receipts from the lease or rental of export property, which is used by the lessee of such property outside the United States,
“(C) gross receipts for services which are related and subsidiary to any qualified sale, exchange, lease, rental, or other disposition of export property by such corporation,
“(D) gross receipts from the sale, exchange, or other disposition or qualified export assets (other than export property),
“(E) dividends (or amounts includible in gross income under section 951) with respect to stock of a related foreign export corporation (as defined in subsection (e)),
“(F) interest on any obligation which is a qualified export asset,
“(G) gross receipts for engineering or architectural services for construction projects located (or proposed for location) outside the United States, and
“(H) gross receipts for the performance of managerial services in furtherance of the production of other qualified export receipts of a DISC.”
The majority of DISCs have only one shareholder, for most are wholly owned by a single corporate parent. Internal Revenue Service, 3 Statistics of Income Bulletin, No. 2, p. 10 (1983).
Subsequent to the tax years in question, the law governing DISCs was changed to decrease the amount of DISC income given preferential treatment. The Tax Reform Act of 1976, Pub. L. 94-455, § 1101(a), 90 Stat. 1655, limited DISC benefits to taxable income attributable to gross receipts in excess of 67% of the average export gross receipts in a 4-year base period. DISCs with adjusted taxable income of $100,000 or less are exempt from that provision. §§ 995(e)(3) and (f) of the Code, 26 U. S. C. §§ 995(e)(3) and (f). The Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, § 204(a), 96 Stat. 423, increased from 50% to 57.5%, for tax years beginning in 1983, the portion of DISC income deemed distributed to the DISC’S shareholders. § 291(a)(4) of the Code, 26 U. S. C. § 291(a)(4).
The State considered two possible methods of DISC taxation. Under the first, a DISC would be taxed directly on its income. Use of this method would encourage formation of DISCs outside the State, so that New York would obtain no tax revenue from them. A direct tax on DISCs would also engender administrative costs. In general, New York uses federal taxable income as the base from which to determine income taxable by the State. Since a DISC would have no federal taxable income, a method of determining a DISC’S taxable income for state-tax purposes would have to be devised. Budget Report, at 18.
Under the second method, a DISC’S income would be attributed to the DISC’S shareholders and taxed as income to them. New York revenue officials feared that full taxation of the DISC’S income in this manner would discourage the manufacture of export products within the State. Ibid.
A corporation’s business allocation percentage for New York tax purposes is computed according to a formula set forth in N. Y. Tax Law §210.3 (McKinney Supp. 1983-1984). The percentage is, basically, the average of the percentages of the corporation’s property situated, income earned, and payroll distributed within the State.
More precisely, Westinghouse Export’s reported income for 1972 was $25,987,000. The amount of the deemed distribution for 1972 was $12,956,500. App. 43.
Westinghouse Export’s reported income for 1973 was $57,948,738. The amount of the deemed distribution for 1973 was $29,838,006. Ibid.
The Tax Commission was willing to allow Westinghouse a $2,569.77 credit for the 4.771297% of Westinghouse Export’s 1972 receipts attributable to goods shipped from New York ports, and a $6,098.22 credit for the 5.523182% of the DISC’S 1973 receipts attributable to New York shipments. Id., at 46.
Hypothetical examples demonstrate that similarly situated corporations, each operating a wholly owned DISC, would face different tax assessments in New York depending on the location from which the DISC shipped its exports. For a parent corporation that has an income of $10,000, a wholly owned DISC with accumulated income of $500, and a New York business allocation percentage of 40%, and assuming an applicable New York tax rate of 10%, Table A shows the difference in New York tax liability in situations where the DISC ships 100%, 50%, or 0% of its exports from locations in New York:
TABLE A
% of DISC Shipment from New York 100% 50%_0%
Parent’s Income $10,000 $10,000 $10,000
DISC Accumulated Income 500 500 500
Consolidated Income 10,500 10,500 10,500
New York Business Allocation % 40% 40% 40%
Income Taxable by New York 4,200 4,200 4,200
New York Tax Rate 10% 10% 10%
Tax Liability (Pre-Credit) 420 420 420
DISC Credit Allowed 14_7_0_
Final Tax Assessment 406 413 420
The DISC credit allowed is computed by multiplying the percentage of the DISC’s export revenues derived from New York shipments (100%, 50% or 0%) by the parent’s New York business allocation percentage (40%); multiplying that product by the parent’s New York tax rate (10%); multiplying that product by the credit percentage (70%); and, finally, multiplying that product by the amount of the accumulated DISC income attributable to the parent ($500).
We are not unmindful of one factor that results when a corporation is induced to move more of its export business into the State of New York: the parent’s business allocation percentage will be adjusted upward to reflect the increased percentage of DISC activity in the State. The increased tax liability will more than offset the increased credit, so that the parent’s tax liability to the State of New York, in absolute terms, increases. The parent’s effective New York tax rate, however, decreases as its DISC does a greater percentage of its shipping from New York. In the next example, each parent is assumed to do 40% of its own business from New York, so that $4,000 of its income is attributable to New York activity. Each DISC has $500 of accumulated income, but differs from the others in terms of the percentage of its income that results from shipping exports from New York ports. Assuming that the same amount of payroll and property are required to generate each dollar of the DISC’S income, the business allocation percentage increases proportionately as the percentage of the DISC’S income derived from New York shipping activity increases:
TABLE B
% of DISC Shipment from New York 100% 50%_0%
Parent’s Income $10,000 $10,000 $10,000
DISC Accumulated Income 500 500 500
Consolidated Income 10,500 10,500 10,500
New York Business Allocation % 42.86% 40.48% 38.10%
Income Taxable by New York 4,500 4,250 4,000
New York Tax Rate 10% 10% 10%
Tax Liability (Pre-Credit) 450 425 400
DISC Credit Allowed 15 _7_ _0_
Final Tax Assessment 435 418 400
Effective Tax Rate on Income Taxable in New York 9.67% 9.84% 10%
The third example demonstrates the most pernicious effect of the credit scheme. In this example, each parent and its DISC maintain the same amount of business in New York as do the other parent-DISC organizations, but the DISCs differ with respect to the amount of export shipping they do from outside New York. Each parent has $10,000 of income and each does 40% of its own business in New York. In addition, each DISC ships the goods that account for $3,000 of its income from New York. The only difference among the three parent-DISC organizations is the amount of DISC activity each conducts outside New York. As the DISC conducts a greater amount of shipping from outside New York, the DISC export credit allowed the parent decreases. Thus, New York lowers the incentive it awards for in-state DISC activity as the DISC increases its out-of-state activity:
TABLE C
% of DISC Shipment from New York 100% 75% 60%
DISC Accumulated Income from New York Shipments $3,000 $3,000 $3,000
DISC Accumulated Income from Shipments from Other States _0_ 1,000 2,000
Total DISC Accumulated Income 3,000 4,000 5,000
Parent’s Income 10,000 10,000 10,000
Consolidated Income 13,000 14,000 15,000
New York Business Allocation % 53.85%
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Ginsburg
delivered the opinion of the Court.
Eleven years ago, in Container Corp. of America v. Franchise Tax Bd., 463 U. S. 159 (1983), this Court upheld California’s income-based corporate franchise tax, as applied to a multinational enterprise, against a comprehensive challenge made under the Due Process and Commerce Clauses of the Federal Constitution. Container Corp. involved a corporate taxpayer domiciled and headquartered in the United States; in addition to its stateside components, the taxpayer had a number of overseas subsidiaries incorporated in the countries in which they operated. The Court’s decision in Container Corp. did not address the constitutionality of California’s taxing scheme as applied to “domestic corporations with foreign parents or [to] foreign corporations with either foreign parents or foreign subsidiaries.” Id., at 189, n. 26. In the consolidated cases before us, we return to the taxing scheme earlier considered in Container Corp. and resolve matters left open in that case.
The petitioner in No. 92-1384, Barclays Bank PLC (Bar-clays), is a United Kingdom corporation in the Barclays Group, a multinational banking enterprise. The petitioner in No. 92-1839, Colgate-Palmolive Co. (Colgate), is the United States-based parent of a multinational manufacturing and sales enterprise. Each enterprise has operations in California. During the years here at issue, California determined the state corporate franchise tax due for these operations under a method known as “worldwide combined reporting.” California’s scheme first looked to the worldwide income of the multinational enterprise, and then attributed a portion of that income (equal to the average of the proportions of worldwide payroll, property, and sales located in California) to the California operations. The State imposed its tax on the income thus attributed to Barclays’ and Colgate’s California business.
Barclays urges that California’s tax system distinctively burdens foreign-based multinationals and results in double international taxation, in violation of the Commerce and Due Process Clauses. Both Barclays and Colgate contend that the scheme offends the Commerce Clause by frustrating the Federal Government’s ability to “speak with one voice when regulating commercial relations with foreign governments.” Japan Line, Ltd. v. County of Los Angeles, 441 U. S. 434, 449 (1979) (internal quotation marks omitted). We reject these arguments, and hold that the Constitution does not. impede application of California’s corporate franchise tax to Barclays and Colgate. Accordingly, we affirm the judgments of the California Court of Appeal.
I
A
The Due Process and Commerce Clauses of the Constitution, this Court has held, prevent States that impose an income-based tax on nonresidents from “tax[ing] value earned outside [the taxing State’s] borders.” ASARCO Inc. v. Idaho Tax Comm’n, 458 U. S. 307, 315 (1982). But when a business enterprise operates in more than one taxing jurisdiction, arriving at “precise territorial allocations of ‘value’ is often an elusive goal, both in theory and in practice.” Container Corp., 463 U. S., at 164. Every method of allocation devised involves some degree of arbitrariness. See id., at 182.
One means of deriving locally taxable income, generally used by States that collect corporate income-based taxes, is the “unitary business” method. As explained in Container Corp., unitary taxation “rejects geographical or transactional accounting,” which is “subject to manipulation” and does not fully capture “the' many subtle and largely unquantifiable transfers of value that take place among the components of a single enterprise.” Id., at 164-165. The “unitary bu'siness/formula apportionment” method
“calculates the local tax base by first defining the scope of the ‘unitary business’ of which the taxed enterprise’s activities in the taxing jurisdiction form one part, and then apportioning the total income of that ‘unitary business’ between the taxing jurisdiction and the rest of the world on the basis of a formula taking into account objective measures of the corporation’s activities within and without the jurisdiction.” Id., at 165.
During the income years at issue in these cases — 1977 for Barclays, 1970-1973 for Colgate — California assessed its corporate franchise tax by employing a “worldwide combined reporting” method. California’s scheme required the taxpayer to aggregate the income of all corporate entities composing the unitary business enterprise, including in the aggregation both affiliates operating abroad and those operating within the United States. Having defined the scope of the “unitary business” thus broadly, California used a long-accepted method of apportionment, commonly called the “three-factor” formula, to arrive at the amount of income attributable to the operations of the enterprise in California. Under the three-factor formula, California taxed a percentage of worldwide income equal to the arithmetic average of the proportions of worldwide payroll, property, and sales located inside the State. Cal. Rev. & Tax. Code Ann. § 25128 (West 1992). Thus, if. a unitary business had 8% of its payroll, 3% of its property, and 4% of its sales in California, the State took the average — 5%—and imposed its tax on that percentage of the business’ total income.
B
The corporate income tax imposed by the United States employs a “separate accounting” method, a means of apportioning income among taxing sovereigns used by all major developed nations. In contrast to combined reporting, separate accounting treats each corporate entity discretely for the purpose of determining income tax liability.
Separate accounting poses the risk that a conglomerate will manipulate transfers of value among its components to minimize its total tax liability. To guard against such manipulation, transactions between affiliated corporations must be scrutinized to ensure that they are reported on an “arm’s-length” basis, i. e., at a price reflecting their true market value. See 26 U. S. C. §482; Treas. Reg. § 1.482-lT(b), 26 CFR § 1.482-lT(b) (1993). Assuming that all transactions are assigned their arm’s-length values in the corporate accounts, a jurisdiction using separate accounting taxes corporations that operate within its borders only on the income those corporations recognize on their own books. See Container Corp., 463 U. S., at 185.
At one time, a number of States used worldwide combined reporting, as California did during the years at issue. In recent years, such States, including California, have modified their systems at least to allow corporate election of some variant of an approach that confines combined reporting to the United States’ “water’s edge.” See 1 Hellerstein & Hellerstein, supra n. 1, ¶ 8.16, at 8-185 to 8-187. California’s 1986 modification of its corporate franchise tax, effective in 1988, 1986 Cal. Stats., ch. 660, §6, made it nearly the last State to give way. 1 Hellerstein & Hellerstein, supra n. 1, ¶ 8.16, at 8-187.
California corporate taxpayers, under the State’s water’s edge alternative, may elect to limit their combined reporting group to corporations in the unitary business whose individual presence in the United States surpasses a certain threshold.. Cal. Rev. & Tax. Code Ann. § 25110 (West 1992); see Leegstra, Eager, & Stolte, The California Water’s-Edge Election, 6 J. St. Tax’n 195 (1987) (explaining operation of California’s water’s edge system). The 1986 amendment conditioned a corporate group’s water’s edge election on payment of a substantial fee, and allowed the California Franchise Tax Board (Tax Board) to disregard a water’s edge election under certain circumstances. In 1993, California again modified its corporate franchise tax statute, this time to allow domestic and foreign enterprises to elect water’s edge treatment without payment of a fee and without the threat of disregard. 1993 Cal. Stats., ch. 31, § 53; id., ch. 881, §22. See Cal. Rev. & Tax. Code Ann. §25110 (West Supp. 1994). The new amendments became effective in January 1994.
C
The first of these consolidated cases, No. 92-1384, is a tax refund suit brought by two members of the Barclays Group, a multinational banking enterprise. Based in the United Kingdom, the Barclays Group includes more than 220 corporations doing business in some 60 nations. The two refund-seeking members of the Barclays corporate family did business in California and were therefore subject to California’s franchise tax. Barclays Bank of California (Barcal), one of the two taxpayers, was a California banking corporation wholly owned by Barclays Bank International Limited (BBI), the second taxpayer. BBI, a United Kingdom corporation, did business in the United Kingdom and in more than 33 other nations and territories.
In computing its California franchise tax based on 1977 income, Barcal reported only the income from its own operations. BBI reported income on the assumption that it participated in a unitary business composed of itself and its subsidiaries, but not its parent corporation and the parent’s other subsidiaries. After auditing BBI’s and Barcal’s 1977 income year franchise tax returns, the Tax Board, respondent here, determined that both were part of a worldwide unitary business, the Barclays Group. Ultimately, the Tax Board assessed additional tax liability of $1,678 for BBI and $152,420 for Barcal.
Barcal and BBI paid the assessments and sued for refunds. They prevailed in California’s lower courts, but were unsuccessful in California’s Supreme Court. The California Supreme Court held that the tax did not impair the Federal Government’s ability to “speak with one voice” in regulating foreign commerce, see Japan Line, Ltd. v. County of Los Angeles, 441 U. S., at 449, and therefore did not violate the Commerce Clause. Having so concluded, the California Supreme Court remanded the case to the Court of Appeal for further development of Barclays’ claim that the compliance burden on foreign-based multinationals imposed by California’s tax violated both the Due Process Clause and the nondiscrimination requirement of the Commerce Clause. Barclay’s Bank Int’l, Ltd. v. Franchise Tax Bd., 2 Cal. 4th 708, 829 P. 2d 279, cert. denied, 506 U. S. 870 (1992). On remand, the Court of Appeal decided the compliance burden issues against Barclays, 10 Cal. App. 4th 1742, 14 Cal. Rptr. 2d 537 (3d Dist. 1992), and the California Supreme Court denied further review. The ease is therefore before us on writ of certiorari to the California Court of Appeal. 510 U. S. 942 (1993). Barclays has conceded, for purposes of this litigation, that the entire Barclays Group formed a worldwide unitary business in 1977.
The petitioner in No. 92-1839, Colgate-Palmolive Co., is a Delaware corporation headquartered in New York. Colgate and its subsidiaries doing business in the United States engaged principally in the manufacture and distribution of household and personal hygiene products. In addition, Colgate owned some 75 corporations that operated entirely outside the United States; these foreign subsidiaries also engaged primarily in the manufacture and distribution of household and personal hygiene products. When Colgate filed California franchise tax returns based on 1970-1973 income, it reported the income earned from its foreign operations on a separate accounting basis. Essentially, Colgate maintained that the Constitution compelled California to limit the reach of its unitary principle to the United States’ water’s edge. See supra, at 306. The Tax Board determined that Colgate’s taxes should be computed on the basis of worldwide combined reporting, and assessed a 4-year deficiency of $604,765. Colgate paid the tax and sued for a refund.
Colgate prevailed in the California Superior Court, which found that the Federal Government had condemned worldwide combined reporting as impermissibly intrusive upon the Nation’s ability uniformly to regulate foreign commercial relations. No. 319715 (Super. Ct. Sacramento Cty., Apr. 19, 1989) (reprinted in App. to Pet. for Cert, in No. 92-1839, pp. 88a-102a). The Court of Appeal reversed, concluding that evidence of the Federal Executive’s opposition to the tax was insufficient. 4 Cal. App. 4th 1681, 1700-1712, 284 Cal. Rptr. 780, 792-800 (3d Dist. 1991). The California Supreme Court returned the case to the Court of Appeal with instructions “to vacate its decision and to refile the opinion after modification in light of” that Court’s decision in Barclays. 9 Cal. Rptr. 2d 358, 831 P. 2d 798 (1992). In its second decision, the Court of Appeal again ruled against Colgate. 10 Cal. App. 4th 1768, 13 Cal. Rptr. 2d 761 (3d Dist. 1992). The California Supreme Court denied further review, and the case is before us on writ of certiorari to the Court of Appeal. 510 U. S. 942 (1993). Like Barclays, Colgate concedes, for purposes of this litigation, that during the years in question, its business, worldwide, was unitary.
II
The Commerce Clause expressly gives Congress power “[t]o regulate Commerce with foreign Nations, and among the several States.” U. S. Const., Art. I, § 8, cl. 3. It has long been understood, as well, to provide “protection from state legislation inimical to the national commerce [even] where Congress has not acted....” Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 769 (1945); see also South Carolina Highway Dept. v. Barnwell Brothers, Inc., 303 U. S. 177, 185 (1938) (Commerce Clause “by its own force prohibits discrimination against interstate commerce”). The Clause does not shield interstate (or foreign) commerce from its “fair share of the state tax burden.” Department of Revenue of Wash. v. Association of Wash. Stevedoring Cos., 435 U. S. 734, 750 (1978). Absent congressional approval, however, a state tax on such commerce will not survive Commerce Clause scrutiny if the taxpayer demonstrates that the tax (1) applies to an activity lacking a substantial nexus to the taxing State; (2) is not fairly apportioned; (3) discriminates against interstate commerce; or (4) is not fairly related to the services provided by the State. Complete Auto Transit, Inc. v. Brady, 430 U. S. 274, 279 (1977).
In “the unique context of foreign commerce,” a State’s power is further constrained because of “the special need for federal uniformity.” Wardair Canada Inc. v. Florida Dept. of Revenue, 477 U. S. 1, 8 (1986). “ ‘In international relations and with respect to foreign intercourse and trade the people of the United States act through a single government with unified and adequate national power.’” Japan Line, Ltd. v. County of Los. Angeles, 441 U. S., at 448, quoting Board of Trustees of Univ. of Ill. v. United States, 289 U. S. 48, 59 (1933). A tax affecting foreign commerce therefore raises two concerns in addition to the four delineated in Complete Auto. The first is prompted by “the enhanced risk of multiple taxation.” Container Corp., 463 U. S., at 185. The second relates to the Federal Government’s capacity to “‘speak with one voice when regulating commercial relations with foreign governments.’” Japan Line, 441 U. S., at 449, quoting Michelin Tire Corp. v. Wages, 423 U. S. 276, 285 (1976).
California’s worldwide combined reporting system easily meets three of the four Complete Auto criteria. The nexus requirement is met by the business all three taxpayers— Barcal, BBI, and Colgate—did in California during the years in question. See Mobil Oil Corp. v. Commissioner of Taxes of Vt., 445 U. S. 425, 436-437 (1980). The “fair apportionment” standard is also satisfied. Neither Barclays nor Colgate has demonstrated the lack of a “rational relationship between the income attributed to the State and the intrastate values of the enterprise,” Container Corp., 463 U. S., at 180-181 (internal quotation marks omitted); nor have the petitioners shown that the income attributed to California is “out of all appropriate proportion to the business transacted by the [taxpayers] in that State.” Id., at 181 (internal quotation marks omitted). We note in this regard that, “if applied by every jurisdiction,” California’s method “would result in no more than all of the unitary business’ income being taxed.” Id., at 169. And surely California has afforded Colgate and the Barclays taxpayers “protection, opportunities and benefits” for which the State can exact a return. Wisconsin v. J. C. Penney Co., 311 U. S. 435, 444 (1940); see ASARCO Inc. v. Idaho State Tax Comm’n, 458 U. S., at 315.
Barclays (but not Colgate) vigorously contends, however, that California’s worldwide combined reporting scheme violates the antidiscrimination component of the Complete Auto test. Barclays maintains that a foreign owner of a taxpayer filing a California tax return “is forced to convert its diverse financial and accounting records from around the world into the language, currency, and accounting principles of the United States” at “prohibitiv[e]” expense. Brief for Petitioner in No. 92-1384, p. 44. Domestic-owned taxpayers, by contrast, need not incur such expense because they “already keep most of their records in English, in United States currency, and in accord with United States accounting principles.” Id., at 45. Barclays urges that imposing this “prohibitive administrative burden,” id., at 43, on foreign-owned enterprises gives a competitive advantage to their United States-owned counterparts and constitutes “economic protectionism” of the kind this Court has often condemned. Id., at 43-46.
Compliance burdens, if disproportionately imposed on out-of-jurisdiction enterprises, may indeed be inconsonant with the Commerce Clause. See, e. g., Hunt v. Washington State Apple Advertising Comm’n, 432 U. S. 333, 350-351 (1977) (increased costs imposed by North Carolina statute on out-of-state apple producers “would tend to shield the local apple industry from the competition of Washington apple growers,” thereby discriminating against those growers). The factual predicate of Barclays’ discrimination claim, however, is infirm.
Barclays points to provisions of California’s implementing regulations setting out three discrete means for a taxpayer to fulfill its franchise tax reporting requirements. Each of these modes of compliance would require Barclays to gather and present much information not maintained by the unitary group in the ordinary course of business. California’s regulations, however, also provide that the Tax Board “shall consider the effort and expense required to obtain the necessary information” and, in “appropriate cases, such as when the necessary data cannot be developed from financial records maintained in the regular course of business,” may accept “reasonable approximations.” Cal. Code of Regs., Title 18, § 25137-6(e)(l) (1985). As the Court of Appeal comprehended, in determining Barclays’ 1977 worldwide income, Barclays and the Tax Board “used these [latter] provisions and [made] computations based on reasonable approximations,” 10 Cal. App. 4th, at 1756,14 Cal. Rptr. 2d, at 545, thus allowing Barclays to avoid the large compliance costs of which it complains. Barclays has not shown that California’s provision for “reasonable approximations” systematically “overtaxes” foreign corporations generally or BBI or Barcal in particular.
In sum, Barclays has not demonstrated that California’s tax system in fact operates to impose inordinate compliance burdens on foreign enterprises. Barclays’ claim of unconstitutional discrimination against foreign commerce therefore fails.
Ill
Barclays additionally argues that California’s “reasonable approximations” method of reducing the compliance burden is incompatible with due process. “Foreign multinationals,” Barclays maintains, “remain at peril in filing their tax returns because there is no standard to determine what ‘approximations’ will be accepted.” Brief for Petitioner in No. 92-1384, at 49. Barclays presents no substantive grievance concerning the treatment it has received, i. e., no example of an approximation rejected by the Tax Board as unreasonable. Barclays instead complains that “[t]he grant of standardless discretion itself violates due process,” so that the taxpayer need not show “actual harm from arbitrary application.” Ibid.
We note, initially, that “reasonableness” is a guide admitting effective judicial review in myriad settings, from encounters between the police and the citizenry, see Terry v. Ohio, 392 U. S. 1, 27 (1968) (Fourth Amendment permits police officer’s limited search for weapons in circumstances where “reasonably prudent man... would be warranted in the belief that his safety or that of others was in danger” based upon “reasonable inferences... draw[n] from the facts in light of [officer’s] experience”), to the more closely analogous federal income tax context. See, e. g., 26 U. S. C. § 162(a)(1) (allowing deductions for ordinary business expenses, including a “reasonable allowance for salaries or other compensation”); § 167(a) (permitting a “reasonable allowance” for wear and tear as a depreciation deduction); see also United States v. Ragen, 314 U. S. 513, 522 (1942) (noting that determinations “by reference to a standard of ‘reasonableness’ [are] not unusual under federal income tax laws”).
We next observe that California’s judiciary has construed the California law to curtail the discretion of California tax officials. See 10 Cal. App. 4th, at 1762, 14 Cal. Rptr. 2d, at 549 (the Tax Board must consider “regularly-maintained or other readily-accessibly corporate documents” in deciding whether the “cost and effort of producing [worldwide combined reporting] information” justifies submission of “reasonable approximations”). We note, furthermore, that California has afforded Barclays the opportunity “to clarify the meaning of the regulation^] by its own inquiry, or by resort to an administrative process.” See Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U. S. 489, 498 (1982). Taxpayers, under the State’s scheme, may seek “an advance determination” from the Tax Board regarding the tax consequences of a proposed course of action. Cal. Code of Regs., Title 18, § 25137-6(e)(2) (1985).
Rules governing international multijurisdictional income allocation have an inescapable imprecision given the complexity of the subject matter. See Container Corp., 463 U. S., at 192 (allocation “bears some resemblance... to slicing a shadow”). Mindful that rules against vagueness are not “mechanically applied” but depend, in their application, on “the nature of the enactment,” Hoffman Estates, 455 U. S., at 498, we hold that California’s scheme does not transgress constitutional limitations in this regard, and that Barclays’ due process argument is no more weighty than its claim of discrimination first placed under a Commerce Clause heading.
IV
A
Satisfied that California’s corporate franchise tax is “proper and fair” as tested under Complete Auto’s guides, see Container Corp., 463 U. S., at 184, we proceed to the “additional scrutiny” required when a State seeks to tax foreign commerce. Id., at 185. First of the two additional considerations is “the enhanced risk of multiple taxation.” Ibid.
In Container Corp., we upheld application of California’s combined reporting obligation to “foreign subsidiaries of domestic corporations,” id., at 193 (emphasis added), against a charge that such application unconstitutionally exposed those subsidiaries to a risk of multiple international taxation. Barclays contends that its situation compels a different outcome, because application of the combined reporting obligation to foreign multinationals creates a “ ‘more aggravated’ risk... of double taxation.” Brief for Petitioner in No. 92-1384, at 32, quoting Nos. 325059 and 325061 (Super. Ct. Sacramento Cty., Aug. 20, 1987) (reprinted in App. to Pet. for Cert, in No. 92-1384, p. A-26). Barclays rests its argument on the observation that “foreign multinationals typically have more of their operations and entities outside of the United States [compared to] domestic multinationals, which typically have a smaller share of their operations and entities outside of the United States.” Brief for Petitioner in No. 92-1384, at 33. As a result, a higher proportion of the income of a foreign multinational is subject to taxation by foreign sovereigns. This reality, Barclays concludes, means that for the foreign multinational, which must include all its foreign operations in the California combined reporting group, “the breadth of double taxation and the degree of burden on foreign commerce are greater than in the case of domestic multinationals.” Ibid.
We do not question Barclays’ assertion that multinational enterprises with a high proportion of income taxed by jurisdictions with wage rates, property values, and sales prices lower than California’s face a correspondingly high risk of multiple international taxation. See Container Corp., 463 U. S., at 187; cf. id., at 199-200 (Powell, J., dissenting) (describing how formulary apportionment leads to multiple taxation). Nor do we question that foreign-based multinationals have a higher proportion of such income, on average, than do their United States counterparts. But Container Corp.’s approval of this very tax, in the face of a multiple taxation challenge, did not rest on any insufficiency in the evidence that multiple taxation might occur; indeed, we accepted in that case the taxpayer’s assertion that multiple taxation in fact had occurred. Id., at 187 (“[T]he tax imposed here, like the tax in Japan Line, has resulted in actual double taxation, in the sense that some of the income taxed without apportionment by foreign nations as attributable to appellant’s foreign subsidiaries was also taxed by California as attributable to the State’s share of the total income of the unitary business of which those subsidiaries are a part.”); see also id., at 187, n. 22.
Container Corp.’s holding on multiple taxation relied on two considerations: first, that multiple taxation was not the “inevitable result” of the California tax; and, second, that the “alternative] reasonably available to the taxing State” (i. e., some version of the separate accounting/“arm’s length” approach), id., at 188-189, “could not eliminate the risk of double taxation” and might in some cases enhance that risk. Id., at 191. We underscored that “even though most nations have adopted the arm’s-length approach in its general outlines, the precise rules under which they reallocate income among affiliated corporations often differ substantially, and whenever that difference exists, the possibility of double taxation also exists.” Ibid, (emphasis added); see also id., at 192 (“California would have trouble avoiding multiple taxation even if it adopted the ‘arm’s-length’ approach....”).
These considerations are not dispositively diminished when California’s tax is applied to the components of foreign, as opposed to domestic, multinationals. Multiple taxation of such entities because of California’s scheme is not “inevitable”; the existence vel non of actual multiple taxation of income remains, as in Container Corp., dependent “on the facts of the individual case.” Id., at 188. And if, as we have held, adoption of a separate accounting system does not dispositively lessen the risk of multiple taxation of the income earned by foreign affiliates of domestic-owned corporations, we see no reason why it would do so in respect of the income earned by foreign affiliates of foreign-owned corporations. We refused in Container Corp. “to require California to give up one allocation method that sometimes results in double taxation in favor of another allocation method that also sometimes results in double taxation.” Id., at 193. The foreign domicile of the taxpayer (or the taxpayer’s parent) is a factor inadequate to warrant retraction of that position.
Recognizing that multiple taxation of international enterprise may occur whatever taxing scheme the State adopts, Justice O’Connor, dissenting in No. 92-1384, finds impermissible under “the [dormant] Foreign Commerce Clause” only double taxation that (1) burdens a foreign corporation in need of protection for lack of access to the political process, and (2) occurs “because [the State] does not conform to international practice.” Post, at 336. But the image of a politically impotent foreign transactor is surely belied by the battalion of foreign governments that has marched to Bar-clays’ aid, deploring worldwide combined reporting in diplomatic notes, amicus briefs, and even retaliatory legislation. See infra, at 324, n. 22; post, at 337. Indeed, California responded to this impressive political activity when it eliminated mandatory worldwide combined reporting. See supra, at 306. In view of this activity, and the control rein Congress holds, see infra, at 329-331, we cannot agree that “international practice” has such force as to dictate this Court’s Commerce Clause jurisprudence. We therefore adhere to the precedent set in Container Corp.
B
We turn, finally, to the question ultimately and most energetically presented: Did California’s worldwide combined reporting requirement, as applied to Barcal, BBI, and Colgate, “impair federal uniformity in an area where federal uniformity is essential,” Japan Line, 441 U. S., at 448; in particular, did the State’s taxing scheme “preven[t] the Federal Government from ‘speaking with one voice’ in international trade”? Id., at 453, quoting Michelin Tire Corp. v. Wages, 423 U. S., at 285.
1
Two decisions principally inform our judgment: first, this Court’s 1983 determination in Container Corp.; and second, our decision three years later in Wardair Canada Inc. v. Florida Dept. of Revenue, 477 U. S. 1 (1986). Container Corp. held that California’s worldwide combined reporting requirement, as applied to domestic corporations with foreign subsidiaries, did not violate the “one voice” standard. Container Corp. bears on Colgate’s case, but not Barcal’s or BBI’s, to this extent: “[T]he tax [in Container Corp.] was imposed, not on a foreign entity..., but on a domestic corporation.” 463 U. S., at 195. Other factors emphasized in Container Corp., however, are relevant to the complaints of all three taxpayers in the consolidated cases now before us. Most significantly, the Court found no “specific indications of congressional intent” to preempt California’s tax:
“First, there is no claim here that the federal tax statutes themselves provide the necessary pre-emptive force. Second, although the United States is a party to a great number of tax treaties that require the Federal Government to adopt some form of ‘arm’s-length’ analysis in taxing the domestic income of multinational enterprises, that requirement is generally waived with respect to the taxes imposed by each of the contracting nations on its own domestic corporations.... Third, the tax treaties into which the United States has entered do not generally cover the taxing activities of subnational governmental units such as States, and in none of the treaties does the restriction on ‘non-arm’s-length’ methods of taxation apply to the States. Moreover, the Senate has on at least one occasion, in considering a proposed treaty, attached a reservation declining to give its consent to a provision in the treaty that would have extended that restriction to the States. Finally,... Congress has long debated, but has not enacted, legislation designed to regulate state taxation of income.” Id., at 196-197 (footnotes and internal quotation marks omitted).
The Court again confronted a “one voice” argument in Wardair Canada Inc. v. Florida Dept. of Revenue, 477 U. S. 1 (1986), and there rejected a Commerce Clause challenge to Florida’s tax on the sale of fuel to common carriers, including airlines. Air carriers were taxed on all aviation fuel purchased in Florida, without regard to the amount the carrier consumed within the State or the amount of its in-state business. The carrier in Wardair, a Canadian airline that operated charter flights to and from the United States, conceded that the challenged tax satisfied the Complete Auto criteria and entailed no threat of multiple international taxation. Joined by the United States as amicus curiae, however, the carrier urged that Florida’s tax “threatened] the ability of the Federal Government to ‘speak with one voice.’” 477 U. S., at 9. There is “a federal policy,” the carrier asserted, “of reciprocal tax exemptions for aircraft, equipment, and supplies, including aviation fuel, that constitute the instrumentalities of international air traffic”; this policy, the carrier argued, “represents the statement that the ‘one voice’ of the Federal Government wishes to make,” a statement “threatened by [Florida’s tax].” Ibid.
This Court disagreed, observing that the proffered evidence disclosed no federal policy of the kind described and indeed demonstrated that the Federal Government intended to permit the States to impose sales taxes on aviation fuel. The international convention and resolution and more than 70 bilateral treaties on which the carrier relied to show a United States policy of tax exemption for the instrumentalities of international air traffic, the Court explained, in fact indicated far less: “[WJhile there appears to be an international aspiration on the one hand to eliminate all impediments to foreign air travel — including taxation of fuel — the law as it presently stands acquiesces in taxation of the sale of that fuel by political subdivisions of countries.” Id., at 10 (emphasis in original). Most of the bilateral agreements prohibited the Federal Government from imposing national taxes on aviation fuel used by foreign carriers, but none prohibited the States or their subdivisions from taxing the sale of fuel to foreign airlines. The Court concluded that “[b]y negative implication arising out of [these international accords,] the United States has at least acquiesced in state taxation of fuel used by foreign carriers in international travel,” and therefore upheld Florida’s tax. Id., at 12.
In both Wardair and Container Corp., the Court considered the “one voice” argument only after determining that the challenged state action was otherwise constitutional. An important premise underlying both decisions is this: Congress may more passively indicate that certain state practices do not “impair federal uniformity in an area where federal uniformity is essential,” Japan Line, 441 U. S., at 448; it need not convey its intent with the unmistakable clarity required to permit state regulation that discriminates against interstate commerce or otherwise falls short under Complete Auto inspection. See, e. g., Maine v. Taylor, 477 U. S. 131, 139 (1986) (requiring an “unambiguous indication of congressional intent” to insulate “otherwise invalid state legislation” from judicial dormant Commerce Clause scrutiny); Northwest Airlines, Inc. v. County of Kent, 510 U. S. 355, 373, and n. 19 (1994) (same).
2
As in Container Cory, and Wardair, we
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Powell
delivered the opinion of the Court.
Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against handicapped persons in any program or activity receiving federal financial assistance. The United States provides financial assistance to airport operators through grants from a Trust Fund created by the Airport and Airway Development Act of 1970. The Government also operates a nationwide air traffic control system. This case presents the question whether, by virtue of such federal assistance, §504 is applicable to commercial airlines.
I
Respondents successfully challenged regulations promulgated by the Civil Aeronautics Board (CAB) to implement §504 of the Rehabilitation Act of 1973, 87 Stat. 390, as amended; 29 U. S. C. § 790 et seq. (1982 ed. and Supp. II). To understand respondents’ arguments, it is necessary to review the process by which the regulations were promulgated.
A. The Rulemaking Process
Section 504 provides:
“No otherwise qualified handicapped individual in the United States . . . shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assist-ance_” 29 U. S. C. §794.
The statute did not specifically provide for administrative implementation. In 1976, however, the President issued Executive Order No. 11914, 3 CFR 117 (1976-1980), calling on the Secretary of Health, Education, and Welfare to coordinate rulemaking under § 504 by all federal agencies. At that time two federal agencies were principally concerned with aviation: the Federal Aviation Administration (FAA), which is primarily concerned with the Air Traffic Control System and the safety of airline operations, including airports, and CAB, which was primarily concerned with economic regulation of the airline industry. Because § 504 had been modeled after Title VI of the Civil Rights Act of 1964, 42 U. S. C. § 2000d et seq., both FAA and CAB patterned their proposed rules after the regulations issued to implement Title VI.
1. The Notice of Proposed Rulemaking Under §504
CAB issued a Notice of Proposed Rulemaking on June 6, 1979. CAB concluded that its authority under §504 was limited to those few airlines that receive a subsidy under § 406(b) or §419 of the Federal Aviation Act. CAB announced its intention, however, to go beyond its § 504 jurisdiction in order to regulate the activities of all commercial airlines. CAB relied on its authority under § 404 of the Federal Aviation Act of 1958, 49 U. S. C. App. § 1374.
Section 404 contains two provisions relevant here: § 404(a)(1), requiring all air carriers to “provide safe and adequate service, equipment, and facilities,” and § 404(b), prohibiting carriers from “subjecting any particular person ... to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever.” CAB explained that “the proposed rules would emphasize that the handicapped are protected by the adequacy of service and antidiscrimination provisions of Section 404 . . . which are applicable to all air carriers, whether or not receiving Federal financial assistance.” 44 Fed. Reg. 32401-32402 (1979). Somewhat inexplicably, CAB relied on both provisions of § 404 taken together to support its regulatory authority over the on-board activities of air carriers, even though it was aware that, under the Airline Deregulation Act of 1978, the antidiscrimination provision of § 404(b) would lapse as of January 1,1983, and only § 404(a)(1), requiring “safe and adequate service,” would remain in effect.
2. The Final Regulations
CAB received public comment on the proposed regulations. Several airlines and the Air Transport Association challenged CAB’s regulatory jurisdiction over the airlines. In the interim, Executive Order No. 12250, 3 CFR 298 (1981), transferred responsibility for coordinating the administration of various civil rights statutes, including § 504, from the Secretary of Health and Human Services to the Attorney General. After public comment and consultation with the Attorney General, CAB issued final regulations. 14 CFR pt. 382 (1986), 47 Fed. Reg. 25948 et seq. (1982).
The regulations have three subparts. Subpart A prohibits discrimination in air transportation against qualified handicapped persons. Subpart B contains specific, detailed requirements that must be followed by all air carriers in providing service to the handicapped. Subpart C sets forth compliance and enforcement mechanisms. As to all three subparts, CAB adhered to its original position that § 504 supported regulatory jurisdiction only over those carriers that receive funds under § 406 or § 419. CAB concluded, however, that the surviving portion of §404 — the “safe and adequate service” clause of § 404(a)(1) — did not support imposition of the specific provisions of subparts B and C on nonsubsidized carriers. Thus, those subparts would apply only to the extent authorized by § 504, that is, to carriers receiving subsidies under §406 or §419. CAB concluded, however, that it had authority to extend the reach of subpart A to all air carriers by virtue of § 404(a)(l)’s “safe and adequate service” clause. The Attorney General approved these regulations.
B. The Court of Appeals Decision
Respondents Paralyzed Veterans of America and two other organizations representing handicapped individuals (collectively PVA) brought this action in the Court of Appeals for the District of Columbia Circuit. PVA challenged the substance of some of the regulations, as well as CAB’s conclusion regarding its rulemaking authority under §504. Only the latter claim is before us. On that issue, PVA contended that CAB’s interpretation of the scope of its rule-making authority under § 504 was inconsistent with congressional intent and controlling legal precedent.
The Court of Appeals agreed with PVA’s position. Paralyzed Veterans of America v. CAB, 243 U. S. App. D. C. 237, 752 F. 2d 694 (1985). In the court’s view, § 504 gave CAB jurisdiction over all air carriers by virtue of the extensive program of federal financial assistance to airports under the Airport and Airway Development Act of 1970, 49 U. S. C. §1714, as amended (1976 ed., Supp. V). The Court of Appeals found an additional source of financial assistance to airlines in the form of the air traffic control system in place at all major airports. The court vacated the regulations to the extent that their application was limited to carriers receiving funds under § 406 or § 419. It instructed DOT — CAB’s successor agency after CAB was disbanded— to issue new regulations that would apply to all commercial airlines.
We granted certiorari to resolve the question of the scope of DOT’s regulatory jurisdiction under § 504. 474 U. S. 918 (1985). We now reverse.
II
It may be helpful briefly to explain the limited nature of the question before us. This case does not present any challenge to CAB’s interpretation of the scope of its regulatory jurisdiction under § 504. Nor is there any challenge to the application of subpart A — the general antidiscrimination regulation — to all commercial airlines. The only issue before us is the Court of Appeals’ conclusion that § 504 applies to commercial airlines as recipients of federal financial assistance.
Section 504 prohibits discrimination against any qualified handicapped individual under “any program or activity receiving Federal financial assistance.” We examine first the grants of federal funds to airport operators, which clearly are federal financial assistance, to determine whether it fairly can be said that commercial airlines “receive” these grants.
A
The starting point of any inquiry into the application of a statute is the language of the statute itself. Reiter v. Sonotone Corp., 442 U. S. 330, 337 (1979). By its terms § 504 limits its coverage to the “program or activity” that “receives]” federal financial assistance. At the outset, therefore, § 504 requires us to identify the recipient of the federal assistance. We look to the terms of the underlying grant statute.
The grant statutes relied on by the Court of Appeals are the Airport and Airway Improvement Act of 1982 (1982 Act), 49 U. S. C. App. § 2201 et seq., and its predecessor statutes, particularly the Airport and Airway Development Act of 1970 (1970 Act), Pub. L. 91-258, 84 Stat. 219 et seq. (formerly codified at 49 U. S. C. § 1701 et seq. (1976 ed.)). The 1970 Act established the Airport and Airway Trust Fund, appropriations from which are used to fund airport development. The purpose of disbursements from the Trust Fund is to establish “a nationwide system of public airports adequate to meet the present and future needs of civil aeronautics.” 84 Stat. 224. Congress directed the Secretary of Transportation to prepare a national airport system plan, id., at 221, and required airport project applications to be consistent with that plan. Id., at 226. In the 1982 Act Congress authorized disbursements from the Trust Fund for the Airport Improvement Program (AIP). Under AIP airport operators submit project grant applications for “airport development or airport planning.” 49 U. S. C. App. § 2201(a). Funds are disbursed for a variety of airport construction projects: e. g., land acquisition, 14 CFR §151.73 (1986); runway paving, § 151.77; and buildings, sidewalks, and parking, § 151.93. The use of the Trust Fund is strictly limited to projects that concern airports. See, e. g., § 151.89 (authorizing road construction) (“Only those airport entrance roads that are definitely needed and are intended only as a way in and out of the airport are eligible”).
It is not difficult to identify the recipient of federal financial assistance under these Acts: Congress has made it explicitly clear that these funds are to go to airport operators. Not a single penny of the money is given to the airlines. Thus, the recipient for purposes of § 504 is the operator of the airport and not its users.
Congress limited the scope of § 504 to those who actually “receive” federal financial assistance because it sought to impose § 504 coverage as a form of contractual cost of the recipient’s agreement to accept the federal funds. “Congress apparently determined that it would require contractors and grantees to bear the costs of providing employment for the handicapped as a quid pro quo for the receipt of federal funds.” Consolidated Rail Corporation v. Darrone, 465 U. S. 624, 633, n. 13 (1984). We relied on this same rationale in Grove City College v. Bell, 465 U. S. 555 (1984), where we noted that the recipient of the federal assistance — the college — was free to terminate its participation in the federal grant program and thus avoid the requirements of Title IX. Id., at 565, n. 13. Under the program-specific statutes, Title VI, Title IX, and § 504, Congress enters into an arrangement in the nature of a contract with the recipients of the funds: the recipient’s acceptance of the funds triggers coverage under the nondiscrimination provision. See Soberal-Perez v. Heckler, 717 F. 2d 36, 41 (CA2 1983) (“This emphasis upon the contractual nature of the receipt of federal moneys in exchange for a promise not to discriminate is still another reason to conclude that Title VI does not cover direct benefit programs since these programs do not entail any such contractual relationship”), cert. denied, 466 U. S. 929 (1984). By limiting coverage to recipients, Congress imposes the obligations of § 504 upon those who are in a position to accept or reject those obligations as a part of the decision whether or not to “receive” federal funds. In this case, the only parties in that position are the airport operators.
B
Respondents attempt to avoid the straightforward conclusion that airlines are not recipients within the meaning of § 504 by arguing that airlines are “indirect recipients” of the aid to airports. They contend that the money given to airports is simply converted by the airports into nonmoney grants to airlines. Under this reasoning, federal assistance is disbursed to airport operators in the form of cash. The airport operators convert the cash into runways and give the federal assistance — now in the form of a runway — to the airlines. In support of this position, respondents point to the fact that many of the structures constructed at airports with aid from the Trust Fund are particularly beneficial to airlines, e. g., runways, taxiways, and ramps. They also find support for their position in Grove City’s recognition that federal financial assistance could be either direct or indirect. This argument confuses intended beneficiaries with intended recipients. While we observed in Grove City that there is no “distinction between direct and indirect aid” and that “[t]here is no basis in the statute for the view that only institutions that themselves apply for federal aid or receive checks directly from the Federal Government are subject to regulation,” we made these statements in the context of determining whom Congress intended to receive the federal money, and thereby be covered by Title IX. 465 U. S., at 564. It was clear in Grove City that Congress’ intended recipient was the college, not the individual students to whom the checks were sent from the Government. It was this unusual disbursement pattern of money from the Government through an intermediary (the students) to the intended recipient that caused us to recognize that federal financial assistance could be received indirectly. While Grove City stands for the proposition that Title IX coverage extends to Congress’ intended recipient, whether receiving the aid directly or indirectly, it does not stand for the proposition that federal coverage follows the aid past the recipient to those who merely benefit from the aid. In this case, it is clear that the airlines do not actually receive the aid; they only benefit from the airports’ use of the aid.
Respondents do not contend that airlines actually receive or are intended to receive money from the Trust Fund. Nor can they argue that the airport operators are, like the students in Grove City, mere conduits of the aid to its intended recipient, since, unlike the students, the airports are the intended recipients of the funds. Rather, respondents assert that the economic benefit to airlines from the aid to airports is a form of federal financial assistance. This position ignores the very distinction made by Congress in §504, and recognized in Grove City: The statute covers those who receive the aid, but does not extend as far as those who benefit from it. In Grove City we recognized that most federal assistance has “economic ripple effects.” We rejected the argument that those indirect economic benefits can trigger statutory coverage. Id., at 572. Congress tied the regulatory authority to those programs or activities that receive federal financial assistance; the key is to identify the recipient of that assistance. In this case, it is clear that the recipients of the financial assistance extended by Congress under the Trust Fund are the airport operators.
c
By tying the scope of §504 to economic benefit derived from Trust Fund expenditures, respondents would give § 504 almost limitless coverage. Congress’ purpose in passing the Acts and establishing the Trust Fund was to confer economic benefits on a large number of persons and businesses. As the House Committee on Interstate and Foreign Commerce explained:
“In addition to the actual users of the airport and airway system — such as airline passengers, general aviation, including private and business aviation operations, air freight forwarders, individual corporate and private shippers, etc. — there are others who benefit substantially from aviation; primarily, perhaps, the military should be considered. From a civilian standpoint those who benefit indirectly include the aircraft manufacturers and all of those whose employment is directly or indirectly related to aviation. To illustrate, an aircraft or aircraft component manufacturer may employ thousands of persons who never fly, yet those persons’ economic lives depend entirely on aviation. More indirectly, but still to be considered, are those who make their livelihood by providing services for the manufacturers’ employees. The employees of such corporations indirectly support such nonaviation interests such as real estate brokers and builders, doctors, dentists, school teachers, etc. This is brought forth here to establish the fact that air transportation in a true sense touches every American home, whether those in the home ever fly or not.” H. R. Rep. No. 91-601, p. 6 (1969).
Even if the reach of § 504 were limited to those whom Congress specifically intended to benefit, the scope of the statute would be broad indeed, covering whole classes of persons and businesses with only an indirect relation to aviation. The statutory “limitation” on § 504’s coverage would virtually disappear, a result Congress surely did not intend.
Respondents contend that distinctions can be drawn among classes of beneficiaries under the 1982 and 1970 Acts. In particular, they assert that the ultimate beneficiaries under the Acts are the passengers, while the economic benefit derived by the airlines is intended to aid the airlines in benefiting the passengers. Section 504 provides no basis for this distinction. Nor can we find a basis in the Trust Fund Acts for preferring passengers over other beneficiaries. Nowhere has Congress expressed a special intent to benefit passengers. Nor has it indicated that the economic benefit to airlines, either because it was more direct or for any other reason, makes them a recipient of federal financial assistance. Rather, Congress recognized a need to improve airports in order to benefit a wide variety of persons and entities, all of them classified together as beneficiaries. Congress did not set up a system where passengers were the primary or direct beneficiaries, and all others benefited by the Acts are indirect recipients of the financial assistance to airports.
In almost any major federal program, Congress may intend to benefit a large class of persons, yet it may do so by funding — that is, extending federal financial assistance to — a limited class of recipients. Section 504, like Title IX in Grove City, draws the line of federal regulatory coverage between the recipient and the beneficiary.
I — I I — I HH
The Court of Appeals found that airports and airlines are “inextricably intertwined” and that the “indissoluble nexus between them is the provision of commercial air transportation.” 243 U. S. App. D. C., at 257, 752 F. 2d, at 714. For these reasons, the Court of Appeals concluded that commercial airlines are part of a federally assisted program of “commercial air transportation” because they make use of airports that accept federal funds, and because airports are “indispensable” to air travel.
We find this reasoning overbroad and unpersuasive. The Court of Appeals defined “program or activity” in part by reference to who is benefited by the financial assistance to airports. See id., at 257-258, 752 F. 2d, at 714-715. As shown above, regulatory coverage tied to the scope of the intended benefits of the Trust Fund Acts is inconsistent with congressional intent in passing § 504. We recognized in Alexander v. Choate, 469 U. S. 287, 299 (1985), that “[a]ny interpretation of §504 must ... be responsive to two powerful but countervailing considerations — the need to give effect to the statutory objectives and the desire to keep § 504 within manageable bounds.” The Court of Appeals’ reasoning extends § 504 beyond its bounds. Under the Court of Appeals’ view various industries and institutions would become part of a federally assisted program or activity, not because they had received federal financial assistance, but because they are “inextricably intertwined” with an institution that has. For example, Congress, with the assistance of the States, has engaged in a mammoth program of interstate highway construction and maintenance. See the Federal-Aid Highway Act of 1956, Pub. L. 627, 70 Stat. 374. Congress in this program used a Trust Fund approach similar to the Airport and Airway Development Act of 1970. If we accepted the Court of Appeals’ construction of “program or activity,” we would also be compelled to conclude that industries that depend on the federally funded highways for their existence, such as trucking firms and delivery services, are part of a program or activity of national highway transportation. The same could be said of federally supported port facilities. This interpretation of § 504 would give it a scope broader than its language implies, and one never intended by Congress.
The Court of Appeals’ reliance on Grove City in support of its definition of the relevant program or activity is misplaced. In Grove City, despite the arguably “indissoluble nexus” among the various departments of a small college, we concluded that only the financial aid program could be subjected to Title IX. In any analogy between Grove City and this case, airport operators would be placed in the position of the college. It is readily apparent that our conclusion in Grove City that only a portion of the college was covered by Title IX cannot support the conclusion that commercial air transportation — a concept much larger than the airports — is the program or activity covered by § 504. The Court of Appeals’ attempt to fuse airports and airlines into a single program or activity is unavailing. It is by reference to the grant statute, and not to hypothetical collective concepts like commercial aviation or interstate highway transportation, that the relevant program or activity is determined.
<1
The Court of Appeals also held that the federally provided air traffic control system is a form of federal financial assistance to airlines. The Federal Government spends some $2 billion annually to run this system 24 hours a day nationwide and in various spots around the world. The air traffic controllers are federal employees, and the Federal Government finances operation of the terminal control facilities. In short, the air traffic control system is “owned and operated” by the United States. For that reason, the air traffic control system is not “federal financial assistance” at all. Rather, it is a federally conducted program that has many beneficiaries but no recipients. The legislative history of Title VI makes clear that such programs do not constitute federal financial assistance to anyone. As then-Deputy Attorney General Katzenbach explained:
“Activities wholly carried out by the United States with Federal funds, such as river and harbor improvements and other public works, defense installations, veterans’ hospitals, mail service, etc., are not included in the list [of federally assisted programs]. Such activities, being wholly owned by, and operated by or for, the United States, cannot fairly be described as receiving Federal ‘assistance.’ While they may result in general economic benefit to neighboring communities, such benefit is not considered to be financial assistance to a program or activity within the meaning of title VI.” 110 Cong. Rec. 13380 (1964).
That reasoning, of course, applies with equal force to § 504. The federal air traffic control system is a public program that does not involve “financial assistance” to anyone.
V
The judgment of the Court of Appeals is accordingly reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
As used herein, the term “airport operator” refers to the various entities that own or manage airports and that have authority to apply for planning or development grants from the Trust Fund. “Commercial airlines” refers to all passenger carriers formerly certificated by the Civil Aeronautics Board.
This responsibility later was transferred to the Secretary of Health and Human Services when the Department of Health, Education and Welfare was divided into the Department of Education and the Department of Health and Human Services. See The Department of Education Organization Act, Pub. L. 96-88, 93 Stat. 669, codified at 20 U. S. C. § 3401 et seq.
The FAA became part of the Department of Transportation (DOT) in 1966. CAB later was disbanded and its functions largely transferred to DOT under the Civil Aeronautics Board Sunset Act of 1984, Pub. L. 98-443, 98 Stat. 1703 et seq.
Title VI is the congressional model for subsequently enacted statutes prohibiting discrimination in federally assisted programs or activities. We have relied on case law interpreting Title VI as generally applicable to later statutes. See Grove City College v. Bell, 465 U. S. 555, 566 (1984); see also S. Rep. No. 93-1297, p. 39 (1974).
Notice of Proposed Rulemaking, Part 382, Nondiscrimination on the Basis of Handicap, 44 Fed. Reg. 32 401 (1979).
49 U. S. C. App. §§ 1376(b) and 1389 (1982 ed. and Supp. II). Section 406 created a program designed to guarantee the air service necessary to transport mail to small communities. That program was terminated in 1982. In 1978, CAB began operating the “section 419 program” in order to subsidize small community and other essential air service that would not otherwise be provided. See Airline Deregulation Act of 1978, Pub. L. 95-504, § 33, 92 Stat. 1732. This program will operate through 1988.
CAB’s decision not to regulate the on-board activities of commercial airlines was consistent with administrative practice under Title VI, which prohibits racial discrimination in any program or activity receiving federal financial assistance. None of the agencies concerned with aviation attempted to regulate the on-board activities of commercial airlines under Title VI. Thus, the consistent administrative interpretation of the program-specific language of Title VI and § 504 has been that it does not cover commercial airlines, unless the airline itself received subsidies from CAB. See 14 CFR § 379.2 (1965), 29 Fed. Reg. 19287 (1964) (CAB); 14 CFR § 15.5(c) (1965), 29 Fed. Reg. 19283 (1964) (FAA). . That interpretation of the statutes by the agencies charged with their enforcement in the area of aviation is entitled to deference. Ford Motor Credit Co. v. Milhollin, 444 U. S. 555, 566 (1980).
Pub. L. 95-504, § 40(a), 92 Stat. 1705, 1744 (codified at 49 U. S. C. App. §1551 (a)(2)(B)).
The other respondents are the American Council of the Blind and the American Coalition of Citizens with Disabilities.
The 1970 Act has been replaced with the Airport and Airway Improvement Act of 1982, 49 U. S. C. App. § 2201 et seq.
See n. 3, supra.
This is not to say that Congress could not give federal financial assistance in the form of property improvements, such as a runway. Although the word “financial” usually indicates “money,” federal financial assistance may take nonmoney form. Cf. Grove City, 465 U. S., at 564-565. Again, the relevant starting point is the grant statute. If it extends money, then the recipient for the purposes of § 504 is the entity that receives the money. If the grant statute extends something other than money, then the recipient is the entity that receives whatever thing of value is extended by the grant statute.
For example, Congress recognized that improved airports would not only satisfy the growing needs of commercial aviation, but also would help foster the significant growth that other areas of civil aviation were experiencing, including air carriers and passengers, air cargo carriers, air taxis, private business flying, and private recreational flying. H. R. Rep. No. 91-601, p. 5 (1969). In short, Congress intended to benefit interstate commerce in general through the means of aiding airports. In the 1970 Act, for example, Congress justified the expenditure because “substantial expansion and improvement of the airport and airway system is [sic] required to meet the demands of interstate commerce, the postal service, and the national defense.” 84 Stat. 219. The 1982 Act contains a similar statement of purpose. 49 U. S. C. App. § 2201(a)(2).
The Court of Appeals concluded that the air traffic control system constituted federal financial assistance, without specifically concluding that the on-board activities of commercial airlines are a program or activity receiving that assistance. Respondents have suggested that we do not need to reach the question whether the air traffic control system is federal financial assistance. We disagree. If we did not reach the issue, then on remand DOT would be required to formulate its policies in accordance with the conclusion of the Court of Appeals.
The Court of Appeals reasoned that the air traffic control system constitutes federal financial assistance because the Federal Government is providing the airlines the services of federal personnel. That reasoning is inconsistent with the longstanding and consistent interpretation of the relevant agencies. FAA, like other agencies, originally promulgated regulations implementing Title VI that defined federal financial assist-anee in a way that allowed for nonmoney assistance. In its definition section, FAA included among possible forms of federal assistance the “detail of Federal personnel.” 14 CFR § 15.23(3) (1965), 29 Fed. Reg. 19286 (1964). DOT’s current Title VI regulations use the same phrase. 49 CFR § 21.23(e)(3) (1985). The air traffic control system does not involve the “detail” of federal personnel; there is, in fact, no other air traffic control entity to which federal personnel can be “detailed” — the system is self-contained. In 1978, pursuant to its responsibility to coordinate the implementation of regulations under § 504 by federal agencies, the Department of Health, Education, and Welfare (HEW) published guidelines that substituted the word “services” for “detail.” 43 Fed. Reg. 2137. But at the same time HEW explained that it did not intend any substantive change in the definitions:
“Despite some difference in the wording of the definitions of federal financial assistance in the regulations implementing section 504 and title VI, the substance of the two definitions does not differ.” Id., at 2132.
Later, the Department of Justice was given the task of coordinating the regulations under various civil rights laws, including § 504. Exec. Order No. 12250, 3 CFR 298 (1980). It retained the HEW definition of federal financial assistance that included “[sjervices of Federal personnel.” 28 CFR § 41.3(e)(2) (1985). Since the first regulations under Title VI, the interpretation of federal financial assistance has been that the detail, or loan, of federal personnel can constitute federal assistance. “Services” in this context means “detail.” No such selection of federal personnel for a particular duty is involved here. The Court of Appeals erred in ignoring this longstanding administrative interpretation. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 844 (1984). We note that any other interpretation would give almost limitless meaning to the term “federal financial assistance.”
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
MR. Justice Rehnquist
delivered the opinion of the Court.
Respondent Metropolitan Edison Co. is a privately owned and operated Pennsylvania corporation which holds a certificate of public convenience issued by the Pennsylvania Public Utility Commission empowering it to deliver electricity to a service area which includes the city of York, Pa. As a condition of holding its certificate, it is subject to extensive regulation by the Commission. Under a provision of its general tariff filed with the Commission, it has the right to discontinue service to any customer on reasonable notice of nonpayment of bills.
Petitioner Catherine Jackson is a resident of York, who has received electricity in the past from respondent. Until September 1970, petitioner received electric service to her home in York under an account with respondent in her own name. When her account was terminated because of asserted delinquency in payments due for service, a new account with respondent was opened in the name of one James Dodson, another occupant of the residence, and service to the residence was resumed. There is a dispute as to whether payments due under the Dodson account for services provided during this period were ever made. In August 1971, Dodson left the residence. Service continued thereafter but concededly no payments were made. Petitioner states that no bills were received during this period.
On October 6, 1971, employees of Metropolitan came to the residence and inquired as to Dodson’s present address. Petitioner stated that it was unknown.to her. On the following day, another employee visited the residence and informed petitioner that the meter had been tampered with so as not to register amounts used. She disclaimed knowledge of this and requested that the service account for her home be shifted from Dodson’s name to that of one Robert Jackson, later identified as her 12-year-old son. Four days later on October 11, 1971, without further notice to petitioner, Metropolitan employees disconnected her service.
Petitioner then filed suit against Metropolitan in the United States District Court for the Middle District of Pennsylvania under the Civil Rights Act of 1871, 42 U. S. C. § 1983, seeking damages for the termination and an injunction requiring Metropolitan to continue providing power to her residence until she had been afforded notice, a hearing, and an opportunity to pay any amounts found due. She urged that under state law she had an entitlement to reasonably continuous electrical service to her home and that Metropolitan’s termination of her service for alleged nonpayment, action allowed by a provision of its general tariff filed with the Commission, constituted “state action” depriving her of property in violation of the Fourteenth Amendment’s guarantee of due process of law.
The District Court granted Metropolitan’s motion to dismiss petitioner’s complaint on the ground that the termination did not constitute state action and hence was not subject to judicial scrutiny under the Fourteenth Amendment. On appeál, the United States Court of Appeals for the Third Circuit affirmed, also finding an absence of state action. We granted certiorari to review this judgment.
The Due Process Clause of the Fourteenth Amendment provides: “[N]or shall any State deprive any person of life, liberty, or property, without due process of law.” In 1883, this Court in the Civil Rights Cases, 109 U. S. 3, affirmed the essential dichotomy set forth in that Amendment between deprivation by the State, subject to scrutiny under its provisions, and private conduct, “however discriminatory or wrongful,” against which the Fourteenth Amendment offers no shield. Shelley v. Kraemer, 334 U. S. 1 (1948).
We have reiterated that distinction on more than one occasion since then. See, e. g., Evans v. Abney, 396 U. S. 435, 445 (1970); Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 171-179 (1972). While the principle that private action is immune from the restrictions of the Fourteenth Amendment is well established and easily stated, the question whether particular conduct is “private,” on the one hand, or “state action,” on the other, frequently admits of no easy answer. Burton v. Wilmington Parking Authority, 365 U. S. 715, 723 (1961); Moose Lodge No. 107 v. Irvis, supra, at 172.
Here the action complained of was taken by a utility company which is privatély owned and operated, but which in many particulars of its business is subject to extensive state regulation. The mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment. 407 U. S., at 176-177. Nor does the fact that the regulation is extensive and detailed, as in the case of most public utilities, do so. Public Utilities Comm’n v. Poliak, 343 U. S. 451, 462 (1952). It may well be that acts of a heavily regulated utility with at least something of a governmentally protected monopoly will more readily be found to be “state” acts than will the acts of an entity lacking these characteristics. [But the inquiry must be whether there is a sufficiently"'dose nexus between the State and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself?] Moose Lodge No. 107, supra, at 176. The true nature of the State’s involvement may not be immediately obvious, and detailed inquiry may be required in order to determine whether the test is met. Burton v. Wilmington Parking Authority, supra.
Petitioner advances a series of contentions which, in her view, lead to the conclusion that this case should fall on the Burton side of the line drawn in the Civil Rights Cases, supra, rather than on the Moose Lodge side of that line. We find none of them persuasive.
Petitioner first argues that “state action” is present because of the monopoly status allegedly conferred upon Metropolitan by the State of Pennsylvania. As a factual matter, it may well be doubted that the State ever granted or guaranteed Metropolitan a monopoly. But assuming that it had, this fact is not determinative in considering whether Metropolitan’s termination of service to petitioner was “state action” for purposes of the Fourteenth Amendment. In Pollak, supra, where the Court dealt with the activities of the District of Columbia Transit Co., a congressionally established monopoly, we expressly disclaimed reliance on the monopoly status of the transit authority. 343 U. S., at 462. Similarly, although certain monopoly aspects were presented in Moose Lodge No. 107, supra, we found that the Lodge’s action was not subject to the provisions of the Fourteenth Amendment. In each of those cases, there was insufficient relationship between the challenged actions of the entities involved and their monopoly status. There is no indication of any greater connection here.
/^Petitioner next urges that state action is present because respondent provides an essential public service required to be supplied on a reasonably continuous basis by Pa. Stat. Ann., Tit. 66, § 1171 (1959), and hence performs a “public function.” We have, of course, found state action present in the exercise by a private entity of powers traditionally exclusively reserved to the State. See, e. g., Nixon v. Condon, 286 U. S. 73 (1932) (election); Terry v. Adams, 345 U. S. 461 (1953) (election); Marsh v. Alabama, 326 U. S. 501 (1946) (company town); Evans v. Newton, 382 U. S. 296 (1966) (municipal park). If we were dealing with the exercise by Metropolitan of some power delegated to it by the State which is traditionally associated with sovereignty, such as eminent domain, our case would be quite a different one. But while the Pennsylvania statute imposes an obligation to furnish service on regulated utilities, it imposes no such obligation on the State. The Pennsylvania courts have rejected the contention that the furnishing of utility services is either a state function or a municipal duty. Girard Life Insurance Co. v. City of Philadelphia, 88 Pa. 393 (1879); Baily v. Philadelphia, 184 Pa. 594, 39 A. 494 (1898).
¿Perhaps in recognition of the fact that the supplying of utility service is not traditionally the exclusive prerogative of the State, petitioner invites the expansion of the doctrine of this limited line of cases into a broad principle that all businesses “affected with the public interest” are state actors in all their actions.
We decline the invitation for reasons stated long ago in Nebbia v. New York, 291 U. S. 502 (1934), in the course of rejecting a substantive due process attack on state legislation:
“It is clear that there is no closed class or category of businesses affected with a public interest . . . . The phrase 'affected with a public interest’ can, in the nature of things, mean no more than that an industry, for adequate reason, is subject to control for the public good. In several of the decisions of this court wherein the expressions 'affected with a public interest,’ and 'clothed with a public use,’ have been brought forward as the criteria ... it has been admitted that they are not susceptible of definition and form an unsatisfactory test. . . .” Id., at 536.
See, e. g., Tyson & Brother v. Banton, 273 U. S. 418, 451 (1927) (Stone, J., dissenting).
Doctors, optometrists, lawyers, Metropolitan, and Nebbia’s upstate New York grocery selling a quart of milk are all in regulated businesses, providing arguably essential goods and services, “affected with a public interest.” We do not believe that such a status converts their every action, absent more, into that of the State.
We also reject the notion that Metropolitan’s termination is state action because the State “has specifically authorized and approved” the termination practice. In the instant case, Metropolitan filed with the Public Utility Commission a general tariff — a provision of which states Metropolitan’s right to terminate service for nonpayment. This provision has appeared in Metropolitan’s previously filed tariffs for many years and has never been the subject of a hearing or other scrutiny by the Commission. Although the Commission did hold hearings on portions of Metropolitan’s general tariff relating to a general rate increase, it never even considered the reinsertion of this provision in the newly'filed general tariff. The provision became effective 60 days after filing when not disapproved by the Commission
As a threshold matter, it is less than clear under state law that Metropolitan was even required to file this provision as part of its tariff or that the Commission would have had the power to disapprove it. The District Court observed that the sole connection of the Commission with this regulation was Metropolitan’s simple notice filing with the Commission and the lack of any Commission action to prohibit it.
The case most heavily relied on by petitioner is Public Utilities Comm’n v. Pollak, supra. There the Court dealt with the contention that Capital Transit’s installation of a piped music system on its buses violated the First Amendment rights of the bus riders. It is not entirely clear whether the Court alternatively held that Capital Transit’s action was action of the “State” for First Amendment purposes, or whether it merely assumed, arguendo, that it was and went on to resolve the First Amendment question adversely to the bus riders. In either event, the nature of the state involvement there was quite different than it is here. The District of Columbia Public Utilities Commission, on its own motion, commenced an investigation of the effects of the piped music, and after a full hearing concluded not only that Capital Transit’s practices were “not inconsistent with public convenience, comfort, and safety,” 81 P. U. R. (N. S.) 122, 126 (1950), but also that the practice “in fact, through the creation of better will among passengers, . . . tends to improve the conditions under which the public ride.” Ibid. Here, on the other hand, there was no such imprimatur placed on the practice of Metropolitan about which petitioner complains. The nature of governmental regulation of private utilities is such that a utility may frequently be required by the state regulatory scheme to obtain approval for practices a business regulated in less detail would be free to institute without any approval from a regulatory body. Approval by a state utility commission of such a request from a regulated utility, where the commission has not put its own weight on the side of the proposed practice by ordering it, does not transmute a practice initiated by the utility and approved by the commission into “state action.” At most, the Commission’s failure to overturn this practice amounted to no more than a determination that a Pennsylvania utility was authorized to employ such a practice if it so desired. Respondent’s exercise of the choice allowed by state law where the initiative comes from it and not from the State, does not make its action in doing so “state action” for purposes of the Fourteenth Amendment.
We also find absent in the instant case the symbiotic relationship presented in Burton v. Wilmington Parking Authority, 365 U. S. 715 (1961). There where a private lessee, who practiced racial discrimination, leased space for a restaurant from a state parking authority in a publicly owned building, the Court held that the State had so far insinuated itself into a position of interdependence with the restaurant that it was a joint participant in the enterprise. Id., at 725. We cautioned, however, that while “a multitude of relationships might appear to some to fall within the Amendment’s embrace,” differences in circumstances beget differences in law, limiting the actual holding to lessees of public property. Id., at 726.
Metropolitan is a privately owned corporation, and it does not lease its facilities from the State of Pennsylvania. It alone is responsible for the provision of power to its customers. In common with all corporations of the State it pays taxes to the State, and it is subject to a form of extensive regulation by the State in a way that most other business enterprises are not. But this was. likewise true of the appellant club in Moose Lodge No. 107 v. Irvis, supra, where we said:
“However detailed this type of regulation may be in some particulars, it cannot be said to in any way foster or encourage racial discrimination. Nor can it be said to make the State in any realistic sense a partner or even a joint venturer in the club’s enterprise.” 407 U. S., at 176-177.'
All of petitioner’s arguments taken together show no more than that Metropolitan was a heavily regulated, privately owned utility, enjoying at least a partial monopoly in the providing of electrical service within its territory, and that it elected to terminate service to petitioner in a manner which the Pennsylvania Public Utility Commission found permissible under state law. Under our decision this is not sufficient to connect the State of Pennsylvania with respondent’s action so as to make the latter’s conduct attributable to the State for purposes of the Fourteenth Amendment.
We conclude that the State of Pennsylvania is not sufficiently connected with respondent’s action in terminating petitioner’s service so as to make respondent’s conduct in so doing attributable to the State for purposes of the Fourteenth Amendment. We therefore have no occasion to decide whether petitioner’s claim to continued service was “property” for purposes of that Amendment, or whether “due process of law” would require a State taking similar action to accord petitioner the procedural rights for which she contends. The judgment of the Court of Appeals for the Third Circuit is therefore
Affirmed.
Metropolitan Edison Company Electrical Tariff, Electric Pa. P. TJ. C. No. 41, Rule 15. This portion of Metropolitan’s general tariff, filed with the Utility Commission under the notice-filing requirement of Pa. Stat. Ann., Tit. 66, § 1142 (1959) (since the general tariff involved a rate increase), provides in pertinent part:
“(15) — Cause for discontinuance of service.
“Company reserves the right to discontinue its service on reasonable notice and to remove its equipment in case of nonpayment of bill. ...”
Its filed tariff also gives it the right to terminate service for fraud or for tampering with a meter but Metropolitan did not seek to assert these grounds below.
The basis for this claimed entitlement is Pa. Stat. Ann., Tit. 66, § 1171 (1959), providing in part:
“Every public utility shall furnish and maintain adequate, efficient, safe, and reasonable service and facilities .... Such service also shall be reasonably continuous and without unreasonable interruptions or delay....”
Mrs. Jackson finds in this provision a state-law entitlement to continuing utility service to her residence. She reasons that under the Due Process Clause of the Fourteenth Amendment she cannot be deprived of this entitlement to utility service without adequate notice and a hearing before an impartial body: until these are completed, her service must continue. Because of our conclusion on the threshold question of state action, we do not reach questions relating to the existence of a property interest or of what procedural guarantees the Fourteenth Amendment would require if a property interest were found to exist.
Mr. Justice Brennan, dissenting, post, at 364, concludes that there is no justiciable controversy between petitioner and respondent because whatever entitlement to service petitioner had was previously terminated by respondent in accordance with its tariff. We do not believe this to be any less a determination of the merits of the action than is our conclusion that whatever deprivation she may have suffered was not caused by the State. Issues of whether a claimed entitlement is “property” within the meaning of the Due Process Clause, Board of Regents v. Roth, 408 U. S. 564 (1972), and whether if so its deprivation was consistent with due process, see Arnett v. Kennedy, 416 U. S. 134 (1974), are themselves constitutional questions which we find no occasion to reach in this case.
Section 1 of the Fourteenth Amendment provides in part:
"No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State déprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
The decision is reported at 348 F. Supp. 954 (1972).
The decision is reported at 483 F. 2d 754 (1973).
415 U. S. 912 (1974). Compare Kadlec v. Illinois Bell Telephone Co., 407 F. 2d 624 (CA7), cert. denied, 396 U. S. 646 (1969); Lucas v. Wisconsin Electric Power Co., 466 F. 2d 638 (CA7 1972), cert. denied, 409 U. S. 1114 (1973), with Palmer v. Columbia Gas of Ohio, Inc., 479 F. 2d 153 (CA6 1973), modified in Turner v. Impala Motors, 503 F. 2d 607 (CA6 1974). Cf. Ihrke v. Northern States Power Co., 459 F. 2d 566 (CA8), vacated as moot, 409 U. S. 815 (1972).
Enterprises subject to the same regulatory system as Metropolitan are enumerated in the definition of “public utility” contained in Pa. Stat. Ann., Tit. 66, § 1102 (17) (1959 and Supp. 1974-1975). Included in this definition are all companies engaged in providing gas, power, or water; all common carriers, pipeline companies, telephone and telegraph companies, sewage collection and disposal companies; and corporations affiliated with any company engaging in such activities. Among some of the enterprises held subject to this regulatory scheme are freight forwarding and storage companies (Highway Freight Co. v. Public Service Comm’n, 108 Pa. Super. 178, 164 A. 835 (1933)), real estate developers who, incident to their business, provide water services (Sayre Land. Co. v. Pennsylvania Public Utility Comm’n, 21 D. & C. 2d 469 (1959)), and individually owned taxicabs. Pennsylvania Public Utility Comm’n v. Israel, 356 Pa. 400, 52 A. 2d 317 (1947). In Philadelphia Rural Transit Co. v. Philadelphia, 309 Pa. 84, 93, 159 A. 861, 864 (1932), the court estimated that there were 26 distinct types of enterprises subject to this regulatory system, and a fair reading of Pennsylvania law indicates a substantial expansion of included enterprises since that case. The incidents of regulation do not appear materially different between enterprises. If the mere existence of this regulatory scheme made Metropolitan’s action that of the State, then presumably the actions of a lone Philadelphia cab driver could also be fairly treated as those of the State of Pennsylvania.
It is provided in Pa. Stat. Ann., Tit. 66, § 1121 (Supp. 1974-1975), that issuance of a certificate of public convenience is a prerequisite for engaging in the utility business in Pennsylvania. The requirements for obtaining such a certificate are described in Pa. Stat. Ann., Tit. 66, §§ 1122,1123 (1959 and Supp. 1974-1975). There is nothing in either Metropolitan’s certificate or in the statutes under which it was issued indicating that the State has granted or guaranteed to Metropolitan monopoly status. In fact Metropolitan does face competition within portions of its service area from another private utility company and from municipal utility companies. Metropolitan was organized in 1874, 39 years before Pennsylvania’s adoption of its first utility regulatory scheme in 1913. . There is no indication that it faced any greater competition in 1912 than today. As. petitioner admits, such public utility companies are natural monopolies created by the economic forces of high threshold capital requirements and virtually unlimited economy of scale. Burdick, The Origin of the Peculiar Duties of Public Service Companies, 11 Col. L. Rev. 514 (1911); H. Trachsel, Public Utility Regulation 7-8, 52 (1947). Regulation was superimposed on such natural monopolies as a substitute for competition and not to eliminate it:
‘The primary object of the Public Utility Law is not to establish monopolies or to guarantee the security of investments in public service corporations, but to serve the interests of the public.” Highway Express Lines, Inc. v. Pennsylvania Public Utility Comm’n, 195 Pa. Super. 92, 100, 169 A. 2d 798, 802 (1961); cf. Pottsville Union Traction Co. v. Public Service Comm’n, 67 Pa. Super. 301, 304 (1917).
The argument has been impliedly rejected by this Court on a number of occasions. See, e. g., Civil Rights Cases, 109 U. S. 3, 8 (1883). It is difficult to imagine a regulated activity more essential or more “clothed with the public interest” than the maintenance of schools, yet wre stated in Evans v. Newton, 382 U. S. 296, 300 (1966):
"The range of governmental activities is broad and varied, and the fact that government has engaged in a particular activity does not necessarily mean that an individual entrepreneur or manager of the same kind of undertaking suffers the same constitutional inhibitions. While a State may not segregate public schools so as to exclude one or more religious groups, those sects may maintain their own parochial educational systems.”
See n. 1, supra. The same provision appeared in all of Metropolitan’s prior general tariffs. The sole reason for substituting the new general tariff, which contains all the terms and conditions of Metropolitan’s service, was to procure a rate increase. This was the sole change between Metropolitan’s Electrical Tariff No. 41 and its predecessor.
Petitioner does not contest the fact that Metropolitan had this right at common law before the advent- of regulation. Brief for Petitioner 31.
Petitioner concedes that the hearing was solely devoted to the question of the proposed rate increase. Id., at 30.
See Pa. Stat. Ann., Tit. 66, § 1148 (1959); Pa. P. U. C. Tariff Regulations, § II, “Public Notice of Tariff Changes.” These provisions-specify that utility companies must give 60 days’ notice to the public before changing their rules filed in their general tariff. Since Pa. Stat. Ann., Tit. 66, § 1171 (1959), provides that “[s]ub-ject to . . . the regulations or orders of ■ the commission, every public utility may have reasonable rules and regulations governing the conditions under which it shall be required to render service,” the Commission arguably had the power to disapprove utility rules. There is no evidence that it has ever even considered the provision in question. When the 60-day notice period passed, the provisions became effective.
Pennsylvania. P. U. C. Tariff Regulations, § VIII, “Discount for Prompt Payment and Penalties for Delayed Payment of Bills,” is the only authority cited for a state-imposed requirement that Metropolitan file its termination provision as part of its general tariff. This section requires the filing of “penalties” imposed upon customers for failures to pay bills promptly. Respondent argues that this applies only to monetary penalties. There is no Pennsylvania case law on the question.
“The only apparent state involvement with the activity complained of here is in Tariff Reg. VIII of the Pennsylvania P. U. C_ [T]he purpose of Tariff Reg. VIII is to insure that public utilities inform their patrons of any possible penalty for failing to pay their bills. As in Kadlec, defendant here acted pursuant to its own regulations and out of a purely private, economic motive. No state official participated in the practice complained of, nor is it alleged that the state requested or co-operated' in the suspension of service.” 348 F. Supp., at 958.
See 343 U. S., at 462. At one point the Court states:
“We find in the reasoning of the court below a sufficiently close relation between the Federal Goveriynent and the radio service to make it necessary for us to consider thise Amendments.” Ibid.
Later, the opinion states:
. "We, therefore, find it appropriate to examine into what restriction, if any, the First and Fifth Amendments place upon the Federal Government . . . assuming that the action of Capital Transit . . . amounts to sufficient Federal Government action to make the First and Fifth Amendments applicable thereto.” Id., at 462-463. (Emphasis added.)
The Court then went on to find no constitutional violation in the challenged action.
As in Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 173 (1972), there is no suggestion in this record that the Pennsylvania Public Utility Commission intended either overtly or covertly to encourage the practice. See n. 15, supra.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | D | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Rutledge
delivered the opinion of the Court.
This controversy began in 1931, when respondent’s predecessors as receivers of the Georgia & Florida Railroad filed an application with the Interstate Commerce Commission for a reexamination of rates then applicable to it for transporting the mails. Since then, in one form or another, the dispute has found its way back and forth through the Commission and the courts, finally to come here now for the second time. See United States v. Griffin, 303 U. S. 226.
Through all these years the carrier and the Commission have been at odds over whether the railroad is entitled to an increase in the rates prescribed for its service for the period beginning April 1, 1931, and ending, as covered by the present suit, February 28, 1938. The case is now here on certiorari to the Court of Claims, 335 U. S. 883, which has rendered a judgment awarding respondent $186,707.06 as increased compensation due for the years 1931 to 1938, Griffin v. United States, 110 Ct. Cl. 330, contrary to the findings and orders of the Commission denying any increase beyond the amounts already paid for that service under the rates fixed by it. Railway Mail Pay, Georgia & Florida R. Co., 192 I. C. C. 779; id., 214 I. C. C. 66.
I.
A statement of the background and course of the litigation will aid in understanding the rather complicated problems presented, both on the merits and affecting jurisdiction.
In 1916 Congress enacted the Railway Mail Pay Act. 39 U. S. C. §§ 523-568. This embodied a comprehensive scheme for regulating transportation of the mails by railroad common carriers. Such carriers were required to transport the mails pursuant to the Act’s provisions. These included that the carriers should be compensated at “fair and reasonable rates” to be fixed and determined by the Interstate Commerce Commission. The rates were to be established only after notice and hearing. But after six months from the entry of a rate order the Postmaster General or a carrier was authorized to apply for a reexamination of the order. 39 U. S. C. §§ 541, 542, 544-554.
The Commission was authorized to prescribe “the method or methods by weight, or space, or both, or otherwise, for ascertaining such rate,” 39 U. S. C. § 542, and for the same purpose “to make such classification of carriers as may be just and reasonable and, where just and equitable, fix general rates applicable to all carriers in the same classification.” 39 U. S. C. § 549. Other sections specify and define four classes of service, namely, full railway post-office car service, apartment service, storage-car service and closed-pouch service. 39 U. S. C. §§ 525-530. Only apartment service and closed-pouch service are involved in this case.
On December 23, 1919, after extended investigation and hearings, the Commission entered its first general mail rate order. Railway-Mail Pay, 56 I. C. C. 1. This adopted the space basis for determining “fair and reasonable rates.” On July 10, 1928, in proceedings for reexamination the Commission granted a general increase of 15% over the preexisting rates. Railway Mail Pay, 144 I. C. C. 675. The Georgia & Florida Railroad accepted these general rates until April 1, 1931.
At that time it applied to the Commission for a reexamination of the rates as applied to itself. The application was heard and determined by Division 5. On May 10,1933, the Commission denied any increase, holding the general rates established by the order of July 10, 1928, fair and reasonable as applied to this carrier. Railway Mail Pay, Georgia & Florida R. Co., 192 I. C. C. 779. This order is in substance, though not technically, the one now involved.
After the Commission had denied reconsideration, the railroad sued in the United States District Court for the Southern District of Georgia to set aside the Commission’s order. A special three-judge court was convened, cf. the Urgent Deficiencies Act, former 28 U. S. C. §§ 41 (28), 47; held the order unlawful; and remanded the case to the Commission for further proceedings. This decree was filed on January 23, 1935.
Thereupon the full Commission conducted further hearings and in a report filed February 4, 1936, again found the rates previously fixed to be fair and reasonable in their application to the Georgia & Florida Railroad. The order therefore denied any increase. Railway Mail Pay, Georgia & Florida R. Co., 214 I. C. C. 66.
Again the carrier resorted to the District Court, filing a supplemental bill. And again that court, composed of the same three judges, held the Commission’s order unlawful in a decree filed on February 23, 1937. The Government appealed directly to this Court, which, in United States v. Griffin, supra, held that the order was not of a type reviewable under the Urgent Deficiencies Act. Accordingly, on February 28, 1938, the District Court’s judgment was reversed with directions to dismiss the bill and without determination of the cause on the merits.
After nearly four years the receivers renewed the litigation by filing this suit in the Court of Claims. The amended petition sets forth in some detail the history of the previous stages of controversy before the Commission and the courts. The carrier’s basic claims on the merits are substantially the same as in those proceedings. They are, in effect, (1) that the Commission’s orders denying any increase are confiscatory, in that the rates prescribed by the general rate order of July 10, 1928, and continued in effect specifically as to this carrier by the orders of May 10, 1933, and February 4, 1936, do not afford just compensation under the Fifth Amendment on the ground that they do not provide for payment of the cost of the service rendered plus a reasonable return upon invested capital allocated to that service; and (2) that the Commission’s orders do not afford the “fair and reasonable” compensation required by the Railway Mail Pay Act. Both claims rest upon attacks made on the Commission’s findings as being unsupported by the evidence before it and on its conclusions as being contrary to that evidence.
To sustain jurisdiction in the Court of Claims, respondent rests upon § 145 of the Judicial Code, 28 U. S. C. § 250, now 28 U. S. C. § 1491, and upon statements made in part Fourth of the opinion in United States v. Griffin, 303 U. S. at 238.
II.
Although the Railway Mail Pay Act contains no explicit provision for judicial review of orders of the Interstate Commerce Commission fixing rates of pay for transporting the mails pursuant to authorizations of the Postmaster General for such service, it had been thought, until the decision in United States v. Griffin, supra, that such orders were of the kind reviewable under the Urgent Deficiencies Act. The effect of that decision, however, was to rule out such orders as those now in question from the jurisdiction conferred by the latter Act.
While the “negative order” basis for the Court’s ruling is no longer effective, Rochester Tel. Corp. v. United States, 307 U. S. 125, the alternative grounding remains in full force. 303 U. S. at 234. Since the very orders now in issue were involved in the Griffin case, it is settled that the railroad or its receivers had no recourse to a district court, under the Urgent Deficiencies Act, for securing review of the Commission’s orders or relief of the type now sought.
The Court in the Griffin case, however, was not content to rest merely with this negative jurisdictional ruling. In part Fourth of the opinion the Court went on to say that its ruling did not “preclude every character of judicial review.” 303 U. S. at 238. The opinion then suggested three possible other methods, two in the Court of Claims and one in the district courts.
Without doubt it was due to these suggestions that respondent’s predecessors chose to bring this suit in the Court of Claims. The language in which the suggestions were made has assumed such importance, in view of the problems raised by the receivers’ choice in following them, that it seems wise here to quote in full what the Court said:
“If the Commission makes the appropriate finding of reasonable compensation but fails, because of an alleged error of law, to order payment of the full amount which the railroad believes is payable under the finding, the Court of Claims has jurisdiction of an action for the balance, as the claim asserted is one founded upon a law of Congress. Missouri Pacific R. Co. v. United States, 271 U. S. 603. Compare United States v. New York Central R. Co., 279 U. S. 73, affirming 65 Ct. Cl. 115, 121. And since railway mail service is compulsory, the Court of Claims would, under the general provisions of the Tucker Act, have jurisdiction also of an action for additional compensation if an order is confiscatory. United States v. Great Falls Mfg. Co., 112 U. S. 645; North American Transportation & Trading Co. v. United States, 253 U. S. 330, 333; Jacobs v. United States, 290 U. S. 13, 16. Moreover, as district courts have jurisdiction of every suit at law or in equity ‘arising under the postal laws' 28 U. S. C., § 41 (6), suit would lie under their general jurisdiction if the Commission is alleged to have acted in excess of its authority, or otherwise illegally. Compare Powell v. United States, 300 U. S. 276, 288, 289.” 303 U. S. at 238.
Respondent and the Court of Claims are at odds over whether the carrier’s claims now asserted fall under the first or the second class of cases of which this Court said the Court of Claims would have jurisdiction. Respondent insists, both in the complaint and in the brief filed here, that his claim is grounded on the basis that the Commission’s orders are confiscatory and have the effect of depriving the carrier of its property and services without just compensation due under the Fifth Amendment.
On the other hand, the Court of Claims expressly disclaims that it was exercising any jurisdiction over constitutional matters. This was done in denying the carrier’s claim to interest on the award. In the court’s view therefore the jurisdiction which it was exerting fell within the first class of cases stated in the Griffin opinion to be within the Court of Claims’ jurisdiction, namely, where the Commission makes the appropriate finding of reasonable compensation but fails, because of an alleged error of law, to order payment of the full amount the carrier believes payable under the finding.
The Government, however, insists that the Court of Claims did not exercise jurisdiction under this category. It disputes that the court “gave effect,” as the court stated, to the Commission’s order or ordered payment of any balance due under the Commission’s finding. Rather, the Government urges, the court flouted that order, substituted its own judgment for the Commission’s concerning the appropriate order to be entered, and in effect entered a wholly new and different order from that made by the Commission, together with a money judgment giving its own view effect.
Ordinarily it would be sufficient for us to take the Court of Claims at its word and accept its stated view of the nature of the jurisdiction it was exerting. But the three differing views of its action taken by itself, by the Government, and by the respondent, together with the difficulties each raises on the record for disposing of the cause, compel us to examine those claims.
If, as the court asserts, it was “giving effect” to the Commission’s order and doing so without substituting its own judgment for the Commission’s as to what was a “fair and reasonable rate,” there should be little difficulty in sustaining the jurisdiction; that is, unless respondent is right in his contention that the Court was called upon to and, notwithstanding its disclaimer, in fact did adjudicate his claim for just compensation under the Fifth Amendment. In that event and on the assumption that the award was proper on the merits, reversal would be required in order that the court might make appropriate allowance for interest.
On the other hand, if the Government is correct in the view that the court did not give effect to the Commission’s order, but instead disregarded that order and substituted its own judgment for the Commission’s concerning what constituted a “fair and reasonable rate,” the question arises whether the Griffin statements were intended to give that power to the Court of Claims under either category of jurisdiction the opinion said that court might have.
III.
The Railway Mail Pay Act gives the Interstate Commerce Commission exclusive jurisdiction to determine “fair and reasonable rates.” The Urgent Deficiencies Act provided for judicial review of the Commission’s rate orders in “cases brought to enjoin, set aside, annul or suspend” such orders. No power was given the reviewing court to revise them when found invalid, or to render judgment for any amount thought to be due under such a revision.
It would be strange, indeed anomalous in the extreme, if this Court by its Griffin pronouncements intended to confer on the Court of Claims, by implication in the cases there held not reviewable under the Urgent Deficiencies Act, a broader, more conclusive and final power of judicial review than that Act expressly provided for like orders within its purview. The assumption is hardly tenable that Congress intended such a result when it enacted the Railway Mail Pay Act or the Urgent Deficiencies Act or both. Congress in no instance has expressly empowered the Court of Claims to review rate orders of the Commission, either to set them aside or to render a money judgment for additional amounts found due upon a determination of an order’s invalidity. To infer such an intention would be contrary not only in spirit to the limitations Congress has placed upon review of such orders wherever expressly provided, but also to the whole history and practice of Congress in conferring jurisdiction on the Court of Claims.
Thus, when these very orders were twice before the district court, under the assumption that it had jurisdiction, that court found the orders invalid. But in each instance it remanded the cause to the Commission for further proceedings; there was no attempt to render a money judgment for the carrier.
Necessarily this restraint reflected the jurisdictional limitations placed upon the court by the Urgent Deficiencies Act. But those limitations themselves reflected another policy, quite apart from and in addition to that giving effect to the constitutional limitations of Article III. The limitations exemplify settled congressional policy concerning the relations of rate-making bodies and reviewing courts. Not only is rate making essentially legislative in the first instance. The policy of judicial restraint is one having regard for the expertise of special agencies charged with performing the rate-making function and for the inherent actual, as well as legal, disability of courts to execute that function. Such doctrines or policies as those of “primary jurisdiction” and exhaustion of administrative remedies lie at the very root of the problem. And this is as true of the jurisdiction of the Court of Claims, which is not restricted by Article III, as it is of courts so limited.
Hardly can it be conceived therefore that Congress would have provided expressly for review of the Commission’s rate-making orders by the Court of Claims; or that, if it had done so, it would have authorized a money judgment for such amount as that court in its own judgment considered the rate should have produced.
It is equally significant, we think, that when the three-judge district court twice set aside the Commission’s order it did so on grounds substantially similar to those used by the Court of Claims in this case for holding the order invalid. In other words, what the district court did by way of examining the orders on their merits, factual as well as legal, the Court of Claims has done in this case. Indeed, it has gone much further, since it has rendered a money judgment for the carrier covering the period 1931-1938, having the effect in the particular circumstances of a new and final order.
IV.
A full understanding of the Commission’s orders and of the effects of the action taken regarding them, both by the three-judge district court and by the Court of Claims, can be had only by reading and comparing the reports and opinions. The limitations of space prevent summarizing their content here in substantial detail. But the gist of the controversy between the Commission and the courts may be indicated.
We note, to begin with, that the court awarded to the respondent $186,707.06, or some 87 per cent more than the amount allowable under the Commission’s orders. This in itself shows the wide discrepancy between the Commission’s view and the court’s concerning the amount of a “fair and reasonable rate.”
Moreover, the Commission’s task in fixing that rate was both gigantic and complex. It was authorized to make classification of carriers where “just and reasonable” and, “where just and equitable,” to “fix general rates applicable to all carriers in the same classification.” 39 U. S. C. § 549. That authority of course was not to be ignored in applying the requirement for compensation of carriers at “fair and reasonable rates.” 39 U. S. C. § 542. The two were not entirely separate, but were merely different prongs of the same fork.
In its first general rate proceeding the Commission classified the nation’s carriers, for mail-pay compensation purposes, placing the Georgia & Florida Railroad in Class I. It also decided generally upon the space basis as an appropriate method of determining fair and reasonable compensation. 56 I. C. C. 1.
Railroad accounting, however, does not, and concededly cannot, accurately reflect actual operating costs of each type of service rendered, or the proportionate amounts of capital employed in rendering each service. The Commission therefore sought a method or methods for making such allocations tentatively as the initial stage of performing its rate-making function. This required, first, segregating freight service from passenger train service; then dividing the latter into three categories: passenger service proper (including baggage service), express service, and mail service.
The problem arose both in the proceedings culminating in the first general rate order, 56 I. C. C. 1, and in those resulting in the general rate increase of 1928. 1441. C. C. 675. In the latter the initial separation of total operating expenses between freight and passenger services was made on the basis of the Commission’s rules governing such separation on large steam railways. Id. at 685-688. But, for determining the cost of service in respect to the further allocation and apportionment of passenger-train service among its three components, the Commission, having determined upon the space basis for this initial stage in fixing “fair and reasonable rates,” was faced with the problem of what should be done with unused space.
That problem presents the crux of this case, as it did of the Commission’s action. In the proceedings leading to the 1928 order, three general plans were given primary consideration for distributing space. They are described in the report last cited. See id. at 681, 689. In general they were alike in allocating full-car space to the service it performed. But they differed widely in allocating unused space in so-called combination cars and mixed cars. Without going into further detail here, suffice it to say that Plan 3 allocated the largest amounts of unused space to passenger and express service and correspondingly the smallest amount to mail service; Plan 2, more nearly approximating the carrier’s proposals, worked out in inverse proportions; and Plan 1 lay between the two. See 144 I. C. C. at 681, 689.
The differences in results following from use of the various plans were highly significant, making the difference between net return and net deficit, or deficits of different sizes, depending upon which plan was used. In each plan after the ultimate space ratios were determined by complicated statistical studies, they were applied to total passenger-train service expense to determine expense ratios for the three constituent services. And those expense ratios were also used to apportion investment in road and equipment assigned to passenger-train service.
The Commission rejected Plan 3 because, it said, that plan had departed from the car-operating unit which it had adopted for making space allocations. 144 I. C. C. 689-691. While not specifically eliminating Plan 1 from consideration for purposes of comparison, the Commission primarily rested its allocations of space for purposes of tentative or preliminary apportionment of costs and capital on Plan 2. Id. at 691.
In utilizing the ratios derived from using Plan 2, however, the Commission expressly stated:
“In connection with the cost studies under any of the plans for dividing the train space, it should be borne in mind that in computations of this character where the direct allocations are relatively small and the great bulk of expenses and investment are necessarily divided, subdivided, apportioned, and reapportioned upon various theories and assump tions, the results can not be accepted as an accurate ascertainment of the costs of service. At best, they are approximations to be given such weight as seems proper in view of all the circumstances under which they have been obtained and the theories underlying the assumptions and the various steps in the computations.” 144 I. C. C. at 691-692. (Emphasis added.)
The Commission proceeded to consider the results obtained by the use of the Plan 2 formula in the light of other circumstances and considerations deemed relevant, including comparison with results obtained upon the basis of the total equated 60-foot-car miles (see 144 I. C. C. at 692), the fact that there was no such incentive to limit the amount of space utilized for passenger, baggage and express services as existed in the case of mail service, id. at 693, and other factors. The Commission then concluded:
“Giving consideration to all the figures based upon the respective cost studies; to the fact that none of these figures except those in the carriers’ exhibits, includes any charge against the passenger-train service for its proportion of the cost of handling nonrevenue freight; giving special weight to the figures based on the plan for the division of train space followed in the original proceeding and subsequent reexaminations; and making allowance for weaknesses of theories and methods, an increase of 15 per cent in mail revenues for the carriers as a whole in this group is justified.” 144 I. C. C. at 695. (Emphasis added.)
This increase, very much smaller than a use of the results obtained by unqualified application of Plan 2 would have produced, resulted in general rates of 14.5 cents per mile of service in a “15-foot apartment car” and 4.5 cents per mile of service in a “3-foot closed-pouch service space.” Those rates became applicable to the Georgia & Florida Railroad, were accepted by it from 1928 to 1931, and are the rates now in question.
In this suit and in the prior proceedings since 1931, no attack has been made on the validity of these rates as general rates applicable to Class I carriers. But the 1931 proceedings challenged their validity as applied to this particular carrier. This has been the bone of contention throughout the subsequent phases of controversy.
When in 1931 the carrier’s application for reexamination was filed, the Commission by its Division 5 first proceeded to make a cost study of the railroad’s individual operations, conducted along the same lines as the cost studies in its general rate hearings. A test period of 28 days from September 28 to October 25, 1931, was selected for obtaining space and other data. Space ratios were determined on the data secured, applied to expenses, and the resulting expense ratios used to apportion investment, all under Plan 2. After adjustments made to reflect the year’s operations for 1931, the Plan 2 formula worked out to show a net operating deficit for mail service of $4,945, which, together with a return of 5.75 per cent on the capital allocated by the formula to mail service, brought the carrier’s claim for increased compensation for that year to $31,227. 192 I. C. C. 779, 781. To meet this, an increase of 87.40 per cent would have been necessary.
As in the general rate investigations and for the same reasons, the Division was unwilling to rest exclusively upon the results obtained by the computations under Plan 2, and went on to consider other factors which it deemed relevant in determining the fairness and reasonableness of the rates. It found that of the three component services in passenger-train service, “the mail service makes the best showing with respect to revenue.” The Division further pointed out that in the period 1929 to 1931, mail revenues had been more stable than revenues from other passenger-train services, passenger service proper having decreased 67 per cent, express service 64 per cent, and mail service 12 per cent. Consideration also was given to the special facts shown relating to use of unused space.
Pointing out that the carrier’s claim was based on the special cost study and the fact that “because of its low traffic density and low earnings per mile of road, it is not comparable with many class I roads which receive the same rates of pay,” the Division reiterated that “The cost study is not considered to be an accurate ascertainment of the actual cost of service. It is an approximation to be given such weight as seems proper in view of all the circumstances. See Railway Mail Pay, supra.” 192 I. C. C. at 783. It then concluded:
“The comparison of mail revenue with other revenue received for services in passenger-train operations shows that mail with relation to the other services is bearing its fair share of the expenses of operation and is contributing relatively more than the other services for the space furnished. Applicant receives the same rates as those received by other roads for the same kind of service. Many of these other roads are, as applicant points out, roads which are very much larger and which have greater traffic and lower unit operating costs. On the other hand many are in much the same situation as the applicant in respect of passenger-train operations. The data submitted fail to justify giving the applicant rates higher than those now paid other railway common carriers for like service.
“We find that the rates of pay now received by applicant for the transportation of mail, established in Railway Mail Pay, 144 I. C. C. 675, for railroads over 100 miles in length, are fair and reasonable. The application for increased compensation is denied.” Ibid.
When the cause was returned to the Commission by the Georgia District Court in 1935, the full Commission reopened the proceeding and held a further hearing at which further evidence was received. In remanding the cause the district court had stressed the computed finding under Plan 2 that “The distribution of expense upon the space ratios shows that the operating ratio for mail service was 102.79” or, as the court added, “that for every dollar applicants received for transporting mails they expended one dollar and 2.79 cents.” The court then asserted that other considerations taken into account by Division 5 “do not refute or impair the fact that the compensation allowed this railroad for the transportation of mail does not equal the cost of so doing.”
Counsel for the carrier stressed this before the Commission as “an adjudication” that the previous rates of pay were “totally inadequate.” But the Commission rejected the apparent district court inference that abandonment of mail service would save the carrier money: “Considering the character of the expenses included in the study it is clear that no such saving could be made. The importance of the operating-ratio figure has been overemphasized. Relative costs derived from a series of studies of expenditures for operations common to a number of services cannot be converted into absolute costs by using a single-figure relation derived from such studies.” 214 I. C. C. at 69.
The Commission then again repeated its insistence that cost computed under such a formula as Plan 2 “is a hypothetical cost and not an actual cost,” ibid.; that in other mail-pay proceedings consideration had been given to other factors; and, again taking such factors into account, concluded upon the augmented record that the rates then applicable to the carrier were fair and reasonable. 214 I. C. C. at 70-76.
On return of the cause, the district court disclaimed entertaining the view “that the hypothetical cost is ‘necessarily conclusive.’ ” Rather, the court said, “It is merely the fairest method that has been devised.” It held inapplicable to the carrier the considerations utilized by the Commission to qualify the results computed by the cost formula, such as “comparisons with compensation received from other services in passenger train cars”; and “comparisons per car-mile and per car-foot mile of the computed cost of mail service and the revenue from authorized mail service with the computed cost of corresponding units in passenger-train service as a whole.” The court accordingly again found the Commission’s order unlawful and remanded the cause to it a second time for further proceedings.
It is obvious, from the foregoing account, that the basic difference between the Commission and the district court lay in whether the Commission’s statistical and mathematical computations under Plan 2 alone should be taken as determinative of costs and thus of fair and reasonable rates or whether those computations were rightly taken by the Commission as merely tentative estimates or approximations, applicable in the initial stage of rate determination, but subject to qualification by comparison with results obtained under other plans and, in the final stage, by consideration of other factors found pertinent in the Commission’s judgment.
This is exactly the question which was crucial in the judgment rendered by the Court of Claims. In its opinion, much more extended than either of those rendered by the district court, it said:
“Under finding 16 herein, it is shown that the Interstate Commerce Commission found and determined that plaintiff would require an increase in its mail revenue of 87.4% in order to secure for itself, under Plan 2 adopted by the Commission, a return of 5.75% theretofore fixed by the Commission, on its investments in road and equipment engaged in mail traffic.... The Commission has, by its use of Plan No. 2, adjudged it to be a fair and reasonable basis. And out of that basis there has been ascertained, by formulae prescribed by the Commission, what is the fair and reasonable compensation for plaintiffs’ carriage of the mails beginning the first of April 1931, and ending at the close of February 1938. Fair and reasonable compensation cannot be both a deficit and the amount of $186,707.06 so found. It is, we conclude, the latter.” 110 Ct. Cl. at 366-367, 369. (Emphasis added.)
The court then quoted the Commission’s concluding language in 192 I. C. C. 779, 783, set out above in the text, and said:
“We are of the opinion that the 'approximation’ [Plan 2] should be given greater weight than the Commission affords it, because, as we have said, and the Commission in effect admits, there is no such thing as certainty in actual cost. Approximate, or as it is called, 'computed’ cost must be relied upon, and as a matter of law must be decisive. There is no alternative, at least no satisfying alternative. Of course there were other methods of computing cost, but the Commission, put to the choice, selected Plan No. 2.” 110 Ct. Cl. at 370.
Then followed rejection of the factors considered by the Commission in qualifying the computations obtained under Plan 2 as “not convincing or even persuasive.” Id. at 372. According to the court: “It was for the Commission to demonstrate that the general rates prescribed gave the plaintiffs a fair and reasonable return. This the Commission failed to do. More than that, the Commission has by its findings, using its adopted plan and its own methods as applied to plaintiffs’ circumstances, proved that plaintiffs have been underpaid $186,707.06 in fair and reasonable compensation for the period in question.” Ibid.
In view of these groundings, the court’s decision tied the Commission exclusively and finally to the results which it had obtained by using Plan 2 in the initial stage of the rate-making process. It rejected the Commission’s repeated assertion, in both the general rate hearings and the special hearings given this carrier, that the cost studies under Plan 2 (or any other such plan) could not be taken as an accurate ascertainment of actual costs of service and should be given only such weight as seemed proper in view of all the circumstances. The court likewise rejected as “not convincing or even persuasive” the numerous factors the Commission considered not only proper, but highly important to be taken into account in qualifying the computed results under Plan 2.
In doing all this the court substituted its own judgment for the Commission’s concerning the relevance of facts to be taken into account in fixing a fair and reasonable rate; the weight to be given to those facts, including the computations under Plan 2 as well as the other facts utilized to check and qualify them; and the burden of proof on the whole case.
In the latter respect the court disregarded not only the general rule which gives administrative determinations in such matters presumptive weight, but also the effect of the statute itself. As has been noted the Railway Mail Pay Act expressly authorized the Commission to classify carriers and “where just and equitable, fix general rates applicable to all carriers in the same classification.” 39 U. S. C. § 649. While this general authority did not preclude examination of the general rate’s application to a particular carrier, it gave that rate prima jade validity as to all within the classification. Indeed, contrary to the court’s holding that the Commission could not consider rates paid to other carriers or their effects, the statute required the Commission to take those rates into account. Ibid. The burden of proof was therefore clearly upon the carrier to show that the general rate was unfair and unreasonable as applied to it and not, as the court held, upon the Commission to show that that rate as applied was fair and reasonable.
We cannot say that the Commission acted arbitrarily or unreasonably in respect to its use of Plan 2 or of the factors used in checking the plan’s results and qualifying them. Contrary to the court’s conclusion, Plan 2 was never intended or accepted by the Commission as furnishing a final and exclusive basis for fixing rates. Certainly it was not arbitrary or unreasonable to use such a plan, which proceeded step by step upon “various theories and assumptions,” as merely a preliminary and wholly tentative step in the process of rate making; or to check its results against those produced by other such plans differing in detail of theories and assumptions employed; or to qualify the computations by the factors which the Commission took into account in the final stages of judgment.
In holding the initial formula conclusive, the court has disregarded the Commission’s informed contrary judgment in matters committed to its special competence. This the court did in the guise of “giving effect” to the Commission’s “finding,” namely, its preliminary computations under Plan 2, and by disregarding all else the Commission took into account as “error of law.” The “finding” was in fact no finding at all, but only a preliminary figure. And the matters thrown out as “error of law” were matters of fact and expert judgment, not legal questions.
We think the carrier has not sustained its burden of showing that the Commission acted arbitrarily or unreasonably and we conclude that the general rates fixed by its 1928 order are, upon the record made, fair and reasonable as applied to the Georgia & Florida Railroad. But for the matter of jurisdiction, this determination would end the case. But the question of jurisdiction remains and is important. Moreover, the determination on the merits is relevant to its disposition.
V.
In sustaining its jurisdiction, the Court of Claims stated: “As the Supreme Court has said, this Court has jurisdiction to render judgment of recovery for an amount sufficient to constitute fair and reasonable compensation under the facts as found by the Commission, unpaid through failure of the Commission, because of an error of law, to order payment thereof.” 110 Ct. Cl. at 366. (Emphasis added.) That language on its face seems fully in accord with the Griffin pronouncement. As will be recalled, it was
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam
The occasion for granting the writ in this case was to . resolve the important question whether it is necessary to accord “transactional” immunity, see Counselman v. Hitchcock, 142 U. S. 547 (1892), to compel a witness to give testimony before a state grand jury over his claim of the privilege against self-incrimination, or whether-mere “use” immunity suffices to that end, see, e. g., Murphy v. Waterfront Comm’n, 378 U. S. 52 (1964); Uniformed Sanitation Mén Assn. v. Commissioner of Sanitation of the City of New York, 426 F. 2d 619 (CA2 1970).
After considering the briefs and oral argument's of the parties on this writ, we have reached the conclusion that the decision of the New York Court of Appeals in Gold v. Menna, 25 N. Y. 2d 475, 255 N. E. 2d 235 (1969), which makes clear that transactional immunity is required in New York and' also indicates that such' court's earlier decision in the case before us, People v. La Bello, 24 N. Y. 2d 598, 249 N. E. 2d 412 (1969), may have rested on that premise, makes this case an inappropriate vehicle for deciding a question of such far-reaching importance.
With the intervening decision in Gold, no controversy any longer exists between the parties as to the question which impelled us to grant the writ: whether, in the circumstances involved in this case, Piccirillo was entitled to “use” or “transactional” immunity. While it is true that, technically speaking, issues remain in the case 'concerning the kind of immunity required by federal law and, if" it be “transactional” rather than “use” immunity in such a case as this, the proper scope of such immunity, both issues arise only against the sterile background of agreement between the parties that Piccirillo is entitled to. “transactional’’ immunity under state law. Thus, our determination upon the fundamental constitutional question underlying this case would be in no sense necessary to. its resolution in this instance.
In this posture of affairs, we conclude that the writ of certiorari should be dismissed as improvidently granted.
It is so orderéd.
Mk. Justice Black dissents from the dismissal of this writ as improvidently granted. He would vacate the judgment below and remand the case to the New York Court of Appeals for reconsideration in light of its later opinion in Gold v. Menna, 25 N. Y. 2d 475, 255 N. E. 2d 235.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice KENNEDY, concurring in part.
I join Parts I and II of the Court's opinion, which, in my view, suffice to resolve this case in a full and proper way.
There is a strong public "interest in giving the prosecution one complete opportunity to convict those who have violated its laws." Arizona v. Washington, 434 U.S. 497, 509, 98 S.Ct. 824, 54 L.Ed.2d 717 (1978). The reason that single opportunity did not occur in one trial here was because both parties consented to sever the possession charge to avoid introducing evidence of petitioner's prior conviction during his trial for burglary and larceny. Petitioner acknowledges that by consenting to severance he cannot argue that the Double Jeopardy Clause bars the second trial. See Brief for Petitioner 9-10. He instead contends that, even though he consented to severance, he preserved the double jeopardy protections applied in Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970), protections that, in Ashe, were a bar to relitigation of factual issues adjudicated in a previous trial.
The Double Jeopardy Clause reflects the principle that "the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent he may be found guilty."
Green v. United States, 355 U.S. 184, 187-188, 78 S.Ct. 221, 2 L.Ed.2d 199 (1957). But this "is not a principle which can be expanded to include situations in which the defendant is responsible for the second prosecution." United States v. Scott, 437 U.S. 82, 95-96, 98 S.Ct. 2187, 57 L.Ed.2d 65 (1978) ; see also id., at 99, 98 S.Ct. 2187 (The "Clause, which guards against Government oppression, does not relieve a defendant from the consequences of his voluntary choice"). This rule recurs throughout the Court's double jeopardy cases, see, e.g., Jeffers v. United States, 432 U.S. 137, 152, 97 S.Ct. 2207, 53 L.Ed.2d 168 (1977) ; Ohio v. Johnson, 467 U.S. 493, 500, n. 9, 502, 104 S.Ct. 2536, 81 L.Ed.2d 425 (1984) ; Evans v. Michigan, 568 U.S. 313, 326, 133 S.Ct. 1069, 185 L.Ed.2d 124 (2013), and, in my view, it controls here.
The end result is that when a defendant's voluntary choices lead to a second prosecution he cannot later use the Double Jeopardy Clause, whether thought of as protecting against multiple trials or the relitigation of issues, to forestall that second prosecution. The extent of the Double Jeopardy Clause protections discussed and defined in Ashe need not be reexamined here; for, whatever the proper formulation and implementation of those rights are, they can be lost when a defendant agrees to a second prosecution. Of course, this conclusion is premised on the defendant's having a voluntary choice, and a different result might obtain if that premise were absent. Cf. Turner v. Arkansas, 407 U.S. 366, 367, 92 S.Ct. 2096, 32 L.Ed.2d 798 (1972) (per curiam ) (applying Ashe to a second trial where state law prohibited a single trial of the charges at issue).
Justice GINSBURG, with whom Justice BREYER, Justice SOTOMAYOR, and Justice KAGAN join, dissenting.
Michael Nelson Currier was charged in Virginia state court with (1) breaking and entering, (2) grand larceny, and (3) possessing a firearm after having been convicted of a felony. All three charges arose out of the same criminal episode. Under Virginia practice, unless the prosecutor and the defendant otherwise agree, a trial court must sever a charge of possession of a firearm by a convicted felon from other charges that do not require proof of a prior conviction. Virginia maintains this practice recognizing that evidence of a prior criminal conviction, other than on the offense for which the defendant is being tried, can be highly prejudicial in jury trials.
After trial for breaking and entering and grand larceny, the jury acquitted Currier of both charges. The prosecutor then chose to proceed against Currier on the severed felon-in-possession charge. Currier objected to the second trial on double jeopardy grounds. He argued that the jury acquittals of breaking and entering and grand larceny established definitively and with finality that he had not participated in the alleged criminal episode. Invoking the issue-preclusion component of the double jeopardy ban, Currier urged that in a second trial, the Commonwealth could not introduce evidence of his alleged involvement in breaking and entering and grand larceny, charges on which he had been acquitted. He further maintained that without allowing the prosecution a second chance to prove breaking and entering and grand larceny, the evidence would be insufficient to warrant conviction of the felon-in-possession charge.
I would hold that Currier's acquiescence in severance of the felon-in-possession charge does not prevent him from raising a plea of issue preclusion based on the jury acquittals of breaking and entering and grand larceny.
I
This Court's decisions "have recognized that the [Double Jeopardy] Clause embodies two vitally important interests." Yeager v. United States, 557 U.S. 110, 117, 129 S.Ct. 2360, 174 L.Ed.2d 78 (2009). "The first is the 'deeply ingrained' principle that 'the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent he may be found guilty.' " Id., at 117-118, 129 S.Ct. 2360 (quoting Green v. United States, 355 U.S. 184, 187-188, 78 S.Ct. 221, 2 L.Ed.2d 199 (1957) ). The second interest the Clause serves is preservation of the "finality of judgments," 557 U.S., at 118, 129 S.Ct. 2360 (internal quotation marks omitted), particularly acquittals, see id., at 122-123, 129 S.Ct. 2360 (an acquittal's "finality is unassailable"); Evans v. Michigan, 568 U.S. 313, 319, 133 S.Ct. 1069, 185 L.Ed.2d 124 (2013) ("The law attaches particular significance to an acquittal." (internal quotation marks omitted)).
The Clause effectuates its overall guarantee through multiple protections. Historically, among those protections, the Court has safeguarded the right not to be subject to multiple trials for the "same offense." See Brown v. Ohio, 432 U.S. 161, 165, 97 S.Ct. 2221, 53 L.Ed.2d 187 (1977). That claim-preclusive rule stops the government from litigating the "same offense" or criminal charge in successive prosecutions, regardless of whether the first trial ends in a conviction or an acquittal. See Bravo-Fernandez v. United States, 580 U.S. ----, ----, 137 S.Ct. 352, 357, 196 L.Ed.2d 242 (2016) ; Brown, 432 U.S., at 165, 97 S.Ct. 2221. To determine whether two offenses are the "same," this Court has held, a court must look to the offenses' elements. Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 76 L.Ed. 306 (1932). If each offense "requires proof of a fact which the other does not," Blockburger established, the offenses are discrete and the prosecution of one does not bar later prosecution of the other. Ibid. If, however, two offenses are greater and lesser included offenses, the government cannot prosecute them successively. See Brown, 432 U.S., at 169, 97 S.Ct. 2221.
Also shielded by the Double Jeopardy Clause is the issue-preclusive effect of an acquittal. First articulated in Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970), the issue-preclusive aspect of the Double Jeopardy Clause prohibits the government from relitigating issues necessarily resolved in a defendant's favor at an earlier trial presenting factually related offenses. Ashe involved the robbery of six poker players by a group of masked men. Id., at 437, 90 S.Ct. 1189. Missouri tried Ashe first for the robbery of Donald Knight. Id., at 438, 90 S.Ct. 1189. At trial, proof that Knight was the victim of a robbery was "unassailable"; the sole issue in dispute was whether Ashe was one of the robbers. Id., at 438, 445, 90 S.Ct. 1189. A jury found Ashe not guilty. Id., at 439, 90 S.Ct. 1189. Missouri then tried Ashe for robbing a different poker player at the same table. Ibid. The witnesses at the second trial "were for the most part the same," although their testimony for the prosecution was "substantially stronger" than it was at the first trial. Id., at 439-440, 90 S.Ct. 1189. The State also "refined its case" by declining to call a witness whose identification testimony at the first trial had been "conspicuously negative." Id., at 440, 90 S.Ct. 1189. The second time around, the State secured a conviction. Ibid.
Although the second prosecution involved a different victim and thus a different "offense," this Court held that the second prosecution violated the Double Jeopardy Clause. A component of that Clause, the Court explained, rests on the principle that "when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit." Id., at 443, 445, 90 S.Ct. 1189. Consequently, "after a jury determined by its verdict that [Ashe] was not one of the robbers," the State could not "constitutionally hale him before a new jury to litigate that issue again." Id., at 446, 90 S.Ct. 1189.
In concluding that the Double Jeopardy Clause includes issue-preclusion protection for defendants, the Court acknowledged that no prior decision had "squarely held [issue preclusion] to be a constitutional requirement." Id., at 445, n. 10, 90 S.Ct. 1189. "Until perhaps a century ago," the Court explained, "few situations arose calling for [issue preclusion's] application." Ibid. "[A]t common law" and "under early federal criminal statutes, offense categories were relatively few and distinct," and "[a] single course of criminal conduct was likely to yield but a single offense." Ibid. "[W]ith the advent of specificity in draftsmanship and the extraordinary proliferation of overlapping and related statutory offenses," however, "it became possible for prosecutors to spin out a startlingly numerous series of offenses from a single alleged criminal transaction." Ibid. With this proliferation, "the potential for unfair and abusive reprosecutions became far more pronounced." Ibid.
Toward the end of the 19th century, courts increasingly concluded that greater protections than those traditionally afforded under the Double Jeopardy Clause were needed to spare defendants from prosecutorial excesses. Federal courts, cognizant of the increased potential for exposing defendants to multiple charges based on the same criminal episode, borrowed issue-preclusion principles from the civil context to bar relitigation of issues necessarily resolved against the government in a criminal trial. Ibid. ; cf. United States v. Oppenheimer, 242 U.S. 85, 87, 37 S.Ct. 68, 61 L.Ed. 161 (1916) ("It cannot be that the safeguards of the person, so often and so rightly mentioned with solemn reverence, are less than those that protect from a liability in debt."). By 1970, when Ashe was decided, issue preclusion, "[a]lthough first developed in civil litigation," had become "an established rule of federal criminal law." Ashe, 397 U.S., at 443, 90 S.Ct. 1189. The question presented in Ashe was whether issue preclusion is not just an established rule of federal criminal procedure, but also a rule of constitutional stature. The Court had no "hesitat[ion]" in concluding that it is. Id., at 445, 90 S.Ct. 1189.
Since Ashe, this Court has reaffirmed that issue preclusion ranks with claim preclusion as a Double Jeopardy Clause component. Harris v. Washington, 404 U.S. 55, 56, 92 S.Ct. 183, 30 L.Ed.2d 212 (1971) (per curiam ). Given criminal codes of prolix character, issue preclusion both arms defendants against prosecutorial excesses, see Ashe, 397 U.S., at 445, n. 10, 90 S.Ct. 1189 and preserves the integrity of acquittals, see Yeager, 557 U.S., at 118-119, 129 S.Ct. 2360. See also id., at 119, 129 S.Ct. 2360 (Double Jeopardy Clause shields defendants against "relitiga[tion] [of] any issue that was necessarily decided by a jury's acquittal in a prior trial").
II
On March 7, 2012, a large safe containing some $71,000 in cash and 20 firearms was stolen from Paul and Brenda Garrison's home. When police recovered the safe, which had been dumped in a river, the firearms remained inside, but most of the cash was gone. After a neighbor reported seeing a white pickup truck leaving the Garrisons' driveway around the time of the theft, police identified the Garrisons' nephew, Bradley Wood, as a suspect. Wood later implicated Currier as an accomplice. A grand jury indicted Currier for breaking and entering, grand larceny, and possessing a firearm after having been convicted of a felony. The felon aspect of the felon-in-possession charge was based on Currier's prior convictions for burglary and larceny. Currier was "in possession" of the firearms, the prosecution contended, based on his brief handling of the guns contained in the safe (taking them out and putting them back) when the remaining cash was removed from inside.
Virginia courts, like many others, recognize that trying a felon-in-possession charge together with offenses that do not permit the introduction of prior felony convictions can be hugely prejudicial to a defendant. See Hackney v. Commonwealth, 28 Va.App. 288, 293-294, 504 S.E.2d 385, 388 (1998) (en banc). Evidence of prior convictions, they have observed, can "confus[e] the issues before the jury" and "prejudice the defendant in the minds of the jury by showing his or her depravity and criminal propensity." Id., at 293, 504 S.E.2d, at 388. Virginia courts therefore hold that "unless the Commonwealth and defendant agree to joinder, a trial court must sever a charge of possession of a firearm by a convicted felon from other charges that do not require proof of a prior conviction." Id., at 295, 504 S.E.2d, at 389. In Currier's case, the prosecution and Currier acceded to the Commonwealth's default rule, and the trial court accordingly severed the felon-in-possession charge from the breaking and entering and grand larceny charges.
The Commonwealth proceeded to try Currier first for breaking and entering and grand larceny. Witnesses for the prosecution testified to Currier's involvement in the crimes. First, Wood testified that Currier helped him break into the Garrisons' home and steal the safe. Second, the Garrisons' neighbor testified that she believed Currier was the passenger in the pickup truck she had seen leaving the Garrisons' residence. The prosecution also sought to introduce evidence that a cigarette butt found in Wood's pickup truck carried Currier's DNA. But the court excluded that evidence because the prosecution failed to disclose it at least 21 days in advance of trial, as Virginia law required.
The sole issue in dispute at the first trial, Currier maintains, was whether he participated in the break-in and theft. See App. 35 (prosecutor's closing statement, stating "What is in dispute? Really only one issue and one issue alone. Was the defendant, Michael Currier, one of those people that was involved in the offense?"). The case was submitted to the jury, which acquitted Currier of both offenses.
Despite the jury's acquittal verdicts, the prosecution proceeded against Currier on the felon-in-possession charge. In advance of his second trial, Currier moved to dismiss the gun-possession charge based on the issue-preclusion component of the Double Jeopardy Clause. He urged that the jury at his first trial rejected the government's contention that he was involved in the break-in and theft. Cf. Ashe, 397 U.S., at 446, 90 S.Ct. 1189 (common issue in first and second trials was whether Ashe was one of the robbers). If the government could not attempt to prove anew his participation in the break-in and theft, he reasoned, there would be no basis for a conviction on the gun-possession charge. I.e., his involvement in handling the guns, on the government's theory of the case, depended on his anterior involvement in breaking and entering the Garrisons' residence and stealing their safe. The trial court refused to dismiss the prosecution or to bar the government from introducing evidence of Currier's alleged involvement in the break-in and theft.
At the second trial, the prosecution shored up its attempt to prove Currier's participation in the break-in and theft. The witnesses refined their testimony. Remedying its earlier procedural lapse by timely notifying Currier, the prosecution introduced the cigarette butt evidence. And, of course, to show Currier was a felon, the prosecution introduced his prior burglary and larceny convictions. The jury found Currier guilty of the felon-in-possession offense.
III
The Court holds that even if Currier could have asserted a double jeopardy issue-preclusion defense in opposition to the second trial, he relinquished that right by acquiescing in severance of the felon-in-possession charge. This holding is not sustainable. A defendant's consent to severance does not waive his right to rely on the issue-preclusive effect of an acquittal.
A
It bears clarification first that, contra to the Court's presentation, issue preclusion requires no showing of prosecutorial overreaching. But cf. ante, at 2161 (stating that "the Double Jeopardy Clause exists to prevent [prosecutorial oppression]"). This Court so ruled in Harris v. Washington, 404 U.S. 55, 92 S.Ct. 183, 30 L.Ed.2d 212, and it has subsequently reinforced the point in Turner v. Arkansas, 407 U.S. 366, 92 S.Ct. 2096, 32 L.Ed.2d 798 (1972) (per curiam ), and Yeager v. United States, 557 U.S. 110, 129 S.Ct. 2360, 174 L.Ed.2d 78.
In Harris, the Washington Supreme Court declined to give an acquittal issue-preclusive effect because there was "no indication of bad faith of the state in deliberately making a 'trial run' in the first prosecution." State v. Harris, 78 Wash.2d 894, 901, 480 P.2d 484, 488 (1971). The State Supreme Court further observed that "it was to the advantage of the defendant, and not the state, to separate the trials" because certain evidence was inadmissible in the first trial that would be admissible in the second. Id., at 898, 480 P.2d, at 486. This Court reversed and explained that an acquittal has issue-preclusive effect "irrespective of the good faith of the State in bringing successive prosecutions." Harris, 404 U.S., at 57, 92 S.Ct. 183.
In Turner, Arkansas prosecutors believed the defendant had robbed and murdered someone. 407 U.S., at 366, 92 S.Ct. 2096. An Arkansas statute required that murder be charged separately, with no other charges appended. Id., at 367, 92 S.Ct. 2096. After a jury acquitted Turner on the murder charge, the State sought to try him for robbery. Id., at 366-367, 92 S.Ct. 2096. Even though state law, not an overzealous prosecutor, dictated the sequential trials, this Court held that the defendant was entitled to assert issue preclusion and found the case "squarely controlled by Ashe. " Id., at 370, 92 S.Ct. 2096.
In Yeager, the defendant stood trial on numerous factually related offenses. 557 U.S., at 113-114, 129 S.Ct. 2360. After a jury acquitted on some counts but hung on others, the prosecution sought to retry a number of the hung counts. Id., at 115, 129 S.Ct. 2360. The defendant argued that issue preclusion should apply in the second trial. In opposition, the prosecution stressed that a retrial "presen[ted] none of the governmental overreaching that double jeopardy is supposed to prevent."
Brief for United States in Yeager v. United States, O.T. 2008, No. 08-67, p. 26 (internal quotation marks omitted). Indeed, the prosecution had "attempted to bring all the charges in a single proceeding," and it was seeking a second trial on some charges only "because the jury hung." Ibid. The Court did not regard as controlling the lack of prosecutorial overreaching. Instead, it emphasized that "[a] jury's verdict of acquittal represents the community's collective judgment regarding all the evidence and arguments presented to it" and that, once rendered, an acquittal's "finality is unassailable." 557 U.S., at 122-123, 129 S.Ct. 2360.
B
There is in Currier's case no suggestion that he expressly waived a plea of issue preclusion at a second trial, or that he failed to timely assert the plea. Instead, the contention, urged by the prosecution and embraced by this Court, is that Currier surrendered his right to assert the issue-preclusive effect of his first-trial acquittals by consenting to two trials.
This Court "indulge[s] every reasonable presumption against waiver of fundamental constitutional rights." Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938) (internal quotation marks omitted). It has found "waiver by conduct" only where a defendant has engaged in "conduct inconsistent with the assertion of [the] right." Pierce Oil Corp. v. Phoenix Refining Co., 259 U.S. 125, 129, 42 S.Ct. 440, 66 L.Ed. 855 (1922). For example, a defendant who "voluntarily absents himself" from trial waives his Sixth Amendment right to be present. Taylor v. United States, 414 U.S. 17, 19, 94 S.Ct. 194, 38 L.Ed.2d 174 (1973) (per curiam ) (internal quotation marks omitted). Similarly, a defendant who "obtains the absence of a witness by wrongdoing" may "forfeit" or "waive" his Sixth Amendment right to confront the absent witness. Davis v. Washington, 547 U.S. 813, 833, 126 S.Ct. 2266, 165 L.Ed.2d 224 (2006). Where, however, a defendant takes no action inconsistent with the assertion of a right, the defendant will not be found to have waived the right.
Currier took no action inconsistent with assertion of an issue-preclusion plea. To understand why, one must comprehend just what issue preclusion forecloses. Unlike the right against a second trial for the same offense (claim preclusion), issue preclusion prevents relitigation of a previously rejected theory of criminal liability without necessarily barring a successive trial. Take Ashe, for example. Issue preclusion prevented the prosecution from arguing, at a second trial, that Ashe was one of the robbers who held up the poker players at gunpoint. But if the prosecution sought to prove, instead, that Ashe waited outside during the robbery and then drove the getaway car, issue preclusion would not have barred that trial. Similarly here, the prosecution could not again attempt to prove that Currier participated in the break-in and theft of the safe at the Garrisons' residence. But a second trial could be mounted if the prosecution alleged, for instance, that Currier was present at the river's edge when others showed up to dump the safe in the river, and that Currier helped to empty out and replace the guns contained in the safe.
In short, issue preclusion does not operate, as claim preclusion does, to bar a successive trial altogether. Issue preclusion bars only a subset of possible trials-those in which the prosecution rests its case on a theory of liability a jury earlier rejected. That being so, consenting to a second trial is not inconsistent with-and therefore does not foreclose-a defendant's gaining the issue-preclusive effect of an acquittal.
The Court cites Jeffers v. United States, 432 U.S. 137, 97 S.Ct. 2207, 53 L.Ed.2d 168 (1977), United States v. Dinitz, 424 U.S. 600, 96 S.Ct. 1075, 47 L.Ed.2d 267 (1976), and United States v. Scott, 437 U.S. 82, 98 S.Ct. 2187, 57 L.Ed.2d 65 (1978), as support for a second trial, on the ground that Currier consented to it. Those decisions do not undermine the inviolacy of an acquittal.
In Jeffers, the defendant was charged with two offenses, one of which was a lesser included offense of the other. 432 U.S., at 140-141, 150, 97 S.Ct. 2207. He asked for, and gained, separate trials of the two charges. Id., at 142-143, 97 S.Ct. 2207. After conviction on the lesser included charge, he argued that a second trial on the remaining charge would violate his double jeopardy right "against multiple prosecutions." Id., at 139, 143-144, 97 S.Ct. 2207. A plurality of this Court rejected Jeffers' argument, reasoning that he had waived the relevant right because he was "solely responsible for the successive prosecutions." Id., at 154, 97 S.Ct. 2207.
Jeffers presented a claim-preclusion question. The Court there said not one word about issue preclusion. Nor did the Court address the staying power of an acquittal. It had no occasion to do so, as Jeffers was convicted on the first charge. Indeed, some years later, three Justices, including the author of the Jeffers plurality, stated: "There is no doubt that had the defendant in Jeffers been acquitted at the first trial, the [issue-preclusion protection] embodied in the Double Jeopardy Clause would have barred a second trial on the greater offense." Green v. Ohio, 455 U.S. 976, 980, 102 S.Ct. 1486, 71 L.Ed.2d 688 (1982) (White, J., joined by Blackmun and Powell, JJ., dissenting from the denial of certiorari) (emphasis added).
Dinitz and Scott are even weaker reeds. In Dinitz, the defendant requested, and gained, a mistrial after the trial judge expelled his lead counsel from the courtroom. 424 U.S., at 602-605, 96 S.Ct. 1075. In Scott, the defendant sought and obtained dismissal of two of three counts prior to their submission to the jury. 437 U.S., at 84, 98 S.Ct. 2187. The question in each case was whether the defendant's actions deprived him of the right to be spared from a second trial on the same offenses. Both decisions simply concluded that when a defendant voluntarily seeks to terminate a trial before a substantive ruling on guilt or innocence, the Double Jeopardy Clause is not offended by a second trial. The cases, however, said nothing about the issue-preclusive effect of a prior acquittal at a subsequent trial. Cf. Burks v. United States, 437 U.S. 1, 17, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978) ( "It cannot be meaningfully said that a person 'waives' his right to a judgment of acquittal by moving for a new trial."). As was the case in Jeffers, Dinitz and Scott presented no occasion to do so.
IV
Venturing beyond Justice KENNEDY's rationale for resolving this case, the plurality would take us back to the days before the Court recognized issue preclusion as a constitutionally grounded component of the Double Jeopardy Clause. See ante, at 2155 (questioning whether issue preclusion "really... exist[s] in criminal law"). I would not engage in that endeavor to restore things past.
One decision, however, should be set straight. The plurality asserts that Dowling v. United States, 493 U.S. 342, 110 S.Ct. 668, 107 L.Ed.2d 708 (1990), established that issue preclusion has no role to play in regulating the issues or evidence presented at a successive trial. Ante, at 2153 - 2154. Dowling did no such thing. The case is tied to Federal Rule of Evidence 404(b), which allows the prosecution to introduce evidence of a defendant's past criminal conduct for described purposes other than to show a defendant's bad character. See Fed. Rule Evid. 404(b)(2). The defendant in Dowling was prosecuted for robbing a bank. 493 U.S., at 344, 110 S.Ct. 668. To bolster its case that Dowling was the perpetrator, the Government sought to introduce evidence that Dowling participated in a home invasion two weeks after the bank robbery. Id., at 344-345, 110 S.Ct. 668. One difficulty for the prosecution: Dowling had been acquitted of the home invasion. Id., at 345, 110 S.Ct. 668. Nevertheless, the trial court admitted the evidence, informing the jurors that Dowling had been acquitted of the home-invasion charge and instructing them on the "limited purpose" for which the evidence was introduced. Id., at 345-346, 110 S.Ct. 668.
The Court in Dowling "decline[d] to extend Ashe " to forbid the prosecution from introducing evidence, under Rule 404(b), of a crime for which the defendant had been acquitted, one involving criminal conduct unrelated to the bank robbery for which Dowling stood trial. Id., at 348, 110 S.Ct. 668. The charge for which Dowling was acquitted took place at a different time and involved different property, a different location, and different victims. Id., at 344, 110 S.Ct. 668. See also United States v. Felix, 503 U.S. 378, 386, 112 S.Ct. 1377, 118 L.Ed.2d 25 (1992) (stressing that the two crimes in Dowling were "unrelated"). It surely could not be said that, in the bank robbery trial, Dowling was being tried a second time for the later-occurring home invasion offense. Here, by contrast, the two trials involved the same criminal episode. See Ashe, 397 U.S., at 446, 90 S.Ct. 1189 ("same robbery"); Turner, 407 U.S., at 368-369, 92 S.Ct. 2096 ("the same set of facts, circumstances, and the same occasion" (internal quotation marks omitted)).
Extending Dowling from the Evidence Rule 404(b) context in which it was embedded to retrials involving the same course of previously acquitted conduct would undermine issue-preclusion's core tenet. That tenet was well stated by Judge Friendly in United States v. Kramer, 289 F.2d 909 (C.A.2 1961) :
"A defendant who has satisfied one jury that he had no responsibility for a crime ought not be forced to convince another of this [lack of responsibility].... The very nub of [issue preclusion] is to extend res judicata beyond those cases where the prior judgment is a complete bar. The Government is free, within limits set by the Fifth Amendment, to charge an acquitted defendant with other crimes claimed to arise from the same or related conduct; but it may not prove the new charge by asserting facts necessarily determined against it on the first trial...." Id., at 915-916 (citation omitted).
So here. The first trial established that Currier did not participate in breaking and entering the Garrisons' residence or in stealing their safe. The government can attempt to prove Currier possessed firearms through a means other than breaking and entering the Garrisons' residence and stealing their safe. But the government should not be permitted to show in the felon-in-possession trial what it failed to show in the first trial, i.e., Currier's participation in the charged breaking and entering and grand larceny, after a full and fair opportunity to do so.
* * *
For the reasons stated, I would reverse the judgment of the Virginia Supreme Court.
Ohio v. Johnson, 467 U.S. 493, 104 S.Ct. 2536, 81 L.Ed.2d 425 (1984), cited by Justice KENNEDY, ante, at 2157, is not in point. It, too, like Jeffers, Scott, and Dinitz, involved claim preclusion, not issue preclusion, i.e., trial of greater offenses after guilty pleas to lesser offenses. See supra, at 2157 - 2158. The case does contain an enigmatic footnote stating, "in a case such as this, where the State has made no effort to prosecute the charges seriatim, the considerations of double jeopardy protection implicit in the application of [issue preclusion] are inapplicable." 467 U.S., at 500, n. 9, 104 S.Ct. 2536. True in a case like Johnson, which involved no prior acquittals, I would not read more into a terse, unelaborated footnote that contains no citation.
Evans v. Michigan
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Opinion of the Court by
Mr. Justice Black,
announced by Mr. Justice Frankfurter.
Robert G. Peters, Jr., and his wife, of Oakland County, Michigan, failed to pay their 1952 federal income taxes. In January 1954 an assessment for this delinquency was filed in the Internal Revenue Collector’s Office at Detroit, Michigan, at which time a lien arose “in favor of the United States upon all property” of the two delinquent taxpayers. Some 10 months after the Government’s tax lien arose, Mr. and Mrs. Peters executed a mortgage on real property they owned in Oakland County to secure an indebtedness to the respondent Union Central Life Insurance Company. They defaulted in payment of the mortgage, and Union Central filed this action to foreclose in the Circuit Court of Oakland County, joining the United States as a party defendant because of its asserted lien.
The company claimed priority for its mortgage over the earlier created federal lien because no notice of the federal lien had been filed with the register of deeds in Oakland County as then required by Michigan law. For this alleged priority the company relied on § 3672 (a) (1) of the 1939 Internal Revenue Code, as amended, providing that a federal tax lien shall not be valid as against any mortgagee until notice has been filed “In the office in which the filing of such notice is authorized by the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law authorized the filing of such notice in an office within the State or Territory.” The Government, however, claimed that Michigan had not “authorized” filing within the meaning of the statute and that the case should be governed by § 3672 (a) (2) which provides that “whenever the State . . . has not by law authorized the filing of such notice in an office within the State,” the notice may be filed in “the office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated.” Since the federal lien had been filed in the District Court months before the mortgage was executed and filed in the county register of deeds’ office, the Government claimed that its lien had priority. The Government's contention that Michigan had not “authorized” a state office for filing the federal tax notice was based on the fact that the Michigan law purporting to authorize such filing expressly required that a federal tax lien notice contain “a description of the land upon which a lien is claimed,” even though the form long used for filing federal tax lien notices in the District Courts throughout the United States does not contain a description of any particular property upon which the lien is asserted. In support of its contention the Government pointed to the fact that in 1953 the Michigan Attorney General ruled that federal tax lien notices not containing such a description are not entitled to recordation, and it is stipulated that from the time of that ruling, up to 1956, “it was the policy of the office of the Register of Deeds for said County of Oakland not to accept for recording notices of Federal tax liens which did not contain a legal description of any land.”
Because the United States had not filed a notice complying with the Michigan law, the Michigan Circuit and Supreme Courts held the federal lien to be subordinate to the mortgage, 361 Mich. 283, 105 N. W. 2d 196. While this holding is in accord with Youngblood v. United States, 141 F. 2d 912 (C. A. 6th Cir.), it conflicts with United States v. Rasmuson, 253 F. 2d 944 (C. A. 8th Cir.). In order to settle this conflict and because of the importance of the question in the administration of the revenue laws, we granted certiorari. 365 U. S. 858.
The Michigan requirement that notice of the federal tax lien be filed in Michigan is, of course, not controlling unless Congress has made it so, for the subject of federal taxes, including “remedies for their collection, has always been conceded to be independent of the legislative action of the States.” United States v. Snyder, 149 U. S. 210, 214. While § 3672 (a)(1) unquestionably requires notice of a federal lien to be filed in a state office when the State authoritatively designates an office for that purpose, the section docs not purport to permit the State to prescribe the form or the contents of that notice. Since such an authorization might well result in radically differing forms of federal tax notices for the various States, it would run counter to the principle of uniformity which has long been the accepted practice in the field of federal taxation. Moreover, a required compliance with Michigan law would mean that the federal tax lien would be superior to all those entitled to notice only as to the property described in the notice even though § 3670 broadly creates a lien “upon all property and rights to property, whether real or personal, belonging to” a taxpayer. This language has been held to include in the lien all property owned by the delinquent taxpayer both at the time the lien arises and thereafter until it is paid. It seems obvious that this expansive protection for the Government would be greatly reduced if to enforce it government agents were compelled to keep aware at all times of all property coming into the hands of its tax delinquents. Imposition of such a task by the Michigan law could seriously cripple the Government in the collection of its taxes, and to attribute to Congress a purpose so to weaken the tax liens it has created would require very clear language. The history of § 3672 belies any such congressional purpose.
In 1893 this Court decided in United States v. Snyder, 149 U. S. 210, that the federal tax lien could be enforced against bona fide purchasers who had no notice of the lien, despite a state law attempting to defeat the lien unless it has been recorded. In order to grant relief from the Snyder rule, Congress in 1913 passed an Act requiring, much as the provision here in question did, that the tax liens should not be “valid as against any mortgagee, purchaser, or judgment creditor” until notice was filed with the clerk of an appropriate District Court or, whenever a State authorized such filing, in the office of a county recorder of deeds. This statute was amended in 1928 by adding that the lien would not be valid until notice was filed “in accordance with the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law provided for the filing of such notice ...” (Emphasis supplied.) Following this in United States v. Maniaci, 36 F. Supp. 293, aff’d, 116 F. 2d 935, both a United States District Court and a Court of Appeals refused to enforce a federal tax lien on Michigan property because the notice of lien, although filed both in a District Court and in the office of the proper Michigan register of deeds, did not contain the description of the property required by Michigan law. In this holding emphasis was placed on the clause added in 1928, requiring notice to be filed “in accordance with the law of the State or Territory in which the property subject to the lien is situated . . . .”
Less than two years after the Maniaci holding Congress again amended the lien notice provisions, struck out “in accordance with the law of the State or Territory” and substituted the language in the section here controlling that notice was not valid until filed “In the office in which the filing of such notice is authorized by the law of the State or Territory.” The reports of the House and Senate Committees reporting this amendment point strongly to a purpose to get away from the ruling in the Maniaci case and make it clear that, while notice of a federal lien must be filed in a state office where authorized by a State, the notice is sufficient if given in the form long used by the Department “without regard to other general requirements with respect to recording prescribed by the law of such State or Territory.” The Department never accepted the Maniaci case and its practice has been to use forms which do not contain a particular description of any property owned by a delinquent taxpayer. The notice provisions were once more amended in the 1954 Code, this time providing that the notice shall be valid if in the Department form “notwithstanding any law of the State or Territory regarding the form or content of a notice of lien.” The House Report stated that this amendment was merely “declaratory of the existing procedure and in accordance with the long-continued practice of the Treasury Department.”
The Michigan law authorizing filing only if a description .of the property was given placed obstacles to the enforcement of federal tax liens that Congress had not permitted, and consequently no state office was “authorized” for filing within the meaning of the federal statute. It was therefore error for the Michigan courts to fail to give priority to the Government’s lien here, notice of which had been filed in the District Court in accordance with federal law.
The judgment of the Michigan Supreme Court is reversed and the cause is remanded to that court for proceedings not inconsistent with this opinion.
Reversed and remanded.
Mr. Justice Douglas dissents.
Sections 3670 and 3671 of the Internal Revenue Code of 1939, in effect at that time.
Act 104, Public Acts of Michigan of 1923, repealed April 13, 1956, by Act 107, Public Acts of Michigan of 1956.
Act 104 was repealed April 13, 1956.
Glass City Bank v. United States, 326 U. S. 265.
37 Stat. 1016.
46 Stat. 876.
56 Stat. 957, § 3672 (a) (1) of the Internal Revenue Code of 1939, as amended.
H. R. Rep. No. 2333, 77th Cong., 2d Sess. 173. See also S. Rep. No. 1631, 77th Cong., 2d Sess. 248.
Section 6323 (b) of the Internal Revenue Code of 1954.
H. R. Rep. No. 1337, 83d Cong., 2d Sess. A406-A407.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | L | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Stevens
delivered the opinion of the Court.
The question presented is whether the incorporation of a federal standard in a state-law private action, when Congress has intended that there not be a federal private action for violations of that federal standard, makes the action one “arising under the Constitution, laws, or treaties of the United States,” 28 U. S. C. § 1331.
I
The Thompson respondents are residents of Canada and the MacTavishes reside in Scotland. They filed virtually identical complaints against petitioner, a corporation, that manufactures and distributes the drug Bendectin. The complaints were filed in the Court of Common Pleas in Hamilton County, Ohio. Each complaint alleged that a child was born with multiple deformities as a result of the mother’s ingestion of Bendectin during pregnancy. In five of the six counts, the recovery of substantial damages was requested on common-law theories of negligence, breach of warranty, strict liability, fraud, and gross negligence. In Count IV, respondents alleged that the drug Bendectin was “misbranded” in violation of the Federal Food, Drug, and Cosmetic Act (FDCA), 52 Stat. 1040, as amended, 21 U. S. C. § 301 et seq. (1982 ed. and Supp. Ill), because its labeling did not provide adequate warning that its use was potentially dangerous. Paragraph 26 alleged that the violation of the FDCA “in the promotion” of Bendectin “constitutes a rebuttable presumption of negligence.” Paragraph 27 alleged that the “violation of said federal statutes directly and proximately caused the injuries suffered” by the two infants. App. 22, 32.
Petitioner filed a timely petition for removal from the state court to the Federal District Court alleging that the action was “founded, in part, on an alleged claim arising under the laws of the United States.” After removal, the two cases were consolidated. Respondents filed a motion to remand to the state forum on the ground that the federal court lacked subject-matter jurisdiction. Relying on our decision in Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921), the District Court held that Count IV of the complaint alleged a cause of action arising under federal law and denied the motion to remand. It then granted petitioner’s motion to dismiss on forum non conveniens grounds.
The Court of Appeals for the Sixth Circuit reversed. 766 F. 2d 1006 (1985). After quoting one sentence from the concluding paragraph in our recent opinion in Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U. S. 1 (1983), and noting “that the FDCA does not create or imply a private right of action for individuals injured as a result of violations of the Act,” it explained:
“Federal question jurisdiction would, thus, exist only if plaintiffs’ right to relief depended necessarily on a substantial question of federal law. Plaintiffs’ causes of action referred to the FDCA merely as one available criterion for determining whether Merrell Dow was negligent. Because the jury could find negligence on the part of Merrell Dow without finding a violation of the FDCA, the plaintiffs’ causes of action did not depend necessarily upon a question of federal law. Consequently, the causes of action did not arise under federal law and, therefore, were improperly removed to federal court.” 766 F. 2d, at 1006.
We granted certiorari, 474 U. S. 1004 (1985), and we now affirm.
II
Article III of the Constitution gives the federal courts power to hear cases “arising under” federal statutes. That grant of power, however, is not self-executing, and it was not until the Judiciary Act of 1875 that Congress gave the federal courts general federal-question jurisdiction. Although the constitutional meaning of “arising under” may extend to all cases in which a federal question is “an ingredient” of the action, Osborn v. Bank of the United States, 9 Wheat. 738, 823 (1824), we have long construed the statutory grant of federal-question jurisdiction as conferring a more limited power. Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 494-495 (1983); Romero v. International Terminal Operating Co., 358 U. S. 354, 379 (1959).
Under our longstanding interpretation of the current statutory scheme, the question whether a claim “arises under” federal law must be determined by reference to the “well-pleaded complaint.” Franchise Tax Board, 463 U. S., at 9-10. A defense that raises a federal question is inadequate to confer federal jurisdiction. Louisville & Nashville R. Co. v. Mottley, 211 U. S. 149 (1908). Since a defendant may remove a case only if the claim could have been brought in federal court, 28 U. S. C. § 1441(b), moreover, the question for removal jurisdiction must also be determined by reference to the “well-pleaded complaint.”
As was true in Franchise Tax Board, supra, the propriety of the removal in this case thus turns on whether the case falls within the original “federal question” jurisdiction of the federal courts. There is no “single, precise definition” of that concept; rather, “the phrase ‘arising under’ masks a welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system.” Id., at 8.
This much, however, is clear. The “vast majority” of cases that come within this grant of jurisdiction are covered by Justice Holmes’ statement that a “ ‘suit arises under the law that creates the cause of action.’” Id., at 8-9, quoting American Well Works Co. v. Layne & Bowler Co., 241 U. S. 257, 260 (1916). Thus, the vast majority of cases brought under the general federal-question jurisdiction of the federal courts are those in which federal law creates the cause of action.
We have, however, also noted that a case may arise under federal law “where the vindication of a right under state law necessarily turned on some construction of federal law.” Franchise Tax Board, 463 U. S., at 9. Our actual holding in Franchise Tax Board demonstrates that this statement must be read with caution; the central issue presented in that case turned on the meaning of the Employee Retirement Income Security Act of 1974, 29 U. S. C. § 1001 et seq. (1982 ed. and Supp. III), but we nevertheless concluded that federal jurisdiction was lacking.
This case does not pose a federal question of the first kind; respondents do not allege that federal law creates any of the causes of action that they have asserted. This case thus poses what Justice Frankfurter called the “litigation-provoking problem,” Textile Workers v. Lincoln Mills, 353 U. S. 448, 470 (1957) (dissenting opinion) — the presence of a federal issue in a state-created cause of action.
In undertaking this inquiry into whether jurisdiction may lie for the presence of a federal issue in a nonfederal cause of action, it is, of course, appropriate to begin by referring to our understanding of the statute conferring federal-question jurisdiction. We have consistently emphasized that, in exploring the outer reaches of § 1331, determinations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system. “If the history of the interpretation of judiciary legislation teaches us anything, it teaches the duty to reject treating such statutes as a wooden set of self-sufficient words. . . . The Act of 1875 is broadly phrased, but it has been continuously construed and limited in the light of the history that produced it, the demands of reason and coherence, and the dictates of sound judicial policy which have emerged from the Act’s function as a provision in the mosaic of federal judiciary legislation.” Romero v. International Terminal Operating Co., 358 U. S., at 379. In Franchise Tax Board, we forcefully reiterated this need for prudence and restraint in the jurisdictional inquiry: “We have always interpreted what Skelly Oil [Co. v. Phillips Petroleum Co., 339 U. S. 667, 673 (1950)] called ‘the current of jurisdictional legislation since the Act of March 3, 1875’. . . with an eye to practicality and necessity.” 463 U. S., at 20.
In this case, both parties agree with the Court of Appeals’ conclusion that there is no federal cause of action for FDCA violations. For purposes of our decision, we assume that this is a correct interpretation of the FDCA. Thus, as the case comes to us, it is appropriate to assume that, under the settled framework for evaluating whether a federal cause of action lies, some combination of the following factors is present: (1) the plaintiffs are not part of the class for whose special benefit the statute was passed; (2) the indicia of legislative intent reveal no congressional purpose to provide a private cause of action; (3) a federal cause of action would not further the underlying purposes of the legislative scheme; and (4) the respondents’ cause of action is a subject traditionally relegated to state law. In short, Congress did not intend a private federal remedy for violations of the statute that it enacted.
This is the first case in which we have reviewed this type of jurisdictional claim in light of these factors. That this is so is not surprising. The development of our framework for determining whether a private cause of action exists has proceeded only in the last 11 years, and its inception represented a significant change in our approach to congressional silence on the provision of federal remedies.
The recent character of that development does not, however, diminish its importance. Indeed, the very reasons for the development of the modern implied remedy doctrine— the “increased complexity of federal legislation and the increased volume of federal litigation,” as well as “the desirability of a more careful scrutiny of legislative intent,” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U. S. 353, 377 (1982) (footnote omitted) — are precisely the kind of considerations that should inform the concern for “practicality and necessity” that Franchise Tax Board advised for the construction of § 1331 when jurisdiction is asserted because of the presence of a federal issue in a state cause of action.
The significance of the necessary assumption that there is no federal private cause of action thus cannot be overstated. For the ultimate import of such a conclusion, as we have repeatedly emphasized, is that it would flout congressional intent to provide a private federal remedy for the violation of the federal statute. We think it would similarly flout, or at least undermine, congressional intent to conclude that the federal courts might nevertheless exercise federal-question jurisdiction and provide remedies for violations of that federal statute solely because the violation of the federal statute is said to be a “rebuttable presumption” or a “proximate cause” under state law, rather than a federal action under federal law.
HH HH HH
Petitioner advances three arguments to support its position that, even in the face of this congressional preclusion of a federal cause of action for a violation of the federal statute, federal-question jurisdiction may lie for the violation of the federal statute as an element of a state cause of action.
First, petitioner contends that the case represents a straightforward application of the statement in Franchise Tax Board that federal-question jurisdiction is appropriate when “it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims.” 463 U. S., at 13. Franchise Tax Board, however, did not purport to disturb the long-settled understanding that the mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction. Indeed, in determining that federal-question jurisdiction was not appropriate in the case before us, we stressed Justice Cardozo’s emphasis on principled, pragmatic distinctions: “‘What is needed is something of that common-sense accommodation of judgment to kaleidoscopic situations which characterizes the law in its treatment of causation... a selective process which picks the substantial causes out of the web and lays the other ones aside.Id., at 20-21 (quoting Gully v. First National Bank, 299 U. S. 109, 117-118 (1936)).
Far from creating some kind of automatic test, Franchise Tax Board thus candidly recognized the need for careful judgments about the exercise of federal judicial power in an area of uncertain jurisdiction. Given the significance of the assumed congressional determination to preclude federal private remedies, the presence of the federal issue as an element of the state tort is not the kind of adjudication for which jurisdiction would serve congressional purposes and the federal system. This conclusion is fully consistent with the very sentence relied on so heavily by petitioner. We simply conclude that the congressional determination that there should be no federal remedy for the violation of this federal statute is tantamount to a congressional conclusion that the presence of a claimed violation of the statute as an element of a state cause of action is insufficiently “substantial” to confer federal-question jurisdiction.
Second, petitioner contends that there is a powerful federal interest in seeing that the federal statute is given uniform interpretations, and that federal review is the best way of insuring such uniformity. In addition to the significance of the congressional decision to preclude a federal remedy, we do not agree with petitioner’s characterization of the federal interest and its implications for federal-question jurisdiction. To the extent that petitioner is arguing that state use and interpretation of the FDCA pose a threat to the order and stability of the FDCA regime, petitioner should be arguing, not that federal courts should be able to review and enforce state FDCA-based causes of action as an aspect of federal-question jurisdiction, but that the FDCA pre-empts state-court jurisdiction over the issue in dispute. Petitioner’s concern about the uniformity of interpretation, moreover, is considerably mitigated by the fact that, even if there is no original district court jurisdiction for these kinds of action, this Court retains power to review the decision of a federal issue in a state cause of action.
Finally, petitioner argues that, whatever the general rule, there are special circumstances that justify federal-question jurisdiction in this case. Petitioner emphasizes that it is unclear whether the FDCA applies to sales in Canada and Scotland; there is, therefore, a special reason for having a federal court answer the novel federal question relating to the extraterritorial meaning of the Act. We reject this argument. We do not believe the question whether a particular claim arises under federal law depends on the novelty of the federal issue. Although it is true that federal jurisdiction cannot be based on a frivolous or insubstantial federal question, “the interrelation of federal and state authority and the proper management of the federal judicial system,” Franchise Tax Board, 463 U. S., at 8, would be ill served by a rule that made the existence of federal-question jurisdiction depend on the district court’s case-by-ease appraisal of the novelty of the federal question asserted as an element of the state tort. The novelty of an FDCA issue is not sufficient to give it status as a federal cause of action; nor should it be sufficient to give a state-based FDCA claim status as a jurisdiction-triggering federal question.
IV
We conclude that a complaint alleging a violation of a federal statute as an element of a state cause of action, when Congress has determined that there should be no private, federal cause of action for the violation, does not state a claim “arising under the Constitution, laws, or treaties of the United States.” 28 U. S. C. § 1331.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
App. 36-37. The petition also alleged that the action “is between citizens of a State and citizens or subjects of a foreign state.” Id,., at 36. Because petitioner is a corporation -with its principal place of business in Ohio, however, the removal was not proper unless the action was founded on a claim arising under federal law. Title 28 U. S. C. § 1441(b) provides:
“(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”
“ ‘Under our interpretations, Congress has given the lower courts jurisdiction to hear, originally or by removal from a state court, only those eases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal law.’” 766 F. 2d, at 1006 (quoting Franchise Tax Board, 463 U. S., at 28).
See Art. III, § 2 (“The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority . . .”).
Act of Mar. 3, 1875, § 1, 18 Stat. 470. As currently codified, the statute provides: “The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States.” 28 U. S. C. § 1331.
The case most frequently cited for that proposition is Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921). In that case the Court upheld federal jurisdiction of a shareholder’s bill to enjoin the corporation from purchasing bonds issued by the federal land banks under the authority of the Federal Farm Loan Act on the ground that the federal statute that authorized the issuance of the bonds was unconstitutional. The Court stated:
“The general rule is that where it appears from the bill or statement of the plaintiff that the right to relief depends upon the construction or application of the Constitution or laws of the United States, and that such federal claim is not merely colorable, and rests upon a reasonable foundation, the District Court has jurisdiction under this provision.” Id., at 199.
The effect of this view, expressed over Justice Holmes’ vigorous dissent, on his American Well Works formulation has been often noted. See, e. g., Franchise Tax Board, 463 U. S., at 9 (“[I]t is well settled that Justice Holmes’ test is more useful for describing the vast majority of cases that come within the district courts’ original jurisdiction than it is for describing which cases are beyond district court jurisdiction”); T. B. Harms Co. v. Eliscu, 339 F. 2d 823, 827 (CA2 1964) (Friendly, J.) (“It has come to be realized that Mr. Justice Holmes’ formula is more useful for inclusion than for the exclusion for which it was intended”).
Jurisdiction may not be sustained on a theory that the plaintiff has not advanced. See Healy v. Sea Gull Specialty Co., 237 U. S. 479, 480 (1915) (“[T]he plaintiff is absolute master of what jurisdiction he will appeal to”); The Fair v. Kohler Die & Specialty Co., 228 U. S. 22, 25 (1913) (“[T]he party who brings a suit is master to decide what law he will rely upon”). See also United States v. Mottaz, 476 U. S. 834, 850 (1986).
See California v. Sierra Club, 451 U. S. 287, 293 (1981); Cannon v. University of Chicago, 441 U. S. 677, 689-709 (1979); Cort v. Ash, 422 U. S. 66, 78 (1975).
See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U. S. 353, 377 (1982) (“In 1975 the Court unanimously decided to modify its approach to the question whether a federal statute includes a private right of action”). Cf. Middlesex County Sewerage Authority v. National Sea Clammers Assn., 453 U. S. 1, 25 (1981) (Stevens, J., concurring in judgment in part and dissenting in part) (“In 1975, in Cort v. Ash, 422 U. S. 66, the Court cut back on the simple common-law presumption by fashioning a four-factor formula that led to the denial of relief in that case”).
See, e. g., Daily Income Fund, Inc. v. Fox, 464 U. S. 523, 535-536 (1984) (“In evaluating such a claim, our focus must be on the intent of Congress when it enacted the statute in question”); Middlesex County Sewerage Authority v. National Sea Clammers Assn., 453 U. S., at 13 (“The key to the inquiry is the intent of the Legislature”); Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630, 639 (1981) (“Our focus, as it is in any case involving the implication of a right of action, is on the intent of Congress”); California v. Sierra Club, 451 U. S., at 293 (“[T]he ultimate issue is whether Congress intended to create a private right of action”); Northwest Airlines, Inc. v. Transport Workers, 451 U. S. 77, 91 (1981) (“The ultimate question in cases such as this is whether Congress intended to create the private remedy”); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U. S. 11, 15 (1979) (“The question whether a statute creates a cause of action, either expressly or by implication, is basically a matter of statutory construction”); Touche Ross & Co. v. Redington, 442 U. S. 560, 568 (1979) (“The question of the existence of a statutory cause of action is, of course, one of statutory construction”).
When we conclude that Congress has decided not to provide a particular federal remedy, we are not free to “supplement” that decision in a way that makes it “meaningless.” Cf. Mobil Oil Corp. v. Higginbotham, 436 U. S. 618, 625 (1978) (When Congress “does speak directly to a question, the courts are not free to ‘supplement’ Congress’ answer so thoroughly that the Act becomes meaningless”). See also California v. Sierra Club, 451 U. S., at 297 (“The federal judiciary will not engraft a remedy on a statute, no matter how salutary, that Congress did not intend to provide”).
See, e. g., Textile Workers v. Lincoln Mills, 353 U. S. 448, 470 (1957) (Frankfurter, J., dissenting) (defining inquiry as “the degree to which federal law must be in the forefront of the case and not collateral, peripheral or remote”); Gully v. First National Bank, 299 U. S. 109, 115 (1936) (“Not every question of federal law emerging in a suit is proof that a federal law is the basis of the suit”); id,., at 118 (“If we follow the ascent far enough, countless claims of right can be discovered to have their source or their operative limits in the provisions of a federal statute or in the Constitution itself with its circumambient restrictions upon legislative power. To set bounds to the pursuit, the courts have formulated the distinction between controversies that are basic and those that are collateral, between disputes that are necessary and those that are merely possible. We shall be lost in a maze if we put that compass by”).
Several commentators have suggested that our §1331 decisions can best be understood as an evaluation of the nature of the federal interest at stake. See, e. g., Shapiro, Jurisdiction and Discretion, 60 N. Y. U. L. Rev. 543, 568 (1985); C. Wright, Federal Courts 96 (4th ed. 1983); Cohen, The Broken Compass: The Requirement That a Case Arise “Directly” Under Federal Law, 115 U. Pa. L. Rev. 890, 916 (1967). Cf. Kravitz v. Homeowners Warranty Corp., 542 F. Supp. 317, 320 (ED Pa. 1982) (Pollak, J.) (“I cannot identify any compelling reasons of federal judicial policy for embracing a case of this kind as a federal question case. The essential Pennsylvania elements of plaintiffs’ suit for rescission would be more appropriately dealt with by a Court of Common Pleas than by this court; and, with respect to the lesser-included issue of federal law, Pennsylvania’s courts are fully competent to interpret the Magnuson-Moss Warranty Act and the relevant F. T. C. regulations, subject to review by the United States Supreme Court”).
Focusing on the nature of the federal interest, moreover, suggests that the widely perceived “irreconcilable” conflict between the finding of federal jurisdiction in Smith v. Kansas City Title & Trust Co., 255 U. S. 180 (1921), and the finding of no jurisdiction in Moore v. Chesapeake & Ohio R. Co., 291 U. S. 205 (1934), see, e. g., M. Redish, Federal Jurisdiction: Tensions in the Allocation of Judicial Power 67 (1980), is far from clear. For the difference in results can be seen as manifestations of the differences in the nature of the federal issues at stake. In Smith, as the Court emphasized, the issue was the constitutionality of an important federal statute. See 255 U. S., at 201 (“It is . . . apparent that the controversy concerns the constitutional validity of an act of Congress which is directly drawn in question. The decision depends upon the determination of this issue”). In Moore, in contrast, the Court emphasized that the violation of the federal standard as an element of state tort recovery did not fundamentally change the state tort nature of the action. See 291 U. S., at 216-217 (“ ‘The action fell within the familiar category of cases involving the duty of a master to his servant. This duty is defined by the common law, except as it may be modified by legislation. The federal statute, in the present case, touched the duty of the master at a single point and, save as provided in the statute, the right of the plaintiff to recover was left to be determined by the law of the State’ ”) (quoting Minneapolis, St. P. & S. S. M. R. Co. v. Popplar, 237 U. S. 369, 372 (1915)).
The importance of the nature of the federal issue in federal-question jurisdiction is highlighted by the fact that, despite the usual reliability of the Holmes test as an inclusionary principle, this Court has sometimes found that formally federal causes of action were not properly brought under federal-question jurisdiction because of the overwhelming predominance of state-law issues. See Shulthis v. McDougal, 225 U. S. 561, 569-570 (1912) (“A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction or effect of such a law, upon the determination of which the result depends. This is especially so of a suit involving rights to land acquired under a law of the United States. If it were not, every suit to establish title to land in the central and western States would so arise, as all titles in those States are traceable back to those laws”); Shoshone Mining Co. v. Rutter, 177 U. S. 505, 507 (1900) (“We pointed out in the former opinion that it was well settled that a suit to enforce a right which takes its origin in the laws of the United States is not necessarily one arising under the Constitution or laws of the United States, within the meaning of the jurisdiction clauses, for if it did every action to establish title to real estate (at least in the newer States) would be such a one, as all titles in those States come from the United States or by virtue of its laws”).
Cf. Longshoremen v. Davis, 476 U. S. 380, 391 (1986) (“[O]ur decisions describing the nature of Garmon pre-emption and defining its boundaries have rested on a determination that in enacting the [National Labor Relations Act] Congress intended for the [National Labor Relations] Board generally to exercise exclusive jurisdiction in this area”).
See Moore v. Chesapeake & Ohio R. Co., 291 U. S., at 214-215 (“Questions arising in actions in state courts to recover for injuries sustained by employees in intrastate commerce and relating to the scope or construction of the Federal Safety Appliance Acts are, of course, federal questions which may appropriately be reviewed in this Court. . . . But it does not follow that a suit brought under the state statute which defines liability to employees who are injured while engaged in intrastate commerce, and brings within the purview of the statute a breach of the duty imposed by the federal statute, should be regarded as a suit arising under the laws of the United States and cognizable in the federal court in the absence of diversity of citizenship”). Cf. Franchise Tax Board, 463 U. S., at 12, n. 12 (“[T]he absence of original jurisdiction does not mean that there is no federal forum in which a pre-emption defense may be heard. If the state courts reject a claim of federal pre-emption, that decision may ultimately be reviewed on appeal by this Court”).
Petitioner also contends that the Court of Appeals opinion rests on a view that federal-question jurisdiction was inappropriate because, whatever the role of the federal issue in the FDCA-related count, the plaintiff could recover on other, strictly state-law claims. See 766 F. 2d, at 1006 (noting that “the jury could find negligence on the part of Merrell Dow without finding a violation of the FDCA”). To the extent that the opinion can be read to express such a view, we agree that it was erroneous. If the FDCA-related count presented a sufficient federal question, its relationship to the other, state-law claims would be determined by the ordinary principles of pendent jurisdiction described in Mine Workers v. Gibbs, 383 U. S. 715 (1966). For the reasons that we have stated, however, there is no federal-question jursidiction even with that possible error corrected.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice White
delivered the opinion of the Court.
Section 901(a) of Title IX of the Education Amendments of 1972, Pub. L. 92-318, 86 Stat. 373, 20 U. S. C. § 1681(a), prohibits sex discrimination in “any education program or activity receiving Federal financial assistance,” and §902 directs agencies awarding most types of assistance to promulgate regulations to ensure that recipients adhere to that prohibition. Compliance with departmental regulations may be secured by termination of assistance “to the particular program, or part thereof, in which... noncompliance has been... found” or by “any other means authorized by law.” §902, 20 U. S. C. § 1682.
This case presents several questions concerning the scope and operation of these provisions and the regulations established by the Department of Education. We must decide, first, whether Title IX applies at all to Grove City College, which accepts no direct assistance but enrolls students who receive federal grants that must be used for educational purposes. If so, we must identify the “education program or activity” at Grove City that is “receiving Federal financial assistance” and determine whether federal assistance to that program may be terminated solely because the College violates the Department’s regulations by refusing to execute an Assurance of Compliance with Title IX. Finally, we must consider whether the application of Title IX to Grove City infringes the First Amendment rights of the College or its students.
I — 1
Petitioner Grove City College is a private, coeducational, liberal arts college that has sought to preserve its institutional autonomy by consistently refusing state and federal financial assistance. Grove City’s desire to avoid federal oversight has led it to decline to participate, not only in direct institutional aid programs, but also in federal student assistance programs under which the College would be required to assess students’ eligibility and to determine the amounts of loans, work-study funds, or grants they should receive. Grove City has, however, enrolled a large number of students who receive Basic Educational Opportunity Grants (BEOG’s), 20 U. S. C. § 1070a (1982 ed.), under the Department of Education’s Alternate Disbursement System (ADS).
The Department concluded that Grove City was a “recipient” of “Federal financial assistance” as those terms are defined in the regulations implementing Title IX, 34 CFR §§ 106.2(g)(1), (h) (1982), and, in July 1977, it requested that the College execute the Assurance of Compliance required by 34 CFR § 106.4 (1983). If Grove City had signed the Assurance, it would have agreed to
“[cjomply, to the extent applicable to it, with Title IX... and all applicable requirements imposed by or pursuant to the Department’s regulation... to the end that... no person in the United States shall, on the basis of sex, be... subjected to discrimination under any education program or activity for which [it] receives or benefits from Federal financial assistance from the Department.” App. to Pet. for Cert. A-126 — A-127.
When Grove City persisted in refusing to execute an Assurance, the Department initiated proceedings to declare the College and its students ineligible to receive BEOG’s. The Administrative Law Judge held that the federal financial assistance received by Grove City obligated it to execute an Assurance of Compliance and entered an order terminating assistance until Grove City “corrects its noncompliance with Title IX and satisfies the Department that it is in compliance” with the applicable regulations. App. to Pet. for Cert. A-97.
Grove City and four of its students then commenced this action in the District Court for the Western District of Pennsylvania, which concluded that the students’ BEOG’s constituted “Federal financial assistance” to Grove City but held, on several grounds, that the Department could not terminate the students’ aid because of the College’s refusal to execute an Assurance of Compliance. Grove City College v. Harris, 500 F. Supp. 253 (1980). The Court of Appeals reversed. 687 F. 2d 684 (CA3 1982). It first examined the language and legislative history of Title IX and held that indirect, as well as direct, aid triggered coverage under § 901(a) and that institutions whose students financed their educations with BEOG’s were recipients of federal financial assistance within the meaning of Title IX. Although it recognized that Title IX’s provisions are program-specific, the court likened the assistance flowing to Grove City through its students to nonearmarked aid, and, with one judge dissenting, declared that “[w]here the federal government furnishes indirect or non-earmarked aid to an institution, it is apparent to us that the institution itself must be the ‘program.’” 687 F. 2d, at 700. Finally, the Court of Appeals concluded that the Department could condition financial aid upon the execution of an Assurance of Compliance and that the Department had acted properly in terminating federal financial assistance to the students and Grove City despite the lack of evidence of actual discrimination.
We granted certiorari, 459 U. S. 1199 (1983), and we now affirm the Court of Appeals’ judgment that the Department could terminate BEOG’s received by Grove City’s students to force the College to execute an Assurance of Compliance.
t-H I — H
In defending its refusal to execute the Assurance of Compliance required by the Department’s regulations, Grove City first contends that neither it nor any “education program or activity” of the College receives any federal financial assistance within the meaning of Title IX by virtue of the fact that some of its students receive BEOG’s and use them to pay for their education. We disagree.
Grove City provides a well-rounded liberal arts education and a variety of educational programs and student services. The question is whether any of those programs or activities “receives] Federal financial assistance” within the meaning of Title IX when students finance their education with BEOG’s. The structure of the Education Amendments of 1972, in which Congress both created the BEOG program and imposed Title IX’s nondiscrimination requirement, strongly suggests an affirmative conclusion. BEOG’s were aptly characterized as a “centerpiece of the bill,” 118 Cong. Rec. 20297 (1972) (Rep. Pucinski), and Title IX “relate[d] directly to [its] central purpose.” 117 Cong. Rec. 30412 (1971) (Sen. Bayh). In view of this connection and Congress’ express recognition of discrimination in the administration of student financial aid programs, it would indeed be anomalous to discover that one of the primary components of Congress’ comprehensive “package of federal aid,” id., at 2007 (Sen. Pell), was not intended to trigger coverage under Title IX.
It is not surprising to find, therefore, that the language of § 901(a) contains no hint that Congress perceived a substantive difference between direct institutional assistance and aid received by a school through its students. The linchpin of Grove City’s argument that none of its programs receives any federal assistance is a perceived distinction between direct and indirect aid, a distinction that finds no support in the text of § 901(a). Nothing in § 901(a) suggests that Congress elevated form over substance by making the application of the nondiscrimination principle dependent on the manner in which a program or activity receives federal assistance. There is no basis in the statute for the view that only institutions that themselves apply for federal aid or receive checks directly from the Federal Government are subject to regulation. Cf. Bob Jones University v. Johnson, 396 F. Supp. 597, 601-604 (SC 1974), affirmance order, 529 F. 2d 514 (CA4 1975). As the Court of Appeals observed, “by its all inclusive terminology [§ 901(a)] appears to encompass all forms of federal aid to education, direct or indirect.” 687 F. 2d, at 691 (emphasis in original). We have recognized the need to “‘accord [Title IX] a sweep as broad as its language,”’ North Haven Board of Education v. Bell, 456 U. S. 512, 521 (1982) (quoting United States v. Price, 383 U. S. 787, 801 (1966)), and we are reluctant to read into § 901(a) a limitation not apparent on its face.
Our reluctance grows when we pause to consider the available evidence of Congress’ intent. The economic effect of direct and indirect assistance often is indistinguishable, see Mueller v. Allen, 463 U. S. 388, 397, n. 6 (1983); id., at 412 (Marshall, J., dissenting); Committee for Public Education v. Nyquist, 413 U. S. 756, 783 (1973); Norwood v. Harrison, 413 U. S. 455, 463-465 (1973), and the BEOG program was structured to ensure that it effectively supplements the College’s own financial aid program. Congress undoubtedly comprehended this reality in enacting the Education Amendments of 1972. The legislative history of the Amendments is replete with statements evincing Congress’ awareness that the student assistance programs established by the Amendments would significantly aid colleges and universities. In fact, one of the stated purposes of the student aid provisions was to “provid[e] assistance to institutions of higher education.” Pub. L. 92-318, § 1001(c)(1), 86 Stat. 381, 20 U. S. C. § 1070(a)(5).
Congress’ awareness of the purpose and effect of its student aid programs also is reflected in the sparse legislative history of Title IX itself. Title IX was patterned after Title VI of the Civil Rights Act of 1964, Pub. L. 88-352, 78 Stat. 252, 42 U. S. C. §2000d et seq. (1976 ed. and Supp. V). Cannon v. University of Chicago, 441 U. S. 677, 684-685 (1979); 118 Cong. Rec. 5807 (1972) (Sen. Bayh). The drafters of Title VI envisioned that the receipt of student aid funds would trigger coverage, and, since they approved identical language, we discern no reason to believe that the Congressmen who voted for Title IX intended a different result.
The few contemporaneous statements that attempted to give content to the phrase “receiving Federal financial assistance,” while admittedly somewhat ambiguous, are consistent with Senator Bayh’s declaration that Title IX authorizes the termination of “all aid that comes through the Department of Health, Education, and Welfare.” 117 Cong. Rec. 30408 (1971). Such statements by individual legislators should not be given controlling effect, but, at least in instances where they are consistent with the plain language of Title IX, Senator Bayh’s remarks are “an authoritative guide to the statute’s construction.” North Haven Board of Education v. Bell, 456 U. S., at 527. The contemporaneous legislative history, in short, provides no basis for believing that Title IX’s broad language is somehow inconsistent with Congress’ underlying intent. See also 20 U. S. C. § 1094(a)(3) (1982 ed.).
Persuasive evidence of Congress’ intent concerning student financial aid may also be gleaned from its subsequent treatment of Title IX. We have twice recognized the probative value of Title IX’s unique postenactment history, North Haven Board of Education v. Bell, supra, at 535; Cannon v. University of Chicago, supra, at 687, n. 7, 702-703, and we do so once again. The Department’s sex discrimination regulations made clear that “[scholarships, loans, [and] grants... extended directly to... students for payment to” an institution constitute federal financial assistance to that entity. 40 Fed. Reg. 24137 (1975); see n. 6, supra. Under the statutory “laying before” procedure of the General Education Provisions Act, Pub. L. 93-380, 88 Stat. 567, as amended, 20 U. S. C. § 1232(d)(1) (1982 ed.), Congress was afforded an opportunity to invalidate aspects of the regulations it deemed inconsistent with Title IX. The regulations were clear, and Secretary Weinberger left no doubt concerning the Department’s position that “the furnishing of student assistance to a student who uses it at a particular institution... [is] Federal aid which is covered by the statute.” Yet, neither House passed a disapproval resolution. Congress’ failure to disapprove the regulations is not dispositive, but, as we recognized in North Haven Board of Education v. Bell, supra, at 533-534, it strongly implies that the regulations accurately reflect congressional intent. Congress has never disavowed this implication and in fact has acted consistently with it on a number of occasions.
With the benefit of clear statutory language, powerful evidence of Congress’ intent, and a longstanding and coherent administrative construction of the phrase “receiving Federal financial assistance,” we have little trouble concluding that Title IX coverage is not foreclosed because federal funds are granted to Grove City’s students rather than directly to one of the College’s educational programs. There remains the question, however, of identifying the “education program or activity” of the College that can properly be characterized as “receiving” federal assistance through grants to some of the students attending the College.
Ill
An analysis of Title IX’s language and legislative history led us to conclude in North Haven Board of Education v. Bell, 456 U. S., at 538, that “an agency’s authority under Title IX both to promulgate regulations and to terminate funds is subject to the program-specific limitations of §§ 901 and 902.” Although the legislative history contains isolated suggestions that entire institutions are subject to the nondiscrimination provision whenever one of their programs receives federal assistance, see 1975 Hearings 178 (Sen. Bayh), we cannot accept the Court of Appeals’ conclusion that in the circumstances present here Grove City itself is a “program or activity” that may be regulated in its entirety. Nevertheless, we find no merit in Grove City’s contention that a decision treating BEOG’s as “Federal financial assistance” cannot be reconciled with Title IX’s program-specific language since BEOG’s are not tied to any specific “education program or activity.”
If Grove City participated in the BEOG program through the RDS, we would have no doubt that the “education program or activity receiving Federal financial assistance” would not be the entire College; rather, it would be its student financial aid program. RDS institutions receive federal funds directly, but can use them only to subsidize or expand their financial aid programs and to recruit students who might otherwise be unable to enroll. In short, the assistance is earmarked for the recipient’s financial aid program. Only by ignoring Title IX’s program-specific language could we conclude that funds received under the RDS, awarded to eligible students, and paid back to the school when tuition comes due represent federal aid to the entire institution.
We see no reason to reach a different conclusion merely because Grove City has elected to participate in the ADS. Although Grove City does not itself disburse students’ awards, BEOG’s clearly augment the resources that the College itself devotes to financial aid. As is true of the RDS, however, the fact that federal funds eventually reach the College’s general operating budget cannot subject Grove City to institution-wide coverage. Grove City’s choice of administrative mechanisms, we hold, neither expands nor contracts the breadth of the “program or activity” — the financial aid program — that receives federal assistance and that may be regulated under Title IX.
To the extent that the Court of Appeals’ holding that BEOG’s received by Grove City’s students constitute aid to the entire institution rests on the possibility that federal funds received by one program or activity free up the College’s own resources for use elsewhere, the Court of Appeals’ reasoning is doubly flawed. First, there is no evidence that the federal aid received by Grove City’s students results in the diversion of funds from the College’s own financial aid program to other areas within the institution. Second, and more important, the Court of Appeals’ assumption that Title IX applies to programs receiving a larger share of a school’s own limited resources as a result of federal assistance earmarked for use elsewhere within the institution is inconsistent with the program-specific nature of the statute. Most federal educational assistance has economic ripple effects throughout the aided institution, and it would be difficult, if not impossible, to determine which programs or activities derive such indirect benefits. Under the Court of Appeals’ theory, an entire school would be subject to Title IX merely because one of its students received a small BEOG or because one of its departments received an earmarked federal grant. This result cannot be squared with Congress’ intent.
The Court of Appeals’ analogy between student financial aid received by an educational institution and nonearmarked direct grants provides a more plausible justification for its holding, but it too is faulty. Student financial aid programs, we believe, are sui generis. In neither purpose nor effect can BEOG’s be fairly characterized as unrestricted grants that institutions may use for whatever purpose they desire. The BEOG program was designed, not merely to increase the total resources available to educational institutions, but to enable them to offer their services to students who had previously been unable to afford higher education. It is true, of course, that substantial portions of the BEOG’s received by Grove City’s students ultimately find their way into the College’s general operating budget and are used to provide a variety of services to the students through whom the funds pass. However, we have found no persuasive evidence suggesting that Congress intended that the Department’s regulatory authority follow federally aided students from classroom to classroom, building to building, or activity to activity. In addition, as Congress recognized in considering the Education Amendments of 1972, the economic effect of student aid is far different from the effect of nonearmarked grants to institutions themselves since the former, unlike the latter, increases both an institution’s resources and its obligations. See Pub. L. 92-318, § 1001(a), 86 Stat. 375, 20 U. S. C. § 1070e; S. Rep. No. 92-346, p. 43 (1971); 118 Cong. Rec. 20331 (1972) (Rep. Badillo). In that sense, student financial aid more closely resembles many earmarked grants.
We conclude that the receipt of BEOG’s by some of Grove City’s students does not trigger institutionwide coverage under Title IX. In purpose and effect, BEOG’s represent federal financial assistance to the College’s own financial aid program, and it is that program that may properly be regulated under Title IX.
IV
Since Grove City operates an “education program or activity receiving Federal financial assistance,” the Department may properly demand that the College execute an Assurance of Compliance with Title IX. 34 CFR § 106.4 (1983). Grove City contends, however, that the Assurance it was requested to sign was invalid, both on its face and as interpreted by the Department, in that it failed to comport with Title IX’s program-specific character. Whatever merit that objection might have had at the time, it is not now a valid basis for refusing to execute an Assurance of Compliance.
The Assurance of Compliance regulation itself does not, on its face, impose institutionwide obligations. Recipients must provide assurance only that “each education program or activity operated by... [them] and to which this part applies will be operated in compliance with this part.” 34 CFR § 106.4 (1983) (emphasis added). The regulations apply, by their terms, “to every recipient and to each education program or activity operated by such recipient which receives or benefits from Federal financial assistance.” 34 CFR §106.11 (1983) (emphasis added). These regulations, like those at issue in North Haven Board of Education v. Bell, 456 U. S. 512 (1982), “conform with the limitations Congress enacted in §§901 and 902.” Id., at 539. Nor does the Department now claim that its regulations reach beyond the College’s student aid program. Furthermore, the Assurance of Compliance currently in use, like the one Grove City refused to execute, does not on its face purport to reach the entire College; it certifies compliance with respect to those “education programs and activities receiving Federal financial assistance.” See n. 2, supra. Under this opinion, consistent with the program-specific requirements of Title IX, the covered education program is the College’s financial aid program.
A refusal to execute a proper program-specific Assurance of Compliance warrants termination of federal assistance to the student financial aid program. The College’s contention that termination must be preceded by a finding of actual discrimination finds no support in the language of § 902, which plainly authorizes that sanction to effect “[c]ompliance with any requirement adopted pursuant to this section.” Regulations authorizing termination of assistance for refusal to execute an Assurance of Compliance with Title VI had been promulgated, 45 CFR §80.4 (Supp., Jan. 1, 1965), and upheld, Gardner v. Alabama, 385 F. 2d 804 (CA5 1967), cert. denied, 389 U. S. 1046 (1968), long before Title IX was enacted, and Congress no doubt anticipated that similar regulations would be developed to implement Title IX. 118 Cong. Rec. 5807 (1972) (Sen. Bayh). We conclude, therefore, that the Department may properly condition federal financial assistance on the recipient’s assurance that it will conduct the aided program or activity in accordance with Title IX and the applicable regulations.
V
Grove City’s final challenge to the Court of Appeals’ decision — that conditioning federal assistance on compliance with Title IX infringes First Amendment rights of the College and its students — warrants only brief consideration. Congress is free to attach reasonable and unambiguous conditions to federal financial assistance that educational institutions are not obligated to accept. E. g., Pennhurst State School and Hospital v. Halderman, 451 U. S. 1, 17 (1981). Grove City may terminate its participation in the BEOG program and thus avoid the requirements of § 901(a). Students affected by the Department’s action may either take their BEOG’s elsewhere or attend Grove City without federal financial assistance. Requiring Grove City to comply with Title IX’s prohibition of discrimination as a condition for its continued eligibility to participate in the BEOG program infringes no First Amendment rights of the College or its students.
Accordingly, the judgment of the Court of Appeals is
Affirmed.
Section 901(a), 20 U. S. C. § 1681(a), provides, in pertinent part:
“No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance....”
Nine statutory exemptions, none of which is relevant to the disposition of this case, follow. See §§ 901(a)(l)-(9), 20 U. S. C. §§ 1681(a)(l)-(9).
Section 902, 20 U. S. C. § 1682, provides:
“Each Federal department and agency which is empowered to extend Federal financial assistance to any education program or activity, by way of grant, loan, or contract other than a contract of insurance or guaranty, is authorized and directed to effectuate the provisions of section [901] with respect to such program or activity by issuing rules, regulations, or orders of general applicability which shall be consistent with achievement of the objectives of the statute authorizing the financial assistance in connection with which the action is taken. No such rule, regulation, or order shall become effective unless and until approved by the President. Compliance with any requirement adopted pursuant to this section may be effected (1) by the termination of or refusal to grant or to continue assistance under such program or activity to any recipient as to whom there has been an express finding on the record, after opportunity for hearing, of a failure to comply with such requirement, but such termination or refusal shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding has been made, and shall be limited in its effect to the particular program, or part thereof, in which such noncomplianee has been so found, or (2) by any other means authorized by law: Provided, however, That no such action shall be taken until the department or agency concerned has advised the appropriate person or persons of the failure to comply with the requirement and has determined that compliance cannot be secured by voluntary means. In the case of any action terminating, or refusing to grant or continue, assistance because of failure to comply with a requirement imposed pursuant to this section, the head of the Federal department or agency shall file with the committees of the House and Senate having legislative jurisdiction over the program or activity involved a full written report of the circumstances and the grounds for such action. No such action shall become effective until thirty days have elapsed after the filing of such report” (emphasis in original).
See, e. g., 20 U. S. C. § 1071 et seq. (1982 ed.); 34 CFR pt. 674 (1983) (National Direct Student Loans); 42 U. S. C. § 2751 et seq. (1976 ed. and Supp. V); 34 CFR pt. 675 (1983) (College Work Study Program); 20 U. S. C. § 1070b (1982 ed.); 34 CFR pt. 676 (1983) (Supplemental Educational Opportunity Grants).
The Department of Health, Education, and Welfare’s functions with respect to BEOG’s were transferred to the Department of Education by § 301(a)(3) of the Department of Education Organization Act, Pub. L. 96-88, 93 Stat. 678, 20 U. S. C. § 3441(a)(3) (1982 ed.). We will refer to both HEW and DOE as “the Department.”
The Secretary, in his discretion, has established two procedures for computing and disbursing BEOG’s. Under the Regular Disbursement System (RDS), the Secretary estimates the amount that an institution will need for grants and advances that sum to the institution, which itself selects eligible students, calculates awards, and distributes the grants by either crediting students’ accounts or issuing checks. 34 CFR §§ 690.71-690.85 (1983). Most institutions whose students receive BEOG’s participate in the RDS, but the ADS is an option made available by the Secretary to schools that wish to minimize their involvement in the administration of the BEOG program. Institutions participating in the program through the ADS must make appropriate certifications to the Secretary, but the Secretary calculates awards and makes disbursements directly to eligible students. 34 CFR §§ 690.91-690.96 (1983).
The Title IX regulations were recodified in 1980, without substantive change, at 34 CFR pt. 106 in connection with the establishment of the Department of Education. 45 Fed. Reg. 30802, 30962-30963 (1980). All references herein are to the currently effective regulations.
“Federal financial assistance” is defined in 34 CFR § 106.2(g)(1) (1983) to include:
“A grant or loan of Federal financial assistance, including funds made available for:
“(ii) Scholarships, loans, grants, wages or other funds extended to any entity for payment to or on behalf of students admitted to that entity, or extended directly to such students for payment to that entity.”
A “recipient” is defined in 34 CFR § 106.2(h) (1983) to include:
“[A]ny public or private agency, institution, or organization, or other entity, or any person, to whom Federal financial assistance is extended directly or through another recipient and which operates an education program or activity which receives or benefits from such assistance....” See also 34 CFR §§ 106.11, 106.31(a) (1983).
The Assurance of Compliance form currently in use differs somewhat from the version quoted in the text. See App. to Brief for Federal Respondents in Hillsdale College v. Department of Education, O. T. 1982, No. 82-1538, pp. 1a-2a. The substance, however, is the same in that it refers to “education programs and activities receiving Federal financial assistance.”
The Department also sought to terminate Guaranteed Student Loans (GSL’s), 20 U. S. C. § 1071 (1982 ed.), received by Grove City’s students.
The District Court held, first, that GSL’s were “contracts] of insurance or guaranty” that could not be terminated under § 902 of Title IX. The Department did not challenge this conclusion on appeal, and we express no view on this aspect of the District Court’s reasoning. The court also concluded that Grove City could not be required to execute an Assurance of Compliance because Subpart E of the Title IX regulations, which prohibits discrimination in employment, was invalid. As the Court of Appeals recognized, we have since upheld the validity of Subpart E. North Haven Board of Education v. Bell, 456 U. S. 512 (1982). The District Court held, in the alternative, that § 902 permitted termination only upon an actual finding of sex discrimination and that Grove City’s refusal to execute an Assurance could not justify a termination of assistance. Finally, the court reasoned that affected students were entitled to hearings before their aid could be discontinued.
In reaching this conclusion, the Court of Appeals accepted the position argued by respondents. As respondents acknowledged in the oral argument before this Court, the Department’s position has not been a model of clarity. Tr. of Oral Arg. 33-35. The Department initially took the position that the receipt of student financial aid would trigger institutionwide coverage under Title IX and construed its regulations to that effect. It pressed that position in the lower courts. In their brief in opposition to the petition for certiorari, respondents did not defend this aspect of the Court of Appeals’ opinion, but argued instead that the question need not be resolved to decide this case. In their brief on the merits and in the oral argument, however, respondents conceded that the Court of Appeals erred in holding that Grove City itself constituted the “program or activity” subject to regulation under Title IX. The Department’s regulations, it was represented, may be construed in a program-specific manner and hence are not inconsistent with the statute. This concession, of course, is not binding on us and does not foreclose our review of the judgment below.
See, e. g., Discrimination Against Women: Hearings on Section 805 of H. R. 16098 before the Special Subcommittee on Education of the House Committee on Education and Labor, 91st Cong., 2d Sess., 235 (1970) (Rep. May); id., at 483 (Rep. Mink); id., at 739 (Rep. Griffiths); 118 Cong. Rec. 3935-3940, 5803-5809 (1972) (Sen. Bayh).
Grove City itself recognizes the problematic nature of the distinction it advances. Although its interpretation of § 901(a) logically would exclude from coverage under Title IX local school districts that receive federal funds through state educational agencies, see, e. g., 20 U. S. C. §3801 et seq. (1982 ed.), Grove City wisely does not attempt to defend this result. In fact, the College concedes that “[b]ecause federal assistance is often passed through state agencies, this type of indirect assistance leads to Title IX jurisdiction over the education program, or activity which ultimately receives the assistance.” Brief for Petitioners 17, n. 17 (emphasis in original). Grove City has proposed no principled basis for treating differently federal assistance received through students and federal aid that is disbursed by a state agency.
Grove City’s students receive BEOG’s to pay for the education they receive at the College. Their eligibility for assistance is conditioned upon continued enrollment at Grove City and on satisfactory progress in their studies. 20 U. S. C. §§ 1091(a)(1), (3) (1982 ed.). Their grants are based on the “cost of attendance” at Grove City, 20 U. S. C. § 1070a(a)(2)(B)(i) (1982 ed.), which includes the College’s tuition and fees, room and board, and a limited amount for books, supplies, and miscellaneous expenses. 34 CFR § 690.51 (1983). The amount that students and their families can reasonably be expected to contribute is subtracted from the maximum BEOG to ensure that the assistance is used solely for educational expenses, 20 U. S. C. § 1070a(a)(2)(A)(i) (1982 ed.), and students are required to file affidavits stating that their awards will be “used solely for expenses related to attendance” at Grove City. 20 U. S. C. § 1091(a)(5) (1982 ed.); see 34 CFR §§690.79, 690.94(a)(2) (1983).
Grove City’s attempt to analogize BEOG’s to food stamps, Social Security benefits, welfare payments, and other forms of general-purpose governmental assistance to low-income families is unavailing. First, there is no evidence that Congress intended the receipt of federal money in this manner to trigger coverage under Title IX. Second, these general assistance programs, unlike student aid programs, were not designed to assist colleges and universities. Third, educational institutions have no control over, and indeed perhaps no knowledge of, whether they ultimately receive federal funds made available to individuals under general assistance programs, but they remain free to opt out of federal student assistance programs. Fourth, individuals’ eligibility for general assistance is not tied to attendance at an educational institution.
See, e. g., H. R. Rep. No. 92-554, p. 244 (1972) (Supplemental Views); 117 Cong. Rec. 2007 (1971) (Sen. Pell); id., at 37778, 37782 (Rep. Quie); ■id., at 39256 (Rep. Steiger); 118 Cong. Rec. 20295 (1972) (Rep. Reid); id., at 20297 (Rep. Pucinski); id., at 20312 (statement of Isaac K. Beckes); id., at 20310 (letter from Kingman Brewster, Jr.); id., at 20324 (Rep. Mitchell).
See, e. g., H. R. Rep. No. 914, 88th Cong., 1st Sess., 104-105 (1963); 110 Cong. Rec. 13388 (1964) (Sen. McClellan). Appendix A to the initial Title VI regulations identified several programs making assistance available through payments to students among those to which the regulations applied, 29 Fed. Reg. 16298, 16304 (1964), as did the version in force when Title IX was enacted. 45 CFR pt. 80, Appendix A (1972). See Bob Jones University v. Johnson, 396 F. Supp. 597 (SC 1974), affirmance order, 529 F. 2d 514 (CA4 1975). The current list of programs covered by Title VI includes BEOG’s and GSL’s, 34 CFR pt. 100, Appendix A (1983), and Grove City’s assumption that Congress would have excluded BEOG’s from coverage under Title VI if the program had been operational in 1964 is baseless.
See 117 Cong. Rec. 30158-30159 (1971) (Sen. McGovern); id., at 39260 (Rep.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Marshall
delivered the opinion of the Court.
The Staggers Rail Act of 1980, which amended the Interstate Commerce Act, regulates the process by which rail carriers may abandon unprofitable lines and provides a mechanism for shippers to obtain continued service by purchasing lines or subsidizing their operation. This case poses the question whether the Interstate Commerce Act, as amended, pre-empts a Minnesota eminent domain statute used to condemn rail property after it has been abandoned pursuant to the amendments. The Court of Appeals for the Eighth Circuit held that the Act, as amended, pre-empted the state statute. 693 F. 2d 819 (1982). We disagree.
I — I
On January 30, 1981, appellee filed an application with the Interstate Commerce Commission (Commission) seeking permission to abandon a 44-mile rail line between Oelwein, Iowa, and Randolph, Minn. Appellee maintained that operation of the line imposed a serious financial strain on its resources. Several shippers in Minnesota (Shippers Group) opposed the abandonment of a 19.2-mile segment of the line that passed through Hayfield, Minn. (Hayfield segment). After an Administrative Law Judge ruled that appellee was entitled to abandon the entire 44-mile line, the Shippers Group, pursuant to the Staggers Rail Act amendments, offered to subsidize operation of the Hayfield segment. See 49 U. S. C. § 10905(c). When the parties could not agree on mutually acceptable terms, the Commission, at the request of the Shippers Group, determined the appropriate price for subsidizing continued operation of the line. See 49 U. S. C. § 10905(e). Dissatisfied with the Commission’s determination, the Shippers Group withdrew its offer. See 49 U. S. C. § 10905(f)(2). Soon thereafter, the Commission granted a certificate of abandonment to appellee, ibid., thereby relieving appellee of its federal obligation to supply rail service.
During the period that the Shippers Group was attempting to prevent the issuance of a certificate of abandonment, appellee entered into contracts with the State of Iowa and various Iowa shippers. These contracts involved improvements of certain trackage in Iowa. Appellee intended to fulfill these contracts by using the track from the abandoned line.
On March 31, 1982, members of the Shippers Group formed appellant Hayfield Northern Railroad Co., Inc. (hereafter appellant). Appellant planned to use the eminent domain authority vested in it by Minn. Stat. §227.27 (1982) to condemn the Hayfield segment that appellee had abandoned. Appellant filed suit in state court and obtained a temporary restraining order preventing appellee from removing track from the Hayfield segment. Appellee immediately removed the suit to Federal District Court and moved to dissolve the restraining order on the ground that the Act, as amended, pre-empted the Minnesota condemnation statute. At this point, the State of Minnesota intervened in order to defend appellant’s application of its condemnation law.
The District Court awarded summary judgment to appel-lee and dissolved the restraining order. After granting a stay pending appeal, the Court of Appeals for the Eighth Circuit affirmed. 693 F. 2d 819 (1982). The Court of Appeals held that the Minnesota condemnation statute was pre-empted because it constituted an obstacle to the accomplishment of the congressional purpose behind the federal abandonment procedure. The Court of Appeals also dissolved its stay and remanded the case to the District Court for calculation of the damages incurred by appellee because of the delay. Following denial of rehearing by the Court of Appeals, we denied appellant’s motion to stay the issuance of the Court of Appeals’ mandate, 460 U. S. 1018 (1983), and subsequently noted probable jurisdiction, 464 U. S. 812 (1983).
II
Pre-emption doctrine stems from the Supremacy Clause of the United States Constitution and invalidates any state law that contradicts or interferes with an Act of Congress. Pre-emption arises in a wide array of contexts, from circumstances in which federal and state laws are plainly contradictory to those in which the incompatibility between state and federal laws is discernible only through inference. This case presents no issue of express pre-emption; nothing on the face of the Staggers Rail Act amendments explictly indicates whether Congress intended to pre-empt state authority over rail property after the Commission has authorized its abandonment. Therefore, in order to determine whether preemption is otherwise indicated, we must inquire more deeply into the intention of Congress and the scope of the pertinent state legislation. We turn, then, to the laws in dispute to ascertain their structure and purpose.
Initially, the Interstate Commerce Act did not subject railroad abandonments to the jurisdiction of the Commission. See Act of Feb. 4, 1887, ch. 104, 24 Stat. 379. Congress ceded authority over abandonments to the Commission in the Transportation Act of 1920, ch. 91, § 402(18) — (22), 41 Stat. 477-478. See Chicago & N. W. Transportation Co. v. Kalo Brick & Tile Co., 450 U. S. 311, 319-320 (1981). The Transportation Act prohibited a carrier from abandoning any portion of a line without first obtaining from the Commission a certificate of abandonment verifying that the future public convenience and necessity permitted the cessation of the carrier’s rail service.
The abandonment procedure proved inadequate, however, because it lacked a specific timetable for the issuance of an abandonment certificate. Railroads consequently found themselves enmeshed in lengthy proceedings before the Commission, unable to unburden themselves promptly of unprofitable lines. See Chicago & N. W. Transportation Co. v. United States, 582 F. 2d 1043, 1045-1046 (CA7), cert. denied, 439 U. S. 1039 (1978); S. Rep. No. 94-499, p. 3 (1975). Congress enacted new legislation to provide railroads with a more expeditious abandonment process that would also be attentive to the interests of shippers and others who might be dependent upon the continuation of rail service on a particular line. See the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act), Pub. L. 94-210, § 802, 90 Stat. 127, originally codified at 49 U. S. C. § la (1976 ed.) (subsequently recodified without substantive change at 49 U. S. C. § 10903 et seq.).
To alleviate the costly delays imposed upon railroads by protracted proceedings before the Commission, the 4-R Act provided a schedule to govern the abandonment process. See 49 U. S. C. §§ la(3), (4) (1976 ed.). At the same time, to afford opponents of an abandonment an opportunity to maintain rail service, the 4-R Act allowed abandonment to be delayed for up to six months if a financially responsible person offered to subsidize or purchase the line. § la(6)(a). It soon became clear, however, that further reforms would be required in order adequately to address both the need of railroads for an even more abbreviated method of abandonment and the need of shippers and communities to avoid the dislocations caused by abandonment. As a consequence, Congress further amended the Interstate Commerce Act by enacting the Staggers Rail Act of 1980, Pub. L. 96-448, § 402, 94 Stat. 1941-1945, codified at 49 U. S. C. §§ 10903-10906.
The Staggers Rail Act amendment most pertinent to this case was the revision of § 10905. Entitled “Offers of financial assistance to avoid abandonment and discontinuance,” § 10905 governs the procedures to be followed when a person seeks to prevent an abandonment by purchasing the carrier’s lines or by subsidizing the carrier’s service. Section 10905 provides that the Commission shall publish in the Federal Register its findings that the public convenience and necessity require or permit abandonment or discontinuance of a particular railroad line and that “[wjithin 10 days following the publication, any person may offer to pay the carrier a subsidy or offer to purchase the line.” 49 U. S. C. § 10905(c). If the Commission finds within 15 days that the offeror is “a financially responsible person (including a government authority)” and that the offer of assistance meets prescribed standards, it “shall postpone the issuance of a certificate authorizing abandonment or discontinuance.” § 10905(d). If the offeror and the carrier “fail to agree on the amount or terms of the subsidy or purchase, either party may, within 30 days after the offer is made, request that the Commission establish the conditions and amount of compensation . . . within 60 days,” § 10905(e), and this decision “shall be binding on both parties, except that the person who has offered to subsidize or purchase the line may withdraw his offer within 10 days of the Commission’s decision.” § 10905(f)(2). If the offer is withdrawn, “the Commission shall immediately issue a certificate authorizing the abandonment or discontinuance.” Ibid.
The underlying rationale of § 10905 represents a continuation of Congress’ efforts to accommodate the conflicting interests of railroads that desire to unburden themselves quickly of unprofitable lines and shippers that are dependent upon continued rail service. Under the 4-R Act, carriers could negotiate with offerors in bad faith while simply waiting for the 6-month negotiating period to elapse. By pursuing this course, carriers could either extract excessive prices from desperate shippers or abandon their lines without reaching an agreement on purchase or subsidy. See Chicago & N. W. Transportation Co. v. United States, 678 F. 2d 665, 667 (CA7 1982). To counteract bad-faith negotiating on the part of carriers, § 10905(f)(2) binds a carrier to the purchase or subsidy price determined by the Commission in the event that the offeror and the carrier cannot themselves come to terms. On the other hand, to reduce the costly delays associated with shipper opposition to proposed abandonments, § 10905 further abbreviates the period required for resolving negotiations over offers. Under the 4-R Act, the period for resolving such offers was six months; under § 402(c) of the Staggers Rail Act amendments, Congress reduced the period to 110 days.
In contrast to the complicated structure of the Interstate Commerce Act, the Minnesota statute at issue is a straightforward application of a State’s familiar power of eminent domain. The statute, originally enacted in 1879, provides:
“Every foreign and domestic railroad corporation shall have power to acquire, by purchase or condemnation, all necessary roadways, spur and side tracks, rights of way, depot grounds, yards, grounds for gravel pits, machine shops, warehouses, elevators, depots, station houses, and all other structures necessary or convenient for the use, operation, or enjoyment of the road, and may make with any other railroad company, such arrangements for the use of any portion of its tracks and roadbeds as it may deem necessary.” Minn. Stat. §222.27 (1982).
Ill
The argument that the Staggers Rail Act amendments pre-empt the State’s power of eminent domain over the abandoned Hayfield segment rests upon two contentions: first, that the federal regulation of railroad abandonments is so pervasive as to make reasonable the inference that Congress left no room for state action on this subject; and, second, that application of the Minnesota statute in the circumstances of this case would pose an obstacle to the accomplishment of the purposes of § 10905.
A
The first contention attempts to bring this case within the narrow ambit of decisions in which this Court has indicated that congressional legislation so occupied the field of a particular subject area that state regulation within that field would be improper no matter how well state law comported with the federal policies involved. Cf. Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Dev. Comm’n, 461 U. S. 190, 203-204 (1983). This Court has repeatedly affirmed, however, that “federal regulation of a field of commerce should not be deemed preemptive of state regulatory power in the absence of persuasive reasons— either that the nature of the regulated subject matter permits no other conclusion, or that the Congress has unmistakably so ordained.” Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132, 142 (1963). In this case, Congress has not “unmistakably ordained” that the States may not exercise their traditional power of eminent domain over railroad property that has been abandoned; nothing in the Act expressly refers to federal pre-emption with respect to the disposition of abandoned railroad property. Nor is there any indication that the subject matter at issue here— abandoned railroad property — is of the sort that “permits no other conclusion” but that it is governed by federal and not state regulation. After all, state law normally governs the condemnation of ordinary real property.
Appellee insists that the line it abandoned cannot properly be viewed as ordinary real property because, even after abandonment has occurred, the line remains under the jurisdiction of the Commission. According to appellee, the elaborate procedural detail of the Act indicates that in addition to granting the Commission exclusive and plenary authority to regulate abandonment, the Act also “granted the Commission exclusive and plenary authority to provide for continuation of rail service via forced sale or subsidy following its authorization of abandonment.” Brief for Appellee 21-22. This claim reflects a misunderstanding of the Act. With exceptions irrelevant to this case, the provisions of the Act relate to requirements that must be met before the Commission will authorize an abandonment. Therefore, unless the Commission attaches postabandonment conditions to a certificate of abandonment, the Commission’s authorization of an abandonment brings its regulatory mission to an end.
The proposition that, as a general matter, issuing a certificate of abandonment terminates the Commission’s jurisdiction is strongly buttressed by the Commission’s own interpretation of its regulatory authority. According to the Commission, “the disposition of rail property after an effective certificate of abandonment has been exercised is a matter beyond the scope of the Commission’s jurisdiction, and within a State’s reserved jurisdiction. Questions of title to, and disposition of, the property are the matters subject to State law.” Abandonment of Railroad Lines and Discontinuance of Service, 365 I. C. C. 249, 261 (1981); see also Chicago & N. W. Transportation Co. — Abandonment—in Waukesha, Jefferson and Dane Counties, WI, I. C. C. Docket No. AB-1 (Sub-No. 144) (May 5, 1983) (set forth in App. to Joint Supplemental Memorandum of Appellant and Appellant-Intervenor A-l, A-5); Common Carrier Status of States, State Agencies and Instrumentalities, and Political Subdivisions, 363 I. C. C. 132, 135 (1980) (“When a rail line has been fully abandoned, it is no longer [a] rail line and the transfer of the line is not subject to our jurisdiction” (footnote omitted)), aff’d sub nom. Simmons v. ICC, 225 U. S. App. D. C. 84, 697 F. 2d 326 (1982); Modern Handcraft, Inc.— Abandonment in Jackson County, Mo., 363 I. C. C. 969, 972 (1981). The Commission’s position, of course, is entitled to considerable deference since it represents the construction of a regulatory statute by the agency charged with the statute’s enforcement. See, e. g., Bureau of Alcohol, Tobacco and Firearms v. Federal Labor Relations Authority, 464 U. S. 89, 97 (1983).
B
The second contention in support of a finding of preemption is that the Minnesota condemnation statute, applied in the manner which appellant proposes, would obstruct the accomplishment of the objectives for which Congress enacted §10905. Cf. Hines v. Davidowitz, 312 U. S. 52, 67 (1941) (pre-emption arises when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress”). More specifically, appellee maintains that if shippers are allowed to institute potentially lengthy condemnation proceedings against abandoned rail lines, the benefits of the 110-day time limit established by § 10905 will be lost.
We are unpersuaded. The expedited process provided by § 10905 was intended to abbreviate the period during which a carrier is obligated to furnish financially burdensome service it seeks to escape through abandonment. State condemnation proceedings do not interfere with that purpose insofar as such proceedings follow abandonment. After the Commission has authorized a carrier to abandon its lines, that carrier is relieved of its obligation to furnish rail service. Nothing in §10905 indicates a federal interest in affording special protection to a carrier after the point at which the carrier’s federal obligation ends.
Appellee also maintains that allowing appellant to bring condemnation proceedings after abandonment would contravene the overall purpose of the Act: to make the railroad industry more efficient and productive. It is true that the exercise of state condemnation authority would prevent appellee from removing property subject to that authority from the Hayfield segment and shifting such property to higher-value uses elsewhere. It is also true that the existence of opportunity costs has been recognized by the Commission as one factor to be taken into account in deciding whether to authorize an abandonment. See, e. g., State of Maine Dept. of Transportation v. ICC, 587 F. 2d 541, 543-544 (CA1 1978). It does not follow however, that state condemnation authority thereby frustrates the federal abandonment scheme. What appellee overlooks is that § 10905 is expressly designed to allow an offeror to force a carrier to forgo abandonment in favor of continued operation through subsidization or purchase, regardless of the opportunity costs entailed by the inability to shift its assets to higher-value uses. See § 10905(f)(2). Offerors must be willing, of course, to subsidize or purchase the line so that the costs of continued operation are lifted from the carrier. § 10905(d). But alleviating the carrier’s burden does not alter the economic reality that opportunity costs continue to be incurred; it merely shifts the incidence of those costs. In light of Congress’ imposition of solutions that subordinate opportunity costs to other considerations, state condemnation authority is not pre-empted merely because it may frustrate the economically optimal use of rail assets.
Finally, appellee maintains that appellant’s proposed application of Minnesota law would interfere with the valuation procedure established by §10905 by allowing appellant to relitigate the price the Commission established for the purchase or subsidizing of appellee’s lines. Although it may seem unfair to allow a shipper a “second bite at the apple” in state condemnation proceedings after it has participated in, and then withdrawn from, negotiations under § 10905, that second opportunity does not frustrate the purpose of the federal valuation scheme. That purpose was to prevent carriers from frustrating bona fide offers of subsidy or purchase through bad-faith negotiations, see supra, at 630-631, not to impose a blanket prohibition covering all postabandonment efforts to obtain abandoned property.
H <1
We hold that appellant s proposed application of Minnesota condemnation law is not pre-empted by the Staggers Act amendments to the Interstate Commerce Act. Accordingly, we reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.
It is so ordered.
Pub. L. 96-448, §402, 94 Stat. 1941-1945, 49 U. S. C. §§ 10903-10906.
Minn. Stat. §222.27 (1982); infra, at 631 (quoting the text of the law). Many States have enacted similar statutes. See Brief for Appellants 5, n. 2 (citing statutes in 33 States).
At the same time that the Shippers Group offered to subsidize continued rail service, it also appealed the decision authorizing abandonment. The Commission denied the appeal whereupon the Shippers Group filed a petition for review in the Court of Appeals. After unsuccessfully seeking a stay of the order permitting abandonment, the Shippers Group withdrew its petition for review. See 693 F. 2d. 819, 820 (1982).
See U. S. Const., Art. VI, cl. 2 (“This Constitution, and the Laws of the United States which shall be made in Pursuance therof. . . shall be the supreme Law of the Land . . . , any Thing in the Constitution or Laws of any State to the Contrary notwithstanding”); Gibbons v. Ogden, 9 Wheat. 1, 211 (1824).
Compare McDermott v. Wisconsin, 228 U. S. 115 (1913) (invalidating state law directly conflicting with federal regulations), with Motor Coach Employees v. Lockridge, 403 U. S. 274 (1971) (holding wrongful discharge action brought in state court precluded by pervasiveness of federal regulation in the area). See generally L. Tribe, American Constitutional Law 376-391 (1978).
See generally Railroad Transportation Policy Act of 1979: Hearings on S. 1946 before the Senate Committee on Commerce, Science, and Transportation, 96th Cong., 1st Sess. (1979); Railroad Deregulation Act of 1979: Hearings on H. R. 4570 before the Subcommittee on Transportation and Commerce of the House Committee on Interstate and Foreign Commerce, 96th Cong., 1st Sess (1979); Railroad Deregulation Act of 1979: Hearings on S. 796 before the Subcommittee on Surface Transportation of the Senate Committee on Commerce, Science, and Transportation, 96th Cong., 1st Sess., pts. 1, 3 (1979).
To enable potential offerors to determine the feasibility of subsidizing or purchasing a line, the Act mandates that a rail carrier applying for an abandonment certificate must provide current financial data, including an estimate of the annual subsidy and minimum purchase price needed to keep the line in operation. 49 U. S. C. § 10905(b).
See S. Rep. No. 96-470, pp. 39-41 (1979) (“The abandonment provisions of this bill are designed to accomplish two major objectives: significantly reducing the time spent processing [abandonment] cases at the Commission and improving the process by which abandoned lines can be subsidized”); H. R. Conf. Rep. No. 96-1430, p. 125 (1980) (§ 10905 as amended will “assist shippers who are sincerely interested in improving rail service, while at the same time protecting carriers from protracted legal proceedings which are calculated merely to tediously extend the abandonment process”).
Compare 49 U. S. C. § la(6)(a) (1976 ed.) with 49 TT §§ 10905(c)-(f).
See, e. g., 49 U. S. C. §10906:
“If the Commission finds that the rail properties proposed to be abandoned are suitable for public purposes, the properties may be sold, leased, exchanged, or otherwise disposed of only under conditions provided in the order of the Commission. The conditions may include a prohibition on any such disposal for a period of not more than 180 days after the effective date of the order, unless the properties have first been offered, on reasonable terms, for sale for public purposes.”
See also 49 U. S. C. § 10905(f)(4) (no purchaser of an abandoned line “may transfer or discontinue service on such line prior to the end of the second year after consummation of the sale, nor may such purchaser transfer such line, except to the carrier from whom it was purchased, prior to the end of the fifth year after consummation of the sale”).
This does not mean that in the postabandonment period, States are free to undo the very purposes for which the Commission authorized an abandonment. For example, if the Commission authorized an abandonment on the ground that relocation of the track was essential to enable the carrier to provide adequate service elsewhere, pre-emption would almost certainly invalidate a subsequent order by a state court barring such a transfer. Cf. In re Boston & Maine Corp., 596 F. 2d 2, 5-7 (CA1 1979); Texas & Pac. R. Co. Abandonment between San Martine and Rock House in Culberson, Texas, 363 I. C. C. 666, 678-679 (1980). This problem is absent from the case at bar.
According to the Court of Appeals “the benefits of the 110 day time schedule would be lost, since the state proceedings, once commenced, could take years.” 693 F. 2d, at 822-823 (citation omitted).
As the Conference Report on the Staggers Rail Act explained, one of the central aims of § 10905 was to “protec[t] carriers from protracted legal proceedings which are calculated merely to tediously extend the abandonment process.” H. R. Conf. Rep. No. 96-1430, p. 125 (1980) (emphasis added).
The Court of Appeals accepted this argument and concluded that allowing appellant to use Minnesota law to condemn the Hayfield segment “would circumvent the Commission’s determination of value.” 693 F. 2d, at 823.
The question whether appellant should be allowed to litigate the value of appellee’s abandoned rail property is an issue more appropriately analyzed in terms of res judicata rather than pre-emption. If an offeror participates in a § 10905 proceeding and obtains an unfavorable valuation, the Commission’s administrative determination may well have preclusive effect in state condemnation proceedings. See, e. g., United States v. Utah Constr. & Mining Co., 384 U. S. 394, 422 (1966) (administrative determinations usually have res judicata effect “[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate”). On the other hand, the 60-day limit within which the Commission must fix a price for purchase or subsidy, see 49 U. S. C. § 10905(f)(1)(A), may deprive the parties of the “adequate opportunity to litigate” required for the imposition of res judicata. We intimate no position on the issue inasmuch as it is not now before us.
Similarly, we leave open the issue whether state condemnation proceedings could, consistent with the purposes of the federal abandonment scheme, fix a lower valuation upon abandoned property than the valuation arrived at in prior § 10905 proceedings.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | J | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Reed
delivered the opinion of the Court.
In each of these cases the employer refused to permit distribution of union literature by nonemployee union organizers on company-owned parking lots. The National Labor Relations Board, in separate and unrelated proceedings, found in each case that it was unreasonably difficult for the union organizer to reach the employees off company property and held that, in refusing the unions access to parking lots, the employers had unreasonably impeded their employees’ right to self-organization in violation of §8 (a)(1) of the National Labor Relations Act. Babcock & Wilcox Co., 109 N. L. R. B. 485, 494; Ranco, Inc., id., 998, 1007, and Seamprufe, Inc., id., 24, 32.
The plant involved in No. 250, Labor Board v. Babcock & Wilcox Co., is a company engaged in the manufacture of tubular products such as boilers and accessories, located on a 100-acre tract about one mile from a community of 21,000 people. Approximately 40% of the 500 employees live in that town and the remainder live within a 30-mile radius. More than 90% of them drive to work in private automobiles and park on a company lot that adjoins the fenced in plant area. The parking lot is reached only by a driveway 100 yards long which is entirely on company property excepting for a public right-of-way that extends 31 feet from the metal of the highway to the plant’s property. Thus, the only public place in the immediate vicinity of the plant area at which leaflets can be effectively distributed to employees is that place where this driveway crosses the public right-of-way. Because of the traffic conditions at that place the Board found it practically impossible for union organizers to distribute leaflets safely to employees in motors as they enter or leave the lot. The Board noted that the company’s policy on such distribution had not discriminated against labor organizations and that other means of communication, such as the mail and telephones, as well as the homes of the workers, were open to the union. The employer justified its refusal to allow distribution of literature on company property on the ground that it had maintained a consistent policy of refusing access to all kinds of pamphleteering and that such distribution of leaflets would litter its property.
The Board found that the parking lot and the walkway from it to the gatehouse, where employees punched in for work, were the only “safe and practicable” places for distribution of union literature. The Board viewed the place of work as so much more effective a place for communication of information that it held the employer guilty of an unfair labor practice for refusing limited access to company property to union organizers. It therefore ordered the employer to rescind its no-distribution order for the parking lot and walkway, subject to reasonable and nondiscriminating regulations “in the interest of plant efficiency and discipline, but not as to deny access to union representatives for the purpose of effecting such distribution.” 109 N. L. R. B., at 486.
The Board petitioned the Court of Appeals for the Fifth Circuit for enforcement. That court refused enforcement on the ground the statute did not authorize the Board to impose a servitude on the employer’s property where no employee was involved. Labor Board v. Babcock & Wilcox Co., 222 F. 2d 316.
The conditions and circumstances involved in No. 251, Labor Board v. Seamprufe, Inc., and No. 422, Ranco, Inc. v. Labor Board, are not materially different, except that Seamprufe involves a plant employing approximately 200 persons and in the Raneo case it appears that union organizers had a better opportunity to pass out literature off company property. The Board likewise ordered these employers to allow union organizers limited access to company lots. The orders were in substantially similar form as that in the Babcock & Wilcox case. Enforcement of the orders was sought in the Courts of Appeals. The Court of Appeals for the Tenth Circuit in No. 251, Labor Board v. Seamprufe, Inc., 222 F. 2d 858, refused enforcement on the ground that a nonemployee can justify his presence on company property only “as it bears a cogent relationship to the exercise of the employees’ guaranteed right of self-organization.” These “solicitors were therefore strangers to the right of self-organization, absent a showing of nonaccessibility amounting to a handicap to self-organization.” Id., at 861. The Court of Appeals for the Sixth Circuit in No. 422 granted enforcement. Labor Board v. Ranco, Inc., 222 F. 2d 543. The per curiam opinion depended upon its decision in Labor Board v. Monarch Tool Co., 210 F. 2d 183, a case in which only employees were involved; Labor Board v. Lake Superior Lumber Corporation, 167 F. 2d 147, an isolated lumber camp case; and our Republic Aviation Corp. v. Labor Board, 324 U. S. 793. It apparently considered, as held in the Monarch Tool case, supra, at 186, that the attitude of the employer in the Raneo case was an “unreasonable impediment to the freedom of communication essential to the exercise of its employees’ rights to self organization.” Because of the conflicting decisions on a recurring phase of enforcement of the National Labor Relations Act, we granted certiorari. 350 U. S. 818, 894.
In each of these cases the Board found that the employer violated §8 (a)(1) of the National Labor Relations Act, 61 Stat. 140, making it an unfair labor practice for an employer to interfere with employees in the exercise of rights guaranteed in § 7 of that Act. The pertinent language of the two sections appears below. These holdings were placed on the Labor Board’s determination in LeTourneau Company of Georgia, 54 N. L. R. B. 1253. In the LeTourneau case the Board balanced the conflicting interests of employees to receive information on self-organization on the company’s property from fellow employees during nonworking time, with the employer’s right to control the use of his property and found the former more essential in the circumstances of that case. Recognizing that the employer could restrict employees’ union activities when necessary to maintain plant discipline or production, the Board said: “Upon all the above considerations, we are convinced, and find, that the respondent, in applying its ‘no-distributing’ rule to the distribution of union literature by its employees on its parking lots has placed an unreasonable impediment on the freedom of communication essential to the exercise of its employees’ right to self-organization,” LeTourneau Company of Georgia, 54 N. L. R. B., at 1262. This Court affirmed the Board. Republic Aviation Corp. v. Labor Board, 324 U. S. 793, 801 et seq. The same rule had been earlier and more fully stated in Peyton Packing Co., 49 N. L. R. B. 828, 843-844.
The Board has applied its reasoning in the LeTourneau case without distinction to situations where the distribution was made, as here, by nonemployees. Carolina Mills, 92 N. L. R. B. 1141, 1149, 1168-1169. The fact that our LeTourneau case ruled only as to employees has been noted by the Courts of Appeal in Labor Board v. Lake Superior Lumber Corp., 167 F. 2d 147, 150, and Labor Board v. Seamprufe, Inc., 222 F. 2d, at 860. Cf. Labor Board v. American Furnace Co., 158 F. 2d 376, 380.
In these present cases the Board has set out the facts that support its conclusions as to the necessity for allowing nonemployee union organizers to distribute union literature on the company’s property. In essence they are that nonemployee union representatives, if barred, would have to use personal contacts on streets or at home, telephones, letters or advertised meetings to get in touch with the employees. The force of this position in respect to employees isolated from normal contacts has been recognized by this Court and by others. See Republic Aviation Corporation v. Labor Board, supra, at 799, note 3; Labor Board v. Lake Superior Lumber Corp., supra, at 150. We recognize, too, that the Board has the responsibility of “applying the Act’s general prohibitory language in the light of the infinite combinations of events which might be charged as violative of its terms.” Labor Board v. Stowe Spinning Co., 336 U. S. 226, 231. We are slow to overturn an administrative decision.
It is our judgment, however, that an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union through other available channels of communication will enable it to reach the employees with its message and if the employer’s notice or order does not discriminate against the union by allowing other distribution. In these circumstances the employer may not be compelled to allow distribution even under such reasonable regulations as the orders in these cases permit.
This is not a problem of always open or always closed doors for union organization on company property. Organization rights are granted to workers by the same authority, the National Government, that preserves property rights. Accommodation between the two must be obtained with as little destruction of one as is consistent with the maintenance of the other. The employer may not affirmatively interfere with organization; the union may not always insist that the employer aid organization. But when the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels, the right to exclude from property has been required to yield to the extent needed to permit communication of information on the right to organize.
The determination of the proper adjustments rests with the Board. Its rulings, when reached on findings of fact supported by substantial evidence on the record as a whole, should be sustained by the courts unless its conclusions rest on erroneous legal foundations. Here the Board failed to make a distinction between rules of law applicable to employees and those applicable to non-employees.
The distinction is one of substance. No restriction may be placed on the employees’ right to discuss self-organization among themselves, unless the employer can demonstrate that a restriction is necessary to maintain production or discipline. Republic Aviation Corp. v. Labor Board, 324 U. S. 793, 803. But no such obligation is owed nonemployee organizers. Their access to company property is governed by a different consideration. The right of self-organization depends in some measure on the ability of employees to learn the advantages of self-organization from others. Consequently, if the location of a plant and the living quarters of the employees place the employees beyond the reach of reasonable union efforts to communicate with them, the employer must allow the union to approach his employees on his property. No such conditions are shown in these records.
The plants are close to small well-settled communities where a large percentage of the employees live. The usual methods of imparting information are available. See, e. g., note 1, supra. The various instruments of publicity are at hand. Though the quarters of the employees are scattered they are in reasonable reach. The Act requires only that the employer refrain from interference, discrimination, restraint or coercion in the employees' exercise of their own rights. It does not require that the employer permit the use of its facilities for organization when other means are readily available.
Labor Board v. Babcock & Wilcox Co., No. 250, is
Affirmed.
Labor Board v. Seamprufe, Inc., No. 251, is
Affirmed.
Ranco, Inc. v. Labor Board, No. 422, is
Reversed.
Mr. Justice Harlan took no part in the consideration or decision of these cases.
“Other union contacts with employees: In addition to distributing literature to some of the employees, as shown above, during the period of concern herein the Union has had other contacts with some of the employees. It has communicated with over 100 employees of Respondent on 3 different occasions by sending literature to them through the mails. Union representatives have communicated with many of Respondent’s employees by talking with them on the streets of Paris, by driving to their homes and talking with them there, and by talking with them over the telephone. All of these contacts have been for the purpose of soliciting the adherence and membership of the employees in the Union.” 109 N. L. R. B., at 492-493.
“Sec. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection ....
“Sec. 8 (a). It shall be an unfair labor practice for an employer—
“(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 ... .” 61 Stat. 140, 29 U. S. C. §§ 157,158 (a)(1).
“As previously indicated, the respondent’s plant is located in the country in the heart of 6,000 acres of land owned by it or its subsidiary. Apart from IT. S. Highway No. 13 (and perhaps the intersecting road), the respondent and its subsidiary own all the land adjacent to the plant. This, in itself, seriously limits the possibilities of effectively communicating with the bulk of the respondent’s employees. This limitation would not, however, be too restrictive if the respondent’s gate opened directly onto the highway, for then persons could stand outside the respondent’s premises and distribute literature as each employee entered or left the plant. But at the respondent’s plant the gate is 100 feet back from the highway, on company property. Over 60 percent of the respondent’s employees, after passing the gate, enter automobiles or busses parked in the space between the gate and the highway, and presumably speed homeward, without ever setting foot on the highway. Distribution of literature to employees is rendered virtually impossible under these circumstances, and it is an inescapable conclusion that self-organization is consequently seriously impeded. It is no answer to suggest that other means of disseminating union literature are not foreclosed. Moreover, the employees’ homes are scattered over a wide area. In the absence of a list of names and addresses, it appears that direct contact with the majority of the respondent’s employees away from the plant would be extremely difficult.” LeTourneau Company of Georgia, 54 N. L. R. B., at 1260-1261.
An element of discrimination existed in the Carolina Mills case, 92 N. L. R. B., at 1142, such as existed in Labor Board v. Stowe Spinning Co., 336 U. S. 226, 230, 233, but this was not relied upon in the opinion. See also Caldwell Furniture Co., 97 N. L. R. B. 1501, 1502, 1509; Monarch Machine Tool Co., 102 N. L. R. B. 1242, 1248, enforced, Labor Board v. Monarch Tool Co., 210 F. 2d 183. For a collection of Board cases, see Ranco, Inc., 109 N. L. R. B. 998, 1006, and Note, 65 Yale L. J. 423.
Universal Camera Corp. v. Labor Board, 340 U. S. 474, 491.
In the Seamprufe case the examiner’s report, approved by the Board, said: “To differentiate between employees soliciting on behalf of the Union and nonemployee union solicitors would be a differentiation not only without substance but in clear defiance of the rationale given by the Board and the courts for permitting solicitation. This conclusion is based on the belief that the rationale enunciated by the Supreme Court in the LeTourneau case, supra, is equally applicable in the case of solicitation by union representatives as well as where the solicitation is done by employees.” 109 N. L. R. B., at 32. See also Babcock & Wilcox Co., id., at 493, and Ranco, Inc., id., at 1006.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | G | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice White
delivered the opinion of the Court.
The State of Vermont collects a use tax when cars are registered with it. The tax is not imposed if the car was purchased in Vermont and a sales tax has been paid. The tax is also reduced by the amount of any sales or use tax paid to another State if that State would afford a credit for taxes paid to Vermont in similar circumstances. The credit is available, however, only if the registrant was a Vermont resident at the time he paid the taxes. Appellants, who bought cars outside of Vermont before becoming residents of that State, challenge the failure to grant them a similar credit. We agree that this failure denies them the equal protection of the laws.
I
Appellants’ complaint, which was dismissed before an answer was filed, sets out the following facts. In December 1980, appellant Norman Williams purchased a new car in Illinois, paying a five-percent sales tax. Three months later, he moved to Vermont, bringing the car with him. He subsequently attempted to register the car in Vermont without paying the required use tax. The Vermont Department of Motor Vehicles refused to register the car. Williams responded by suing in the Federal District Court for the District of Vermont, which, relying on 28 U. S. C. § 1341, dismissed his complaint. Williams then paid the tax, which came to $172, unsuccessfully sought a refund from the Department of Motor Vehicles, and filed the present suit in Vermont Superior Court.
The complaint alleged a number of constitutional defects in the State’s failure to afford appellants credit for the sales taxes they had paid. One of them was that the Equal Protection Clause of the Fourteenth Amendment forbade the State to deny the credit to them while providing it in the case of vehicles “acquired outside the state by a resident of Vermont.” Vt. Stat. Ann., Tit. 32, §8911(9) (1981).
The Superior Court dismissed the complaint. Acknowledging that the use tax “does not afford, on its face, equal treatment to residents and nonresidents who purchase cars out-of-state,” App. 14, the court considered the relevant inquiry to be “whether discrimination occurs within the state,” id., at 15. It saw no such discrimination, reasoning that in practice Vermont residents always pay the use tax, because reciprocal States excuse payment of the sales tax and therefore there is no out-of-state payment to credit the use tax against. The court also found no burden on the right to travel, no violation of the Privileges and Immunities Clause, and no interference with interstate commerce.
The Vermont Supreme Court affirmed, 144 Vt. 649, 478 A. 2d 993 (1984), by citation to another decision handed down the same day, Leverson v. Conway, 144 Vt. 523, 481 A. 2d 1029, appeal dism’d for want of a substantial federal question, 469 U. S. 926 (1984), pet. for rehearing pending, No. 84-315. Leverson was an essentially identical case brought by a former Wisconsin resident who, like appellants, had purchased a car in his home State and paid a sales tax, then moved to Vermont and been obliged to pay the use tax. The Vermont Supreme Court upheld the tax. First, it rejected the argument that denying a credit for a sales tax paid to another State infringed the right to travel. The use tax did not impose a penalty for moving to Vermont — the obligation was incurred only by registering one’s car there. Absent such a penalty, and given that there is no fundamental right to have or to register a car, the Equal Protection Clause required only minimal scrutiny. The statute was rationally related to the legitimate state interest in raising revenue to maintain and improve the highways, and rationally placed the burden on those who used them. The exemption for residents who purchased cars in reciprocal States encouraged purchases within Vermont by residents of those States. This goal would not be furthered by granting an exemption to new residents who have already purchased cars elsewhere. The court went on to hold that the Privileges and Immunities Clause did not come into play because no right, such as the right to travel, qualifying as a privilege or immunity was involved. It also rejected a Commerce Clause challenge, viewing this as a straightforward use tax, imposed only on goods that had come to rest in Vermont.
The Vermont Supreme Court denied rehearing, and appellants brought this appeal. We noted probable jurisdiction, 469 U. S. 1085 (1984), and we now reverse.
I — I 1 — I
The Vermont Motor Vehicle Purchase and Use Tax, Vt. Stat. Ann., Tit. 32, ch. 219 (1981), is distinct from the State’s general sales and use taxes. It is intended to “improve and maintain the state and interstate highway systems, to pay the principal and interest on bonds issued for the improvement and maintenance of those systems and to pay the cost of administering this chapter.” § 8901. The revenue from the tax goes into a distinct “transportation fund.” §8912. The tax is of two sorts: a four-percent sales tax is imposed at the time of purchase of a motor vehicle in Vermont by a Vermont resident, § 8903(a), and a four-percent use tax is imposed upon registration of a motor vehicle in Vermont unless the Vermont sales tax was paid, § 8903(b). A number of vehicles are exempt, including, for example, those owned by a State, the United States, or charitable institutions, and those transferred within a family. See generally § 8911. Prior to September 1, 1980, the statute also exempted “pleasure cars, the owners of which were not residents of this State at the time of purchase and had registered and used the vehicle for at least thirty days in a state or province other than Vermont.” Vt. Stat. Ann., Tit. 32, §8911(6) (1970 and Supp. 1981) (repealed). That provision would have exempted appellants from the use tax. Since its repeal, registrants who purchased their cars out-of-state when not Vermont residents have had to pay the use tax, regardless of whether they already paid a sales tax in another jurisdiction on the same car.
One other exemption is critical to this case. Section 8911(9) provides that the tax does not apply to
“pleasure cars acquired outside the state by a resident of Vermont on which a state sales or use tax has been paid by the person applying for a registration in Vermont, providing that the state or province collecting such tax would grant the same pro-rata credit for Vermont tax paid under similar circumstances. If the tax paid in another state is less than the Vermont tax the tax due shall be the difference.”
There is some dispute as to the reach of this provision. Appellants assert that, in light of this provision, had they been residents when they purchased their cars, they would now be exempt from the use tax. The State disagrees, asserting that the exemption applies only to Vermont residents who register their cars in Vermont without first having registered them elsewhere. According to it, a resident who purchases, pays a sales or use tax on, and registers a car in another State must also pay the Vermont use tax upon his return, bearing the same obligation as appellants.
The State’s submission, if it is to be accepted, would negate any claim that appellants were treated differently than Vermont residents in similar circumstances. For several reasons, however, we do not believe that in ruling on the equal protection claim the Vermont Supreme Court construed the exemption in this manner. The exemption contained in §8911(9) refers to “pleasure cars acquired outside the state by a resident of Vermont.” That language on its face exempts Vermont residents who register in another State, and in Leverson the Vermont Supreme Court appears to have proceeded on this basis. That court set out a comprehensive list of who must pay the tax, from which the Vermont resident who first registers the car in another State is conspicuously absent. 144 Vt., at 532, 481 A. 2d, at 1034. The opinion also several times points out that residents who pay a tax in a nonreciprocal State do not enjoy the credit upon registering their cars in Vermont. Id., at 532, 533, 481 A. 2d, at 1034, 1035. Had the court believed that those purchasing and registering a car in a reciprocal State are also not exempt, one would have expected it to have said so. Similarly, the court noted that someone in appellants’ position “is treated in exactly the same manner as all nonexempt persons, including the resident who purchases his vehicle in a nonreciprocal state.” Id., at 533, 481 A. 2d, at 1035. If the court had understood the statute as do appellees, it would also have noted that appellants were treated just like any resident who had previously registered a car elsewhere, not just one who purchased in a nonreciprocal State.
More fundamentally, had the Vermont Supreme Court accepted the narrow construction of the exemption that the State urges, it surely would have stated that the new resident suffers no unequal treatment under the statute at all and would have found no necessity to justify any discriminatory impact of the tax. This would have been a simple and straightforward answer to the equal protection claim, and there would have been no occasion to address the level of scrutiny to be applied to the discrimination or to identify the State’s interest in imposing the differential treatment of the nonresident. Instead, the court concluded that the State need have only a rational basis for the discrimination, and proceeded to hold that there was adequate justification for not extending the exemption to nonresidents.
In short, every indication is that a Vermont resident who, like appellants, bought a car in another State, paid a sales or use tax, and used the car there for a period of time before coming to Vermont, would receive the credit. Appellees offer only their own say-so to the contrary. See Tr. of Oral Arg. 39. Pointing to nothing in the statute or in the opinion below to support their narrow reading, they would have us essentially add a clause that is not there. We cannot do so without stronger authority. We therefore proceed on the understanding that a Vermonter enjoys a credit for any sales taxes paid to a reciprocating State, even if he registered and used the car there before registering the car in Vermont.
HH HH h-i
This Court has expressly reserved the question whether a State must credit a sales tax paid to another State against its own use tax. Southern Pacific Co. v. Gallagher, 306 U. S. 167, 172 (1939); Henneford v. Silas Mason Co., 300 U. S. 577, 587 (1937). The District of Columbia and all but three States with sales and use taxes do provide such a credit, although reciprocity may be required. CCH, State Tax Guide 6013 (1984). As noted above, see n. 2, swpra, Vermont provides a credit with regard to its general use tax. Such a requirement has been endorsed by at least one state court, Montgomery Ward & Co. v. State Board of Equalization, 272 Cal. App. 2d 728, 78 Cal. Rptr. 373 (1969), cert. denied, 396 U. S. 1040 (1970), was advocated 20 years ago in the much-cited Report of the Willis Subcommittee, H. R. Rep. No. 565, 89th Cong., 1st Sess., 1136, 1177-1178 (1965), is adopted in the Multistate Tax Compact, Art. V, § 1, and has significant support in the commentary, e. g., J. Hellerstein & W. Hellerstein, State and Local Taxation 637-638 (1978); Developments in the Law: Federal Limits on State Taxation of Interstate Business, 75 Harv. L. Rev. 953, 999-1000 (1962). Appellants urge us to hold that it is a constitutional requirement. Brief for Appellants 31-35. Once again, however, we find it unnecessary to reach this question. Whatever the general rule may be, to provide a credit only to those who were residents at the time they paid the sales tax to another State is an arbitrary distinction that violates the Equal Protection Clause.
This Court has many times pointed out that in structuring internal taxation schemes “the States have large leeway in making classifications and drawing lines which in their judgment produce reasonable systems of taxation.” Lehnhausen v. Lake Shore Auto Parts Co., 410 U. S. 356, 359 (1973). It has been reluctant to interfere with legislative policy decisions in this area. See Regan v. Taxation with Representation of Washington, 461 U. S. 540, 547-548 (1983); San Antonio Independent School District v. Rodriguez, 411 U. S. 1, 40-41 (1973); Allied Stores of Ohio, Inc. v. Bowers, 358 U. S. 522, 526-527 (1959). An exemption such as that chai-lenged here “will be sustained if the legislature could have reasonably concluded that the challenged classification would promote a legitimate state purpose.” Exxon Corp. v. Eagerton, 462 U. S. 176, 196 (1983). See generally Schweiker v. Wilson, 450 U. S. 221, 234-235 (1981).
We perceive no legitimate purpose, however, that is furthered by this discriminatory exemption. As we said in holding that the use tax base cannot be broader than the sales tax base, “equal treatment for in-state and out-of-state taxpayers similarly situated is the condition precedent for a valid use tax on goods imported from out-of-state.” Halliburton Oil Well Co. v. Reily, 373 U. S. 64, 70 (1963). A State may not treat those within its borders unequally solely on the basis of their different residences or States of incorporation. WHYY v. Glassboro, 393 U. S. 117, 119 (1968); Wheeling Steel Corp. v. Glander, 337 U. S. 562, 571-572 (1949). In the present case, residence at the time of purchase is a wholly arbitrary basis on which to distinguish among present Vermont registrants — at least among those who used their cars elsewhere before coming to Vermont. Having registered a car in Vermont they are similarly situated for all relevant purposes. Each is a Vermont resident, using a car in Vermont, with an equal obligation to pay for the maintenance and improvement of Vermont’s roads. The purposes of the statute would be identically served, and with an identical burden, by taxing each. The distinction between them bears no relation to the statutory purpose. See Zobel v. Williams, 457 U. S. 55, 61 (1982); cf. Texaco, Inc. v. Short, 454 U. S. 516, 540 (1982). As the Court said in Wheeling, appellants have not been “accorded equal treatment, and the inequality is not because of the slightest difference in [Vermont’s] relation to the decisive transaction, but solely because of the[ir] different residence.” 337 U. S., at 572.
In some ways, this is not a typical sales and use tax scheme. The proceeds go to a transportation fund rather than to general revenue. Perhaps as a result, the sales tax is narrower than most, in that it applies not to all sales within the jurisdiction, but only to those to residents. Conversely, the use tax is broader than most, in that it applies to items purchased by nonresidents and taxed by other States. As noted, the general sales and use tax provisions of Vermont, for example, have neither of these features. See n. 2, supra.
Applied to those such as appellants, the use tax exceeds the usual justifications for such a tax. A use tax is generally perceived as a necessary complement to the sales tax, designed to “ ‘protect a state’s revenues by taking away the advantages to residents of traveling out of state to make untaxed purchases, and to protect local merchants from out-of-state competition which, because of its lower or nonexistent tax burdens, can offer lower prices.’” Leverson, 144 Vt., at 527, 481 A. 2d, at 1032, quoting Rowe-Genereux, Inc. v. Department of Taxes, 138 Vt. 130, 133-134, 411 A. 2d 1345, 1347 (1980); see Henneford v. Silas Mason Co., supra, at 581. This customary rationale for the use tax has no application to purchases made out-of-state by those who were not residents of the taxing State at the time of purchase. These home-state transactions cannot be seen as lost Vermont sales, and are certainly not ones lost as a result of Vermont’s sales tax. Imposing a use tax on them in no way protects local business. In short, in its structure, this sales and use tax combination is exactly the opposite of the customary provisions: there is no disincentive to the Vermont resident’s purchasing outside the State, and there is a penalty on those who bought out-of-state but could not have been expected to do otherwise. The first provision limits local commerce, the second does not help it.
Despite Leverson’s passing reference to the standard rationale for use taxes, then, the only plausible justification for imposing the tax on those in appellants’ position in the first place — apart from the simple desire to raise funds — is the principle that those using the roads should pay for them. In Leverson, the Vermont Supreme Court supported the tax by reference to “Vermont’s basic policy” of making those who use the highways contribute to their maintenance and improvement. 144 Vt., at 532, 481 A. 2d, at 1034. Yet this does not explain the exemption for a resident who bought a car elsewhere and paid a tax to another State, which, as the dissent points out, post, at 32-33, is “directly contrary” to the user-pays principle. This “basic policy” arguably supports imposition of the use tax on appellants, and the denial of a credit to them; but it provides no rational reason to spare Vermont residents an equal burden. The same response applies to the Vermont court’s statement that to allow an exemption for people in appellants’ position, or for Vermonters who purchase in nonreciprocal States, “would run counter to the state’s present policies of requiring user contributions and encouraging purchases within the state, and would result in the loss of tax revenues to the state.” 144 Vt., at 533, 481 A. 2d, at 1035. This is no less true with regard to the Vermonter who purchases a car in a reciprocal State. Granting the resident a credit for sales tax paid to the other State is similarly “counter to the state’s policies of requiring user contributions and encouraging purchases within the state.” Ibid.
The Leverson court’s primary explanation of the exemption was that it
“appears to be based upon a policy of encouraging out-of-staters from reciprocal states to purchase their vehicles in Vermont and pay a sales tax to Vermont, secure in the knowledge that they will not be subject to a duplicate tax in their home states, and upon a legislative assumption that few, if any, tax dollars will be lost through this exercise in comity.” Id., at 532, 481 A. 2d, at 1034-1035.
However, the exemption cannot be justified as an indirect means of encouraging out-of-staters to purchase in. Vermont and pay Vermont sales tax, for the straightforward reason that Vermont does not impose its sales tax on nonresidents. § 8903(a).
Appellees take a different tack, suggesting that the exemption is designed to encourage interstate commerce by enabling Vermont residents, faced with limited automobile offerings at home, Tr. of Oral Arg. 35-36, to shop outside the State without penalty. Brief for Appellees 7. This justification may sound plausible, but it fails to support the classification at issue. Those in appellants’ position pay exactly the penalty for purchasing out-of-state that Vermont spares its own residents. The credit may rationally further Vermont’s legitimate interest in facilitating Vermonters’ out-of-state purchases, but this interest does not extend to the facilitation of Vermonters’ out-of-state use. Vermont may choose not to penalize old residents who used their cars in other States, but it cannot extend that benefit to old residents and deny it to new ones. The fact that it may be rational or beneficent to spare some the burden of double taxation does not mean that the beneficence can be distributed arbitrarily.
Finally, the Vermont court pointed out that Leverson was “treated in exactly the same manner as all nonexempt persons, including the resident who purchases his vehicle in a nonreciprocal state.” 144 Vt., at 533, 481 A. 2d, at 1035. Yet the fact that all those not benefited by the challenged exemption are treated equally has no bearing on the legitimacy of that classification in the first place. A State cannot deflect an equal protection challenge by observing that in light of the statutory classification all those within the burdened class are similarly situated. The classification must reflect pre-existing differences; it cannot create new ones that are supported by only their own bootstraps. “The Equal Protection Clause requires more of a state law than nondiscriminatory application within the class it establishes.” Rinaldi v. Yeager, 384 U. S. 305, 308 (1966).
In sum, we can see no relevant difference between motor vehicle registrants who purchased their cars out-of-state while they were Vermont residents and those who only came to Vermont after buying a car elsewhere. To free one group and not the other from the otherwise applicable tax burden violates the Equal Protection Clause.
> I — (
Our holding is quite narrow, and we conclude by emphasizing what we do not decide. We need not consider appellants’ various arguments based on the right to travel, the Privileges and Immunities Clause, and the Commerce Clause. We again put to one side the question whether a State must in all circumstances credit sales or use taxes paid to another State against its own use tax. In addition, we note that this action was dismissed for failure to state a claim before an answer was filed. The “dominant theme running through all state taxation cases” is the “concern with the actuality of operation.” Halliburton, 373 U. S., at 69. It is conceivable that, were a full record developed, it would turn out that in practice the statute does not operate in a discriminatory fashion. Finally, in light of the fact that the action was dismissed on the pleadings, and given the possible relevance of state law, see Bacchus Imports, Ltd. v. Dias, 468 U. S. 263, 277 (1984), we express no opinion as to the appropriate remedy.
We hold only that, when the statute is viewed on its face, appellants have stated a claim of unconstitutional discrimination. The decision below is accordingly reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Justice Powell took no part in the decision of this case.
Appellant Susan Levine moved to Vermont in 1979. She brought with her a car she had purchased in New York a year before on which she had paid a seven-percent state sales tax. Upon registering her car in Vermont in 1982, she paid a use tax of $110. She then successfully moved to intervene in Williams’ suit.
The general sales and use tax provisions are found in Vt. Stat. Ann., Tit. 32, ch. 233 (1981). The present controversy could not have arisen under these provisions. Vermont’s ordinary use tax applies neither to “property purchased by the user while a nonresident of this State,” § 9744(a)(2), nor to any property to the extent the user has already paid a sales or use tax to a State with a reciprocal agreement, § 9744(a)(3). Appellants would be exempt under both these subsections.
Both taxes have a ceiling of $600. The sales tax is paid on the purchase price. §§ 8902(4), (5) (1981), § 8903(a) (Supp. 1984). The use tax is paid on the car’s low book value at the time of registration. App. 16; § 8907.
If the statute operated as the State says it does, it might still be discriminatory, at least in theory. A nonresident who buys his car in another State, pays a sales tax, but does not register it there, and brings it right to Vermont, would pay two taxes, whereas a Vermont resident doing the same thing would pay only one. But this is not a distinction that appellants could challenge. Since they registered their cars out-of-state, they would not qualify for the exemption, but neither would a resident who had done the same.
The State put forward this reading of the statute in its briefs in this ease and in Leverson. See Brief for Appellees in No. 83-139 (Vt. Sup. Ct.), pp. 18-19, and n. 2; Brief for Appellee in No. 83-157 (Vt. Sup. Ct.), pp. 17-18, and n. 3.
The dissent suggests that this reading is not consistent with the statutory language. Post, at 32-33, and n. 3. While it is not our business to interpret state statutes, there is no necessary inconsistency. The literal language applies whenever a Vermonter buys a car in another State, regardless of how quickly he returns to Vermont. Significantly, the tax from which § 8911(9) exempts Vermont residents is imposed “at the time of first registering or transferring a registration.” § 8903(b) (emphasis added); see also § 8905(b). In addition, the credit applies when a “state sales or use tax has been paid.” § 8911(9) (emphasis added). If it extended only to the Vermont resident who bought a car elsewhere and brought it straight to Vermont, the reference to a use tax would be meaningless. Finally, as the dissent itself notes, post, at 36, n. 5, if the credit only applied in these circumstances, the provision would be essentially superfluous. We should not assume the legislature passed a statute without effect.
Halliburton was decided under the Commerce Clause and is not dis-positive. We do not consider in what way, if any, the failure to give appellants a credit might burden interstate commerce. The critical point is the Court’s emphasis on the need for equal treatment of taxpayers who can be distinguished only on the basis of residence. See also Henneford v. Silas Mason Co., 300 U. S. 577, 583-584 (1937).
The dissent does not disagree that such people are similarly situated, nor does it identify any justification for preferential treatment of the resident. Post, at 32-34. It merely argues that the inequity is the acceptable result of the imprecision of a generally rational classification. Post, at 33-35. Under rational-basis scrutiny, legislative classifications are of course allowed some play in the joints. But the choice of a proxy criterion — here, residence for State of use — cannot be so casual as this, particularly when a more precise and direct classification is easily drawn.
A nonrecurring use tax pegged to the value of the car is an exceedingly loosely tailored means to this end. The amount of such a payment has no relation to the extent of use, includes the irrelevant variable of the luxury value of the ear, and fails to account for the possibility of the owner moving out of the State or selling the car during its useful life. Reliance on annual registration fees would provide a more accurate measure of current use and would seem to be more closely related to the stated purpose. However, appellants do not challenge the tax itself as an equal protection violation. And despite the looseness of the fit, we would be hard pressed to say that this manner of funding highway maintenance and construction is irrational. “If the classification has some ‘reasonable basis,’ it does not offend the Constitution simply because the classification ‘is not made with mathematical nicety or because in practice it results in some inequality.’ ” Dandridge v. Williams, 397 U. S. 471, 485 (1970), quoting Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78 (1911).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice SOTOMAYOR delivered the opinion of the Court.
Article III, § 1, of the Constitution provides that “[t]he judicial Power of the United States, shall be vested in one supremé Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” Congress has in turn established 94 District Courts and 13 Courts of Appeals, composed of judges who enjoy the protections of Article III: life tenure and pay that cannot be diminished.. Because these protections help to ensure the integrity and independence of the Judiciary, “we have long recognized that, in general, Congress may not withdraw from” the Article III courts “any matter which, from its nature, is the suN ject of a suit at the common law, or in equity, or in admiralty.”- Stern v. Marshall, 564 U.S.-,-, 131 S.Ct. 2594, 2609, 180 L.Ed.2d 475 (2011) (internal quotation marks omitted).
Congress has also authorized the appointment of bankruptcy and magistrate judges, who do not enjoy the protections of Article III, to assist Article III courts in their work. The number of magistrate and bankruptcy judgeships exceeds the number of circuit and district judgeships. And it is no exaggeration to say that without the distinguished service of these judicial colleagues, the work of the federal court system would grind nearly to a halt.
Congress’ efforts to align the responsibilities of non-Artiele III judges with the boundaries set by the Constitution have not always been successful. In Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982) (plurality opinion), and more recently in Stem, this Court held that Congress violated Article' III by authorizing bankruptcy judges to decide certain claims for which litigants are constitutionally entitled to an Article III adjudication. This case presents the question whether Article III allows bankruptcy judges to adjudicate such claims with the parties’ consent. We hold that Article III is not violated when the parties knowingly and voluntarily consent to adjudication by a bankruptcy judge.
I
A
Before 1978, district courts typically delegated bankruptcy proceedings to “referees.” Executive Benefits Ins. Agency v. Arkison, 573 U.S. -, -, 134 S.Ct. 2165, 2170, 189 L.Ed.2d 83 (2014). Under the Bankruptcy Act of 1898, bankruptcy referees had “[sjummary jurisdiction” over “claims involving ‘property in the actual or constructive possession of the bankruptcy court’ ”=that is, over the apportionment of the bankruptcy estate among creditors: Ibid, (alteration omitted). They could preside over other proceedings--matters implicating the court’s “plenary jurisdiction”-by consent. Id., at-, 134 S.Ct., at 2170; see also MacDonald v. Plymouth County Trust Co., 286 U.S. 263, 266-267, 52 S.Ct. 505, 76 L.Ed. 1093 (1932).
In 1978, Congress enacted the Bankruptcy Reform Act, which repealed the 1898 Act and gave the newly created bankruptcy courts power “much broader than that exercised under the former referee system.” Northern Pipeline, 458 U.S., at 54, 102 S.Ct. 2858. The Act “[e]liminat[ed] the distinction between ‘summary’ and ‘plenary’ jurisdiction” and enabled bankruptcy courts to decide “all ‘civil proceedings arising under title 11 [the Bankruptcy title] or arising in or related to cases under title 11.’ ” Ibid, (emphasis deleted). Congress thus vested bankruptcy judges with most of the “ ‘powers of a court of equity, law, and admiralty,’ ” id., at 55, 102 S.Ct. 2858 without affording them the benefits of Article III. This Court therefore held parts of the system unconstitutional in Northern Pipeline.
Congress responded by enacting the Bankruptcy Amendments and Federal Judgeship Act of 1984. Under that Act, district courts have original jurisdiction over bankruptcy cases and related proceedings. 28 U.S.C. §§ 1334(a), (b). But “[e]ach district court may provide that any or all” bankruptcy cases and related proceedings “shall be referred to the bankruptcy judges for the district.” § 157(a). Bankruptcy judges are “judicial officers of the United States district court,” appointed to 14-year terms by the courts of appeals, and subject to removal for cause. §§ 152(a)(1), (e). “The district court may withdraw” a reference to the bankruptcy court “on its own motion or on timely motion of any party, for cause shown.” § 157(d).
When a district court refers a case to a bankruptcy judge, that judge’s statutory authority depends on whether Congress has classified the matter as a “[c]ore proceedin[g]” or a “[n]on-core proceeding],” §§' 157(b)(2), (4) — much as the authority of bankruptcy referees, before the 1978 Act, depended on whether the proceeding was “summary” or “plenary.” Congress identified as “[cjore” a nonexclusive list of 16 types of proceedings, § 157(b)(2), in which it thought bankruptcy courts could constitutionally enter judgment. Congress gave bankruptcy courts the power to “hear and determine” core proceedings and to “enter appropriate orders and judgments,” subject to appellate review by the district court. § 157(b)(1); see § 158. But it gave bankruptcy courts more limited authority in non-core proceedings: They may “hear and determine” such proceedings, and “enter appropriate orders and judgments,” only “with the consent of all the parties to the proceeding.” § 157(c)(2). Absent consent, bankruptcy courts in non-core proceedings may only “submit proposed findings of fact and conclusions of law,” which the district courts review de novo. § 157(c)(1).
B
Petitioner Wellness International Network is a manufacturer of health and nutrition products. Wellness and respondent Sharif entered into a contract under which Sharif would distribute Wellness’ products. The relationship quickly soured, and in 2005, Sharif sued Wellness in the United States District Court for the Northern District of Texas. Sharif repeatedly ignored Wellness’ discovery requests and other litigation obligations, resulting in an entry of default judgment for Wellness. The District Court eventually sanctioned Sharif by awarding Wellness over $650,000 in attorney’s fees. This case arises from Wellness’ long-running — and so far’unsuccessful — efforts to collect on that judgment.
In February 2009, Sharif filed for Chapter' 7 bankruptcy in the Northern District of Illinois. The bankruptcy petition listed Wellness as a creditor. Wellness requested documents concerning Sharif’s assets, which Sharif did not provide. Wellness later obtained a loan application Sharif had filed in 2002, listing more than $5 million in assets. When confronted, Sharif informed Wellness and the Chapter 7 trustee that he had lied on the loan application. The listed assets, Sharif claimed, were actually owned by the Soad Wattar Living Trust (Trust), an entity Sharif said he administered on behalf of his mother, and for the benefit of his sister. Wellness pressed Sharif for information on the Trust, but Sharif again failed to respond.
Wellness filed a five-count adversary complaint against Sharif in the Bankruptcy Court. See App. 5-22. Counts I-IY of the complaint objected to the discharge of Sharif s debts because, among other reasons, Sharif had concealed property by claiming that it was owned by the Trust. Count V of the complaint sought a declaratory'judgment that the Trust was Sharif s alter ego. and that its assets should therefore be treated as part of Sharif s bankruptcy estate. Id., at 21. In his answer, Sharif admitted that the adversary proceeding was a “core proceeding” under 28 U.S.C. § 157(b)-i.e., a proceeding in which the Bankruptcy Court could enter final judgment subject to appeal. See §§ 157(b)(1), (2)(J); App. 24. Indeed, Sharif requested judgment in his favor on all counts of Wellness’ complaint and urged the Bankruptcy Court to “find that the Soad Wattar Living Trust is not property of the [bankruptcy] estate.” Id., at 44.
A familiar pattern of discovery evasion ensued. Wellness responded by filing a motion for sanctions, or, in the alternative, to compel discovery. Granting the motion to compel, the Bankruptcy Court warned Sharif that if he did not respond to Wellness’ discovery requests a default judgment would be entered against him. Sharif eventually complied with some discovery obligations, but did not produce any documents related to the Trust.
In July 2010, the Bankruptcy Court issued a ruling finding that Sharif had violated the court’s discovery order. See App. to Pet. for Cert. 92a-120a. It accordingly denied Sharifs request to discharge his debts and entered a default judgment against him in the adversary proceeding. And it declared, as requested by count V of Wellness’ complaint, that the assets supposedly held by the Trust were in fact property of Sharifs bankruptcy estate because Sharif “treats [the Trust’s] assets as his own property.” Id., at 119a.
Sharif appealed to the District Court. Six weeks before Sharif filed his opening brief in the District Court, this Court decided Stem. In Stem, the Court held that Article III prevents bankruptcy courts from entering final judgment on claims that seek only to “augment” the bankruptcy estate and would otherwise “exis[t] without regard to any bankruptcy proceeding.” 564 U.S., at-,-, 131 S.Ct., at 2614, 2618. Sharif did not cite Stem in his opening brief. Rather, after the close of briefing, Sharif moved for leave to file a supplemental brief, arguing that in light of In re Ortiz, 665 F.3d 906 (C.A.7 2011)-a recently issued decision interpreting Stemr&emdash;“ the bankruptcy court’s order should only be treated as a report and recommendation.” App. 145. The District Court denied Sharifs motion for supplemental briefing as untimely and affirmed the Bankruptcy Court’s judgment.
The Court of Appeals for the Seventh Circuit affirmed in part -and reversed in part. 727 F.3d 751 (2013). The Seventh Circuit acknowledged that ordinarily Sharifs Stem objection would “not [be] preserved because he waited too long to assert it.” 727 F.3d, at 767. But the court determined that the ordinary rule did not apply because Sharifs argument concerned “the allocation of authority between bankruptcy courts and district courts” under Article III, and thus “implicate[d] structural interests.” Id., at 771. Based on those separation-of-powers considerations, the court held that “a litigant may not waive” a Stem objection. Id., at 773. Turning to the merits of Sharifs contentions, the Seventh Circuit agreed with the Bankruptcy Court’s resolution of counts I-IV of Wellness’ adversary complaint. It further concluded, however, that count V of the complaint alleged a so-called “Stem claim,” that is, “a claim designated for final adjudication in the bankruptcy court as a statutory matter, but prohibited from proceeding in that way as a constitutional matter.” Executive Benefits, 573 U.S., at-, 134 S.Ct., at 2170. The Seventh Circuit therefore ruled that the Bankruptcy Court lacked constitutional authority to enter final judgment on count V.
We granted certiorari, 573 U.S. -, 134 S.Ct. 2901, 189 L.Ed.2d 854 (2014), and now reverse the judgment of the Seventh Circuit.
II
Our precedents make clear that litigants may validly consent to adjudication by bankruptcy courts.
A
Adjudication by consent is nothing new. Indeed, “[djuring the early years of the Republic, federal courts, with the consent of the litigants, regularly referred adjudication of entire disputes to non-Article III referees, masters, or arbitrators, for entry of final judgment in accordance with the referee’s report.” Brubaker, The Constitutionality of Litigant Consent to Non-Article III Bankruptcy Adjudications, 32 Bkrtcy. L. Letter No. 12, p. 6 (Dec. 2012); see, e.g., Thornton v. Carson, 7 Cranch 596, 597, 3 L.Ed. 451 (1813) (affirming damages awards in two actions that “were referred, by consent under a rule of Court to arbitrators”); Heckers v. Fowler, 2 Wall. 123, 131, 17 L.Ed. 759 (1865) (observing that the “[p]ractice of referring pending actions under a rule of court, by consent of parties, was well known at common law,” and “is now universally regarded... as the proper foundation of judgment”); Newcomb v. Wood, 97 U.S. 581, 583, 24 L.Ed. 1085 (1878) (recognizing “[t]he power of a court of justice, with the consent of the parties, to appoint arbitrators and refer a case pending before it”).'
The foundational case in the modern era is Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986). The Commodity Futures Trading Commission (CFTC), which Congress had authorized to hear customer complaints against commodities brokers, issued a regulation allowing itself to hear state-law counterclaims as well. William Schor filed a complaint with the CFTC against his broker, and the broker, which had previously filed claims against Schor in federal court, refiled them as counterclaims in the CFTC proceeding. The CFTC ruled against Schor on the counterclaims. This Court upheld that ruling against both statutory and constitutional challenges.
On the constitutional question (the one relevant here) the Court began by holding' that Schor had “waived any right he may have possessed to the full trial of [the broker’s] counterclaim before an Article III court.” Id., at 849, 106 S.Ct. 3245. The Court then explained why this waiver legitimated the CFTC’s exercise of authority: “[A]s a personal right, Article Ill’s guarantee of an impartial and independent federal adjudication is subject to waiver, just as are other personal constitutional rights”&emdash;such as the right to a jury&emdash;“that dictate the procedures by which civil and criminal matters must be tried.” Id., at 848-849, 106 S.Ct. 3245.
The Court went on to state that a litigant’s waiver of his “personal right” to an Article III court is not always dispositive because Article III “not only preserves to litigants their interest in an. impartial and independent federal adjudication of claims..., but also serves as ‘an inseparable element of the constitutional system of checks and balances.’... To the extent that this structural principle is implicated in a given case”&emdash;but only to that extent&emdash; “the parties cannot by consent cure the constitutional difficulty....” Id., at 850-851,106 S.Ct. 3245.
Leaning heavily on the importance of Schor’s consent, the Court found no structural concern implicated by the CFTC’s adjudication of the counterclaims against him. While “Congress gave the CFTC the authority to adjudicate such matters,” the Court wrote,
“the decision to invoke this forum is left entirely to the parties and the power of the federal judiciary to take jurisdiction of these matters is unaffected. In such circumstances, separation of powers concerns are diminished, for it seems self-evident that just as Congress may encourage parties to settle a dispute out of court or resort to arbitration without impermissible incursions on the separation of powers, Congress may make available a quasi-judicial mechanism through which willing parties may, at their option, elect to resolve their differences.” Id., at 855, 106 S.Ct. 3245.
The option for parties to submit their disputes to a non-Article III adjudicator was at most a “de minimis ” infringement on the prerogative of the federal courts. Id., at 856, 106 S.Ct. 3245.
A few years after Schor, the Court decided a pair of cases—Gomez v. United States, 490 U.S. 858, 109 S.Ct. 2237, 104 L.Ed.2d 923 (1989), and Peretz v. United States, 501 U.S. 923, 111 S.Ct. 2661, 115 L.Ed.2d 808 (1991)—that reiterated the importance of consent to the constitutional analysis. Both cases concerned whether the Federal Magistrates Act authorized magistrate judges to preside over jury selection in a felony trial; the difference was that Peretz consented to the practice while Gomez did not. That difference was dispositive.
In Gomez, the Court interpreted the statute as not allowing magistrate judges to supervise voir dire without consent, emphasizing the constitutional concerns that might otherwise arise. See 490 U.S., at 864, 109 S.Ct. 2237. In Peretz, the Court upheld the Magistrate Judge’s action, stating that “the defendant’s consent significantly changes the constitutional analysis.” 501 U.S., at 932, 111 S.Ct. 2661. The Court concluded that allowing a magistrate judge to supervise jury selection&emdash; with consent&emdash;does not violate Article III, explaining that “litigants may waive their personal right to have an Article III judge preside over a civil trial,” id., at 936, 111 S.Ct. 2661 (citing Schor, 478 U.S., at 848, 106 S.Ct. 3245), and that “[t]he most basic rights of criminal defendants are similarly subject to waiver,” 501 U.S., at 936, 111 S.Ct. 2661. And “[e]ven assuming that a litigant may not waive structural protections provided by Article III,” the Court found “no such structural protections.... implicated by” a magistrate judge’s supervision of voir dire:
“Magistrates are appointed and subject to removal by Article III judges. The ‘ultimate decision’ whether to invoke the magistrate’s assistance is made by the district court, subject to veto, by the parties. The decision whether to empanel the jury whose selection a magistrate has supervised also remains entirely with the district court. Because ‘the entire process takes place under the district court’s total control and jurisdiction,’ there is no danger that use of the magistrate involves a ‘congressional attempt “to transfer jurisdiction [to non-Article III tribunals] for the purpose of emasculating” constitutional courts.’ ” Id., at 937, 111 S.Ct. 2661 (citations omitted; alteration in original).
The lesson of Schor, Peretz; and the history that preceded them is plain: The entitlement to an Article III adjudicator is “a personal right” and thus ordinarily “subject to waiver,” Schor, 478 U.S., at 848, 106 S.Ct. 3245. Article III also serves a structural purpose, “barring congressional attempts ‘to transfer jurisdiction [to non-Article III tribunals] for the purpose of emasculating’ constitutional courts and thereby preventing] ‘the encroachment or aggrandizement of one branch at the expense of the other.’ ” Id., at 850, 106 S.Ct. 3245 (citations omitted). But allowing Article I adjudicators to decide claims submitted to them by consent does not offend the separation of powers so long as Article III courts retain supervisory authority over the process.
B
The question here, then, is whether allowing bankruptcy courts to decide Stem claims by consent would “impermissibly threate[n] the institutional integrity of the Judicial Branch.” Schor, 478 U.S., at 851, 106 S.Ct. 3245. And that question must be decided not by “formalistic and unbending rules,” but “with an eye to the practical effect that the” practice “will have on the constitutionally assigned role of the federal judiciary.” Ibid.; see Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568, 587, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985) (“[Practical attention to substance rather than doctrinaire reliance on formal categories should inform application of Article III”). The Court must weigh
“the extent to which the essential attributes of judicial power are reserved to Article III courts, and, conversely, the extent to which the non-Article III forum exercises the range of jurisdiction and powers normally vested only in Article III courts, the origins and importance of the right to be adjudicated, and the concerns that drove Congress to depart from the requirements of Article III.” Schor, 478 U.S., at 851, 106 S.Ct. 3245 (internal quotation marks omitted).
Applying these factors, we conclude that allowing bankruptcy litigants to waive the right to Article III adjudication of Stem claims does not usurp the constitutional prerogatives of Article’ III courts. Bankruptcy judges, like magistrate judges, “are appointed and subject to removal by Article III judges,” Peretz, 501 U.S., at 937, 111 S.Ct. 2661; see 28 U.S.C. §§ 152(a)(1), (e). They “serve as judicial officers of the United States district court,” § 151, and collectively “constitute a unit of the district court” for that district, § 152(a)(1). Just as “[t]he ‘ultimate decision’ whether to invoke [a.] magistrate [judge]’s assistance is made by the district court,” Peretz, 501 U.S., at 937, 111 S.Ct. 2661 bankruptcy courts hear matters solely on a district court’s reference, § 157(a), which the district court may withdraw sua sponte or at the request of a party, § 157(d). “[Separation of powers concerns are diminished” when, as here, “the decision to invoke [a non-Article III] forum is left entirely to the parties and the power of the federal judiciary to take jurisdiction” remains in place. Schor, 478 U.S., at 855, 106 S.Ct. 3245.
Furthermore, like the CFTC in Schor, bankruptcy courts possess no free-floating authority to decide claims traditionally heard by Article III courts. Then-ability to resolve such matters is limited to “a narrow class of common law claims as an incident to the [bankruptcy courts’] primary, and unchallenged, adjudicative function.” Id., at 854, 106 S.Ct. 3245. “In such circumstances, the magnitude of any intrusion on the Judicial Branch can only be termed de minimis.” Id., at 856, 106 S.Ct. 3245.
Finally, there is no indication that Congress gave bankruptcy courts the ability to decide Stem claims in an effort to aggrandize itself of humble the Judiciary. As in Peretz, “[b]ecause ‘the entire process takes place under the district court’s total control and jurisdiction,’ there is no danger that use of the [bankruptcy court] involves a ‘congressional attemp[t] “to transfer jurisdiction [to non-Article III tribunals] for the purpose of emasculating” constitutional courts.’ ” 501 U.S., at 937, 111 S.Ct. 2661 (citation omitted); see also Schor, 478 U.S., at 855, 106 S.Ct. 3245 (allowing CFTC’s adjudication of counterclaims because of “the degree of judicial control saved to the federal courts, as well as the congressional purpose behind the jurisdictional delegation, the demonstrated need for the delegation, and the limited nature of the delegation” (citation omitted)); Pacemaker Diagnostic Clinic of America, Inc. v. Instromedix, Inc., 725 F.2d 537, 544 (C.A.9 1984) (en banc) (Kennedy, J.) (magistrate judges may adjudicate civil cases by consent because the Federal Magistrates Act “invests the Article III judiciary with extensive administrative control over the management, composition, and operation of the magistrate system”).
Congress could choose to rest the full share of the Judiciary’s labor on the shoulders of Article III judges. But doing so would require a substantial increase in the number of district judgeships. Instead, Congress has supplemented the capacity of district courts through the able assistance of bankruptcy judges. So long as those judges are subject to control by the Article III courts, their work poses no threat to, the separation of powers.
C
Our recent decision in Stem, on which Sharif and the principal dissent rely heavily, does not compel a different result. That is because Stem — like its predecessor, Northern Pipeline — turned on the fact that the litigant “did not truly consent to” resolution of the claim against it in a npn-Article. Ill forum. 564 U.S., at -, 131 S.Ct., at 2614.
To understand Stem, it is necessary to first understand Northern Pipeline. There, the Court considered whether bankruptcy judges “could ‘constitutionally be vested with jurisdiction to decide [a] state-law contract claim’ against an entity that was not otherwise part of the bank-. ruptey proceedings.” 564 U.S., at -, 131 S.Ct., at 2609-2610. In answering that question in the negative, both the plurality and then-Justice Rehnquist, concurring in the judgment, noted that the entity in question did not consent to the bankruptcy court’s adjudication of the claim. See 458 U.S., at 80, n. 31, 102 S.Ct. 2858 (plurality opinion); id., at 91, 102 S.Ct. 2858 (opinion of Rehnquist, J.). The Court confirmed in two later cases that Northern Pipeline turned on the lack of consent. See Schor, 478 U.S., at 849, 106 S.Ct. 3245 (“[I]n Northern Pipeline,... the absence of consent to an initial adjudication before a non-Article III tribunal was relied on as a significant factor in determining that Article III forbade such adjudication”);. Thomas, 473 U.S., at 584, 105 S.Ct. 3325.
Stem presented the same scenario. The majority cited the dissent’s observation that Northern Pipeline “established] only that Congress may not yest in a non-Article III court the power to adjudicate, render final judgment, and issue binding orders in a traditional contract action arising under state law, without consent of the litigants, and subject only to ordinary appellate review,” 564 U.S., at -, 131 S.Ct., at 2615 (emphasis added; internal quotation marks omitted). To which the majority responded, “Just so: Substitute ‘tort’ for ‘contract,’ and that statement directly covers this case.” Id., at -, 131 S.Ct., at 2615; see also id., at -, 131 S.Ct., at 2614 (defendant litigated in the Bankruptcy Court because he “had nowhere else to go” to pursue his claim). Because Stem was premised on noncon-sent to adjudication by the Bankruptcy Court, the “constitutional bar” it announced, see post, at 1957 (ROBERTS, C.J., dissenting), simply does not govern the question whether litigants may validly consent to adjudication by a bankruptcy court..
An expansive reading of Stem, moreover, would be inconsistent with the opinion’s own description of its holding. The Court in Stem took pains to note that the question before it was “a ‘narrow’ one,” and that its answer did “not change all that much” about the division of labor between district courts and bankruptcy courts. Id., at -, 131 S.Ct., at 2620; see also id., at -, 131 S.Ct., at 2620 (stating that Congress had exceeded the limitations of Article III “in one isolated respect”). That could not have been a fair characterization of the decision if it meant that bankruptcy judges could no longer exercise their longstanding authority to resolve claims submitted to them by consent. Interpreting Stem to bar consensual adjudications by bankruptcy courts would “meaningfully chang[e] the division of labor” in our judicial system, contra, id., at -, 131 S.Ct., at 2620.
In sum, the cases in which this Court has found a violation of a litigant’s right to an Article III decisionmaker have involved an objecting defendant forced to litigate involuntarily before a non-Article III court. The Court has never done what Sharif and the principal dissent would have us do&emdash;hold that a litigant who has the right to an Article III court may not waive that right through his consent.
D
The principal dissent warns darkly of the consequences of today’s decision. See post, at 1958 -1960. To hear the principal dissent tell it, the world will end not in fire, or ice, but in a bankruptcy court. The response to these ominous predictions is the same now as it was when Justice Brennan, dissenting in Schor, first made them nearly 30 years ago:
“This is not to say, of course, that if Congress created a phalanx of non-Arti-ele III tribunals equipped to handle the entire business of the Article III courts without any Article III supervision or control and without evidence of valid and specific legislative necessities, the fact that the parties had the election to proceed in their forum of choice would necessarily save the scheme from constitutional attack. But this ease obviously.bears no resemblance to such a scenario....” 478 U.S., at 855, 106 S.Ct. 3245 (citations omitted).
Adjudication based on litigant consent has been a consistent feature of the federal court system since its inception. Reaffirming that unremarkable fact, we are confident, poses no great threat to anyone’s birthrights, constitutional or otherwise.
Ill
Sharif contends that to the extent litigants may validly consent to adjudication by a bankruptcy court, such consent must be express. We disagree.
Nothing in the Constitution requires that consent to adjudication by a bankruptcy court be express. Nor does the relevant statute, 28 U.S.C. § 157, mandate express consent; it states only that a bankruptcy court must obtain “the consent”&emdash;consent simpliciter&emdash;“of all parties to the proceeding” before hearing and determining a non-core claim. § 157(c)(2). And a requirement of express consent would be in great tension with our decision in Roell v. Withrow, 538 U.S. 580, 123 S.Ct. 1696, 155 L.Ed.2d 775 (2003). That case concerned the interpretation of § 636(c), which authorizes magistrate judges to “conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case,” with “the consent of the parties.” The specific question in Roell was whether, as a statutory matter, the “consent” required by § 636(c) had to be express. The dissent argued that “[rjeading § 636(c)(1) to require express consent not only is more consistent with the text of the statute, but also” avoids constitutional concerns by “ensur[ing] that the parties knowingly and voluntarily waive their right to an Article III judge.” 538 U.S., at 595, 123 S.Ct. 1696 (opinion of THOMAS, J.). But the majority—thus placed on notice of the constitutional concern—was untroubled by it, opining that “the Article III right is substantially honored” by permitting waiver based on “actions rather than words.” Id., at 589, 590, 123 S.Ct. 1696.
The implied consent standard articulated in Roell supplies the appropriate rule for adjudications by bankruptcy courts under § 157. Applied in the bankruptcy context, that standard possesses the same pragmatic virtues—increasing judicial efficiency and checking gamesmanship—that motivated our adoption of it for consent-based adjudications by magistrate judges. See id., at 590, 123 S.Ct. 1696. It bears emphasizing, however, that a litigant’s consent—whether express or implied—must still be knowing and voluntary. Roell makes clear that the key inquiry is whether “the litigant or counsel was made aware of the need for consent and the right to refuse it, and still voluntarily appeared to try the case” before the non-Article III adjudicator. Ibid.; see also id., at 588, n. 5, 123 S.Ct. 1696 (“notification of the right to refuse” adjudication by a non-Article III court “is a prerequisite to any inference of consent”).
IV
It would be possible to resolve this case by determining whether Sharif in fact consented to the Bankruptcy Court’s adjudication of count V of Wellness’ adversary, complaint. But reaching that determination would require a deeply factbound analysis of the procedural history unique to this protracted litigation. Our resolution of the consent question — unlike the antecedent constitutional question — would provide little guidánce to litigants or the lower courts. Thus, consistent with our role as “a court of review, not of first view,” Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. -, -, 134 S.Ct. 2120, 2131, 189 L.Ed.2d 37 (2014) (internal quotation marks omitted), we leave it to the Seventh Circuit to decide on remand whether Sharif s actions evinced the requisite knowing and voluntary consent, and also whether, as Wellness contends, Sharif forfeited his Stem argument below.
* ■ * *
The Court holds that Article III permits bankruptcy courts to decide Stem claims submitted to them by consent. The judgment of the United States Court of Appeals for the Seventh Circuit is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
. Congress has authorized 179 circuit judge-ships and 677 district judgeships, a total of 856. United States Court's, Status of Article III Judgeships, http://www.uscourts.gov/ Statistics/JudicialBusiness/2014/status-article-iii-judgeships.aspx (all Internet materials as visited May 22, 2015, and available in Clerk of Court's case file). The number of authorized magistrate and bankruptcy judgeships currently stands at 883: 534 full-time magistrate judgeships and 349 bankruptcy judge-ships. United States Courts, Appointments of Magistrate Judges, http://www.uscourts.gov/ Statistics/JudicialBusiness/2014/ appointments-magistrate-judges.aspx; United States Courts, Status of Bankruptcy Judge-ships, http://www.uscourts.gov/Statistics/ JudicialBusiness/2014/status-bankruptcy-judgeships.aspx.
. Between October 1, 2013, and September 30, 2014, for example, litigants filed 963,739 cases in bankruptcy courts&emdash;more than double the total number filed in district and circuit courts. United States Courts, Judicial Caseload Indicators, http://www.uscourts.gov/ Statistics/JudicialBusiness/2014/judicial-caseload-indicators.aspx.
. Congress appears to have drawn the term "core” from Northern Pipeline’s description of "the restructuring of
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice O’Connor
delivered the opinion.of the Court.
This ease presents the question whether the Double Jeopardy Clause, which we have found applicable in the capital sentencing context, see Bullington v. Missouri, 451 U. S. 430 (1981), extends to noncapital sentencing proceedings. We hold that it does not, and accordingly affirm the judgment of the California Supreme Court.
? — i
Petitioner was charged under California law with one count of using a minor to sell marijuana, Cal. Health & Safety-Code Ann. § 11861(a) (West 1991), one count of sale or transportation of marijuana, § 11360(a), and one count of possession of marijuana for sale, § 11359. In the information, the State also notified petitioner that it would seek to prove two sentence enhancement allegations: that petitioner had previously been convicted of assault and that he had served a prison term for that offense, see Cal. Penal Code Ann. §§ 245(a)(1), 667(e)(1), and 667.5 (West Supp. 1998).
Under California’s “three-strikes” law, a defendant convicted of a felony who has two qualifying prior convictions for “serious felonies” receives a minimum sentence of 25 years to life; when the instant conviction was preceded by one serious felony offense, the court doubles a defendant’s term of imprisonment. §§ 667(d)(1) and (e)(l)-(2). An assault conviction qualifies as a serious felony if the defendant either inflicted great bodily injury on another person or personally used a dangerous or deadly weapon during the assault, §§ 1192.7(e)(8) and (23). According to California law, a number of procedural safeguards surround the assessment of prior conviction allegations: Defendants may invoke the right to a jury trial, the right to confront witnesses, and the privilege against self-incrimination; the prosecution must prove the allegations beyond a reasonable doubt; and the rules of evidence apply. See, e. g., 16 Cal. 4th 826, 833-834, 941 P. 2d 1121, 1126 (1997).
Here, petitioner waived his right to a jury trial on the sentencing issues, and the court granted his motion to bifurcate the proceedings. After a jury entered a guilty verdict on the substantive offenses, the truth of the prior conviction allegations was argued before the court. The prosecutor asserted that petitioner had personally used a stick in committing the assault, see Tr. 189-190 (June 12,1995), App. 12, but introduced into evidence only a prison record demonstrating that petitioner had been convicted of assault with a deadly weapon and had served a prison term for the offense, see People’s Exh. 1 (filed June 12, 1995), App. 3-6. The trial court found both sentencing allegations true and imposed an 11-year term of imprisonment: 5 years on count one, doubled to 10 under the three-strikes law, and a 1-year enhancement for the prior prison term. The court also stayed a 3-year sentence on count 2 and ordered the 2-year sentence on count 3 to be served concurrently.
Petitioner appealed, and the California Court of Appeal, on its own motion, requested briefing as to whether sufficient evidence supported the finding that petitioner had a qualifying prior conviction. The State conceded that the record of the sentencing proceedings did not contain proof beyond a reasonable doubt that petitioner had personally inflicted great bodily injury or used a deadly weapon, but requested another opportunity to prove the allegations on remand. See Respondent’s Supplemental Brief (Cal. App.), pp. 2-3, App. 33-35. The court, however, determined both that the evidence was insufficient to trigger the sentence enhancement and that a remand for retrial on the allegation would violate double jeopardy principles.
The California Supreme Court reversed the Court of Appeal’s ruling that the Double Jeopardy Clause bars retrial of prior conviction allegations. The three-justice plurality noted this Court’s traditional reluctance to apply double jeopardy principles to sentencing proceedings and concluded that the exception recognized in Bullington, supra, did not apply. In Bullington, we held that a capital defendant who had received a life sentence during a penalty phase that bore “the hallmarks of [a] trial on guilt or innocence” could not be resentenced to death upon retrial following appeal. Here, the plurality acknowledged that California’s proceedings to assess the truth of prior conviction allegations have the hallmarks of a trial, but it found Bullington distinguishable on several grounds. First, the plurality cited statements by this Court indicating that Bullington’s rationale is confined to the unique circumstances of capital cases. See 16 Cal. 4th, at 836-837, 941 P. 2d, at 1128 (citing Caspari v. Bohlen, 510 U. S. 383, 392 (1994); Pennsylvania v. Goldhammer, 474 U. S. 28, 30 (1985) (per curiam)). The plurality also reasoned that capital sentencing procedures are mandated by the Supreme Court’s interpretation of the Federal Constitution, whereas the procedural protections accorded in California’s sentence enhancement proceedings rest on statutory grounds. 16 Cal. 4th, at 837, 941 P. 2d, at 1128. The plurality then cited the breadth and subjectivity of the factual determinations at issue in the capital sentencing context, as well as the financial and emotional burden that the penalty phase of a capital case places on a defendant. Id., at 838-839, 941 P. 2d, at 1129. Finally, the plurality explained that a qualifying strike involves a finding of a particular “status” that may be made from the record of the prior conviction, while the jury’s sentencing determination in a capital case “depends on the specific facts of the defendant’s present crime, as well as an overall assessment of the defendant’s character.” Id., at 839, 941 P. 2d, at 1130.
The concurring justice who provided the fourth vote to reverse noted that retrial on a prior conviction allegation would not require the factfinder to reevaluate the evidence underlying the substantive offense. Accordingly, she concluded that a second attempt at proving the allegation would not unfairly subject a defendant to the risk of repeated prosecution within the meaning of the Double Jeopardy Clause. Id., at 846-847, 941 P. 2d, at 1134-1135 (Brown, J., concurring). Three justices dissented, asserting that under Bullington’s rationale, the Double Jeopardy Clause precludes successive efforts to prove prior conviction allegations. Id., at 847, 941 P. 2d, at 1135 (opinion of Werdegar, J.).
The California Supreme Court’s decision deepened a conflict among the state courts as to Bullington’s application to noncapital sentencing. Compare, e.g., State v. Hennings, 100 Wash. 2d 379, 670 P. 2d 256 (1983), with People v. Levin, 157 Ill. 2d 138, 623 N. E. 2d 317 (1993). Prior to this Court’s determination that the nonretroactivity rule of Teague v. Lane, 489 U. S. 288 (1989), would bar the extension of Bull-ington to noncapital sentencing proceedings on federal ha-beas review, see Caspari, supra, the Federal Courts of Appeals had reached disparate conclusions as well. Compare, e. g., Briggs v. Procunier, 764 F. 2d 368, 371 (CA5 1985), with Denton v. Duckworth, 873 F. 2d 144 (CA7), cert. denied, 493 U. S. 941 (1989). In view of the conflicting authority on the issue, we granted certiorari, 522 U. S. 1072 (1998).
HH
The Double Jeopardy Clause of the Fifth Amendment, applicable to the States through the Fourteenth Amendment, provides: “[N]or shall any person be subject for the same offence to be twice put in jeopardy of life or limb.” We have previously held that it protects against successive prosecutions for the same offense after acquittal or eonviction and against multiple criminal punishments for the same offense. See North Carolina v. Pearce, 395 U. S. 711, 717 (1969). Historically, we have found double jeopardy protections inapplicable to sentencing proceedings, see Bullington, 451 U. S., at 438, because the determinations at issue do not place a defendant in jeopardy for an “offense,” see, e. g., Nichols v. United States, 511 U. S. 738, 747 (1994) (noting that repeat-offender laws “ ‘penaliz[e] only the last offense committed by the defendant’”). Nor have sentence enhancements been construed as additional punishment for the previous offense; leather, they act to increase a sentence “because of the manner in which [the defendant] committed the crime of conviction.” United States v. Watts, 519 U. S. 148, 154 (1997) (per curiam); see also Witte v. United States, 515 U. S. 389, 398-399 (1995). An enhanced sentence imposed on a persistent offender thus “is not to be viewed as either a new jeopardy or additional penalty for the earlier crimes” but as “a stiffened penalty for the latest crime, which is considered to be an aggravated offense because a repetitive one.” Gryger v. Burke, 334 U. S. 728, 732 (1948); cf. Moore v. Missouri, 159 U. S. 673, 678 (1895) (“[T]he State may undoubtedly provide that persons who have been before convicted of crime may suffer severer punishment for subsequent of-fences than for a first offence”).
Justice Scalia insists that the recidivism enhancement the Court confronts here in fact constitutes an element of petitioner’s offense. His dissent addresses an issue that was neither considered by the state courts nor discussed in petitioner’s brief before this Court. In any event, Justice Scalia acknowledges, post, at 741, that his argument is squarely foreclosed by our decision in Almendarez-Torres v. United States, 523 U. S. 224 (1998). One could imagine circumstances in which fundamental fairness would require that a particular fact be treated as an element of the offense, see post, at 738 (Scalia, J., dissenting), but there are also cases in which fairness calls for defining a fact as a sentencing factor. A defendant might not, for example, wish to simultaneously profess his innocence of a drug offense and dispute the amount of drugs allegedly involved. Cf. Gregg v. Georgia, 428 U. S. 153, 190-195 (1976) (joint opinion of Stewart, Powell, and Stevens, JJ.) (discussing the benefits of bifurcated proceedings in capital eases). In part for that reason, the Court has rejected an absolute rule that an enhancement constitutes an element of the offense any time that it increases the maximum sentence to which a defendant is exposed. See Almendarez-Torres, supra. Under California law, the maximum sentence applicable to a first offender who uses a minor to sell drugs is 7 years, and a judge may double that sentence to 14 years where the offender has previously been convicted of a qualifying felony. See Cal. Health & Safety Code Ann. § 11361(a) (West 1991). That increase falls well within the range that the Court has found to be constitutionally permissible. See Almendarez-Torres, supra (upholding a potential 18-year increase to a 2-year sentence). Thus, the sentencing determination here did not place petitioner in jeopardy for an “offense.”
Sentencing decisions favorable to the defendant, moreover, cannot generally be analogized to an acquittal. We have held that where an appeals court overturns a conviction on the ground that the prosecution proffered insufficient evidence of guilt, that finding is comparable to an acquittal, and the Double Jeopardy Clause precludes a second trial. See Burks v. United States, 437 U. S. 1, 16 (1978). Where a similar failure of proof occurs in a sentencing proceeding, however, the analogy is inapt. The pronouncement of sentence simply does not “have the qualities of constitutional finality that attend an acquittal.” United States v. DiFrancesco, 449 U. S. 117, 134 (1980); see also Bullington, supra, at 438 (“The imposition of a particular sentence usually is not regarded as an ‘acquittal’ of any more severe sentence that could have been imposed”).
The Double Jeopardy Clause “does not provide the defendant with the right to know at any specific moment in time what the exact limit of his punishment will turn out to be.” DiFrancesco, 449 U. S., at 137. Consequently, it is a “well-established part of our constitutional jurisprudence” that the guarantee against double jeopardy neither prevents the prosecution from seeking review of a sentence nor restricts the length of a sentence imposed upon retrial after a defendant’s successful appeal. See id., at 135; Pearce, supra, at 720; see also Stroud v. United States, 251 U. S. 15, 18 (1919) (despite a harsher sentence on retrial, the defendant was not “placed in second jeopardy within the meaning of the Constitution”).
Our opinion in Bullington established a “narrow exception” to the general rule that.double jeopardy principles have no application in the sentencing context. See Schiro v. Farley, 510 U. S. 222, 231 (1994). In Bullington, a capital defendant had received a sentence of life imprisonment from the original sentencing jury. The defendant subsequently obtained a new trial on the ground that the court had permitted prospective women jurors to claim automatic exemption from jury service in violation of the Sixth and Fourteenth Amendments. 451 U. S., at 436. When the State announced its intention to seek the death penalty again, the defendant alleged a double jeopardy violation. We determined that the first jury’s deliberations bore the “hallmarks of the trial on guilt or innocence,” id., at 439, because the jury was presented with a choice between two alternatives together with standards to guide their decision, the prosecution undertook the burden of establishing facts beyond a reasonable doubt, and the evidence was introduced in a separate proceeding that formally resembled a trial, id., at 438. In light of the jury’s binary determination and the heightened procedural protections, we found the proceeding distinct from traditional sentencing, in which “it is impossible to conclude that a sentence less than the statutory maximum ‘constitute[s] a decision to the effect that the government has failed to prove its ease.’ ” Id., at 443 (quoting Burks, supra, at 15).
Moreover, we reasoned that the “embarrassment, expense and ordeal” as well as the “anxiety and insecurity” that a capital defendant faces “are at least equivalent to that faced by any defendant at the guilt phase of a criminal trial.” 451 U. S., at 445. And we cited the “unacceptably high risk” that repeated attempts to persuade a jury to impose the death penalty would lead to an erroneous capital sentence. Id., at 445-446. We later extended the rule set forth in Bullington to a capital sentencing scheme in which the judge, as opposed to a jury, had initially determined that a life sentence was appropriate. See Arizona v. Rumsey, 467 U. S. 203, 209-210 (1984).
Petitioner contends that the rationale for imposing a double jeopardy bar in Bullington and Rumsey applies with equal force to California’s proceedings to determine the truth of a prior conviction allegation. Like the Missouri capital sentencing scheme at issue in Bullington, petitioner argues, the sentencing proceedings here have the “hallmarks of a trial on guilt or innocence” because the senteneer makes an objective finding as to whether the prosecution has proved a historical fact beyond a reasonable doubt. The determination whether a defendant in fact has qualifying prior convictions may be distinguished, petitioner maintains, from the normative decisions typical of traditional sentencing. In petitioner’s view, once a defendant has obtained a favorable finding on such an issue, the State should not be permitted to retry the allegation.
Even assuming, however, that the proceeding on the prior conviction allegation has the “hallmarks” of a trial that we identified in Bullington, a critical component of our reasoning in that ease was the capital sentencing context. The penalty phase of a capital trial is undertaken to assess the gravity of a particular offense and to determine whether it warrants the ultimate punishment; it is in many respects a continuation of the trial on guilt or innocence of capital murder. “It is of vital importance” that the decisions made in that context “be, and appear to be, based on reason rather than caprice or emotion.” Gardner v. Florida, 430 U. S. 349, 358 (1977). Because the death penalty is unique “in both its severity and its finality,” id., at 357, we have recognized an acute need for reliability in capital sentencing proceedings. See Lockett v. Ohio, 438 U. S. 586, 604 (1978) (opinion of Burger, C. J.) (stating that the “qualitative difference between death and other penalties calls for a greater degree of reliability when the death sentence is imposed”); see also Strickland v. Washington, 466 U. S. 668, 704 (1984) (Brennan, J., concurring in part and dissenting in part) (“[W]e have consistently required that capital proceedings be policed at all stages by an especially vigilant concern, for procedural fairness and for the accuracy of factfinding”).
That need for reliability accords with one of the central concerns animating the constitutional prohibition against double jeopardy. As the Court explained in Green v. United States, 355 U. S. 184 (1957), the Double Jeopardy Clause prevents States from “mak[ing] repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that even though innocent he may be found guilty.” Id., at 187-188. Indeed, we cited the heightened interest in accuracy in the Bullington decision itself. We noted that in a capital sentencing proceeding, as in a criminal trial, “'the interests of the defendant [are] of such magnitude that... they have been protected by standards of proof designed to exclude as nearly as possible the likelihood of an erroneous judgment.’ ” 451 U. S., at 441 (quoting Addington v. Texas, 441 U. S. 418, 423-424 (1979)).
Moreover, we have suggested in earlier cases that Bull-ingtoris rationale is confined to the “unique circumstances of a capital sentencing proceeding.” Caspari, 510 U. S., at 392; see also Goldhammer, 474 U. S., at 30 (“[T]he decisions of this Court ‘clearly establish that a sentencing in a noncapi-tal case] does not have the qualities of constitutional finality that attend an acquittal’ ”) (quoting DiFrancesco, 449 U. S., at 134). In addition, we have cited Bullington as an example of the heightened procedural protections accorded capital defendants. See Strickland, supra, at 686-687 (“A capital sentencing proceeding ... is sufficiently like a trial in its adversarial format and in the existence of standards for decision, see [Bullington], that counsel’s role in the proceeding is comparable to counsel’s role at -trial”).
In an attempt to minimize the relevance of the death penalty context, petitioner argues that the application of double jeopardy principles turns on the nature rather than the consequences of the proceeding. For example, petitioner notes that Bullington did not overrule the Court’s decision in Stroud v. United States, 251 U. S. 15 (1919) — which found the double jeopardy bar inapplicable to a particular capital sentencing proceeding — but rather distinguished it on the ground that the proceeding at issue did not bear the hallmarks of a trial on guilt or innocence. Stroud predates our decisions in Furman v. Georgia, 408 U. S. 238 (1972) (per curiam), and Gregg v. Georgia, 428 U. S. 153 (1976) (joint opinion of Stewart, Powell, and Stevens, JJ.); it was decided at a time when “no significant constitutional difference between the death penalty and lesser punishments for crime had been expressly recognized by this Court.” See Gardner, supra, at 357 (opinion of Stevens, J.). Consequently, the capital sentencing procedures at issue in Stroud did not resemble a trial, and the Court confronted a different question in that case. The holding of Bullington turns on both the trial-like proceedings at issue and the severity of the penalty at stake. That the Court focused on the absence of procedural safeguards in distinguishing an earlier capital case does not mean that the Bullington decision rests on a purely procedural rationale.
In our death penalty jurisprudence, moreover, the nature and the consequences of capital sentencing proceedings are intertwined. We have held that “in capital cases the fundamental respect for humanity underlying the Eighth Amendment requires consideration of the character and record of the individual offender and the circumstances of the particular offense as a constitutionally indispensable part of the process of inflicting the penalty of death.” Woodson v. North Carolina, 428 U. S. 280, 304 (1976) (plurality opinion) (citation omitted). Where noncapital sentencing proceedings contain trial-like protections, that is a matter of legislative grace, not constitutional command. Many States have chosen to implement procedural safeguards to protect defendants who may face dramatic increases in their sentences as a result of recidivism enhancements. We do not believe that because the States have done so, we are compelled to extend the double jeopardy bar. Indeed, were we to apply double jeopardy here, we might create disincentives that would diminish these important procedural protections.
* * *
We conclude that Bullington’s rationale is confined to the unique circumstances of capital sentencing and that the Double Jeopardy Clause does not preclude retrial on a prior conviction allegation in the noncapital sentencing context. Accordingly, the judgment of the California Supreme Court is affirmed.
It is so ordered.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Chief Justice Burger
delivered the opinion of the Court.
We granted certiorari, 444 U. S. 824, to resolve the constitutionality of a provision of the Federal Magistrates Act, 28 U. S. C. § 636 (b)(1)(B), which permits a district court to refer to a magistrate a motion to suppress evidence and authorizes the district court to determine and decide such motion based on the record developed before a magistrate, including the magistrate’s proposed findings of fact and recommendations.
I
Respondent Raddatz was indicted on March 31, 1977, in the Northern District of Illinois for unlawfully receiving a firearm in violation of 18 U. S. C. § 922 (h). Prior to trial, respondent moved to suppress certain incriminating statements he had made to police officers and to agents of the Bureau of Alcohol, Tobacco, and Firearms. Over his objections, the District Court referred the motion to a Magistrate for an evidentiary hearing pursuant to the Federal Magistrates Act, 28 U. S. C. § 636 (b)(1)(B).
The evidence received at the suppression hearing disclosed that on August 8, 1976, two police officers responded to a report of a crime in progress. When they arrived at the scene, they observed respondent standing next to one Jimmy Bastón, who was lying on the street, bleeding from the head. Respondent was placed under arrest for illegal use of a weapon and was given Miranda warnings. The arresting officers testified that respondent explained at the time of his arrest and after the warning that he had been fighting with Bastón over a family dispute and had brought the gun with him in case any of Baston’s friends tried to interfere.
In due course, state charges were filed against respondent. One month later, on November 19, 1976, Agents Russell and McCulloch of the Bureau of Alcohol, Tobacco, and Firearms interviewed respondent at his home. According to their testimony at the suppression hearing, the agents had been informed by state officials that a state firearms charge was pending against respondent. The agents questioned respondent about the gun found in his possession at the time he was arrested because it had at one time been owned by an out-of-state man who had been slain in an unsolved homicide. At this interview, respondent gave a different version of the events, stating that he had seized the gun from Bastón during their August 8 fight and that he did not know where Bastón had obtained a gun. The agents asked respondent to help them locate Bastón and told him they would inform the United States Attorney of his cooperation if he were subsequently prosecuted.
Respondent’s testimony before the Magistrate concerning the November 19 interview varied from that of the federal agents. According to his testimony, he was informed that he would shortly be indicted for violations of federal firearms laws, but that if he agreed to cooperate, “somebody would talk to the prosecutor, and it would be dismissed.” He also testified that he was told that if he did not agree to help, he could find himself “going to the Federal penitentiary for a long time.”
On January 12, 1977, respondent telephoned the agents and requested a meeting. At this interview, he retracted his November 19 version and stated that he had not taken the gun from Bastón, but had obtained it from his half-brother. He testified at the suppression hearing that he made the incriminating statements at the January 12 meeting only after first obtaining confirmation from the agents of their November 19 promise that the indictment would be dismissed if he cooperated. The agents testified that no such promise was ever made to respondent, either on November 19 or on January 12. They testified that at the January 12 meeting respondent agreed to act as an informant and that they gave him $10 at that time to assist him in gathering information.
A final meeting occurred on January 14, 1977. Respondent returned to the local offices of the Bureau of Alcohol, Tobacco, and Firearms, accompanied by his wife and children. He was informed by Agent McCulloch that his case had been referred to the United States Attorney for prosecution. The agents again discussed with him the possibility of his becoming an informant, and repeated their promise that any cooperation would be brought to the attention of the United States Attorney. Agent McCulloch gave respondent $50 to pay expenses of acquiring information.
II
The focus of respondent’s legal argument at the suppression hearing was that under Malloy v. Hogan, 378 U. S. 1, 7 (1964), and Bram v. United States, 168 U. S. 532, 542-543 (1897), his confession was not freely and voluntarily given. He contended that he had been induced to utter the incriminating statements through a promise of immunity and sought to demonstrate a course of conduct on the part of the agents supportive of such a promise.
In his report and findings, the Magistrate recommended that the motion to suppress the statements made on August 8, November 19, and January 12 be denied. He made findings that respondent had knowingly, intelligently, and voluntarily made inculpatory statements on all three occasions. Moreover, the Magistrate specifically stated: “I find the testimony of the Alcohol, Tobacco and Firearms Agent more credible ... ; I find that Federal agents never advised [respondent] that charges against him would be dismissed, if he cooperated.” App. to Pet. for Cert. 41a. The evidence before the Magistrate showed that respondent had altered his version of events on several occasions.
Respondent filed objections to the Magistrate’s report. In rendering its decision, the District Court stated that it considered the transcript of the hearing before the Magistrate on the motion to suppress, the parties’ proposed findings of fact, conclusions of law, and supporting memoranda, and that it read the recommendation of the Magistrate and heard oral argument of counsel. Finding “that the three statements given by the defendant and sought to be suppressed were made voluntarily,” the District Court accepted the recommendation of the Magistrate and denied the motion to suppress.
By agreement of the parties, the court tried respondent on the basis of the transcript of the suppression hearing, and stipulations that the firearm had been manufactured in Florida and that respondent had been convicted of eight felonies. He was found guilty and sentenced to six months’ imprisonment to be followed by four and one-half years on probation.
The Court of Appeals reversed. 592 F. 2d 976. It first rejected the statutory arguments, holding that the District Court had the power to refer to a magistrate the motion to suppress and did not abuse its discretion under the statute in deciding the issue without hearing live testimony of disputed questions of fact. Turning to the constitutional issues, the court held that the referral provisions of the Federal Magistrates Act, 28 U. S. C. § 636 (b)(1)(B), did not violate Art. Ill of the Constitution because the statute required the District Court to make a de novo determination of any disputed portion of the Magistrate’s proposed findings and recommendations. However, the Court of Appeals held that respondent had been deprived of due process by the failure of the District Court personally to hear the controverted testimony. Where credibility is crucial to the outcome, “the district court cannot constitutionally exercise its discretion to refuse to hold a hearing on contested issues of fact in a criminal case.” 592 F. 2d, at 986. The District Court was directed to hold a new hearing.
Ill
We first address respondent’s contention that under the statute, the District Court was required to rehear the testimony on which the Magistrate based his findings and recommendations in order to make an independent evaluation of credibility. The relevant statutory provisions authorizing a district court to refer matters to a magistrate and establishing the mode of review of the magistrate’s actions are in 28 U. S. C. § 636 (b)(1). In § 636 (b) (1) (A), Congress provided that a district court judge could designate a magistrate to “hear and determine” any pretrial matter pending before the court, except certain “dispositive” motions. Review by the district court of the magistrate’s determination of these nondispositive motions is on a “clearly erroneous or contrary to law” standard.
Certain “dispositive” motions, including a “motion ... to suppress evidence in a criminal case,” are covered by § 636 (b)(1)(B). As to these “dispositive” motions, the district judge may “designate a magistrate to conduct hearings, including evidentiary hearings, and to submit to a judge of the court proposed findings of fact and recommendations for the disposition, by a judge of the court of [the] motion.” However, the magistrate has no authority to make a final and binding disposition. Within 10 days after the magistrate files his proposed findings and recommendations, any party may file objections. The statute then provides:
“A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate. The judge may also receive further evidence or recommit the matter to the magistrate with instructions.” § 636 (b)(1) (emphasis added).
It should be clear that on these dispositive motions, the statute calls for a de novo determination, not a de novo hearing. We find nothing in the legislative history of the statute to support the contention that the judge is required to rehear the contested testimony in order to carry out the statutory command to make the required “determination.” Congress enacted the present version of § 636 (b) as part of the 1976 amendments to the Federal Magistrates Act in response to this Court’s decision in Wingo v. Wedding, 418 U. S. 461 (1974). Wingo held that as a matter of statutory construction, the 1968 Magistrates Act did not authorize magistrates to hold evidentiary hearings in federal habeas corpus cases. Congress amended the Act “in order to clarify and further define the additional duties which may be assigned to a United States Magistrate in the discretion of a judge of the district court.” S. Rep. No. 94-625, p. 1 (1976) (hereinafter S. Rep.); H. R. Rep. No. 9A-1609, p. 2 (1976) (hereinafter H. R. Rep.).
The bill as reported out of the Senate Judiciary Committee did not include the language requiring the district court to make a de novo determination. Rather, it included only the language permitting • the district court to “accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.” Yet the Senate Report which accompanied the bill emphasized that the purpose of the bill’s language was to vest “ultimate adjudicatory power over dis-positive motions” in the district court while granting the “widest discretion” on how to treat the recommendations of the magistrate. S. Rep., at 10.
The House Judiciary Committee added to the Senate bill the present language of the statute, providing that the judge shall make a “de novo determination” of contested portions of the magistrate’s report upon objection by any party. According to the House Report, “[t]he amendment states expressly what the Senate implied: i. e. that the district judge in making the ultimate determination of the matter, would have to give fresh consideration to those issues to which specific objection has been made by a party.” The Report goes on to state, quite explicitly, what was intended by “de novo determination”:
“The use of the words ‘de novo determination’ is not intended to require the judge to actually conduct a new hearing on contested issues. Normally, the judge, on application, will consider the record which has been developed before the magistrate and make his own determination on the basis of that record, without being bound to adopt the findings and conclusions of the magistrate. In some specific instances, however, it may be necessary for the judge to modify or reject the findings of the magistrate, to take additional evidence, recall witnesses, or recommit the matter to the magistrate for further proceedings.” H. R. Rep., at 3.
Further evidence that Congress did not intend to require the district court to rehear the witnesses is provided in the House Committee Report’s express adoption of the Ninth Circuit’s procedures for district court review of a magistrate’s credibility recommendations as announced in Campbell v. United States District Court for the Northern District of California, 501 F. 2d 196, cert. denied, 419 U. S. 879 (1974). There, in language quoted in the Committee Report, the court had stated: “ Tf [the district court] finds there is a problem as to the credibility of a witness or witnesses or for other good reasons, it may, in the exercise of its discretion, call and hear the testimony of a witness or witnesses in an adversary proceeding. It is not required to hear any witness and not required to hold a de novo hearing of the case.’ ” H. R. Rep., at 3-4 (emphasis added), quoting 501 F. 2d, at 206.
Congressional intent, therefore, is unmistakable. Congress focused on the potential for Art. Ill constraints in permitting a magistrate to make decisions on dispositive motions. See S. Rep., at 6; H. R. Rep., at 8. The legislative history discloses that Congress purposefully used the word determination rather than hearing, believing that Art. Ill was satisfied if the ultimate adjudicatory determination was reserved to the district court judge. And, in providing for a “de novo determination” rather than de novo hearing, Congress intended to permit whatever reliance a district judge, in the exercise of sound judicial discretion, chose to place on a magistrate’s proposed findings and recommendations. See Mathews v. Weber, 423 U. S. 261, 275 (1976).
IV
Having rejected respondent’s statutory argument, we turn to his constitutional challenge. He contends that the review procedures established by § 636 (b)(1) permitting the district court judge to make a de novo determination of contested credibility assessments without personally hearing the live testimony, violate the Due Process Clause of the Fifth Amendment and Art. Ill of the United States Constitution.
A
The guarantees of due process call for a “hearing appropriate to the nature of the case.” Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306, 313 (1950). The issue before us, therefore, is whether the nature of the issues presented and the interests implicated in a motion to suppress evidence require that the district court judge must actually hear the challenged testimony. The core of respondent’s challenge to the statute is that “[t]he one who decides must hear.” Morgan v. United States, 298 U. S. 468, 481 (1936). Here, he contends, only the magistrate “hears,” but the district court is permitted to “decide” by reviewing the record compiled before the magistrate and making a final determination.
In Mathews v. Eldridge, 424 U. S. 319, 335 (1976), we emphasized that three factors should be considered in determining whether the flexible concepts of due process have been satisfied: (a) the private interests implicated; (b) the risk of an erroneous determination by reason of the process accorded and the probable value of added procedural safeguards; and (c) the public interest and administrative burdens, including costs that the additional procedures would involve. In providing the fullest measure of due process protection, the Court of Appeals stressed that in this particular case the success or failure of the motion to suppress would, as a practical matter, determine the outcome of the prosecution.
Of course, the resolution of a suppression motion can and often does determine the outcome of the case; this may be true of various pretrial motions. We have repeatedly pointed out, however, that the interests underlying a voluntariness hearing do not coincide with the criminal law objective of determining guilt or innocence. See, e. g., United States v. Janis, 428 U. S. 433, 453-454 (1976); United States v. Peltier, 422 U. S. 531, 535-536, 538-539 (1975); Rogers v. Richmond, 365 U. S. 534, 540-544 (1961). In Lego v. Twomey, 404 U. S. 477 (1972), we considered whether the prosecution was required to prove beyond a reasonable doubt that a confession was voluntary. In holding that a preponderance of the evidence was sufficient, we stated that “the purpose that a volun-tariness hearing is designed to serve has nothing whatever to do with improving the reliability of jury verdicts.” Id., at 486. Accord, Jackson v. Denno, 378 U. S. 368, 384-385 (1964), holding that the “reliability of a confession has nothing to do with its voluntariness.” A defendant who has not prevailed at the suppression hearing remains free to present evidence and argue to — and may persuade — the jury that the confession was not reliable and therefore should be disregarded. See 18 U. S. C. § 3501 (a).
This Court on other occasions has noted that the interests at stake in a suppression hearing are of a lesser magnitude than those in the criminal trial itself. At a suppression hearing, the court may rely on hearsay and other evidence, even though that evidence would not be admissible at trial. United States v. Matlock, 415 U. S. 164, 172-174 (1974); Brinegar v. United States, 338 U. S. 160, 172-174 (1949); Fed. Rules Evid. 104 (a), 1101 (d)(1). Furthermore, although the Due Process Clause has been held to require the Government to disclose the identity of an informant at trial, provided the identity is shown to be relevant and helpful to the defense, Roviaro v. United States, 353 U. S. 53, 60-61 (1957), it has never been held to require the disclosure of an informant’s identity at a suppression hearing. McCray v. Illinois, 386 U. S. 300 (1967). We conclude that the process due at a suppression hearing may be less demanding and elaborate than the protections accorded the defendant at the trial itself.
To be sure, courts must always be sensitive to the problems of making credibility determinations on the cold record. More than 100 years ago, Lord Coleridge stated the view of the Privy Council that a retrial should not be conducted by reading the notes of the witnesses’ prior testimony:
“The most careful note must often fail to convey the evidence fully in some of its most important elements.. .. It cannot give the look or manner of the witness: his hesitation, his doubts, his variations of language, his confidence or precipitancy, his calmness or consideration; . . . the dead body of the evidence, without its spirit; which is supplied, when given openly and orally, by the ear and eye of those who receive it.” Queen v. Bertrand, 4 Moo. P. C. N. S. 460, 481, 16 Eng. Rep. 391, 399 (1867).
This admonition was made with reference to an appellate court’s review of a nisi prius judge in a trial on the merits; here we are dealing with a situation more comparable to a special master’s findings or actions of an administrative tribunal on findings of a hearing officer.
The Court of Appeals rejected an analogy to administrative agency cases because of its view that the interest inherent in a suppression motion was often the equivalent, as a practical matter, of the trial itself. Our view of the due process demands of a motion to suppress evidence makes those agency cases relevant, although to be sure we do not suggest that the interests inherent in administrative adjudications are always equivalent to those implicated in a constitutional challenge to the admissibility of evidence in a criminal case. Generally, the ultimate factfinder in administrative proceedings is a commission or board, and such trier has not heard the witnesses testify. See, e. g., 5 U. S. C. § 557 (general rule under the Administrative Procedure Act); 29 U. S. C. § 160 (c) (National Labor Relations Board); 33 U. S. C. § 921 (b)(3) (Benefits Review Board); 17 CFR § 207.17 (g)(2) (1979) (Securities and Exchange Commission). While the commission or board — or an administrator- — may defer to the findings of a hearing officer, that is not compelled. See, e. g., Universal Camera Corp. v. NLRB, 340 U. S. 474 (1951); NLRB v. Mackay Radio & Tel. Co., 304 U. S. 333, 350-351 (1938); Morgan v. United States, 298 U. S. 468 (1936); Utica Mutual Ins. Co. v. Vincent, 375 F. 2d 129, 132 (CA2) (Friendly, J.), cert. denied, 389 U. S. 839 (1967).
We conclude that the due process rights claimed here are adequately protected by § 636 (b)(1). While the district court judge alone acts as the ultimate decisionmaker, the statute grants the judge the broad discretion to accept, reject, or modify the magistrate’s proposed findings. That broad discretion includes hearing the witnesses live to resolve conflicting credibility claims. Finally, we conclude that the statutory scheme includes sufficient procedures to alert the district court whether to exercise its discretion to conduct a hearing and view the witnesses itself.
B
In passing the 1976 amendments to the Federal Magistrates Act, Congress was alert to Art. Ill values concerning the vesting of decisionmaking power in magistrates. Accordingly, Congress made clear that the district court has plenary discretion whether to authorize a magistrate to hold an eviden-tiary hearing and that the magistrate acts subsidiary to and only in aid of the district court. Thereafter, the entire process takes place under the district court’s total control and jurisdiction.
We need not decide whether, as suggested by the Government, Congress could constitutionally have delegated the task of rendering a final decision on a suppression motion to a non-Art. Ill officer. See Palmore v. United States, 411 U. S. 389 (1973). Congress has not sought to make any such delegation. Rather, Congress has provided that the magistrate’s proposed findings and recommendations shall be subjected to a de novo determination “by the judge who . . . then exercise [s] the ultimate authority to issue an appropriate order.” S. Rep., at 3. Moreover, “[t]he authority — and the responsibility — to make an informed, final determination ... remains with the judge.” Mathews v. Weber, 423 U. S., at 271.
On his Art. III claim, Crowell v. Benson, 285 U. S. 22 (1932), and its progeny offer little comfort to respondent. There, the Court stated that “[i]n cases brought to enforce constitutional rights, the judicial power of the United States necessarily extends to the independent determination of all questions, both of fact and law, necessary to the performance of that supreme function.” Id., at 60. See also Ng Fung Ho v. White, 259 U. S. 276 (1922). While stating that “the enforcement of constitutional rights requires that the Federal court should determine such an issue upon its own record and the facts elicited before it,” 285 U. S., at 64, the Court pointedly noted a “distinction of controlling importance” between records formed before administrative agencies and those compiled by officers of the court such as masters in chancery or commissioners in admiralty where the proceeding is “constantly subject to the court’s control.” We view the statutory scheme here as rendering a magistrate’s recommendations more analogous to a master or a commissioner than to an administrative agency for Art. Ill purposes.
Moreover, four years later, in St. Joseph Stock Yards Co. v. United States, 298 U. S. 38 (1936), Mr. Chief Justice Hughes substantially cut back on the Court’s Crowell holding, which he had authored, and on which respondent relies. The question there was whether administrative rate regulations were unconstitutionally confiscatory. While reaffirming his statement that administrative agencies cannot finally determine “constitutional facts,” Mr. Chief Justice Hughes noted:
“But this judicial duty to exercise an independent judgment does not require or justify disregard of the weight which may properly attach to findings [by an administrative body] upon hearing and evidence. On the contrary, the judicial duty is performed in the light of the proceedings already had and may be greatly facilitated by the assembling and analysis of the facts in the course of the legislative determination.” 298 U. S., at 53.
See also Estep v. United States, 327 U. S. 114, 122-123 (1946). Thus, although the statute permits the district court to give to the magistrate’s proposed findings of fact and recommendations “such weight as [their] merit commands and the sound discretion of the judge warrants,” Mathews v. Weber, supra, at 275, that delegation does not violate Art. Ill so long as the ultimate decision is made by the district court.
We conclude that the statute strikes the proper balance between the demands of due process and the constraints of Art. III. Accordingly, the judgment of the Court of Appeals is
Reversed.
Before the Court of Appeals, respondent apparently conceded that the statute permits the procedures employed here. His statutory arguments in the Court of Appeals were that the reference was invalid because not made pursuant to required enabling rules and that the Court of Appeals should exercise its supervisory powers to prohibit the procedure employed. That court rejected both arguments, and he has pursued neither before this Court.
As originally introduced in the Senate, the bill provided that upon request by a party to a proceeding before a magistrate, the district “court shall hear de novo those portions of the report or specific proposed findings of fact or conclusions of law to which objection is made.” S. 1283, 94th Cong., 1st Sess. (1975) (emphasis added). As reported out of the Senate Judiciary Committee, however, this language, including the word “hear,” was deleted.
We conclude that to construe §636 (b)(1) to require the district court to conduct a second hearing whenever either party objected to the magistrate’s credibility findings would largely frustrate the plain objective of Congress to alleviate the increasing congestion of litigation in the district courts. We cannot “impute to Congress a purpose to paralyze with one hand what it sought to promote with the other.” Clark v. Uebersee Finanz-Korporation, 332 U. S. 480, 489 (1947).
Under the Fifth Amendment, a criminal defendant may not be compelled to testify against himself. In that sense, the exclusion of involuntary confessions derives from the Amendment itself. United States v. Janis, 428 U. S. 433, 443 (1976).
Lego v. Twomey, 404 U. S. 477 (1972), also rejected the argument that because of the high value society places on the constitutional right to be free from compulsory self-incrimination, due process requires proof of voluntariness beyond a reasonable doubt. This Court found no indication that federal rights would suffer from determining admissibility by a preponderance of the evidence.
Nothing in the Magistrates Act or other statute precludes renewal at trial of a motion to suppress evidence even though such motion was denied before trial. A district court's authority to consider anew a suppression motion previously denied is within its sound judicial discretion. See generally Gouled v. United States, 255 U. S. 298, 312 (1921); Rouse v. United States, 123 U. S. App. D. C. 348, 359 F. 2d 1014 (1966).
Neither the statute nor its legislative history reveals any specific consideration of the situation where a district judge after reviewing the record in the process of making a de novo “determination” has doubts concerning the credibility findings of the magistrate. The issue is not before us, but we assume it is unlikely that a district judge would reject a magistrate’s proposed findings on credibility when those findings are dispositive and substitute the judge’s own appraisal; to do so without seeing and hearing the witness or witnesses whose credibility is in question could well give rise to serious questions which we do not reach.
The Committee Reports noted several instances prior to the 1976 amendments where Congress had vested in officers of the court, other than the judge, the power to exercise discretion in performing an adjudicatory function, “subject always to ultimate review by a judge of the court,” citing 11 U. S. C. § 67 (c) (reference to bankruptcy referee) and 28 U. S. C. § 1920 (power of clerk of court to tax costs). By analogy, Congress reasoned that permitting the exercise of an adjudicatory function by a magistrate, subject to ultimate review by the district court, would also pass constitutional muster. S. Rep., at 6; H. R. Rep., at 8.
In Crowell, in reviewing the constitutionality of the delegation of fact-finding to administrative officers to consider claims under the Longshoremen’s and Harbor Workers’ Compensation Act, the Court was concerned that Congress could not reach beyond the constitutional limits which are inherent in the admiralty and maritime jurisdiction. It stated that unless the injuries to which the Act relates occurred upon the navigable waters of the United States, they would fall outside that jurisdiction. 285 U. S., at 55.
The Crowell Court rejected a wholesale attack on any delegation of factfinding to the administrative tribunal. It noted that “there is no requirement that, in order to maintain the essential attributes of the judicial power, all determinations of fact in constitutional courts shall be made by judges.” Id., at 51-52.
In exercising our original jurisdiction under Art. Ill, we appoint special masters who may be either 'Art. Ill judges or members of the Bar; the role of the master is, for these purposes, analogous to that of a magistrate. The master is generally charged to “take such evidence as may be . . . necessary,” Nebraska v. Iowa, 379 U. S. 996 (1965), and to “find the facts specially and state separately his conclusions of law thereon.” Mississippi v. Louisiana, 346 U. S. 862 (1953). In original cases, as under the Federal Magistrates Act, the master’s recommendations are advisory only, yet this Court regularly acts on the basis of the master’s report and exceptions thereto.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | D | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Clark
delivered the opinion of the Court.
The question for decision in this case is whether the president and principal negotiator of a labor union is a “representative” of employees within the meaning of § 302 (b) of the Labor Management Relations Act of 1947. 61 Stat. 136, 29 U. S. C. § 141. That section makes it unlawful for “any representative of any employees” to receive money or other thing of value from the employer. The District Court, 128 F. Supp. 128, held that respondent Joseph P. Ryan was a “representative” within the meaning of § 302 (b), but the Court of Appeals for the Second Circuit reversed, Judge Hand dissenting. 225 F. 2d 417. Because of the importance of this question in the administration of the Act, we granted certiorari, 350 U. S. 860.
Ryan was president of The International Longshoremen’s Association (ILA) during the years 1950 and 1951. The ILA and its affiliated groups were the recognized collective-bargaining agents for longshore labor in the Port of New York, and bargained through a wage scale committee of which Ryan was a member. He signed the agreements negotiated during that period. J. Arthur Kennedy & Son, Inc., and Daniels & Kennedy, Inc., were concerns engaged in stevedoring operations; their employees were members of the ILA, and they were bound by the agreements negotiated with that union by the New York Shipping Association. The District Court found that James C. Kennedy, president of both Kennedy companies, had given Ryan $1,000 in December of each year from 1946 through 1951, and $500 in April 1951. These findings are not disputed. Ryan was indicted under § 302 (b) for accepting the one 1950 and two 1951 payments. He was found guilty and sentenced to six months’ imprisonment on each of the three counts, the sentences to run concurrently, and fined $2,500.
The Court of Appeals reversed solely on its interpretation of the term “representative” in § 302 (b) of the LMRA. It concluded that the term had a technical meaning in labor legislation and was limited to “the exclusive bargaining representative” of the employees, which in this case was the ILA itself. Since the section applied only to the “representative,” payments to Ryan individually were not covered even though as president of the representative union, he was a member of its wage scale committee and signed all negotiated agreements. We do not decide whether any official of a union is ex officio a representative of employees under § 302. We believe, however, that respondent’s relationship brings him within that term.
The LMRA provides that the term “representative” shall have “the same meaning as when used in the National Labor Relations Act as amended by this Act.” §501 (3). The pertinent definition appears in §2(4) of the NLRA: “The term 'representatives’ includes any individual or labor organization.” 49 Stat. 449, 450, 29 U. S. C. §§ 151, 152 (4).
The Board has held that employees may choose to elect an individual as exclusive or sole bargaining representative. The Court of Appeals, laying much stress on these holdings, assumes that the possibility of such a one-man exclusive bargaining representative, though extremely rare, is the only reason for the inclusion of the word “individual” in this definition. We cannot accept such an anomalous view. It is obvious that any labor organization, even when serving as an exclusive bargaining representative, can negotiate, speak, and act only through individuals. All collective bargaining is conducted by individuals who represent labor and management. Many limitations or prohibitions upon labor organization action can be effective only if there are corresponding limitations or prohibitions on the individuals who act for the labor organization. Congress, we believe, placed the identical limitations on both individuals and organizations by terming both “representatives” of employees in § 2 (4). We agree with Judge Hand that in using the term “representative” Congress intended that it include any person authorized by the employees to act for them in dealings with their employers.
Considering the precise words of the statute — “any representative of any employees” — it is plain that their literal meaning strongly suggests that they were meant to include someone in the position of respondent Ryan who represented employees both as a union president and principal negotiator. And this interpretation is strengthened by a consideration of the full text of § 302. ' Paragraphs (a) and (b) of § 302 make it unlawful for any employer to offer, or any representative to accept, money or other thing of value. Paragraph (c) lists five exceptions to these broad prohibitions. The first exempts payments as compensation for services “to any representative who is an employee” of the employer. Thus it is clear that § 302 anticipates that a “representative” may be an individual. Of the remaining four exceptions, one could apply only to unions but each of the other three could apply as readily to individuals.
Further, a narrow reading of the term “representative” would substantially defeat the congressional purpose. In 1946 Congress was disturbed by the demands of certain unions that the employers contribute to “welfare funds” which were in the sole control of the union or its officers and could be used as the individual officers saw fit. The United Mine Workers’ demand that mine operators create a welfare fund for the union by contributing 10 cents for each ton of coal mined, caused the Congress to act. The Case Bill, H. R. 4908, 79th Cong., 2d Sess., which regulated welfare funds in a manner similar to § 302, was enacted in 1946, but was vetoed by the President. The following year the Taft-Hartley Act containing § 302 was passed over another veto. But, if “representative” means only the “exclusive bargaining representative,” the explicit limitations on welfare funds in § 302 (c) (5) may be easily evaded. Payments made directly to union officials, or to other individuals as trustees, would apparently be excluded from § 302. Thus, a narrow construction would frustrate the primary intent of Congress.
Nor can it be contended that in this legislation Congress was aiming solely at the welfare fund problem. Such a suggestion is supported neither by the legislative history nor the structure of the section. The arrangement of § 302 is such that the only reference to welfare funds is contained in § 302 (c)(5). If Congress intended to deal with that problem alone, it could have done so directly, without writing a broad prohibition in subsections (a) and (b) and five specific exceptions thereto in subsection (c), only the last of which covers welfare funds. As the statute reads, it appears to be a criminal provision, malum prohibitum, which outlaws all payments, with stated exceptions, between employer and representative.
The legislative history supports these conclusions. As passed by the House of Representatives, the Hartley Bill forbade employer contributions to union welfare funds, and made it an unfair labor practice to give favors to “any person in a position of trust in a labor organization . . . .” H. R. 3020, 80th Cong., 1st Sess., § 8 (a) (2). The scope of this bill was enlarged when it'reached the Senate to include, in the words of Senator Taft, a “case where the union representative is shaking down the employer . . . 93 Cong. Rec. 4746. The resulting Senate amendment made it criminal both for the employer and the “representative” of employees to engage in such practices.
It is not disputed that the plain language of the Senate version of the bill brought within its coverage any individual who dealt with an employer on behalf of two or more of the latter’s employees concerning employment matters. As passed by the Senate, § 302 contained a special definition of the term “representative.” The Joint Conference Committee substituted for it the definition of that term in the NLRA, as amended. § 501 (3). This substitution was among those described by the Joint Conference Committee Report as “minor clarifying changes.” H. R. Conf. Rep. No. 510, 80th Cong., 1st Sess., at 67.
We cannot read this history as supporting the conclusion that the scope of § 302 was limited by the Joint Conference to include only the “exclusive bargaining representative” of employees. Such a change would have drastically reduced the scope of the section, and could hardly be described as a “minor clarifying” change. Certainly, in the face of this legislative history, we should not reduce the legislation to a practical nullity.
It is insisted that this interpretation clashes with the use of the term “representative” in various sections of the NLRA. In the majority of the examples given, the scope of the term is made clear by other words in the provisions themselves. But further, the provision in the LMRA that “representative” shall have its NLRA meaning is no more applicable to § 302 than to any other section of the LMRA, and in several other sections of that Act it is patent that “representative” cannot be construed to include only the exclusive bargaining representative. For example, § 204 (a) refers to “employers and employees and their representatives,” and § 211 (a) refers to “interested representatives of employers, employees, and the general public.” There are other examples, but these are sufficient. If the severely restricted construction contended for the word “representative” is inapplicable to one section of the LMRA, there is no compulsion to apply it to any other section.
We conclude, therefore, that § 302 prohibits payments by employers to individuals who represent employees in their relations with the employers. The judgment is
Reversed and remanded.
Mr. Justice Harlan took no part in the consideration or decision of this case.
The previous section, 302 (a), makes it unlawful for any employer “to pay or deliver, or to agree to pay or deliver, any money or other thing of value to any representative of any of his employees who are employed in an industry affecting commerce.” The record does not disclose whether the Government has taken any action under this section against the employers involved.
See The Robinson-Ransbottom Pottery Co., 27 N. L. R. B. 1093; Louisville Sanitary Wiper Co., 65 N. L. R. B. 88.
Statistics supplied by the NLRB for the last two years show that one-man exclusive bargaining representatives constitute less than 0.1 % of all representatives certified by the Board. In fiscal year 1955, the Board, certified 1 individual in 2,904 elections in which representatives were chosen. There were 10 petitions for certification filed by individuals in 4,372 elections. In fiscal 1954, 5 individuals were certified in 3,108 elections in which representatives were chosen. There were 11 such petitions and a total of 4,813 elections.
“Sec. 302. (a) It shall be unlawful for any employer to pay or deliver, or to agree to pay or deliver, any money or other thing of value to any representative of any of his employees who are employed in an industry affecting commerce.
“(b) It shall be unlawful for any representative of any employees who are employed in an industry affecting commerce to receive or accept, or to agree to receive or accept, from the employer of such employees any money or other thing of value.
“(c) The provisions of this section shall not be applicable (1) with respect to any money or other thing of value payable by an employer to any representative who is an employee or former employee of such employer, as compensation for, or by reason of, his services as an employee of such employer; (2) with respect to the payment or delivery of any money or other thing of value in satisfaction of a judgment of any court or a decision or award of an arbitrator or impartial chairman or in compromise, adjustment, settlement or release of any claim, complaint, grievance, or dispute in the absence of fraud or duress; (3) with respect to the sale or purchase of an article or commodity at the prevailing market price in the regular course of business; (4) with respect to money deducted from the wages of employees in payment of membership dues in a labor organization: Provided, That the employer has received from each employee, on whose account such deductions are made, a written assignment which shall not be irrevocable for a period of more than one year, or beyond the termination date of the applicable collective agreement, whichever occurs sooner; or (5) with respect to money or other thing of value paid to a trust fund established by such representative, for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents) : Provided, That (A) such payments are held in trust for the purpose of paying, either from principal or income or both, for the benefit of employees, their families and dependents, for medical or hospital care, pensions on retirement or death of employees, compensation for injuries or illness resulting from occupational activity or insurance to provide any of the foregoing, or unemployment benefits or life insurance, disability and sickness insurance, or accident insurance; (B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer, and employees and employers are equally represented in the administration of such fund, together with such neutral persons as the representatives of the employers and the representatives of the employees may agree upon and in the event the employer and employee groups dead-dock on the administration of such fund and there are no neutral persons empowered to break such deadlock, such agreement provides that the two groups shall agree on an impartial umpire to decide such dispute, or in event of their failure to agree within a reasonable length of time, an impartial umpire to decide such dispute shall, on petition of either group, be appointed by the district court of the United States for the district where the trust” fund has its principal office, and shall also contain provisions for an annual audit of the trust fund, a statement of the results of which shall be available for inspection by interested persons at the principal office of the trust fund and at such other places as may be designated in such written agreement; and (C) such payments as are intended to be used for the purpose of providing pensions or annuities for employees are made to a separate trust which provides that the funds held therein cannot be used for any purpose other than paying such pensions or annuities.
“(d) Any person who willfully violates any of the provisions of this section shall, upon conviction thereof, be guilty of a misdemeanor and be subject to a fine of not more than $10,000 or to imprisonment for not more than one year, or both. . . .” 61 Stat. 157, 29 U. S. C. §186.
Subsection (4), relating to check-off payments for union dues, presupposes that the “representative” is the labor union itself. Subsections (2), relating to payments of judgments or arbitration awards, (3), relating to purchase or sale of goods in the ordinary course of business, and (5), relating to payments to trust or welfare funds, however, are consistent with either interpretation of the term “representative.”
Section 302 (g) of the Senate version stated, “For the purposes of this section, the term 'representative’ means any labor organization which, or any individual who, is authorized or purports to be authorized to deal with an employer, on behalf of two or more of his employees, concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work . . .
Examples are, § 1, “designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment,” § 7, “to bargain collectively through representatives of their own choosing,” § 8 (b) (4) (B) and (C), “a labor organization as the representative of his employees,” § 8 (b) (4) (D), “bargaining representative for employees.”
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | G | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Sotqmayor
delivered the opinion of the Court.
The Fair Debt Collection Practices Act (FDCPA or Act) imposes civil liability on “debt collector[s]” for certain prohibited debt collection practices. Section 813(c) of the Act, 15 U. S. C. § 1692k(c), provides that a debt collector is not liable in an action brought under the Act if she can show “the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” This case presents the question whether the “bona fide error” defense in § 1692k(c) applies to a violation resulting from a debt collector’s mistaken interpretation of the legal requirements of the FDCPA. We conclude it does not.
I
A
Congress enacted the FDCPA in 1977, 91 Stat. 874, to eliminate abusive debt collection practices, to ensure that debt collectors who abstain from such practices are not competitively disadvantaged, and to promote consistent state action to protect consumers. 15 U. S. C. § 1692(e). The Act regulates interactions between consumer debtors and “debt collector[s],” defined to include any person who “regularly collects... debts owed or due or asserted to be owed or due another.” §§1692a(5), (6). Among other things, the Act prohibits debt collectors from making false representations as to a debt’s character, amount, or legal status, § 1692e(2)(A); communicating with consumers at an “unusual time or place” likely to be inconvenient to the consumer, § 1692e(a)(l); or using obscene or profane language or violence or the threat thereof, §§1692d(l), (2). See generally §§ 1692b-1692j; Heintz v. Jenkins, 514 U. S. 291, 292-293 (1995).
The Act is enforced through administrative action and private lawsuits. With some exceptions not relevant here, violations of the FDCPA are deemed to be unfair or deceptive acts or practices under the Federal Trade Commission Act (FTC Act), 15 U. S. C. §41 et seq, and are enforced by the Federal Trade Commission (FTC). See § 16921. As a result, a debt collector who acts with “actual knowledge or knowledge fairly implied on the basis of objective circumstances that such act is [prohibited under the FDCPA]” is subject to civil penalties of up to $16,000 per day. §§ 45(m)(l)(A), (C); 74 Fed. Reg. 858 (2009) (amending 16 CFR§ 1.98(d)).
The FDCPA also provides that “any debt collector who fails to comply with any provision of th[e] [Act] with respect to any person is liable to such person.” 15 U. S. C. § 1692k(a). Successful plaintiffs are entitled to “actual damage [s],” plus costs and “a reasonable attorney’s fee as determined by the court.” Ibid. A court may also award “additional damages,” subject to a statutory cap of $1,000 for individual actions, or, for class actions, “the lesser of $500,000 or 1 per centum of the net worth of the debt collector.” § 1692k(a)(2). In awarding additional damages, the court must consider “the frequency and persistence of [the debt collector’s] noncompliance,” “the nature of such noncompliance,” and “the extent to which such noncompliance was intentional.” § 1692k(b).
The Act contains two exceptions to provisions imposing liability on debt collectors. Section 1692k(c), at issue here, provides that
“[a] debt collector may not be held liable in any action brought under [the FDCPA] if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.”
The Act also states that none of its provisions imposing liability shall apply to “any act done or omitted in good faith in conformity with any advisory opinion of the [FTC].” § 1692k(e).
B
Respondents in this case are a law firm, Carlisle, McNellie, Rini, Kramer & Ulrich, L. P. A., and one of its attorneys, Adrienne S. Foster (collectively Carlisle). In April 2006, Carlisle filed a complaint in Ohio state court on behalf of a client, Countrywide Home Loans, Inc. Carlisle sought foreclosure of a mortgage held by Countrywide in real property owned by petitioner Karen L. Jerman. The complaint in-eluded a “Notice,” later served on Jerman, stating that the mortgage debt would be assumed to be valid unless Jerman disputed it in writing. Jerman’s lawyer sent a letter disputing the debt, and Carlisle sought verification from Countrywide. When Countrywide acknowledged that Jerman had, in fact, already paid the debt in full, Carlisle withdrew the foreclosure lawsuit.
Jerman then filed her own lawsuit seeking class certification and damages under the FDCPA, contending that Car-lisle violated §1692g by stating that her debt would be assumed valid unless she disputed it in writing. While acknowledging a division of authority on the question, the District Court held that Carlisle had violated § 1692g by requiring Jerman to dispute the debt in writing. 464 F. Supp. 2d 720, 722-725 (ND Ohio 2006). The court ultimately granted summary judgment to Carlisle, however, concluding that § 1692k(e) shielded it from liability because the violation was not intentional, resulted from a bona fide error, and occurred despite the maintenance of procedures reasonably adapted to avoid any such error. 502 F. Supp. 2d 686, 695-697 (2007). The Court of Appeals for the Sixth Circuit affirmed. 538 F. 3d 469 (2008). Acknowledging that the Courts of Appeals are divided regarding the scope of the bona fide error defense, and that the “majority view is that the defense is available for clerical and factual errors only,” the Sixth Circuit nonetheless held that § 1692k(c) extends to “mistakes of law.” Id., at 473-476 (internal quotation marks omitted). The Court of Appeals found “nothing unusual” about attorney debt collectors maintaining “procedures” within the meaning of § 1692k(c) to avoid mistakes of law. Id., at 476. Noting that a parallel bona fide error defense in the Truth in Lending Act (TILA), 15 U. S. C. § 1640(c), expressly excludes legal errors, the court observed that Congress has amended the FDCPA several times since 1977 without excluding mistakes of law from § 1692k(c). 538 F. 3d, at 476.
We granted certiorari to resolve the conflict of authority as to the scope of the FDCPA’s bona fide error defense, 557 U. S. 933 (2009), and now reverse the judgment of the Sixth Circuit.
II
A
The parties disagree about whether a “violation” resulting from a debt collector’s misinterpretation of the legal requirements of the FDCPA can ever be “not intentional” under § 1692k(c). Jerman contends that when a debt collector intentionally commits the act giving rise to the violation (here, sending a notice that included the “in writing” language), a misunderstanding about what the Act requires cannot render the violation “not intentional,” given the general rule that mistake or ignorance of law is no defense. Carlisle and the dissent, in contrast, argue that nothing in the statutory text excludes legal errors from the category of “bona fide error[s]” covered by § 1692k(c) and note that the Act refers not to an unintentional “act” but rather an unintentional “violation.” The latter term, they contend, evinces Congress’ intent to impose liability only when a party knows its conduct is unlawful. Carlisle urges us, therefore, to read § 1692k(e) to encompass “all types of error,” including mistakes of law. Brief for Respondents 7.
We decline to adopt the expansive reading of § 1692k(e) that Carlisle proposes. We have long recognized the “common maxim, familiar to all minds, that ignorance of the law will not excuse any person, either civilly or criminally.” Barlow v. United States, 7 Pet. 404, 411 (1833) (opinion for the Court by Story, J.); see also Cheek v. United States, 498 U. S. 192, 199 (1991) (“The general rule that ignorance of the law or a mistake of law is no defense to criminal prosecution is deeply rooted in the American legal system”). Our law is therefore no stranger to the possibility that an act may be “intentional” for purposes of civil liability, even if the actor lacked actual knowledge that her conduct violated the law. In Kolstad v. American Dental Assn., 527 U. S. 526 (1999), for instance, we addressed a provision of the Civil Rights Act of 1991 authorizing compensatory and punitive damages for “intentional discrimination,” 42 U. S. C. § 1981a, but limiting punitive damages to conduct undertaken “with malice or with reckless indifference to the federally protected rights of an aggrieved individual,” § 1981a(b)(l). We observed that in some circumstances “intentional discrimination” could occur without giving rise to punitive damages liability, such as where an employer is “unaware of the relevant federal prohibition” or acts with the “distinct belief that its discrimination is lawful.” 527 U. S., at 536-537. See also W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts 110 (5th ed. 1984) (“[I]f one intentionally interferes with the interests of others, he is often subject to liability notwithstanding the invasion was made under an erroneous belief as to some... legal matter that would have justified the conduct”); Restatement (Second) of Torts § 164, and Comment e (1963-1964) (intentional tort of trespass can be committed despite the actor’s mistaken belief that she has a legal right to enter the property).
Likely for this reason, when Congress has intended to provide a mistake-of-law defense to civil liability, it has often done so more explicitly than here. In particular, the FTC Act’s administrative-penalty provisions — which, as noted above, Congress expressly incorporated into the FDCPA— apply only when a debt collector acts with “actual knowledge or knowledge fairly implied on the basis of objective circumstances” that its action was “prohibited by [the FDCPA].” 15 U. S. C. §§ 45(m)(l)(A), (C). Given the absence of similar language in §1692k(c), it is a fair inference that Congress chose to permit injured consumers to recover actual damages, costs, fees, and modest statutory damages for “intentional” conduct, including violations resulting from mistaken interpretation of the FDCPA, while reserving the more onerous penalties of the FTC Act for debt collectors whose intentional actions also reflected “knowledge fairly implied on the basis of objective circumstances” that the conduct was prohibited. Cf. 29 U. S. C. §260 (authorizing courts to reduce liquidated damages under the Portal-to-Portal Act of 1947 if an employer demonstrates that “the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act of 1938”); 17 U. S. C. § 1203(c)(5)(A) (provision of Digital Millennium Copyright Act authorizing court to reduce damages where “the violator was not aware and had no reason to believe that its acts constituted a violation”).
Congress also did not confine liability under the FDCPA to “willful” violations, a term more often understood in the civil context to excuse mistakes of law. See, e. g., Trans World Airlines, Inc. v. Thurston, 469 U. S. 111, 125-126 (1985) (civil damages for “willful violations” of Age Discrimination in Employment Act of 1967 require a showing that the employer “knew or showed reckless disregard for the matter of whether its conduct was prohibited” (internal quotation marks omitted)); cf. Safeco Ins. Co. of America v. Burr, 551 U. S. 47, 57 (2007) (although “ 'willfully’ ” is a “ ‘word of many meanings’ ” dependent on context, “we have generally taken it [when used as a statutory condition of civil liability] to cover not only knowing violations of a standard, but reckless ones as well” (quoting Bryan v. United States, 524 U. S. 184, 191 (1998))). For this reason, the dissent missteps in relying on Thurston and McLaughlin v. Richland Shoe Co., 486 U. S. 128, 133 (1988), as both cases involved the statutory phrase “willful violation.” Post, at 613-614.
The dissent reaches a contrary conclusion based on the interaction of the words “violation” and “not intentional” in § 1692k(c). Post, at 613. But even in the criminal context, cf. n. 6, swpra, reference to a “knowing” or “intentional” “violation” or cognate terms has not necessarily implied a defense for legal errors. See Bryan, 524 U. S., at 192 (“ ‘[T]he knowledge requisite to knowing violation of a statute is factual knowledge as distinguished from knowledge of the law’ ” (quoting Boyce Motor Lines, Inc. v. United States, 342 U. S. 337, 345 (1952) (Jackson, J., dissenting))); United States v. International Minerals & Chemical Corp., 402 U. S. 558, 559, 563 (1971) (statute imposing criminal liability on those who “ ‘knowingly violatje]’ ” regulations governing transportation of corrosive chemicals does not require “proof of [the defendant’s] knowledge of the law”); Ellis v. United States, 206 U. S. 246, 255, 257 (1907) (rejecting argument that criminal penalty applicable to those who “intentionally violate” a statute “requires knowledge of the law”).
The dissent advances a novel interpretative rule under which the combination of a “mens rea requirement” and the word “‘violation’” (as opposed to language specifying “the conduct giving rise to the violation”) creates a mistake-of-law defense. Post, at 613. Such a rule would be remarkable in its breadth, applicable to the many scores of civil and criminal provisions throughout the U. S. Code that employ such a combination of terms. The dissent’s theory draws no distinction between “knowing,” “intentional,” or “willful” and would abandon the care we have traditionally taken to construe such words in their particular statutory context. See, e. g., Safeco, 551 U. S., at 57. More fundamentally, the dissent’s categorical rule is at odds with precedents such as Bryan, 524 U. S., at 192, and International Minerals, 402 U. S., at 559, 563, in which we rejected a mistake-of-law defense when a statute imposed liability for a “knowing violation” or on those who “knowingly violat[ej” the law.
The dissent posits that the word “intentional,” in the civil context, requires a higher showing of mens rea than “willful” and thus that it should be easier to avoid liability for intentional, rather than willful, violations. Post, at 615. Even if the dissent is correct that the phrase “intentional violation,” standing alone in a civil liability statute, might be read to excuse mistakes of law, the FDCPA juxtaposes the term “not intentional” “violation” in §1692k(c) with the more specific language of § 45(m)(l)(A), which refers to “actual knowledge or knowledge fairly implied on the basis of objective circumstances” that particular conduct was unlawful. The dissent’s reading gives short shrift to that textual distinction.
We draw additional support for the conclusion that bona fide errors in § 1692k(c) do not include mistaken interpretations of the FDCPA, from the requirement that a debt collector maintain “procedures reasonably adapted to avoid any such error.” The dictionary defines “procedure” as “a series of steps followed in a regular orderly definite way.” Webster’s Third New International Dictionary 1807 (1976). In that light, the statutory phrase is more naturally read to apply to processes that have mechanical or other such “regular orderly” steps to avoid mistakes — for instance, the kind of internal controls a debt collector might adopt to ensure its employees do not communicate with consumers at the wrong time of day, § 1692c(a)(l), or make false representations as to the amount of a debt, § 1692e(2). The dissent, like the Court of Appeals, finds nothing unusual in attorney debt collectors’ maintaining procedures to avoid legal error. Post, at 628; 538 F. 3d, at 476. We do not dispute that some entities may maintain procedures to avoid legal errors. But legal reasoning is not a mechanical or strictly linear process. For this reason, we find force in the suggestion by the Government (as amicus curiae supporting Jerman) that the broad statutory requirement of procedures reasonably designed to avoid “any” bona fide error indicates that the relevant procedures are ones that help to avoid errors like clerical or factual mistakes. Such procedures are more likely to avoid error than those applicable to legal reasoning, particularly in the context of a comprehensive and complex federal statute such as the FDCPA that imposes open-ended prohibitions on, inter alia, “false, deceptive,” § 1692e, or “unfair” practices, § 1692f. See Brief for United States as Amicus Curiae 16-18.
Even if the text of § 1692k(e), read in isolation, leaves room for doubt, the context and history of the FDCPA provide further reinforcement for construing that provision not to shield violations resulting from misinterpretations of the requirements of the Act. See Dada v. Mukasey, 554 U. S. 1, 16 (2008) (“In reading a statute we must not look merely to a particular clause, but consider in connection with it the whole statute” (internal quotation marks omitted)). As described above, Congress included in the FDCPA not only the bona fide error defense but also a separate protection from liability for “any act done or omitted in good faith in conformity with any advisory opinion of the [FTC].” § 1692k(e). In our view, the Court of Appeals' reading is at odds with the role Congress evidently contemplated for the FTC in resolving ambiguities in the Act. Debt collectors would rarely need to consult the FTC if § 1692k(c) were read to offer immunity for good-faith reliance on advice from private counsel. Indeed, debt collectors might have an affirmative incentive not to seek an advisory opinion to resolve ambiguity in the law, as receipt of such advice would prevent them from claiming good-faith immunity for violations and would potentially trigger civil penalties for knowing violations under the FTC Act. More importantly, the existence of a separate provision that, by its plain terms, is more obviously tailored to the concern at issue (excusing civil liability when the Act's prohibitions are uncertain) weighs against stretching the language of the bona Me error defense to accommodate Carlisle’s expansive reading.
Any remaining doubt about the proper interpretation of § 1692k(c) is dispelled by evidence of the meaning attached to the language Congress copied into the FDCPA’s bona fide error defense from a parallel provision in an existing statute. TILA, 82 Stat. 146, was the first of several statutes collectively known as the Consumer Credit Protection Act (CCPA) that now include the FDCPA. As enacted in 1968, § 130(e) of TILA provided an affirmative defense that was in pertinent part identical to the provision Congress later enacted into the FDCPA: “A creditor may not be held liable in any action brought under [TILA] if the creditor shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” 82 Stat. 157 (codified at 15 U.S. C. § 1640(e)).
During the 9-year period between the enactment of TILA and passage of the FDCPA, the three Federal Courts of Appeals to consider the question interpreted TILA’s bona fide error defense as referring to clerical errors; no such court interpreted TILA to extend to violations resulting from a mistaken legal interpretation of that Act. We have often observed that when “judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates, as a general matter, the intent to incorporate its... judicial interpretations as well.” Bragdon v. Abbott, 524 U. S. 624, 645 (1998); see also Rowe v. New Hampshire Motor Transp. Assn., 552 U. S. 364, 370 (2008). While the interpretations of three Federal Courts of Appeals may not have “settled” the meaning of TILA’s bona fide error defense, there is no reason to suppose that Congress disagreed with those interpretations when it enacted the FDCPA Congress copied verbatim the pertinent portions of TILA’s bona fide error defense into the FDCPA. Compare 15 U.S.C. § 1640(c) (1976 ed.) with § 813(c), 91 Stat. 881. This close textual correspondence supports an inference that Congress understood the statutory formula it chose for the FDCPA consistent with Federal Court of Appeals interpretations of TILA.
Carlisle and the dissent urge reliance, consistent with the approach taken by the Court of Appeals, on a 1980 amendment to TILA that added the following sentence to that statute’s bona fide error defense: “Examples of a bona fide error include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person’s obligations under [TILA] is not a bona fide error.” See Truth in Lending Simplification and Reform Act, § 615, 94 Stat. 181. The absence of a corresponding amendment to the FDCPA, Carlisle reasons, is evidence of Congress’ intent to give a more expansive seope to the FDCPA defense. For several reasons, we decline to give the 1980 TILA amendment such interpretative weight. For one, it is not obvious that the amendment changed the scope of TILA’s bona fide error defense in a way material to our analysis, given the uniform interpretations of three Courts of Appeals holding that the TILA defense does not extend to mistakes of law. (Contrary to the dissent’s suggestion, post, at 681, this reading does not render the 1980 amendment surplusage. Congress may simply have intended to codify existing judicial interpretations to remove any potential for doubt in jurisdictions where courts had not yet addressed the issue.) It is also unclear why Congress would have intended the FDCPA’s defense to be broader than the one in TILA, which presents at least as significant a set of concerns about imposing liability for uncertain legal obligations. See, e. g., Ford Motor Credit Co. v. Milhollin, 444 U. S. 555, 566 (1980) (TILA is “‘highly technical’”). Our reluctance to give controlling weight to the TILA amendment in construing the FDCPA is reinforced by the fact that Congress has not expressly included mistakes of law in any of the numerous bona fide error defenses, worded in pertinent part identically to § 1692k(c), elsewhere in the U. S. Code. Compare, e. g., 12 U. S. C. § 4010(c)(2) (bona fide error defense in Expedited Funds Availability Act expressly excluding “an error of legal judgment with respect to [obligations under that Act]”) with 15 U. S. C. §§ 1693m(e), 1693h(c) (bona fide error provisions in the Electronic Fund Transfer Act that are silent as to errors of legal judgment). Although Carlisle points out that Congress has amended the FDCPA on several occasions without expressly restricting the scope of §1692k(e), that does not suggest Congress viewed the statute as having the expansive reading Carlisle advances, particularly as not until recently had a Court of Appeals interpreted the bona fide error defense to include a violation of the FDCPA resulting from a mistake of law. See Johnson v. Riddle, 305 F. 3d 1107, 1121-1124, and nn. 14-15 (CA10 2002).
Carlisle’s reliance on Heintz, 514 U. S. 291, is also unavailing. We held in that case that the FDCPA’s definition of “debt collector” includes lawyers who regularly, through litigation, attempt to collect consumer debts. Id., at 292. We addressed a concern raised by the petitioner (as here, a lawyer collecting a debt on behalf of a client) that our reading would automatically render liable “any litigating lawyer who brought, and then lost, a claim against a debtor,” on the ground that § 1692e(5) prohibits a debt collector from making any “‘threat to take action that cannot legally be taken.'” Id., at 295. We expressed skepticism that § 1692e(5) itself demanded such a result. But even assuming the correctness of petitioner’s reading of § 1692e(5), we suggested that the availability of the bona fide error defense meant that the prospect of liability for litigating lawyers was not “so absurd” as to warrant implying a categorical exemption unsupported by the statutory text. Ibid. We had no occasion in Heintz to address the overall scope of the bona fide error defense. Our discussion of § 1692e(5) did not depend on the premise that a misinterpretation of the requirements of the Act would fall under the bona fide error defense. In the mine-run lawsuit, a lawyer is at least as likely to be unsuccessful because of factual deficiencies as opposed to legal error. Lawyers can, of course, invoke §1692k(c) for violations resulting from qualifying factual errors.
Carlisle's remaining arguments do not change our view of § 1692k(c). Carlisle perceives an inconsistency between our reading of the term “intentional” in that provision and the instruction in § 1692k(b) that a court look to whether “noncompliance was intentional” in assessing statutory additional damages. But assuming §1692k(b) encompasses errors of law, we see no conflict, only congruence, in reading the Act to permit a court to adjust statutory damages for a good-faith misinterpretation of law, even where a debt collector is not entitled to the categorical protection of the bona fide error defense. Carlisle is also concerned that under our reading, § 1692k(c) would be unavailable to a debt collector who violates a provision of the FDCPA applying to acts taken with particular intent because in such instances the relevant act would not be unintentional. See, e. g., § 1692d(5) (prohibiting a debt collector from “[c]ausing a telephone to ring... continuously with intent to annoy, abuse, or harass”). Including mistakes as to the scope of such a prohibition, Car-lisle urges, would ensure that § 1692k(c) applied throughout the FDCPA. We see no reason, however, why the bona fide error defense must cover every provision of the Act.
The parties and amici make arguments concerning the legislative history that we address for the sake of completeness. Carlisle points to a sentence in a Senate Committee Report stating that “[a] debt collector has no liability... if he violates the act in any manner, including with regard to the act’s coverage, when such violation is unintentional and occurred despite procedures designed to avoid such violations.” S. Rep. No. 95-382, p. 5 (1977); see also post, at 609-611 (opinion of Scalia, J.) (discussing report). But by its own terms, the quoted sentence does not unambiguously support Carlisle’s reading. Even if a bona fide mistake “with regard to the act’s coverage” could be read in isolation to contemplate a mistake of law, that reading does not exclude mistakes of fact. A mistake “with regard to the act’s coverage” may derive wholly from a debt collector’s factually mistaken belief, for example, that a particular debt arose out of a non-consumer transaction and was therefore not “covered” by the Act. There is no reason to read this passing statement in the Senate Report as contemplating an exemption for legal error that is the product of an attorney’s erroneous interpretation of the FDCPA — particularly when attorneys were excluded from the Act’s definition of “debt collector” until 1986. 100 Stat. 768. Moreover, the reference to “any manner” of violation is expressly qualified by the requirements that the violation be “unintentional” and occur despite maintenance of appropriate procedures. In any event, we need not choose between these possible readings of the Senate Report, as the legislative record taken as a whole does not lend strong support to Carlisle’s view. We therefore decline to give controlling weight to this isolated passage.
B
Carlisle, its amici, and the dissent raise the additional concern that our reading will have unworkable practical consequences for debt collecting lawyers. See, e. g., Brief for Respondents 40-41,45-48; NARCA Brief 4-16; post, at 615-624. Carlisle claims the FDCPA’s private enforcement provisions have fostered a “ ‘cottage industry* ” of professional plaintiffs who sue debt collectors for trivial violations of the Act. See Brief for Respondents 40-41. If debt collecting attorneys can be held personally liable for their reasonable misinterpretations of the requirements of the Act, Carlisle and its amici foresee a flood of lawsuits against creditors’ lawyers by plaintiffs (and their attorneys) seeking damages and attorney’s fees. The threat of such liability, in the dissent’s view, creates an irreconcilable conflict between an attorney’s personal financial interest and her ethical obligation of zealous advocacy on behalf of a client: An attorney uncertain about what the FDCPA requires must choose between, on the one hand, exposing herself to liability and, on the other, resolving the legal ambiguity against her client’s interest or advising the client to settle — even where there is substantial legal authority for a position favoring the client. Post, at 621-624.
We do not believe our holding today portends such grave consequences. For one, the FDCPA contains several provisions that expressly guard against abusive lawsuits, thereby mitigating the financial risk to creditors’ attorneys. When an alleged violation is trivial, the “actual damage[s]” sustained, § 1692k(a)(l), will likely be de minimis or even zero. The Act sets a cap on “additional” damages, § 1692k(a)(2), and vests courts with discretion to adjust such damages where a violation is based on a good-faith error, § 1692k(b). One amicus suggests that attorney’s fees may shape financial incentives even where actual and statutory damages are modest. NARCA Brief 11. The statute does contemplate an award of costs and “a reasonable attorney’s fee as determined by the court” in the case of “any successful action to enforce the foregoing liability.” § 1692k(a)(3). But courts have discretion in calculating reasonable attorney’s fees under this statute, and §1692k(a)(3) authorizes courts to award attorney’s fees to the defendant if a plaintiff’s suit “was brought in bad faith and for the purpose of harassment.”
Lawyers also have recourse to the affirmative defense in §1692k(c). Not every uncertainty presented in litigation stems from interpretation of the requirements of the Act itself; lawyers may invoke the bona fide error defense, for instance, where a violation results from a qualifying factual error. Jerman and the Government suggest that lawyers can entirely avoid the risk of misinterpreting the Act by obtaining an advisory opinion from the FTC under § 1692k(e). Carlisle fairly observes that the FTC has not frequently issued such opinions, and that the average processing time may present practical difficulties. Indeed, the Government informed us at oral argument that the FTC has issued only four opinions in the past decade (in response to seven requests), and the FTC’s response time has typically been three or four months. Tr. of Oral Arg. 27-28, 30. Without disregarding the possibility that the FTC advisory opinion process might be useful in some cases, evidence of present administrative practice makes us reluctant to place significant weight on § 1692k(e) as a practical remedy for the concerns Carlisle has identified.
We are unpersuaded by what seems an implicit premise of Carlisle’s arguments: that the bona fide error defense is a debt collector’s sole recourse to avoid potential liability. We addressed a similar argument in Heintz, in which the petitioner urged that certain of the Act’s substantive provisions would generate “‘anomalies’” if the term “debt collector” was read to include litigating lawyers. 514 U. S., at 295. Among other things, the petitioner in Heintz contended that §1692c(e)’s bar on further communication with a consumer who notifies a debt collector that she is refusing to pay the debt would prohibit a lawyer from filing a lawsuit to collect the debt. Id., at 296-297. We agreed it would be “odd” if the Act interfered in this way with “an ordinary debt-collecting lawsuit” but suggested § 1692c(c) did not demand such a reading in light of several exceptions in the text of that provision itself. Ibid. As in Heintz, we need not authoritatively interpret the Act’s conduct-regulating provisions to observe that those provisions should not be assumed to compel absurd results when applied to debt collecting attorneys.
To the extent the FDCPA imposes some constraints on a lawyer’s advocacy on behalf of a client, it is hardly unique in our law. “[A]n attorney’s ethical duty to advance the interests of his client is limited by an equally solemn duty to comply with the law and standards of professional conduct.” Nix v. Whiteside, 475 U. S. 157, 168 (1986). Lawyers face sanctions, among other things, for suits presented “for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.” Fed. Rules Civ. Proc. 11(b), (c). Model rules of professional conduct adopted by many States impose outer bounds on an attorney’s pursuit of a client’s interests. See, e. g., ABA Model Rules of Professional Conduct 3.1 (2009) (requiring nonfrivolous basis in law and fact for claims asserted); 4.1 (truth
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
Petitioner Lawrence Jefferson, who has been sentenced to death, claimed in both state and federal courts that his lawyers were constitutionally inadequate because they failed to investigate a traumatic head injury that he suffered as a child. The state court rejected that claim after making a finding that the attorneys were'advised by an expert that such investigation was unnecessary. Under the governing federal statute, that factual finding is presumed correct unless any one of eight exceptions applies. See 28 U. S. C. §§2254(d)(l)-(8) (1994 ed.). But the Court of Appeals considered only one of those exceptions (specifically § 2254(d)(8)). And on that basis, it considered itself “duty-bound” to accept the state court’s finding, and rejected Jefferson’s claim. Because the Court of Appeals did not fully consider several remaining potentially applicable exceptions, we vacate its judgment and remand.
I
When Jefferson was a child, he “suffered a serious injury to his head.” Jefferson v. Terry, 490 P. Supp. 2d 1261, 1326 (ND Ga. 2007); see id., at 1320 (quoting Jefferson’s mother’s testimony that “a car ran over the top of his head” when he was two years old). The accident left his skull swollen and misshapen and his forehead visibly scarred. Jefferson v. Hall, 570 F. 3d 1283, 1311, 1315, n. 4 (CA11 2009) (Carnes, J., dissenting). During the District Court proceedings below, uncontroverted experts testified that, as a result of his head injury, Jefferson has “permanent brain damage” that “causes abnormal behavior” over which he “has no or substantially limited control.” 490 F. Supp. 2d, at 1321-1322. According to these experts, Jefferson’s condition causes “‘emotional dullness,’” “‘restless or aggressive characteristics,’” “‘impulsiveness,’” “‘temper outbursts,’” “‘markedly diminished impulse control,’ ” “‘impaired social judgment,’” and “‘transient outbursts of rage which are totally inconsistent with his normal behavioral pattern.’ ” Id., at 1322, 1327.
The experts further testified that Jefferson’s “ ‘severe cognitive disabilities’ ” “ ‘profoundly alter’ ” his “ ‘ability to plan and coordinate his actions, to be aware of the consequences of his behavior, and to engage in premeditated or intentional acts.’” Id., at 1327. But they testified he is neither psychotic nor retarded. Id., at 1319. Thus, they said, to a lay observer or even to a professional psychologist, Jefferson does not outwardly appear mentally impaired. Indeed, according to the experts, “ ‘the behavior that may result from’ ” his condition “‘could, without the administration of proper testing, be mistaken for volitional.’” Id., at 1322.
Jefferson faced a death sentence for killing his co-worker while the two men were fishing. Id., at 1271-1272. Prior to trial, he was examined by a psychologist named Dr. Gary Dudley, who prepared a formal report in which he concluded that Jefferson’s mental deficiencies do not impair “ ‘his judgment or decision-making capacity.’” 570 F. 3d, at 1294 (quoting report). But Dr. Dudley’s report included a caveat: “ ‘One possibility that could not be explored because of [Jefferson’s] incarceration has to do with the sequelae,’ ” i. e., pathologies, related to a “‘head injury experienced during childhood.’ ” Ibid. “ ‘In my opinion,’ ” he wrote, “ ‘it would be worthwhile to conduct neuropsychological evaluation of this individual to rule out an organic etiology,’ ” i. e., to rule out brain damage. Ibid.
Although “it is undisputed that the testing” Dr. Dudley recommended “could have easily been performed,” 490 F. Supp. 2d, at 1322, and that Jefferson’s attorneys possessed police reports and hospital records recounting his head injury, id., at 1323, the attorneys did not have Jefferson tested. At sentencing, they presented only testimony from two prison guards, who stated that Jefferson was an unproblematic inmate, and from three members of Jefferson’s family, who testified that he is a “responsible, generous, gentle, and kind” person and “a good father.” 570 F. 3d, at 1290-1291. And while Jefferson’s mother briefly mentioned the car accident, “she was not questioned and did not offer any testimony regarding the impact, if any, that the accident had on him.” Id., at 1291. Thus, “[a]s far as the jury knew, Jefferson did not suffer from brain damage or neurological impairment; he had no organic disorders”; and “his emotional stability, impulse control, and judgment were perfectly normal.” Id., at 1311 (Carnes, J., dissenting).
Jefferson sought habeas relief in state court, arguing that his two trial attorneys unreasonably failed to pursue brain-damage testing. In response, the trial attorneys testified that they did not pursue such testing because, after delivering his formal written report, Dr. Dudley later told them that further investigation “ ‘may be a waste of time because the rest of [his] report’ ” had “ ‘said that [Jefferson] was non psychotic.’” Id., at 1295 (quoting testimony). Dr. Dudley did not testify in person at the hearing, but he submitted a sworn affidavit denying that he had ever made such statements. He said “it had always been his expert opinion ‘that neuropsychological testing was necessary”’ and that when he wrote as much in his formal report “he ‘meant it.’” Id., at 1312 (Carnes, J., dissenting) (quoting affidavit). He added, “ ‘I never, before or after that report, suggested to [Jefferson’s attorneys] that such an evaluation was not necessary or that it would not be worthwhile.’ ” Ibid.; cf. Pet. for Cert. 17, n. 12.
Jefferson contends, and the State has not disputed, that after the hearing concluded the state-court judge contacted the attorneys for the State ex parte. And in a private conversation that included neither Jefferson nor his attorneys, the judge asked the State’s attorneys to draft the opinion of the court. See id., at 3, 12. According to Jefferson, no such request was made of him, nor was he informed of the request made to opposing counsel. Id., at 12, n. 8, 13; see also Jefferson v. Zant, 263 Ga. 316, 431 S. E. 2d 110, 111 (1993) (“Jefferson contends [the order] amounts to no more and no less than a reply brief to which [he] has not had a chance to respond”).
The attorneys for the State prepared an opinion finding that “Dr. Dudley led [Jefferson’s trial attorneys] to believe that further investigation would simply be a waste of time because Petitioner [i]s not psychotic.” Jefferson v. Zant, Civ. Action No. 87-V-1241 (Super. Ct. Butts Cty., Ga., Oct. 7, 1992), p. 16, App. 4 to Pet. for Cert. 16 (hereinafter State Order); see also id., at 37. The opinion “specifically credits the testimony of [the trial attorneys] with regard to their efforts to investigate Petitioner’s mental condition.” Id., at 18; see also id., at 36. And relying on these findings, it concludes that Jefferson’s attorneys “made a reasonable investigation into [his] mental health” and were thus not ineffective. Id., at 37.
Notably, as the Georgia Supreme Court acknowledged, the State’s opinion discusses statements purportedly made on Jefferson’s behalf by a witness “who did not testify” or participate in the proceedings. 263 Ga., at 318, 431 S. E. 2d, at 112; see State Order 24-25. Nonetheless, the opinion “was adopted verbatim by the [state] court.” 263 Ga., at 317, 431 S. E. 2d, at 111. And while the State Supreme Court recognized that we have “ ‘criticized’ ” such a practice, it affirmed the judgment. Id., at 317, 320, 431 S. E. 2d, at 112, 114 (quoting Anderson v. Bessemer City, 470 U. S. 564, 572 (1985)).
II
Jefferson next sought federal habeas relief in the District Court. In his opening brief, he argued that “there is no reason under principles of comity or otherwise to give any deference to the findings of the State Habeas Corpus Court.” Brief for Petitioner in No. l:96-CV-989-CC (ND Ga.), Doc. 105, p. 4, and n. 1 (hereinafter District Court Brief). In support of that argument, he claimed that the state court “merely signed an order drafted by the State without revision of a single word,” even though the order “described witnesses who never testified.” Ibid. And he said that such a process “raisfes] serious doubts as to whether [the judge] even read, much less carefully considered, the proposed order submitted by the State.” Ibid.
The District Court ruled in Jefferson’s favor. It noted that under the relevant statute “factual findings of state courts are presumed to be correct unless one of . . . eight enumerated exceptions . applies.” 490 F. Supp. 2d, at 1280; see also ibid., n. 5 (listing the exceptions). And it acknowledged “the state habeas corpus court’s failure to explain the basis” for its credibility findings. Id., at 1324, n. 17. But it accepted Jefferson’s claim of ineffective assistance of counsel without disturbing the state court’s factual findings because it believed he should prevail even accepting those findings as true. Id., at 1324-1325.
On appeal, Jefferson defended the District Court’s judgment primarily on its own terms. But he also argued that the state court’s factfinding was “dubious at best” in light of the process that court employed, and that the Court of Appeals therefore “should harbor serious doubts about the findings of fact and credibility determinations in the state court record.” Brief for Petitioner/Appellee in No. 07-12502 (CA11), pp. 31-32, n. 10 (hereinafter Appeals Brief).
A divided Court of Appeals panel reversed, and Jefferson filed this petition for certiorari asking us to review his claim of ineffective assistance of counsel. And, in so doing, he challenges — as he did in the State Supreme Court, the District Court, and the Court of Appeals — “the fact findings of the state court,” given what he describes as the deficient procedure employed by that court while reviewing his claim. Pet. for Cert. 11-13, 17, n. 12, 18, n. 13 (recounting “ 'reason[s] to doubt’” the state court’s findings). Cf. Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 379 (1995) (stating standard for preserving an issue for review in this Court).
Ill
This habeas application was filed prior to the enactment of the Antiterrorism and Effective Death Penalty Act of 1996 and is therefore governed by federal habeas law as it existed prior to that point. Lindh v. Murphy, 521 U. S. 320, 326-336 (1997). In 1963, we set forth the “appropriate standard” to be applied by a “federal court in habeas corpus” when “the facts” pertinent to a habeas application “are in dispute.” Townsend v. Sain, 372 U. S. 293, 312. We held that when “the habeas applicant was afforded a full and fair hearing by the state court resulting in reliable findings” the district court “ordinarily should . . . accept the facts as found” by the state-court judge. Id., at 318. However, “if the habeas applicant did not receive a full and fair evidentiary hearing in a state court, either at the time of the trial or in a collateral proceeding,” we held that the federal court “must hold an evidentiary hearing” to resolve any facts that “are in dispute.” Id., at 312. We further “explained] the controlling criteria” by enumerating six circumstances in which such an evidentiary hearing would be required:
“(1) [T]he merits of the factual dispute were not resolved in the state hearing; (2) the state factual determination is not fairly supported by the record as a whole; (3) the fact-finding procedure employed by the state court was not adequate to afford a full and fair hearing; (4) there is a substantial allegation of newly discovered evidence; (5) the material facts were not adequately developed at the state-court hearing; or (6) for any reason it appears that the state trier of fact did not afford the habeas applicant a full and fair fact hearing.” Id., at 313 (emphasis added).
Three years later, in 1966, Congress enacted an amendment to the federal habeas statute that “was an almost verbatim codification of the standards delineated in Townsend v. Sain.” Miller v. Fenton, 474 U. S. 104, 111 (1985). That codification read in relevant part as follows:
“In any proceeding instituted in a Federal court by an application for a writ of habeas corpus by a person in custody pursuant to the judgment of a State court, a determination ... of a factual issue, made by a State court of competent jurisdiction .. . , shall be presumed to be correct, unless the applicant shall establish or it shall otherwise appear, or the respondent shall admit—
""(1) that the merits of the factual dispute were not resolved in the State court hearing;
“(2) that the factfinding procedure employed by the State court was not adequate to afford a full and fair hearing;
“(3) that the material facts were not adequately developed at the State court hearing;
“(4) that the State court lacked jurisdiction of the subject matter or over the person of the applicant in the State court proceeding;
""(5) that the applicant was an indigent and the State court, in deprivation of his constitutional right, failed to appoint counsel to represent him in the State court proceeding;
“(6) that the applicant did not receive a full, fair, and adequate hearing in the State court proceeding; or
“(7) that the applicant was otherwise denied due process of law in the State court proceeding;
“(8) or unless ... the Federal court on a consideration of [the relevant] part of the record as a whole concludes that such factual determination is not fairly supported by the record.” § 2254(d) (emphasis added).
As is clear from the statutory text quoted above, and as the District Court correctly stated, if any “one of the eight enumerated exceptions ... applies” then “the state court’s fact-finding is not presumed correct.” 490 F. Supp. 2d, at 1280; accord, Miller, supra, at 105 (“Under 28 U. S. C. § 2254(d), state-court findings of fact "shall be presumed to be correct’ in a federal habeas corpus proceeding unless one of eight enumerated exceptions applies”); see also 1 R. Hertz & J. Liebman, Federal Habeas Corpus Practice and Procedure § 20.2c, pp. 915-918 (5th ed. 2005).
Jefferson has consistently argued that the federal courts “should harbor serious doubts about” and should not “give any deference to” the “findings of fact and credibility determinations” made by the state habeas court because those findings were drafted exclusively by the attorneys for the State pursuant to an ex parte request from the state-court judge, who made no such request of Jefferson, failed to notify Jefferson of the request made to opposing counsel, and adopted the State’s proposed opinion verbatim even though it recounted evidence from a nonexistent witness. See, e. g., Appeals Brief 32, n. 10; District Court Brief 4, n. 1; Pet. for Cert. 12. These are arguments that the state court’s process was deficient. In other words, they are arguments that Jefferson “did not receive a full and fair evidentiary hearing in . . . state court.” Townsend, supra, at 312. Or, to use the statutory language, they are arguments that the state court’s “factfinding procedure,” “hearing,” and “proceeding” were not “full, fair, and adequate.” §§ 2254(d)(2), (6), (7).
But the Court of Appeals did not consider the state court’s process when it applied the statutory presumption of correctness. Instead, it invoked Circuit precedent that applied only paragraph (8) of § 2254(d), which, codifying the second Townsend exception, 372 U. S., at 313, lifts the presumption of correctness for findings that are “not fairly supported by the record.” See 570 F. 3d, at 1300 (quoting Jackson v. Herring, 42 F. 3d 1350, 1366 (CA11 1995), in turn quoting 28 U. S. C. § 2254(d)(8)). And even though the Court of Appeals “recognize[d]” that Jefferson had argued that the state court’s process had produced factual findings that were “ ‘dubious at best,”’ and that federal courts should therefore “‘harbor serious doubts about’” the state court’s “‘findings of fact and credibility,’” the Court of Appeals nonetheless held that the state court’s findings are “ ‘entitled to a presumption of correctness’ ” that it was “duty-bound” to apply. 570 F. 3d, at 1304, n. 8 (quoting Appeals Brief 32, n. 10). The Court of Appeals explicitly stated that it considered itself “duty-bound” to defer to the state court’s findings because “Jefferson has not argued that any of the state courts’ factual findings were ‘not fairly supported by the record, ’” a direct reference to § 2254(d)(8) and to the second Townsend exception. 570 F. 3d, at 1304, n. 8 (emphasis added). And it then concluded: “Based on these factual findings of the state ha-beas courts — all of which are fairly supported by the record — we believe that Jefferson’s counsel were reasonable in deciding not to pursue neuropsychological testing.” Id., at 1304 (emphasis added).
In our view, the Court of Appeals did not properly consider the legal status of the state court’s factual findings. Under Townsend, as codified by the governing statute, a federal court is not “duty-bound” to accept any and all state-court findings that are “fairly supported by the record.” Those words come from § 2254(d)(8), which is only one of eight enumerated exceptions to the presumption of correctness. But there are seven others, see §§2254(d)(l)-(7), none of which the Court of Appeals considered when addressing Jefferson’s claim. To be sure, we have previously stated in cases applying § 2254(d)(8) that “a federal court” may not overturn a state court’s factual conclusion “unless the conclusion is not ‘fairly supported by the record.’ ” Parker v. Dug-ger, 498 U. S. 308, 320 (1991) (granting federal habeas relief after rejecting state court’s finding under § 2254(d)(8)); see also Demosthenes v. Baal, 495 U. S. 731 (1990) (per curiam) (applying § 2254(d)(8)); cf. post, at 303 (Scalia, J., dissenting). But in those cases there was no suggestion that any other provisions enumerated in § 2254(d) were at issue. That is not the case here. In treating § 2254(d)(8) as the exclusive statutory exception, and by failing to address Jefferson’s argument that the state court’s procedures deprived its findings of deference, the Court of Appeals applied the statute and our precedents incorrectly.
Although we have stated that a court’s “verbatim adoption of findings of fact prepared by prevailing parties” should be treated as findings of the court, we have also criticized that practice. Anderson, 470 U. S., at 572. And we have not considered the lawfulness of, nor the application of the ha-beas statute to, the use of such a practice where (1) a judge solicits the proposed findings ex parte, (2) does not provide the opposing party an opportunity to criticize the findings or to submit his own, or (3) adopts findings that contain internal evidence suggesting that the judge may not have read them. Cf. id., at 568; Ga. Code of Judicial Conduct, Canon 3(A)(4) (1993) (prohibiting ex parte judicial communications).
We decline to determine in the first instance whether any of the exceptions enumerated in §§2254(d)(l)-(8) apply in this case, see, e. g., Cutter v. Wilkinson, 544 U. S. 709, 718, n. 7 (2005), especially given that the facts surrounding the state habeas court’s process are undeveloped. Respondent has conceded that the State drafted the state court’s final order at that court’s request and that the order was adopted verbatim, 263 Ga., at 317, 431 S. E. 2d, at 111, and has not disputed in this Court that the state court solicited the order “ex parte and without prior notice” and “did not seek a proposed order, from Petitioner,” Pet. for Cert. 12, and n. 8. But the precise nature of what transpired during the state-court proceedings is not fully known. See 263 Ga., at 316-317, 431 S. E. 2d, at 111 (noting dispute as to whether Jefferson “had a chance to respond” to the final order); see also Pet. for Cert. 13.
Accordingly, we believe it necessary for the lower courts to determine on remand whether the state court’s factual findings warrant a presumption of correctness, and to conduct any further proceedings as may be appropriate in light of their resolution of that issue. See Townsend, 372 U. S., at 313-319; Keeney v. Tamayo-Reyes, 504 U. S. 1 (1992). In so holding, we express no opinion as to whether Jefferson’s Sixth Amendment rights were violated assuming the state court’s factual findings to be true.
* * *
The petition for a writ of certiorari and motion to proceed informa pauperis are granted. The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Whittaker
delivered the opinion of the Court.
Respondents, who are federal narcotics agents, arrested petitioner without a warrant in Cook County, Illinois, and, in the course of an incidental search, found narcotic drugs on his person which they seized. Respondents then delivered petitioner to the Cook County authorities who confined him in the county jail. In due course, the county grand jury returned an indictment charging petitioner with possessing the narcotics in violation of an Illinois statute. Soon after his arraignment and plea of “not guilty,” petitioner moved the court for an order suppressing the use of the narcotics as evidence in his impending criminal trial. After a full hearing, including the taking of evidence (not contained in this record), the court denied the motion.
Before the case was reached for trial, petitioner brought the present action against respondents in the Federal District Court in Chicago to impound the narcotics (though he did not allege that respondents have possession of them) and to enjoin their use, and the respondents from testifying, at the trial of the criminal case in the state court. The very meager complaint alleged, in addition to the facts we have stated, only a few of the facts relating to petitioner’s arrest, and that he believes “respondents will be called to testify in [the state criminal] case that the petitioner unlawfully had in his possession the narcotic drugs seized by the respondents ....” It concluded with a prayer for the relief stated.
Respondents moved to dismiss the complaint for failure to state a claim upon which relief could be granted. After a hearing, the District Court granted the motion and dismissed the action. On appeal, the Seventh Circuit affirmed. 275 F. 2d 932. To consider petitioner’s claim that the judgment is repugnant to controlling rules and decisions of this Court, we granted certiorari. 363 U. S. 840.
We have concluded that the action was properly dismissed and that the judgment must be affirmed.
Although the complaint alleged that the arrest was made without a warrant, there was no allegation that it was made without probable cause. In the absence of such an allegation the courts below could not, nor can we, assume that respondents arrested petitioner without probable cause to believe that he had committed or was committing a narcotics offense. And if they had such probable cause, the arrest, though without a warrant, was lawful and the subsequent search of petitioner’s person and the seizure of the found narcotics were validly made incidentally to a lawful arrest. Weeks v. United States, 232 U. S. 383, 392; Carroll v. United States, 267 U. S. 132, 158; Agnello v. United States, 269 U. S. 20, 30; Giordenello v. United States, 357 U. S. 480, 483; Draper v. United States, 358 U. S. 307, 310-311. For this reason alone the complaint failed to state a claim upon which relief could be granted.
Nor did the complaint allege, even in conclusional terms, that petitioner does not have a plain and adequate remedy at law in the state court to redress any possible illegality in the arrest and incidental search and seizure. Indeed, the allegations of the complaint affirmatively show that petitioner does have such a remedy in the Illinois court and that he has actually prosecuted it there, but only to the point of an adverse interlocutory order. That court, whose jurisdiction first attached, retains jurisdiction over this matter to the exclusion of all other courts — certainly to the exclusion of the Federal District Court — until its duty has been fully performed, Harkrader v. Wadley, 172 U. S. 148, 164; Peck v. Jenness, 7 How. 612, 624-625, and it can determine this matter as well as, if not better than, the federal court. If, at the criminal trial, the Illinois court adheres to its interlocutory order on the suppression issue to petitioner's prejudice, he has an appeal to the Supreme Court of that State, and a right if need be to petition for “review by this Court of any federal questions involved.” Douglas v. City of Jeannette, 319 U. S. 157, 163. It is therefore clear that petitioner has a plain and adequate remedy at law in the criminal case pending against him in the Illinois court.
There is still another cardinal reason why it was proper for the District Court to dismiss the complaint. We live in the jurisdiction of two sovereignties. Each has its own system of courts to interpret and enforce its laws, although in common territory. These courts could not perform their respective functions without embarrassing conflicts unless rules were adopted to avoid them. Such rules have been adopted. One of them is that an accused “should not be permitted to use the machinery of one sovereignty to obstruct his trial in the courts of the other, unless the necessary operation of such machinery prevents his having a fair trial.” Ponzi v. Fessenden, 258 U. S. 254, 260. Another is that federal courts should not exercise their discretionary power “to interfere with or embarrass threatened proceedings in state courts save in those exceptional cases which call for the interposition of a court of equity to prevent irreparable injury which is clear and imminent . . . .” Douglas v. City of Jeannette, supra, at 163.
By this action, petitioner not only seeks to interfere with and embarrass the state court in his criminal case, but he also seeks completely to thwart its judgment by relitigating in a trial de novo in a federal court the very issue that he has already litigated in the state court. “If we were to sanction this intervention, we would expose every State criminal prosecution to insupportable disruption. Every question of procedural due process of law— with its far-flung and undefined range — would invite a flanking movement against the system of State courts by resort to the federal forum, with review if need be to this Court, to determine the issue. Asserted unconstitutionality in the impaneling and selection of the grand and petit juries, in the failure to appoint counsel, in the admission of a confession, in the creation of an unfair trial atmosphere, in the misconduct of the trial court [and, we may add, in the ruling of motions to suppress evidence, and in ruling the competency of witnesses and their testimony] — all would provide ready opportunities, which conscientious counsel might be bound to employ, to subvert the orderly, effective prosecution of local crime in local courts. To suggest these difficulties is to recognize their solution.” Stefanelli v. Minard, 342 U. S. 117, 123-124.
Notwithstanding all of this, petitioner contends that the averments of his complaint were sufficient to entitle him to the relief prayed under the principles announced in Rea v. United States, 350 U. S. 214. But it is plain that the averments of this complaint do hot invoke or even approach the principles of the Rea case. That case did not hold, as petitioner’s contention assumes, that narcotic drugs lawfully seized by federal officers are inadmissible, or that such officers may not testify about their seizure, in state prosecutions. Such a concept would run counter to the express command of Congress that federal officers shall cooperate with the States in such investigations and prosecutions. See 21 U. S. C. § 198 (a). Indeed, the situation here is just the reverse of the situation in Rea. There, the accused had been indicted in a federal court for the unlawful acquisition of marihuana, and had moved in that court, under Rule 41 (e) of the Federal Rules of Criminal Procedure (18 U. S. C. App. Rule 41 (e)), for an order suppressing the use of the marihuana as evidence at the trial. After hearing, the District Court, finding that the accused’s arrest and search had been made by federal officers under an illegal warrant issued by a United States Commissioner, granted the motion to suppress. The effect of that order, under the express provisions of that Rule, was that the suppressed property “shall not be admissible in evidence at any hearing or trial.” Cf. Reina v. United States, 364 U. S. 507, 510-511. Despite that order, one of the arresting federal officers thereafter caused the accused to be rearrested and charged, in a state court, with possession of the same marihuana in violation of the State’s statute, and threatened to make the State’s case by his testimony and the use of the marihuana that the federal court had earlier suppressed under Rule 41 (e). Thereupon, to prevent the thwarting of the federal suppression order, petitioner moved the federal court to enjoin that conduct. That court denied the motion and its judgment was affirmed on appeal. On certiorari, this Court, acting under its supervisory power over the federal rules, which “extends to policing [their] requirements and making certain that they are observed,” 350 U. S., at 217, reversed the judgment, because “A federal agent [had] violated [and was about further to violate] the federal Rules governing searches and seizures — Rules prescribed by this Court and made effective after submission to the Congress. See 327 U. S. 821 et seq.” 350 U. S., at 217.
How different are the facts in the present case! Here there is no allegation or showing that any proceedings ever were taken against petitioner under any federal rule or in any federal court. There has been no finding that petitioner’s arrest was unlawful or that the search of his person which yielded the narcotics was not incident to a lawful arrest and therefore proper. The state court’s finding — the only court involved and the only finding on the matter — is the other way. Nor is there even any allegation in the complaint that the arrest was not made upon probable cause, although it is admitted that the search was made incident to the arrest.
It is clear that the complaint was properly dismissed.
Affirmed.
In this respect, the complaint alleged only that at the hearing on the motion to suppress "the following facts and circumstances were developed:
“(a) The respondents testified that they had a certain building under surveillance where they had information that narcotic drugs were being sold. [Footnote 1 continued on p. 888.']
“(b) That the respondents saw your petitioner approach the said building and enter the same; that a short time later they observed your petitioner leave the building whereupon they arrested him.
“(c) That they could not state under oath whether he had the narcotic drugs in his possession before he entered the building under surveillance or not; that when they arrested him, they did not have a warrant for his arrest.”
Article II, § 6, of the Illinois Constitution protects against unreasonable searches and seizures in substantially the same language as the Fourth Amendment. That State’s interpretation of its constitutional provision and its exclusionary rule, similar to the one followed in the federal courts, makes the Illinois law accord with the principles established by this Court for the federal system. See, e. g., People v. La Bostrie, 14 Ill. 2d 617, 620-623, 153 N. E. 2d 570, 572-574; People v. Tillman, 1 Ill. 2d 525, 529-530, 116 N. E. 2d 344, 346-347.
“When a state court and a court of the United States may each take jurisdiction of a matter, the tribunal where jurisdiction first attaches holds it, to the exclusion of the other, until its duty is fully performed and the jurisdiction involved is exhausted; and this rule applies alike in both civil and criminal cases.” Harkrader v. Wadley, supra, at 164.
“It is a doctrine of law too long established to require a citation of authorities, that . . . where the jurisdiction of a court, and the right of a plaintiff to prosecute his suit in it, have once attached, that right cannot be arrested or taken away by proceedings in another court. These rules have their foundation, not merely in comity, but on necessity. For if one may enjoin, the other may retort by injunction, and thus the parties be without remedy; being liable to a process for contempt in one, if they dare to proceed in the other.” Peck v. Jenness, supra, at 624-625.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Stevens
delivered the opinion of the Court.
Respondent applied for a patent on a “Method for Updating Alarm Limits.” The only novel feature of the method is a mathematical formula. In Gottschalk v. Benson, 409 U. S. 63, we held that the discovery of a novel and useful mathematical formula may not be patented. The question in this case is whether the identification of a limited category of useful, though conventional, post-solution applications of such a formula makes respondent’s method eligible for patent protection.
I
An “alarm limit” is a number. During catalytic conversion processes, operating conditions such as temperature, pressure, and flow rates are constantly monitored. When any of these “process variables” exceeds a predetermined “alarm limit,” an alarm may signal the presence of an abnormal condition indicating either inefficiency or perhaps danger. Fixed alarm limits may be appropriate for a steady operation, but during transient operating situations, such as start-up, it may be necessary to “update” the alarm limits periodically.
Respondent’s patent application describes a method of updating alarm limits. In essence, the method consists of three steps: an initial step which merely measures the present value of the process variable (e. g., the temperature); an intermediate step which uses an algorithm to calculate an updated alarm-limit value; and a final step in which the actual alarm limit is adjusted to the updated value. The only difference between the conventional methods of changing alarm limits and that described in respondent’s application rests in the second step — the mathematical algorithm or formula. Using the formula, an operator can calculate an updated alarm limit once he knows the original alarm base, the appropriate margin of safety, the .time interval that should elapse between each updating, the current temperature (or other process variable), and the appropriate weighting factor to be used to average the original alarm base and the current temperature.
The patent application does not purport to explain how to select the appropriate margin of safety, the weighting factor, or any of the other variables. Nor does it purport to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit. Although the computations can be made by pencil and paper calculations, the abstract of disclosure makes it clear that the formula is primarily useful for computerized calculations producing automatic adjustments in alarm settings.
The patent claims cover any use of respondent’s formula for updating the value of an alarm limit on any process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons. Since there are numerous processes of that kind in the petrochemical and oil-refining industries, the claims cover a broad range of potential uses of the method. They do not, however, cover every conceivable application of the formula.
II
The patent examiner rejected the application. He found that the mathematical formula constituted the only difference between respondent’s claims and the prior art and therefore a patent on this method “would in practical effect be a patent on the formula or mathematics itself.” The examiner concluded that the claims did not describe a discovery that was eligible for patent protection.
The Board of Appeals of the Patent and Trademark Office sustained the examiner’s rejection. The Board also concluded that the “point of novelty in [respondent’s] claimed method” lay in the formula or algorithm described in the claims, a subject matter that was unpatentable under Benson, supra.
The Court of Customs and Patent Appeals reversed. In re Flook, 559 F. 2d 21. It read Benson as applying only to claims that entirely pre-empt a mathematical formula or algorithm, and noted that respondent was only claiming on the use of his method to update alarm limits in a process comprising the catalytic chemical conversion of hydrocarbons. The court reasoned that since the mere solution of the algorithm would not constitute infringement of the claims, a patent on the method would not pre-empt the formula.
The Acting Commissioner of Patents and Trademarks filed a petition for a writ of certiorari, urging that the decision of the Court of Customs and Patent Appeals will have a debilitating effect on the rapidly expanding computer “software” industry, and will require him to process thousands of additional patent applications. Because of the importance of the question, we granted certiorari, 434 U. S. 1033.
Ill
This case turns entirely on the proper construction of § 101 of the Patent Act, which describes the subject matter that is eligible for patent protection. It does not involve the familiar issues of novelty and obviousness that routinely arise under §§ 102 and 103 when the validity of a patent is challenged. For the purpose of our analysis, we assume that respondent’s formula is novel and useful and that he discovered it. We also assume, since respondent does not challenge the examiner’s finding, that the formula is the only novel feature of respondent’s method. The question is whether the discovery of this feature makes an otherwise conventional method eligible for patent protection.
The plain language of § 101 does not answer the question. It is true, as respondent argues, that his method is a “process” in the ordinary sense of the word. But that was also true of the algorithm, which described a method for converting binary-coded decimal numerals into pure binary numerals, that was involved in Gottschalk v. Benson. The holding that the discovery of that method could not be patented as a “process” forecloses a purely literal reading of § 101. Reasoning that an algorithm, or mathematical formula, is like a law of nature, Benson applied the established rule that a law of nature cannot be the subject of a patent. Quoting from earlier cases, we said:
“ 'A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.’ Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” 409 U. S., at 67.
The line between a patentable “process” and an unpatenta-ble “principle” is not always clear. Both are “conception [s] of the mind, seen only by [their] effects when being executed or performed.” Tilghman v. Proctor, 102 U. S. 707, 728. In Benson we concluded that the process application in fact sought to patent an idea, noting that
“[t]he mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.” 409 U. S., at 71-72.
Respondent correctly points out that this language does not apply to his claims. He does not seek to “wholly preempt the mathematical formula,” since there are uses of his formula outside the petrochemical and oil-refining industries that remain in the public domain. And he argues that the presence of specific “post-solution" activity — the adjustment of the alarm limit to the figure computed according to the formula — distinguishes this case from Benson and makes his process patentable. We cannot agree.
The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques. The concept of patentable subject matter under § 101 is not “like a nose of wax which may be turned and twisted in any direction ....” White v. Dunbar, 119 U. S. 47, 51.
Yet it is equally clear that a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm. See Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U. S. 45; Tilghman v. Proctor, supra. For instance, in Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U. S. 86, the applicant sought a patent on a directional antenna system in which the wire arrangement was determined by the logical application of a mathematical formula. Putting the question of patentability to one side as a preface to his analysis of the infringement issue, Mr. Justice Stone, writing for the Court, explained:
“While a scientific truth, or the mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” Id., at 94.
Funk Bros. Seed Co. v. Kalo Co., 333 U. S. 127, 130, expresses a similar approach:
“He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end.”
Mackay Radio and Funk Bros, point to- the proper analysis for this case: The process itself, not merely the mathematical algorithm, must be new and useful. Indeed, the novelty of the mathematical algorithm is not a determining factor at all. Whether the algorithm was in fact known or unknown at the time of the claimed invention, as one of the “basic tools of scientific and technological work,” see Gottschalk v. Benson, 409 U. S., at 67, it is treated as though it were a familiar part of the prior art.
This is also the teaching of our landmark decision in O’Reilly v. Morse, 15 How. 62. In that case the Court rejected Samuel Morse's broad claim covering any use of electromagnetism for printing intelligible signs, characters, or letters at a distance. Id., at 112-121. In reviewing earlier cases applying the rule that a scientific principle cannot be patented, the Court placed particular emphasis on the English case of Neilson v. Harford, Web. Pat. Cases 295, 371 (1844), which involved the circulation of heated air in a furnace system to increase its efficiency. The English court rejected the argument that the patent merely covered the principle that furnace temperature could be increased by injecting hot air, instead of cold into the furnace. That court’s explanation of its decision was relied on by this Court in Morse:
“ Tt is very difficult to distinguish it [the Neilson patent] from the specification of a patent for a principle, and this at first created in the minds of the court much difficulty; but after full consideration, we think that the plaintiff does not merely claim a principle, but a machine, embodying a principle, and a very valuable one. We think the case must he considered as if the principle being well known, the plaintiff had first invented a mode of applying it 15 How., at 115 (emphasis added).
We think this case must also be considered as if the principle or mathematical formula were well known.
Respondent argues that this approach improperly imports into § 101 the considerations of “inventiveness” which are the proper concerns of §§ 102 and 103. This argument is based on two fundamental misconceptions.
First, respondent incorrectly assumes that if a process application implements a principle in some specific fashion, it automatically falls within the patentable subject matter of § 101 and the substantive patentability of the particular process can then be determined by the conditions of §§ 102 and 103. This assumption is based on respondent’s narrow reading of Benson, and is as untenable in the context of § 101 as it is in the context of that case. It would make the determination of patentable subject matter depend simply on the draftsman’s art and would ill serve the principles underlying the prohibition against patents for “ideas” or phenomena of nature. The rule that the discovery of a law of nature cannot be patented rests, not on the notion that natural phenomena are not processes, but rather on the more fundamental understanding that they are not the kind of “discoveries” that the statute was enacted to protect. The obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious.
Second, respondent assumes that the fatal objection to his application is the fact that one of its components — the mathematical formula — consists of unpatentable subject matter. In countering this supposed objection, respondent relies on opinions by the Court of Customs and Patent Appeals which reject the notion “that a claim may be dissected, the claim components searched in the prior art, and, if the only component found novel is outside the statutory classes of invention, the claim may be rejected under 35 U. S. C. § 101.” In re Chatfield, 545 F. 2d 152, 158 (CCPA 1976). Our approach to respondent’s application is, however, not at all inconsistent with the view that a patent claim must be considered as a whole. Respondent’s process is unpatentable under § 101, not because it contains a mathematical algorithm as one component, but because once that algorithm is assumed to be within the prior art, the application, considered as. a whole, contains no patentable invention. Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application.
Here it is absolutely clear that respondent’s application contains no claim of patentable invention. The chemical processes involved in catalytic conversion of hydrocarbons are well known, as are the practice of monitoring the chemical process variables, the use of alarm limits to trigger alarms, the notion that alarm limit values must be recomputed and readjusted, and the use of computers for “automatic monitoring-alarming.” Respondent’s application simply provides a new and presumably better method for calculating alarm limit values. If we assume that that method was also known, as we must under the reasoning in Morse, then respondent’s claim is, in effect, comparable to a claim that the formula 2irr can be usefully applied in determining the circumference of a wheel. As the Court of Customs and Patent Appeals has explained, “if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.” In re Richman, 563 F. 2d 1026, 1030 (1977).
To a large extent our conclusion is based on reasoning derived from opinions written before the modern business of developing programs for computers was conceived. The youth of the industry may explain the complete absence of precedent supporting patentability. Neither the dearth of precedent, nor this decision, should therefore be interpreted as reflecting a judgment that patent protection of certain novel and useful computer programs will not promote the progress of science and the useful arts, or that such protection is undesirable as a matter of policy. Difficult questions of policy concerning the kinds of programs that may be appropriate for patent protection and the form and duration of such protection can be answered by Congress on the basis of current empirical data not equally available to this tribunal.
It is our duty to construe the patent statutes as they now read, in light of our prior precedents, and we must proceed cautiously when we are asked to extend patent rights into areas wholly unforeseen by Congress. As Mr. Justice White explained in writing for the Court in Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518, 531:
“[W] e should not expand patent rights by overruling or modifying our prior cases construing the patent statutes, unless the argument for expansion of privilege is based on more than mere inference from ambiguous statutory language. We would require a clear and certain signal from Congress before approving the position of a litigant who, as respondent here, argues that the beachhead of privilege is wider, and the area of public use narrower, than courts had previously thought. No such signal legitimizes respondent’s position in this litigation.”
The judgment of the Court of Customs and Patent Appeals is
Reversed.
APPENDIX TO OPINION OE THE COURT
Claim 1 of the patent describes the method as follows:
“1. A method for updating the value of at least one alarm limit on at least one process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons wherein said alarm limit has a current value of
Bo+K
“wherein Bo is the current alarm base and K is a predetermined alarm offset which comprises:
“(1) Determining the present value of said process variable, said present value being defined as PYL;
“(2) Determining a new alarm base Bi, using the following equation:
Bi=Bo(1.0-F)+PVL(F)
“where F is a predetermined number greater than zero and less than 1.0;
“(3) Determining an updated alarm limit which is defined as Bi+K; and thereafter
“(4) Adjusting said alarm limit to said updated alarm limit value.” App. 63A.
In order to use respondent’s method for computing a new limit, the operator must make four decisions. Based on his knowledge of normal operating conditions, he first selects the original “alarm base” (Bo); if a temperature of 400 degrees is normal, that may be the alarm base. He next decides on an appropriate margin of safety, perhaps 50 degrees; that is his “alarm offset” (K). The sum of the alarm base and the alarm offset equals the alarm limit. Then he decides on the time interval that will elapse between each updating; that interval has no effect on the computation although it may, of course, be of great practical importance. Finally, he selects a weighting factor (F), which may be any number between 99% and 1%, and which is used in the updating calculation.
If the operator has decided in advance to use an original alarm base (Bo) of 400 degrees, a constant alarm offset (K) of 50 degrees, and a weighting factor (F) of 80%', the only additional information he needs in order to compute an updated alarm limit (UAV), is the present value of the process variable (PYL). The computation of the updated alarm limit according to respondent’s method involves these three steps:
First, at the predetermined interval, the process variable is measured; if we assume the temperature is then 425 degrees, PVL will then equal 425.
Second, the solution of respondent’s novel formula will produce a new alarm base (Bi) that will be a weighted average of the preceding alarm base (Bo) of 400 degrees and the current temperature (PVL) of 425. It will be closer to one or the other depending on the value of the weighting factor (F) selected by the operator. If F is 80%, that percentage of 425 (340) plus 20% (1 — F) of 400 (80) will produce a new alarm base of 420 degrees.
Third, the alarm offset (K) of 50 degrees is then added to the new alarm base (Bx) of 420 to produce the updated alarm limit (UAV) of 470.
The process is repeated at the selected time intervals. In each updating computation, the most recently calculated alarm base and the current measurement of the process variable will be substituted for the corresponding numbers in the original calculation, but the alarm offset and the weighting factor will remain constant.
We use the word “algorithm” in this case, as we did in, Gottschalk v. Benson, 409 U. S. 63, 65, to mean “[a] procedure for solving a given type of mathematical problem
Claim 1 of the patent is set forth in the appendix to this opinion, which also contains a more complete description of these three steps.
App. 13A.
Examples mentioned in the abstract of disclosure include naphtha reforming, petroleum distillate and petroleum residuum cracking, hydro-cracking and desulfurization, aromatic hydrocarbon and paraffin isomerization and disproportionation, paraffin-olefin alkylation, and the like. Id., at 8A.
Id., at 47A.
Id., at 60A.
The term “software” is used in the industry to describe computer programs. The value of computer programs in use in the United States in 1976 was placed at $43.1 billion, and projected at $70.7 billion by 1980 according to one industry estimate. See Brief for the Computer & Business Equipment Manufacturers Assn, as Amicus Curiae 17-18, n. 16.
Title 35 U. S. C. § 101 provides:
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
Section 100 (b) provides:
“The term ‘process? means process, art or method, and includes a new use of a known process, machine, manufacture,, composition of matter, or material.”
The statutory definition of “process” is broad. See n. 8, supra. An argument can be made, however, that this Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a “different state or thing.” See Cochrane v. Deener, 94 U. S. 780, 787-788. As in Benson, we assume that a valid process patent may issue even if it does not meet one of these qualifications of our earlier precedents. 409 U. S., at 71.
In Benson we phrased the issue in this way:
“The question is whether the method described and claimed is a 'process’ within the meaning of the Patent Act.” Id., at 64.
It should be noted that in Benson there was a specific end use contemplated for the algorithm — utilization of the algorithm in computer programming. See In re Chatfield, 545 F. 2d 152, 161 (CCPA 1976) (Rich, J., dissenting). Of course, as the Court pointed out, the formula had no other practical application; but it is not entirely clear why a process claim is any more or less patentable because the specific end use contemplated is the only one for which the algorithm has any practical application.
In Eibel Process Co. the Court upheld a patent on an improvement on a papermaking machine that made use of the law of gravity to enhance the flow of the product. The patentee, of course, did not claim to have discovered the force of gravity, but that force was an element in his novel conception.
Tilghman v. Proctor involved a process claim for " ‘the manufacturing of fat acids and glycerine from fatty bodies.’ ” The Court distinguished the process from the principle involved as follows:
f,'[T]he claim of the patent is not for a mere principle. The chemical principle or scientific fact upon which it is founded is, that the elements of neutral fat require to be severally united with an atomic equivalent of water in order to separate from each other and become free. This chemical fact was not discovered by Tilghman. He only claims to have invented a particular mode of bringing about the desired chemical union between the fatty elements and water.” 102 U. S., at 729.
See also Risdon Locomotive Works v. Medart, 158 U. S. 68; Tilghman v. Proctor, supra.
Sections 102 and 103 establish certain conditions, such as novelty and nonobviousness, to patentability.
The underlying notion is that a scientific principle, such as that expressed in respondent’s algorithm, reveals a relationship that has always existed.
“An example of such a discovery [of a scientific principle] was Newton’s formulation of the law of universal gravitation, relating the force of attraction between two bodies, F, to their masses, m and m', and the square of the distance, d, between their centers, according to the equation F=mm//d2. But this relationship always existed — even before Newton announced his celebrated law. Such ‘mere’ recognition of a theretofore existing phenomenon or relationship carries with it no rights to exclude others from its enjoyment. . . . Patentable subject matter must be new (novel); not merely heretofore unknown. There is a very compelling reason for this rule. The reason is founded upon the proposition that in granting patent rights, the public must not be deprived of any rights that it theretofore freely enjoyed.” P. Rosenberg, Patent Law Fundamentals, §4, p. 13 (1975).
Section 103, by its own terms, requires that a determination of obviousness be made by considering “the subject matter as a whole.” 35 U. S. C. § 103. Although this does not necessarily require that analysis of what is patentable subject matter under § 101 proceed on the same basis, we agree that it should.
App. 22.
Respondent argues that the inventiveness of his process must be determined as of “the time the invention is made” under § 103, and that, therefore, it is improper to judge the obviousness of his process by assessing the application of the formula as though the formula were part of the prior art. This argument confuses the issue of pátentable subject matter under § 101 with that of obviousness under § 103. Whether or not respondent’s formula can be characterized as “obvious,” his process patent rests solely on the claim that his mathematical algorithm, when related to a computer program, will improve the existing process for updating alarm units. Very simply, our holding today is that a claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under § 101.
Articles assessing the merits and demerits of patent protection for computer programming are numerous. See, e. g., Davis, Computer Programs and Subject Matter Patentability, 6 Rutgers J. of Computers and Law 1 (1977), and articles cited therein, at 2 n. 5. Even among those who favor patentability of computer programs, there is questioning of whether the 17-year protection afforded by the current Patent Act is either needed or appropriate. See id., at 20 n. 133.
More precisely, it is defined as a number greater than 0, but less than 1.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Chief Justice Rehnquist
delivered the opinion of the Court.
This case presents us with a challenge to the independent counsel provisions of the Ethics in Government Act of 1978, 28 U. S. C. §§49, 591 et seq. (1982 ed., Supp. V). We hold today that these provisions of the Act do not violate the Appointments Clause of the Constitution, Art. II, §2, cl. 2, or the limitations of Article III, nor do they impermissibly interfere with the President’s authority under Article II in violation of the constitutional principle of separation of powers.
h — I
Briefly stated, Title VI of the Ethics in Government Act (Title VI or the Act), 28 U. S. C. §§591-599 (1982 ed., Supp. V), allows for the appointment of an “independent counsel” to investigate and, if appropriate, prosecute certain high-ranking Government officials for violations of federal criminal laws. The Act requires the Attorney General, upon receipt of information that he determines is “sufficient to constitute grounds to investigate whether any person [covered by the Act] may have violated any Federal criminal law,” to.conduct a preliminary investigation of the matter. When the Attorney General has completed this investigation, or 90 days has elapsed, he is required to report to a special court (the Special Division) created by the Act “for the purpose of appointing independent counsels.” 28 U. S. C. §49 (1982 ed., Supp. V). If the Attorney General determines that “there are no reasonable grounds to believe that further investigation is warranted,” then he must notify the Special Division of this result. In such a case, “the division of the court shall have no power to appoint an independent counsel.” § 592(b)(1). If, however, the Attorney General has determined that there are “reasonable grounds to believe that further investigation or prosecution is warranted/’ then he “shall apply to the division of the court for the appointment of an independent counsel.” The Attorney General’s application to the court “shall contain sufficient information to assist the [court] in selecting an independent counsel and in defining that independent counsel’s prosecutorial jurisdiction.” § 592(d). Upon receiving this application, the Special Division “shall appoint an appropriate independent counsel and shall define that independent counsel’s prosecutorial jurisdiction.” § 593(b).
With respect to all matters within the independent counsel’s jurisdiction, the Act grants the counsel “full power and independent authority to exercise all investigative and pros-ecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice.” § 594(a). The functions of the independent counsel include conducting grand jury proceedings and other investigations, participating in civil and criminal court proceedings and litigation, and appealing any decision in any case in which the counsel participates in an official capacity. §§ 594(a)(1) — (3). Under § 594(a)(9), the counsel’s powers include “initiating and conducting prosecutions in any court of competent jurisdiction, framing and signing indictments, filing informations, and handling all aspects of any case, in the name of the United States.” The counsel may appoint employees, § 594(c), may request and obtain assistance from the Department of Justice, § 594(d), and may accept referral of matters from the Attorney General if the matter falls within the counsel’s jurisdiction as defined by the Special Division, § 594(e). The Act also states that an independent counsel “shall, except where not possible, comply with the written or other established policies of the Department of Justice respecting enforcement of the criminal laws.” § 594(f). In addition, whenever a matter has been referred to an independent counsel under the Act, the Attorney General and the Justice Department are required to suspend all investigations and proceedings regarding the matter. § 597(a). An independent counsel has “full authority to dismiss matters within [his or her] prosecutorial jurisdiction without conducting an investigation or at any subsequent time before prosecution, if to do so would be consistent” with Department of Justice policy. § 594(g).
Two statutory provisions govern the length of an independent counsel’s tenure in office. The first defines the procedure for removing an independent counsel. Section 596(a)(1) provides:
“An independent counsel appointed under this chapter may be removed from office, other than by impeachment and conviction, only by the personal action of the Attorney General and only for good cause, physical disability, mental incapacity, or any other condition that substantially impairs the performance of such independent counsel’s duties.”
If an independent counsel is removed pursuant to this section, the Attorney General is required to submit a report to both the Special Division and the Judiciary Committees of the Senate and the House “specifying the facts found and the ultimate grounds for such removal.” § 596(a)(2). Under the current version of the Act, an independent counsel can obtain judicial review of the Attorney General’s action by filing a civil action in the United States District Court for the District of Columbia. Members of the Special Division “may not hear or determine any such civil action or any appeal of a de-cisión in any such civil action.” The reviewing court is authorized to grant reinstatement or “other appropriate relief.” § 596(a)(3).
The other provision governing the tenure of the independent counsel defines the procedures for “terminating” the counsel’s office. Under § 596(b)(1), the office of an independent counsel terminates when he or she notifies the Attorney General that he or she has completed or substantially completed any investigations or prosecutions undertaken pursuant to the Act. In addition, the Special Division, acting either on its own or on the suggestion of the Attorney General, may terminate the office of an independent counsel at any time if it finds that “the investigation of all matters within the prosecutorial jurisdiction of such independent counsel... have been completed or so substantially completed that it would be appropriate for the Department of Justice to complete such investigations and prosecutions.” § 596(b)(2).
Finally, the Act provides for congressional oversight of the activities of independent counsel. An independent counsel may from time to time send Congress statements or reports on his or her activities. § 595(a)(2). The “appropriate committees of the Congress” are given oversight jurisdiction in regard to the official conduct of an independent counsel, and the counsel is required by the Act to cooperate with Congress in the exercise of this jurisdiction. § 595(a)(1). The counsel is required to inform the House of Representatives of “substantial and credible information which [the counsel] receives... that may constitute grounds for an impeachment.” § 595(c). In addition, the Act gives certain congressional committee members the power to “request in writing that the Attorney General apply for the appointment of an independent counsel.” § 592(g)(1). The Attorney General is required to respond to this request within a specified time but is not required to accede to the request. § 592(g)(2),
The proceedings in this case provide an example of how the Act works in practice. In 1982, two Subcommittees of the House of Representatives issued subpoenas directing the Environmental Protection Agency (EPA) to produce certain documents relating to the efforts of the EPA and the Land and Natural Resources Division of the Justice Department to enforce the “Superfund Law.” At that time, appellee Olson was the Assistant Attorney General for the Office of Legal Counsel (OLC), appellee Schmults was Deputy Attorney General, and appellee Dinkins was the Assistant Attorney General for the Land and Natural Resources Division. Acting on the advice of the Justice Department, the President ordered the Administrator of EPA to invoke executive privilege to withhold certain of the documents on the ground that they contained “enforcement sensitive information.” The Administrator obeyed this order and withheld the documents. In response, the House voted to hold the Administrator in contempt, after which the Administrator and the United States together filed a lawsuit against the House. The conflict abated in March 1983, when the administration agreed to give the House Subcommittees limited access to the documents.
The following year, the House Judiciary Committee began an investigation into the Justice Department’s role in the controversy over the EPA documents. During this investigation, appellee Olson testified before a House Subcommittee on March 10, 1983. Both before and after that testimony, the Department complied with several Committee requests to produce certain documents. Other documents were at first withheld, although these documents were eventually disclosed by the Department after the Committee learned of their existence. In 1985, the majority members of the Judiciary Committee published a lengthy report on the Committee’s investigation. Report on Investigation of the Role of the Department of Justice in the Withholding of Environmental Protection Agency Documents from Congress in 1982-83, H. R. Rep. No. 99-435 (1985). The report not only criticized various officials in the Department of Justice for their role in the EPA executive privilege dispute, but it also suggested that appellee Olson had given false and misleading testimony to the Subcommittee on March 10, 1983, and that appellees Schmults and Dinkins had wrongfully withheld certain documents from the Committee, thus obstructing the Committee’s investigation. The Chairman of the Judiciary Committee forwarded a copy of the report to the Attorney General with a request, pursuant to 28 U. S. C. § 592(c), that he seek the appointment of an independent counsel to investigate the allegations against Olson, Schmults, and Dinkins.
The Attorney General directed the Public Integrity Section of the Criminal Division to conduct a preliminary investigation. The Section’s report concluded that the appointment of an independent counsel was warranted to investigate the Committee’s allegations with respect to all three appellees. After consulting with other Department officials, however, the Attorney General chose to apply to the Special Division for the appointment of an independent counsel solely with respect to appellee Olson. The Attorney General accordingly requested appointment of an independent counsel to investigate whether Olson’s March 10, 1983, testimony “regarding the completeness of [OLC’s] response to the Judiciary Committee’s request for OLC documents, and regarding his knowledge of EPA’s willingness to turn over certain disputed documents to Congress, violated 18 U. S. C. § 1505, § 1001, or any other provision of federal criminal law.” Attorney General Report, at 2-3. The Attorney General also requested that the independent counsel have authority to investigate “any other matter related to that allegation.” Id., at 11.
On April 23, 1986, the Special Division appointed James C. McKay as independent counsel to investigate “whether the testimony of... Olson and his revision of such testimony on March 10, 1983, violated either 18 ]LJ. S. C. § 1505 or § 1001, or any other provision of federal law.” The court also ordered that the independent counsel
“shall have jurisdiction to investigate any other allegation of evidence of violation of any Federal criminal law by Theodore Olson developed during, investigations, by the Independent Counsel, referred to above, and connected with or arising out of that investigation, and Independent Counsel shall have jurisdiction to prosecute for any such violation.” Order, Div. No. 86-1 (CADC Special Division, April 23, 1986).
McKay later resigned as independent counsel, and on May 29, 1986, the Division appointed appellant Morrison as his replacement, with the same jurisdiction.
In January 1987, appellant asked the Attorney General pursuant to § 594(e) to refer to her as “related matters” the Committee’s allegations against appellees Schmults and Din-kins. The Attorney General refused to refer the matters, concluding that his decision not to request the appointment of an independent counsel in regard to those matters was final under § 592(b)(1). Appellant then asked the Special Division to order that the matters be referred to her under § 594(e). On April 2, 1987, the Division ruled that the Attorney General’s decision not to seek appointment of an independent counsel with respect to Schmults and Dinkins was final and unreviewable under § 592(b)(1), and that therefore the court had no authority to make the requested referral. In re Olson, 260 U. S. App. D. C. 168, 818 F. 2d 34. The court ruled, however, that its original grant of jurisdiction to appellant was broad enough to permit inquiry into whether Olson may have conspired with others, including Schmults and Dinkins, to obstruct the Committee’s investigation. Id., at 181-182, 818 F. 2d, at 47-48.
Following this ruling, in May and June 1987, appellant caused a grand jury to issue and serve subpoenas ad testifi-candum and duces tecum on appellees. All three appellees moved to quash the subpoenas, claiming, among other things, that the independent counsel provisions of the Act were unconstitutional and that appellant accordingly had no authority to proceed. On July 20, 1987, the District Court upheld the constitutionality of the Act and denied the motions to quash. In re Sealed Case, 665 F. Supp. 56 (DC). The court subsequently ordered that appellees be held in contempt pursuant to 28 U. S. C. § 1826(a) for continuing to refuse to comply with the subpoenas. See App. to Juris. Statement 140a, 143a, 146a. The court stayed the effect of its contempt orders pending expedited appeal.
A divided Court of Appeals reversed. In re Sealed Case, 267 U. S. App. D. C. 178, 838 F. 2d 476 (1988). The majority ruled first that an independent counsel is not an “inferior Officer” of the United States for purposes of the Appointments Clause. Accordingly, the court found the Act invalid because it does not provide for the independent counsel to be nominated by the President and confirmed by the Senate, as the Clause requires for “principal” officers. The court then went on to consider several alternative grounds for its conclusion that the statute was unconstitutional. In the majority’s view, the Act also violates the Appointments Clause insofar as it empowers a court of law to appoint an “inferior” officer who performs core executive functions; the Act’s delegation of various powers to the Special Division violates the limitations of Article III; the Act’s restrictions on the Attorney General’s power to remove an independent counsel violate the separation of powers; and finally, the Act interferes with the Executive Branch’s prerogative to “take care that the Laws be faithfully executed,” Art. II, §3. The dissenting judge was of the view that the Act was constitutional. 267 U. S. App. D. C., at 238, 838 F. 2d, at 536. Appellant then sought review by this Court, and we noted probable jurisdiction. 484 U. S. 1058 (1988). We now reverse.
II
Before we get to the merits, we first must deal with appellant's contention that the constitutional issues addressed by the Court of Appeals cannot be reviewed on this appeal from the District Court’s contempt judgment. Appellant relies on Blair v. United States, 250 U. S. 273 (1919), in which this Court limited rather sharply the issues that may be raised by an individual who has been subpoenaed as a grand jury witness and has been held in contempt for failure to comply with the subpoena. On the facts of this case, however, we find it unnecessary to consider whether Blair has since been narrowed by our more recent decisions, as appellees contend and the Court of Appeals found in another related case, In re Sealed Case, 264 U. S. App. D. C. 125, 827 F. 2d 776 (1987). Appellant herself admits that she failed to object to the District Court’s consideration of the merits of appellees’ constitutional claims, and as a result, the Court of Appeals ruled that she had waived her opportunity to contend on appeal that review of those claims was barred by Blair. We see no reason why the Court of Appeals was not entitled to conclude that the failure of appellant to object on this ground in the District Court was a sufficient reason for refusing to consider it, and we likewise decline to consider it. Appellant’s contention is not “jurisdictional” in the sense that it cannot be waived by failure to raise it at the proper time and place. It is not the sort of claim which would defeat jurisdiction in the District Court by showing that an Article III “Case” or “Controversy” is lacking. Appellees are subject to the burden of complying with the grand jury subpoena as a result of the District Court’s contempt order, there is a legitimate adver-saba! relationship between the parties, and the courts possess the power to redress or resolve the current controversy. See Bender v. Williamsport Area School District, 475 U. S. 534, 541-543 (1986). We therefore turn to consider the merits of appellees’ constitutional claims.
III
The Appointments Clause of Article II reads as follows:
“[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” U. S. Const., Art. II, §2, cl. 2.
The parties do not dispute that “[t]he Constitution for purposes of appointment... divides all its officers into two classes.” United States v. Germaine, 99 U. S. 508, 509 (1879). As we stated in Buckley v. Valeo, 424 U. S. 1, 132 (1976): “Principal officers are selected by the President with the advice and consent of the Senate. Inferior officers Congress may allow to be appointed by the President alone, by the heads of departments, or by the Judiciary.” The initial question is, accordingly, whether appellant is an “inferior” or a “principal” officer. If she is the latter, as the Court of Appeals concluded, then the Act is in violation of the Appointments Clause.
The line between “inferior” and “principal” officers is one that is far from clear, and the Framers provided little guidance into where it should be drawn. See, e. g., 2 J. Story, Commentaries on the Constitution § 1536, pp. 397-398 (3d ed. 1858) (“In the practical course of the government there does not seem to have been any exact line drawn, who are and who are not to be deemed inferior officers, in the sense of the constitution, whose appointment does not necessarily require the concurrence of the senate”). We need not attempt here to decide exactly where the line falls between the two types of officers, because in our view appellant clearly falls on the “inferior officer” side of that line. Several factors lead to this conclusion.
First, appellant is subject to removal by a higher Executive Branch official. Although appellant may not be “subordinate” to the Attorney General (and the President) insofar as she possesses a degree of independent discretion to exercise the powers delegated to her under the Act, the fact that she can be removed by the Attorney General indicates that she is to some degree “inferior” in rank and authority. Second, appellant is empowered by the Act to perform only certain, limited duties. An independent counsel’s role is restricted primarily to investigation and,. if appropriate, prosecution for certain federal crimes. Admittedly, the Act delegates to appellant “full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice,” § 594(a), but this grant of authority does not include any authority to formulate policy for the Government or the Executive Branch, nor does it give appellant any administrative duties outside of those necessary to operate her office. The Act specifically provides that in policy matters appellant is to comply to the extent possible with the policies of the Department. § 594(f).
Third, appellant’s office is limited in jurisdiction. Not only is the Act itself restricted in applicability to certain federal officials suspected of certain serious federal crimes, but an independent counsel can only act within the scope of the jurisdiction that has been granted by the Special Division pursuant to a request by the Attorney General. Finally, appellant’s office is limited in tenure. There is concededly no time limit on the appointment of a particular counsel. Nonetheless, the office of independent counsel is “temporary” in the sense that an independent counsel is appointed essentially to accomplish a single task, and when that task is over the office is terminated, either by the counsel herself or by action of the Special Division. Unlike other prosecutors, appellant has no ongoing responsibilities that extend beyond the accomplishment of the mission that she was appointed for and authorized by the Special Division to undertake. In our view, these factors relating to the “ideas of tenure, duration... and duties” of the independent counsel, Germaine, supra, at 511, are sufficient to establish that appellant is an “inferior” officer in the constitutional sense.
This conclusion is consistent with our few previous decisions that considered the question whether a particular Government official is a “principal” or an “inferior” officer. In United States v. Eaton, 169 U. S. 331 (1898), for example, we approved Department of State regulations that allowed executive officials to appoint a “vice-consul” during the temporary absence of the consul, terming the “vice-consul” a “subordinate officer” notwithstanding the Appointment Clause’s specific reference to “Consuls” as principal officers. As we stated: “Because the subordinate officer is charged with the performance of the duty of the superior for a limited time and under special and temporary conditions he is not thereby transformed into the superior and permanent official.” Id., at 343. In Ex parte Siebold, 100 U. S. 371 (1880), the Court found that federal “supervisor[s] of elections,” who were charged with various duties involving oversight of local congressional elections, see id., at 379-380, were inferior officers for purposes of the Clause. In Go-Bart Importing Co. v. United States, 282 U. S. 344, 352-353 (1931), we held that “United States commissioners are inferior officers.” Id., at 352. These commissioners had various judicial and prosecutorial powers, including the power to arrest and imprison for trial, to issue warrants, and to institute prosecutions under “laws relating to the elective franchise and civil rights.” Id., at 353, n. 2. All of this is consistent with our reference in United States v. Nixon, 418 U. S. 683, 694, 696 (1974), to the office of Watergate Special Prosecutor — whose authority was similar to that of appellant, see id., at 694, n. 8 — as a “subordinate officer.”
This does not, however, end our inquiry under the Appointments Clause. Appellees argue that even if appellant is an “inferior” officer, the Clause does not empower Congress to place the power to appoint such an officer outside the Executive Branch. They contend that the Clause does not contemplate congressional authorization of “interbranch appointments,” in which an officer of one branch is appointed by officers of another branch. The relevant language of the Appointments Clause is worth repeating. It reads: “... but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the courts of Law, or in the Heads of Departments.” On its face, the language of this “excepting clause” admits of no limitation on interbranch appointments. Indeed, the inclusion of “as they think proper” seems clearly to give Congress significant discretion to determine whether it is “proper” to vest the appointment of, for example, executive officials in the “courts of Law.” We recognized as much in one of our few decisions in this area, Ex parte Siebold, supra, where we stated:
“It is no doubt usual and proper to vest the appointment of inferior officers in that department of the government, executive or judicial, or in that particular executive department to which the duties of such officers appertain. But there is no absolute requirement to this effect in the Constitution; and, if there were, it would be difficult in many cases to determine to which department an office properly belonged....
“But as the Constitution stands, the selection of the appointing power, as between the functionaries named, is a matter resting in the discretion of Congress. And, looking at the subject in a practical light, it is perhaps better that it should rest there, than that the country should be harassed by the endless controversies to which a more specific direction on this subject might have given rise.” Id., at 397-398.
Our only decision to suggest otherwise, Ex parte Hennen, 13 Pet. 230 (1839), from which the first sentence in the above quotation from Siebold was derived, was discussed in Siebold and distinguished as “not intended to define the constitutional power of Congress in this regard, but rather to express the law or rule by which it should be governed.” 100 U. S., at 398. Outside of these two cases, there is very little, if any, express discussion of the propriety of interbranch appointments in our decisions, and we see no reason now to depart from the holding of Siebold that such appointments are not proscribed by the excepting clause.
We also note that the history of the Clause provides no support for appellees’ position. Throughout most of the process of drafting the Constitution, the Convention concentrated on the problem of who should have the authority to appoint judges. At the suggestion of James Madison, the Convention adopted a proposal that the Senate should have this authority, 1 Records of the Federal Convention of 1787, pp. 232-233 (M. Farrand ed. 1966), and several attempts to transfer the appointment power to the President were rejected. See 2 id., at 42-44, 80-83. The August 6, 1787, draft of the Constitution reported by the Committee of Detail retained Senate appointment of Supreme Court Judges, provided also for Senate appointment of ambassadors, and vested in the President the authority to “appoint officers in all cases not otherwise provided for by this Constitution.” Id., at 183, 185. This scheme was maintained until September 4, when the Committee of Eleven reported its suggestions to the Convention. This Committee suggested that the Constitution be amended to state that the President “shall nominate and by and with the advice and consent of the Senate shall appoint ambassadors, and other public Ministers, Judges of the Supreme Court, and all other Officers of the [United States], whose appointments are not otherwise herein provided for. ” Id., at 498-499. After the addition of “Consuls” to the list, the Committee’s proposal was adopted, id., at 539, and was subsequently reported to the Convention by the Committee of Style. See id., at 599. It was at this point, on September 15, that Gouvemeur Morris moved to add the Excepting Clause to Art. II, §2. Id., at 627. The one comment made on this motion was by Madison, who felt that the Clause did not go far enough in that it did not allow Congress to vest appointment powers in “Superior Officers below Heads of Departments.” The first vote on Morris’ motion ended in a tie. It was then put forward a second time, with the urging that “some such provision [was] too necessary, to be omitted.” This time the proposal was adopted. Id., at 627-628. As this discussion shows, there was little or no debate on the question whether the Clause empowers Congress to provide for interbranch appointments, and there is nothing to suggest that the Framers intended to prevent Congress from having that power.
We do not mean to say that Congress’ power to provide for interbranch appointments of “inferior officers” is unlimited. In addition to separation-of-powers concerns, which would arise if such provisions for appointment had the potential to impair the constitutional functions assigned to one of the branches, Siebold itself suggested that Congress’ decision to vest the appointment power in the courts would be improper if there was some “incongruity” between the functions normally performed by the courts and the performance of their duty to appoint. 100 U. S., at 398 (“[T]he duty to appoint inferior officers, when required thereto by law, is a constitutional duty of the courts; and in the present case there is no such incongruity in the duty required as to excuse the courts from its performance, or to render their acts void”). In this case, however, we do not think it impermissible for Congress to vest the power to appoint independent counsel in a specially created federal court. We thus disagree with the Court of Appeals’ conclusion that there is an inherent incongruity about a court having the power to appoint prosecu-torial officers. We have recognized that courts may appoint private attorneys to act as prosecutor for judicial contempt judgments. See Young v. United States ex rel. Vuitton et Fils S. A., 481 U. S. 787 (1987). In Go-Bart Importing Co. v. United States, 282 U. S. 344 (1931), we approved court appointment of United States commissioners, who exercised certain limited prosecutorial powers. Id., at 353, n. 2. In Siebold, as well, we indicated that judicial appointment of federal marshals, who are “executive officers], ” would not be inappropriate. Lower courts have also upheld interim judicial appointments of United States Attorneys, see United States v. Solomon, 216 F. Supp. 835 (SDNY 1963), and Congress itself has vested the power to make these interim appointments in the district courts, see 28 U. S. C. § 546(d) (1982 ed., Supp. V). Congress, of course, was concerned when it created the office of independent counsel with the conflicts of interest that could arise in situations when the Executive Branch is called upon to investigate its own high-ranking officers. If it were to remove the appointing authority from the Executive Branch, the most logical place to put it was in the Judicial Branch. In the light of the Act’s provision making the judges of the Special Division ineligible to participate in any matters relating to an independent counsel they have appointed, 28 U. S. C. § 49(f) (1982 ed., Supp. V), we do not think that appointment of the independent counsel by the court runs afoul of the constitutional limitation on “incongruous” interbranch appointments.
IV
Appellees next contend that the powers vested in the Special Division by the Act conflict with Article III of the Constitution. We have long recognized that by the express provision of Article III, the judicial power of the United States is limited to “Cases” and “Controversies.” See Muskrat v. United States, 219 U. S. 346, 356 (1911). As a general rule, we have broadly stated that “executive or administrative duties of a nonjudicial nature may not be imposed on judges holding office under Art. Ill of the Constitution.” Buckley, 424 U. S., at 123 (citing United States v. Ferreira, 13 How. 40 (1852); Hayburn’s Case, 2 Dall. 409 (1792)). The purpose of this limitation is to help ensure the independence of the Judicial Branch and to prevent the Judiciary from encroaching into areas reserved for the other branches. See United States Parole Comm’n v. Geraghty, 445 U. S. 388, 396 (1980). With this in mind, we address in turn the various duties given to the Special Division by the Act.
Most importantly, the Act vests in the Special Division the power to choose who will serve as independent counsel and the power to define his or her jurisdiction. § 593(b). Clearly, once it is accepted that the Appointments Clause gives Congress the power to vest the appointment of officials such as the independent counsel in the “courts of Law,” there can be no Article III objection to the Special Division’s exercise of that power, as the power itself derives from the Appointments Clause, a source of authority for judicial action that is independent of Article III. Appellees contend, however, that the Division’s Appointments Clause powers do not encompass the power to define the independent counsel’s jurisdiction. We disagree. In our view, Congress’ power under the Clause to vest the “Appointment” of inferior officers in the courts may, in certain circumstances, allow Congress to give the courts some discretion in defining the nature and scope of the appointed official’s authority. Particularly when, as here, Congress creates a temporary “office” the nature and duties of which will by necessity vary with the factual circumstances giving rise to the need for an appointment.in the first place, it may vest the power to define the scope of the office in the court as an incident to the appointment of the officer pursuant to the Appointments Clause. This said, we do not think that Congress may give the Division unlimited discretion to determine the independent counsel’s jurisdiction. In order for the Division’s definition of the counsel’s jurisdiction to be truly “incidental” to its power to appoint, the jurisdiction that the court decides upon must be demonstrably related to the factual circumstances that gave rise to the Attorney General’s investigation and request for the appointment of the independent counsel in the particular case.
The Act also vests in the Special Division various powers and duties in relation to the independent counsel that, because they do not involve appointing the counsel or defining his or her jurisdiction, cannot be said to derive from the Division’s Appointments Clause authority. These duties include granting extensions for the Attorney General’s preliminary investigation, § 592(a)(3); receiving the report of the Attorney General at the conclusion of his preliminary investigation, §§ 592(b)(1), 593(c)(2)(B); referring matters to the counsel upon request, § 594(e); receiving reports from the counsel regarding expenses incurred, § 594(h)(1)(A); receiving a report from the Attorney General following the removal of an independent counsel, § 596(a)(2); granting attorney’s fees upon request to individuals who were investigated but not indicted by an independent counsel, § 593(f); receiving a final report from the counsel, § 594(h)(1)(B); deciding whether to release the counsel’s final report to Congress or the public and determining whether any protective orders should be issued, § 594(h)(2); and terminating an independent counsel when his or her task is completed, § 596(b)(2).
Leaving aside for the moment the Division’s power to terminate an independent counsel, we do not think that Article III absolutely prevents Congress from vesting these other miscellaneous powers in the Special Division pursuant to the Act. As we observed above, one purpose of the broad prohibition upon the courts’ exercise of “executive or administrative duties of a nonjudicial nature,” Buckley, 424 U. S., at 123, is to maintain the separation between the Judiciary and the other branches of the Féderal Government by ensuring that judges do not encroach upon executive or legislative authority or undertake tasks that are more properly accomplished by those branches. In this case, the miscellaneous powers described above do not impermissibly trespass upon the authority of the Executive Branch. Some of these allegedly “supervisory” powers conferred on the court are passive: the Division merely “receives” reports from the counsel or the Attorney General, it is not entitled to act on them or to specifically approve or disapprove of their contents. Other provisions of the Act do require the court to exercise some judgment and discretion, but the powers granted by these provisions are themselves essentially ministerial. The Act simply does not give the Division the power to “supervise” the independent counsel in the exercise of his or her investigative or prosecutorial authority. And,
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | M | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Chief Justice Burger
delivered the opinion of the Court.
This appeal presents the question whether appellant was validly convicted for refusing to comply with a policeman’s demand that he identify himself pursuant to a provision of the Texas Penal Code which makes it a crime to refuse such identification on request.
I
At 12:45 in the afternoon of December 9, 1977, Officers Venegas and Sotelo of the El Paso Police Department were cruising in a patrol car. They observed appellant and another man walking in opposite directions away from one another in an alley. Although the two men were a few feet apart when they first were seen, Officer Venegas later testified that both officers believed the two had been together or were about to meet until the patrol car appeared.
The car entered the alley, and Officer Venegas got out and asked appellant to identify himself and explain what he was doing there. The other man was not questioned or detained. The officer testified that he stopped appellant because the situation “looked suspicious and we had never seen that subject in that area before.” The area of El Paso where appellant was stopped has a high incidence of drug traffic. However, the officers did not claim to suspect appellant of any specific misconduct, nor did they have any reason to believe that he was armed.
Appellant refused to identify himself and angrily asserted that the officers had no right to stop him. Officer Venegas replied that he was in a “high drug problem area”; Officer Sotelo then “frisked” appellant, but found nothing.
When appellant continued to refuse to identify himself, he was arrested for violation of Tex. Penal Code Ann., Tit. 8, § 38.02 (a) (1974), which makes it a criminal act for a person to refuse to give his name and address to an officer “who has lawfully stopped him and requested the information.” Following the arrest the officers searched appellant; nothing untoward was found.
While being taken to the El Paso County Jail appellant identified himself. Nonetheless, he was held in custody and charged with violating § 38.02 (a). When he was booked he was routinely searched a third time. Appellant was convicted in the El Paso Municipal Court and fined $20 plus court costs for violation of § 38.02. He then exercised his right under Texas law to a trial de novo in the El Paso County Court. There, he moved to set aside the information on the ground that § 38.02 (a) of the Texas Penal Code violated the First, Fourth, and Fifth Amendments and was unconstitutionally vague in violation of the Fourteenth Amendment. The motion was denied. Appellant waived a jury, and the court convicted him and imposed a fine of $45 plus court costs.
Under Texas law an appeal from an inferior court to a county court is subject to further review only if a fine exceeding $100 is imposed. Tex. Code Crim. Proc. Ann., Art. 4.03 (Vernon 1977). Accordingly, the County Courtis rejection of appellant's constitutional claims was a decision “by the highest court of a State in which a decision could be had.” 28 U. S. C. § 1257 (2). On appeal here we noted probable jurisdiction. 439 U. S. 909 (1978). We reverse.
II
When the officers detained appellant for the purpose of requiring him to identify himself, they performed a seizure of his person subject to the requirements of the Fourth Amendment. In convicting appellant, the County Court necessarily found as a matter of fact that the officers “lawfully stopped” appellant. See Tex. Penal Code Ann., Tit. 8, § 38.02 (1974). The Fourth Amendment, of course, “applies to all seizures of the person, including seizures that involve only a brief detention short of traditional arrest. Davis v. Mississippi, 394 U. S. 721 (1969); Terry v. Ohio, 392 U. S. 1, 16-19 (1968). ‘[W] hen ever a police officer accosts an individual and restrains his freedom to walk away, he has “seized” that person,’ id., at 16, and the Fourth Amendment requires that the seizure be ‘reasonable.’ ” United States v. Brignoni-Ponce, 422 U. S. 873, 878 (1975).
The reasonableness of seizures that are less intrusive than a traditional arrest, see Dunaway v. New York, 442 U. S. 200, 209-210 (1979); Terry v. Ohio, 392 U. S. 1, 20 (1968), depends “on a balance between the public interest and the individual’s right to personal security free from arbitrary interference by law officers.” Pennsylvania v. Mimms, 434 U. S. 106, 109 (1977); United States v. Brignoni-Ponce, supra, at 878. Consideration of the constitutionality of such seizures involves a weighing of the gravity of the public concerns served by the seizure, the degree to which the seizure advances the public interest, and the severity of the interference with individual liberty. See, e. g., 422 U. S., at 878-883.
A central concern in balancing these competing considerations in a variety of settings has been to assure that an individual’s reasonable expectation of privacy is not subject to arbitrary invasions solely at the unfettered discretion of officers in the field. See Delaware v. Prouse, 440 U. S. 648, 654-655 (1979); United States v. Brignoni-Ponce, supra, at 882. To this end, the Fourth Amendment requires that a seizure must be based on specific, objective facts indicating that society’s legitimate interests require the seizure of the particular individual, or that the seizure must be carried out pursuant to a plan embodying explicit, neutral limitations on the conduct of individual officers. Delaware v. Prouse, supra, at 663. See United States v. Martinez-Fuerte, 428 U. S. 543, 558-562 (1976).
The State does not contend that appellant was stopped pursuant to a practice embodying neutral criteria, but rather maintains that the officers were justified in stopping appellant because they had a “reasonable, articulable suspicion that a crime had just been, was being, or was about to be committed.” We have recognized that in some circumstances an officer may detain a suspect briefly for questioning although he does not have “probable cause” to believe that the suspect is involved in criminal activity, as is required for a traditional arrest. United States v. Brignoni-Ponce, supra, at 880-881. See Terry v. Ohio, supra, at 25-26. However, we have required the officers to have a reasonable suspicion, based on objective facts, that the individual is involved in criminal activity. Delaware v. Prouse, supra, at 663; United States v. Brignoni-Ponce, supra, at 882-883; see also Lanzetta v. New Jersey, 306 U. S. 451 (1939),
The flaw in the State’s case is that none of the circumstances preceding the officers’ detention of appellant justified a reasonable suspicion that he was involved in criminal conduct. Officer Yenegas testified at appellant’s trial that the situation in the alley “looked suspicious,” but he was unable to point to any facts supporting that conclusion. There is no indication in the record that it was unusual for people to be in the alley. The fact that appellant was in a neighborhood frequented by drug users, standing alone, is not a basis for concluding that appellant himself was engaged in criminal conduct. In short, the appellant’s activity was no different from the activity of other pedestrians in that neighborhood. When pressed, Officer Venegas acknowledged that the only reason he stopped appellant was to ascertain his identity. The record suggests an understandable desire to assert a police presence; however, that purpose does not negate Fourth Amendment guarantees.
In the absence of any basis for suspecting appellant of misconduct, the balance between the public interest and appellant’s right to personal security and privacy tilts in favor of freedom from police interference. The Texas statute under which appellant was stopped and required to identify himself is designed to advance a weighty social objective in large metropolitan centers: prevention of crime. But even assuming that purpose is served to some degree by stopping and demanding identification from an individual without any specific basis for believing he is involved in criminal activity, the guarantees of the Fourth Amendment do not allow it. When such a stop is not based on objective criteria, the risk of arbitrary and abusive police practices exceeds tolerable limits. See Delaware v. Prouse, supra, at 661.
The application of Tex. Penal Code Ann., Tit. 8, § 38.02 (1974), to detain appellant and require him to identify himself violated the Fourth Amendment because the officers lacked any reasonable suspicion to believe appellant was engaged or had engaged in criminal conduct. Accordingly, appellant may not be punished for refusing to identify himself, and the conviction is
Reversed.
APPENDIX TO OPINION OF THE COURT
“THE COURT: . . . What do you think about if you stop a person lawfully, and then if he doesn’t want to talk to you, you put him in jail for committing a crime.
“MR. PATTON [Prosecutor]: Well first of all, I would question the Defendant’s statement in his motion that the First Amendment gives an individual the right to silence.
“THE COURT: . . . I’m asking you why should the State put you in jail because you don’t want to say anything.
“MR. PATTON: Well, I think there’s certain interests that have to be viewed.
“THE COURT: Okay, I’d like you to tell me what those are.
“MR. PATTON: Well, the Governmental interest to maintain the safety and security of the society and the citizens to live in the society, and there are certainly strong Governmental interests in that direction and because of that, these interests outweigh the interests of an individual for a certain amount of intrusion upon his personal liberty. I think these Governmental interests outweigh the individual’s interests in this respect, as far as simply asking an individual for his name and address under the proper circumstances.
“THE COURT: But why should it be a crime to not answer?
“MR. PATTON: Again, I can only contend that if an answer is not given, it tends to disrupt.
“THE COURT: What does it disrupt?
“MR. PATTON: I think it tends to disrupt the goal of this society to maintain security over its citizens to make sure they are secure in their gains and their homes.
“THE COURT: How does that secure anybody by forcing them, under penalty of being prosecuted, to giving their name and address, even though they are lawfully stopped?
“MR. PATTON: Well I, you know, under the circumstances in which some individuals would be lawfully stopped, it’s presumed that perhaps this individual is up to something, and the officer is doing his duty simply to find out the individual’s name and address, and to determine what exactly is going on.
“THE COURT: I’m not questioning, I’m not asking whether the officer shouldn’t ask questions. I’m sure they should ask everything they possibly could find out. What I’m asking is what’s the State’s interest in putting a man in jail because he doesn’t want to answer something. I realize lots of times an officer will give a defendant a Miranda warning which means a defendant doesn’t have to make a statement. Lots of defendants go ahead and confess, which is fine if they want to do that. But if they don’t confess, you can’t put them in jail, can you, for refusing to confess to a crime?” App. 15-17 (emphasis added).
The entire section reads as follows:
Ҥ 38.02. Failure to Identify as Witness
“(a) A person commits an offense if he intentionally refuses to report or gives a false report of his name and residence address to a peace officer who has lawfully stopped him and requested the information.”
This situation is to be distinguished from the observations of a trained, experienced police officer who is able to perceive and articulate meaning in given conduct which would be wholly innocent to the untrained observer. See United States v. Brignoni-Ponce, 422 U. S. 873, 884-885 (1975); Christensen v. United States, 104 U. S. App. D. C. 35, 36, 259 E. 2d 192, 193 (1958).
We need not decide whether an individual may be punished for refusing to identify himself in the context of a lawful investigatory stop which satisfies Fourth Amendment requirements. See Dunaway v. New York, 442 U. S. 200, 210 n. 12 (1979); Terry v. Ohio, 392 U. S. 1, 34 (1968) (White, J., concurring). The County Court Judge who convicted appellant was troubled by this question, as shown by the colloquy set out in the Appendix to this opinion.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice SOTOMAYOR delivered the opinion of the Court.
Title VII of the Civil Rights Act of 1964 permits the Equal Employment Opportunity Commission (EEOC) to issue a subpoena to obtain evidence from an employer that is relevant to a pending investigation. The statute authorizes a district court to issue an order enforcing such a subpoena. The question presented here is whether a court of appeals should review a district court's decision to enforce or quash an EEOC subpoena de novo or for abuse of discretion. This decision should be reviewed for abuse of discretion.
I
A
Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of "race, color, religion, sex, or national origin." § 703(a), 78 Stat. 255, 42 U.S.C. § 2000e-2(a). The statute entrusts the enforcement of that prohibition to the EEOC. See § 2000e-5(a) ; EEOC v. Shell Oil Co., 466 U.S. 54, 61-62, 104 S.Ct. 1621, 80 L.Ed.2d 41 (1984). The EEOC's responsibilities "are triggered by the filing of a specific sworn charge of discrimination," University of Pa. v. EEOC, 493 U.S. 182, 190, 110 S.Ct. 577, 107 L.Ed.2d 571 (1990), which can be filed either by the person alleging discrimination or by the EEOC itself, see § 2000e-5(b). When it receives a charge, the EEOC must first notify the employer, ibid., and must then investigate "to determine whether there is reasonable cause to believe that the charge is true," University of Pa., 493 U.S., at 190, 110 S.Ct. 577 (internal quotation marks omitted).
This case is about one of the tools the EEOC has at its disposal in conducting its investigation: a subpoena. In order "[t]o enable the [EEOC] to make informed decisions at each stage of the enforcement process," Title VII "confers a broad right of access to relevant evidence." Id., at 191, 110 S.Ct. 577. It provides that the EEOC "shall ... have access to, for the purposes of examination, ... any evidence of any person being investigated or proceeded against that relates to unlawful employment practices covered by" Title VII and "is relevant to the charge under investigation." 42 U.S.C. § 2000e-8(a). And the statute enables the EEOC to obtain that evidence by "authoriz[ing] [it] to issue a subpoena and to seek an order enforcing [the subpoena]." University of Pa., 493 U.S., at 191, 110 S.Ct. 577 ; see § 2000e-9. Under that authority, the EEOC may issue "subp [o]enas requiring the attendance and testimony of witnesses or the production of any evidence." 29 U.S.C. § 161(1). An employer may petition the EEOC to revoke the subpoena, see ibid., but if the EEOC rejects the petition and the employer still "refuse[s] to obey [the] subp[o]ena," the EEOC may ask a district court to issue an order enforcing it, see § 161(2).
A district court's role in an EEOC subpoena enforcement proceeding, we have twice explained, is a straightforward one. See University of Pa., 493 U.S., at 191, 110 S.Ct. 577 ; Shell Oil, 466 U.S., at 72, n. 26, 104 S.Ct. 1621. A district court is not to use an enforcement proceeding as an opportunity to test the strength of the underlying complaint. Ibid. Rather, a district court should " 'satisfy itself that the charge is valid and that the material requested is "relevant" to the charge.' " University of Pa., 493 U.S., at 191, 110 S.Ct. 577. It should do so cognizant of the "generou[s]" construction that courts have given the term "relevant." Shell Oil, 466 U.S., at 68-69, 104 S.Ct. 1621 ("virtually any material that might cast light on the allegations against the employer"). If the charge is proper and the material requested is relevant, the district court should enforce the subpoena unless the employer establishes that the subpoena is "too indefinite," has been issued for an "illegitimate purpose," or is unduly burdensome. Id., at 72, n. 26, 104 S.Ct. 1621. See United States v. Morton Salt Co., 338 U.S. 632, 652-653, 70 S.Ct. 357, 94 L.Ed. 401 (1950) ( "The gist of the protection is in the requirement ... that the disclosure sought shall not be unreasonable" (internal quotation marks omitted)).
B
This case arises out of a Title VII suit filed by a woman named Damiana Ochoa. Ochoa worked for eight years as a "cigarette selector" for petitioner McLane Co., a supply-chain services company. According to McLane, the job is a demanding one: Cigarette selectors work in distribution centers, where they are required to lift, pack, and move large bins containing products. McLane requires employees taking physically demanding jobs-both new employees and employees returning from medical leave-to take a physical evaluation. According to McLane, the evaluation "tests ... range of motion, resistance, and speed" and "is designed, administered, and validated by a third party." Brief for Petitioner 6. In 2007, Ochoa took three months of maternity leave. When she attempted to return to work, McLane asked her to take the evaluation. Ochoa attempted to pass the evaluation three times, but failed. McLane fired her.
Ochoa filed a charge of discrimination, alleging (among other things) that she had been fired on the basis of her gender. The EEOC began an investigation, and-at its request-McLane provided it with basic information about the evaluation, as well as a list of anonymous employees that McLane had asked to take the evaluation. McLane's list included each employee's gender, role at the company, and evaluation score, as well as the reason each employee had been asked to take the evaluation. But the company refused to provide what the parties call "pedigree information": the names, Social Security numbers, last known addresses, and telephone numbers of the employees who had been asked to take the evaluation. Upon learning that McLane used the evaluation nationwide, the EEOC expanded the scope of its investigation, both geographically (to focus on McLane's nationwide operations) and substantively (to investigate whether McLane had discriminated against its employees on the basis of age). It issued subpoenas requesting pedigree information as it related to its new investigation. But McLane refused to provide the pedigree information, and so the EEOC filed two actions in Federal District Court-one arising out of Ochoa's charge and one arising out of a separate age-discrimination charge the EEOC itself had filed-seeking enforcement of its subpoenas.
The enforcement actions were assigned to the same District Judge, who, after a hearing, declined to enforce the subpoenas to the extent that they sought the pedigree information. See EEOC v. McLane Co., 2012 WL 1132758, *5 (D.Ariz., Apr. 4, 2012) (age discrimination charge); Civ. No. 12-2469, 2012 WL 5868959 (D Ariz., Nov. 19, 2012), App. to Pet. for Cert. 28-30 (Title VII charge). In the District Court's view, the pedigree information was not "relevant" to the charges because " 'an individual's name, or even an interview he or she could provide if contacted, simply could not shed light on whether the [evaluation] represents a tool of ... discrimination.' " App. to Pet. for Cert. 29 (quoting 2012 WL 1132758, at *5 ; some internal quotation marks omitted).
The Ninth Circuit reversed. See 804 F.3d 1051 (2015). Consistent with Circuit precedent, the panel reviewed the District Court's decision to quash the subpoena de novo, and concluded that the District Court had erred in finding the pedigree information irrelevant. Id., at 1057. But the panel questioned in a footnote why de novo review applied, observing that its sister Circuits "appear[ed] to review issues related to enforcement of administrative subpoenas for abuse of discretion." Id., at 1056, n. 3 ; see infra, at 1167 (reviewing Court of Appeals authority).
This Court granted certiorari to resolve the disagreement between the Courts of Appeals over the appropriate standard of review for the decision whether to enforce an EEOC subpoena. 579 U.S. ----, 137 S.Ct. 30, 195 L.Ed.2d 902 (2016). Because the United States agrees with McLane that such a decision should be reviewed for abuse of discretion, Stephen B. Kinnaird was appointed as amicus curiae to defend the judgment below. 580 U.S. ----, 137 S.Ct. 461, 196 L.Ed.2d 339 (2016). He has ably discharged his duties.
II
A
When considering whether a district court's decision should be subject to searching or deferential appellate review-at least absent "explicit statutory command"-we traditionally look to two factors. Pierce v. Underwood, 487 U.S. 552, 558, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). First, we ask whether the "history of appellate practice" yields an answer. Ibid. Second, at least where "neither a clear statutory prescription nor a historical tradition exists," we ask whether, " 'as a matter of the sound administration of justice, one judicial actor is better positioned than another to decide the issue in question.' " Id., at 558, 559-560, 108 S.Ct. 2541 (quoting Miller v. Fenton, 474 U.S. 104, 114, 106 S.Ct. 445, 88 L.Ed.2d 405 (1985) ). Both factors point toward abuse-of-discretion review here.
First, the longstanding practice of the courts of appeals in reviewing a district court's decision to enforce or quash an administrative subpoena is to review that decision for abuse of discretion. That practice predates even Title VII itself. As noted, Title VII confers on the EEOC the same authority to issue subpoenas that the National Labor Relations Act (NLRA) confers on the National Labor Relations Board (NLRB). See n. 1, supra . During the three decades between the enactment of the NLRA and the incorporation of the NLRA's subpoena-enforcement provisions into Title VII, every Circuit to consider the question had held that a district court's decision whether to enforce an NLRB subpoena should be reviewed for abuse of discretion. See NLRB v. Consolidated Vacuum Corp., 395 F.2d 416, 419-420 (C.A.2 1968) ; NLRB v. Friedman, 352 F.2d 545, 547 (C.A.3 1965) ; NLRB v. Northern Trust Co., 148 F.2d 24, 29 (C.A.7 1945) ; Goodyear Tire & Rubber Co. v. NLRB, 122 F.2d 450, 453-454 (C.A.6 1941). By the time Congress amended Title VII to authorize EEOC subpoenas in 1972, it did so against this uniform backdrop of deferential appellate review.
Today, nearly as uniformly, the Courts of Appeals apply the same deferential review to a district court's decision as to whether to enforce an EEOC subpoena. Almost every Court of Appeals reviews such a decision for abuse of discretion. See, e.g., EEOC v. Kronos Inc., 620 F.3d 287, 295-296 (C.A.3 2010) ; EEOC v. Randstad, 685 F.3d 433, 442 (C.A.4 2012) ; EEOC v. Roadway Express, Inc., 261 F.3d 634, 638 (C.A.6 2001) ; EEOC v. United Air Lines, Inc., 287 F.3d 643, 649 (C.A.7 2002) ; EEOC v. Technocrest Systems, Inc., 448 F.3d 1035, 1038 (C.A.8 2006) ; EEOC v. Dillon Companies, Inc., 310 F.3d 1271, 1274 (C.A.10 2002) ; EEOC v. Royal Caribbean Cruises, Ltd., 771 F.3d 757, 760 (C.A.11 2014) (per curiam ). As Judge Watford-writing for the panel below-recognized, the Ninth Circuit alone applies a more searching form of review. See 804 F.3d, at 1056, n. 3 ("Why we review questions of relevance and undue burden de novo is unclear"); see also EPA v. Alyeska Pipeline Serv. Co., 836 F.2d 443, 445-446 (C.A.9 1988) (holding that de novo review applies). To be sure, the inquiry into the appropriate standard of review cannot be resolved by a head-counting exercise. But the "long history of appellate practice" here, Pierce, 487 U.S., at 558, 108 S.Ct. 2541 carries significant persuasive weight.
Second, basic principles of institutional capacity counsel in favor of deferential review. The decision whether to enforce an EEOC subpoena is a case-specific one that turns not on "a neat set of legal rules," Illinois v. Gates, 462 U.S. 213, 232, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983), but instead on the application of broad standards to "multifarious, fleeting, special, narrow facts that utterly resist generalization," Pierce, 487 U.S., at 561-562, 108 S.Ct. 2541 (internal quotation marks omitted). In the mine run of cases, the district court's decision whether to enforce a subpoena will turn either on whether the evidence sought is relevant to the specific charge before it or whether the subpoena is unduly burdensome in light of the circumstances. Both tasks are well suited to a district judge's expertise. The decision whether evidence sought is relevant requires the district court to evaluate the relationship between the particular materials sought and the particular matter under investigation-an analysis "variable in relation to the nature, purposes and scope of the inquiry." Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 209, 66 S.Ct. 494, 90 L.Ed. 614 (1946). Similarly, the decision whether a subpoena is overly burdensome turns on the nature of the materials sought and the difficulty the employer will face in producing them. These inquiries are "generally not amenable to broad per se rules," Sprint/United Management Co. v. Mendelsohn, 552 U.S. 379, 387, 128 S.Ct. 1140, 170 L.Ed.2d 1 (2008) ; rather, they are the kind of "fact-intensive, close calls" better suited to resolution by the district court than the court of appeals, Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 404, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) (internal quotation marks omitted).
Other functional considerations also show that abuse-of-discretion review is appropriate here. For one, district courts have considerable experience in other contexts making decisions similar-though not identical-to those they must make in this one. See Buford v. United States, 532 U.S. 59, 66, 121 S.Ct. 1276, 149 L.Ed.2d 197 (2001) ("[T]he comparatively greater expertise" of the district court may counsel in favor of deferential review). District courts decide, for instance, whether evidence is relevant at trial, Fed. Rule Evid. 401 ; whether pretrial criminal subpoenas are unreasonable in scope, Fed. Rule Crim. Proc. 16(c)(2) ; and more. These decisions are not the same as the decisions a district court must make in enforcing an administrative subpoena. But they are similar enough to give the district court the "institutional advantag[e]," Buford, 532 U.S., at 64, 121 S.Ct. 1276 that comes with greater experience. For another, as we noted in Cooter & Gell, deferential review "streamline[s] the litigation process by freeing appellate courts from the duty of reweighing evidence and reconsidering facts already weighed and considered by the district court," 496 U.S., at 404, 110 S.Ct. 2447 -a particularly important consideration in a "satellite" proceeding like this one, ibid., designed only to facilitate the EEOC's investigation.
B
Amicus ' arguments to the contrary have aided our consideration of this case. But they do not persuade us that de novo review is appropriate.
Amicus ' central argument is that the decision whether a subpoena should be enforced does not require the exercise of discretion on the part of the district court, and so it should not be reviewed for abuse of discretion. On amicus ' view, the district court's primary role is to test the legal sufficiency of the subpoena, not to weigh whether it should be enforced as a substantive matter. Cf. Shell Oil, 466 U.S., at 72, n. 26, 104 S.Ct. 1621 (rejecting the argument that the district court should assess the validity of the underlying claim in a proceeding to enforce a subpoena). Even accepting amicus ' view of the district court's task, however, this understanding of abuse-of-discretion review is too narrow. As commentators have observed, abuse-of-discretion review is employed not only where a decisionmaker has "a wide range of choice as to what he decides, free from the constraints which characteristically attach whenever legal rules enter the decision[making] process"; it is also employed where the trial judge's decision is given "an unusual amount of insulation from appellate revision" for functional reasons. Rosenberg, Judicial Discretion of the Trial Court, Viewed From Above, 22 Syracuse L. Rev. 635, 637 (1971); see also 22 C. Wright & K. Graham, Federal Practice and Procedure § 5166.1 (2d ed. 2012). And as we have explained, it is in large part due to functional concerns that we conclude the district court's decision should be reviewed for abuse of discretion. Even if the district court's decision can be characterized in the way that amicus suggests, that characterization would not be inconsistent with abuse-of-discretion review.
Nor are we persuaded by amicus ' remaining arguments. Amicus argues that affording deferential review to a district court's decision would clash with Court of Appeals decisions instructing district courts to defer themselves to the EEOC's determination that evidence is relevant to the charge at issue. See Director, Office of Thrift Supervision v. Vinson & Elkins, LLP, 124 F.3d 1304, 1307 (C.A.D.C.1997) (district courts should defer to agency appraisals of relevance unless they are "obviously wrong"); EEOC v. Lockheed Martin Corp., Aero & Naval Systems, 116 F.3d 110, 113 (C.A.4 1997) (same). In amicus ' view, it is "analytically impossible" for the court of appeals to defer to the district court if the district court must itself defer to the agency. Tr. of Oral Arg. 29. We think the better reading of those cases is that they rest on the established rule that the term "relevant" be understood "generously" to permit the EEOC "access to virtually any material that might cast light on the allegations against the employer." Shell Oil, 466 U.S., at 68-69, 104 S.Ct. 1621. A district court deciding whether evidence is "relevant" under Title VII need not defer to the EEOC's decision on that score; it must simply answer the question cognizant of the agency's broad authority to seek and obtain evidence. Because the statute does not set up any scheme of double deference, amicus ' arguments as to the infirmities of such a scheme are misplaced.
Nor do we agree that, as amicus suggests, the constitutional underpinnings of the Shell Oil standard require a different result. To be sure, we have described a subpoena as a " 'constructive' search," Oklahoma Press, 327 U.S., at 202, 66 S.Ct. 494 and implied that the Fourth Amendment is the source of the requirement that a subpoena not be "too indefinite," Morton Salt, 338 U.S., at 652, 70 S.Ct. 357. But not every decision that touches on the Fourth Amendment is subject to searching review. Subpoenas in a wide variety of other contexts also implicate the privacy interests protected by the Fourth Amendment, but courts routinely review the enforcement of such subpoenas for abuse of discretion. See, e.g., United States v. Nixon, 418 U.S. 683, 702, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974) (pretrial subpoenas duces tecum ); In re Grand Jury Subpoena, 696 F.3d 428, 432 (C.A.5 2012) (grand jury subpoenas); In re Grand Jury Proceedings, 616 F.3d 1186, 1201 (C.A.10 2010) (same). And this Court has emphasized that courts should pay "great deference" to a magistrate judge's determination of probable cause, Gates, 462 U.S., at 236, 103 S.Ct. 2317 (internal quotation marks omitted)-a decision more akin to a district court's preenforcement review of a subpoena than the warrantless searches and seizures we considered in Ornelas v.
United States, 517 U.S. 690, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996), on which amicus places great weight. The constitutional pedigree of Shell Oil does not change our view of the correct standard of review.
III
For these reasons, a district court's decision to enforce an EEOC subpoena should be reviewed for abuse of discretion, not de novo .
The United States also argues that the judgment below can be affirmed because it is clear that the District Court abused its discretion. But "we are a court of review, not of first view," Cutter v. Wilkinson, 544 U.S. 709, 718, n. 7, 125 S.Ct. 2113, 161 L.Ed.2d 1020 (2005), and the Court of Appeals has not had the chance to review the District Court's decision under the appropriate standard. That task is for the Court of Appeals in the first instance. As part of its analysis, the Court of Appeals may also consider, as and to the extent it deems appropriate, any arguments made by McLane regarding the burdens imposed by the subpoena.
The judgment of the Court of Appeals is hereby vacated, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
The statute does so by conferring on the EEOC the same authority given to the National Labor Relations Board to conduct investigations. See 42 U.S.C. § 2000e-9 ("For the purpose of all ... investigations conducted by the Commission ... section 161 of title 29 shall apply").
The District Court also refused to enforce the subpoena to the extent that it sought a second category of evidence: information about when and why those employees who had been fired after taking the test had been fired. The District Court provided no explanation for not enforcing the subpoena to the extent it sought this information, and the Court of Appeals reversed on that ground. 804 F.3d 1051, 1059 (C.A.9 2015). McLane does not challenge this aspect of the Court of Appeals' decision. See Tr. of Oral Arg. 8.
To be sure, there are pure questions of law embedded in a district court's decision to enforce or quash a subpoena. Whether a charge is "valid," EEOC v. Shell Oil Co., 466 U.S. 54, 72, n. 26, 104 S.Ct. 1621, 80 L.Ed.2d 41 (1984) -that is, legally sufficient-is a pure question of law. And the question whether a district court employed the correct standard of relevance, see id., at 68-69, 104 S.Ct. 1621 -as opposed to how it applied that standard to the facts of a given case-is a question of law. But "applying a unitary abuse-of-discretion standard" does not shelter a district court that makes an error of law, because "[a] district court would necessarily abuse its discretion if it based its ruling on an erroneous view of the law." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 403, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice White
delivered the opinion of the Court.
The question is whether it is an unreasonable seizure under the Fourth and Fourteenth Amendments to stop an automobile, being driven on a public highway, for the purpose of checking the driving license of the operator and the registration of the car, where there is neither probable cause to believe nor reasonable suspicion that the car is being driven contrary to the laws governing the operation of motor vehicles or that either the car or any of its occupants is subject to seizure or detention in connection with the violation of any other applicable law.
I
At 7:20 p. m. on November 30, 1976, a New Castle County, Del., patrolman in a police cruiser stopped the automobile occupied by respondent. The patrolman smelled marihuana smoke as he was walking toward the stopped vehicle, and he seized marihuana in plain view on the car floor. Respondent was subsequently indicted for illegal possession of a controlled substance. At a hearing on respondent's motion to suppress the marihuana seized as a result of the stop, the patrolman testified that prior to stopping the vehicle he had observed neither traffic or equipment violations nor any suspicious activity, and that he made the stop only in order to check the driver’s license and registration. The patrolman was not acting pursuant to any standards, guidelines, or procedures pertaining to document spot checks, promulgated by either his department or the State Attorney General. Characterizing the stop as “routine,” the patrolman explained, “I saw the car in the area and wasn’t answering any complaints, so I decided to pull them off.” App. A9. The trial court granted the motion to suppress, finding the stop and detention to have been wholly capricious and therefore violative of the Fourth Amendment.
The Delaware Supreme Court affirmed, noting first that “[t]he issue of the legal validity of systematic, roadblock-type stops of a number of vehicles for license and vehicle registration check is not now before the Court,” 382 A. 2d 1359, 1362 (1978) (emphasis in original). The court held that “a random stop of a motorist in the absence of specific articulable facts which justify the stop by indicating a reasonable suspicion that a violation of the law has occurred is constitutionally impermissible and violative of the Fourth and Fourteenth Amendments to the United States Constitution.” Id., at 1364. We granted certiorari to resolve the conflict between this decision, which is in accord with decisions in five other jurisdictions, and the contrary determination in six jurisdictions that the Fourth Amendment does not prohibit the kind of automobile stop that occurred here. 439 U. S. 816 (1978).
II
Because the Delaware Supreme Court held that the stop at issue not only violated the Federal Constitution but also was impermissible under Art. I, § 6, of the Delaware Constitution, it is urged that the judgment below was based on an independent and adequate state ground and that we therefore have no jurisdiction in this case. Fox Film Corp. v. Muller, 296 U. S. 207, 210 (1935). At least, it is suggested, the matter is sufficiently uncertain that we should remand for clarification as to the ground upon which the judgment rested. California v. Krivda, 409 U. S. 33, 35 (1972). Based on our reading of the opinion, however, we are satisfied that even if the State Constitution would have provided an adequate basis for the judgment, the Delaware Supreme Court did not intend to rest its decision independently on the State Constitution and that we have jurisdiction of this case.
As we understand the opinion below, Art I, § 6, of the Delaware Constitution will automatically be interpreted at least as broadly as the Fourth Amendment; that is, every police practice authoritatively determined to be contrary to the Fourth and Fourteenth Amendments will, without further analysis, be held to be contrary to Art. I, § 6. This approach, which is consistent with previous opinions of the Delaware Supreme Court, was followed in this case. The court analyzed the various decisions interpreting the Federal Constitution, concluded that the Fourth Amendment foreclosed spot checks of automobiles, and summarily held that the State Constitution was therefore also infringed. This is one of those cases where “at the very least, the [state] court felt compelled by what it understood to be federal constitutional considerations to construe ... its own law in the manner it did.” Zacchini v. Scripps-Howard Broadcasting Co., 433 U. S. 562, 568 (1977). Had state law not been mentioned at all, there would be no question about our jurisdiction, even though the State Constitution might have provided an independent and adequate state ground. Ibid. The same result should follow here where the state constitutional holding depended upon the state court's view of the reach of the Fourth and Fourteenth Amendments. If the state court misapprehended federal law, “[i]t should be freed to decide . . . these suits according to its own local law.” Missouri ex rel. Southern R. Co. v. Mayfield, 340 U. S. 1, 5 (1950).
Ill
The Fourth and Fourteenth Amendments are implicated in this case because stopping an automobile and detaining its occupants constitute a “seizure” within the meaning of those Amendments, even though the purpose of the stop is limited and the resulting detention quite brief. United States v. Martinez-Fuerte, 428 U. S. 543, 556-558 (1976); United States v. Brignoni-Ponce, 422 U. S. 873, 878 (1975); cf. Terry v. Ohio, 392 U. S. 1, 16 (1968). The essential purpose of the proscriptions in the Fourth Amendment is to impose a standard of “reasonableness” upon the exercise of discretion by government officials, including law enforcement agents, in order “ 'to safeguard the privacy and security of individuals against arbitrary invasions. . . ” Marshall v. Barlow’s, Inc., 436 U. S. 307, 312 (1978), quoting Camara v. Municipal Court, 387 U. S. 523, 528 (1967). Thus, the permissibility of a particular law enforcement practice is judged by balancing its intrusion on the individual’s Fourth Amendment interests against its promotion of legitimate governmental interests. Implemented in this manner, the reasonableness standard usually requires, at a minimum, that the facts upon which an intrusion is based be capable of measurement against “an objective standard,” whether this be probable cause or a less stringent test. In those situations in which the balance of interests precludes insistence upon “some quantum of individualized suspicion,” other safeguards are generally relied upon to assure that the individual’s reasonable expectation of privacy is not “subject to the discretion of the official in the field,” Camara v. Municipal Court, 387 U. S., at 532. See id., at 534-535; Marshall v. Barlow’s, Inc., supra, at 320-321; United States v. United States District Court, 407 U. S. 297, 322-323 (1972) (requiring warrants).
In this case, however, the State of Delaware urges that patrol officers be subject to no constraints in deciding which automobiles shall be stopped for a license and registration check because the State’s interest in discretionary spot checks as a means of ensuring the safety of its roadways outweighs the resulting intrusion on the privacy and security of the persons detained.
IV
We have only recently considered the legality of investigative stops of automobiles where the officers making the stop-have neither probable cause to believe nor reasonable suspicion that either the automobile or its occupants are subject to seizure under the applicable criminal laws. In United States v. Brignoni-Ponce, supra, Border Patrol agents conducting roving patrols in areas near the international border asserted statutory authority to stop at random any vehicle in order to determine whether it contained illegal aliens or was involved in smuggling operations. The practice was held to violate the Fourth Amendment, but the Court did not invalidate all warrantless automobile stops upon less than probable cause. Given “the importance of the governmental interest at stake, the minimal intrusion of a brief stop, and the absence of practical alternatives for policing the border,” 422 U. S., at 881, the Court analogized the roving-patrol stop to the on-the-street encounter addressed in Terry v. Ohio, supra, and held:
“Except at the border and its functional equivalents, officers on roving patrol may stop vehicles only if they are aware of specific articulable facts, together with rational inferences from those facts, that reasonably warrant suspicion that the vehicles contain aliens who may be illegally in the country.” 422 U. S., at 884 (footnote omitted).
Because “the nature of illegal alien trafile and the characteristics of smuggling operations tend to generate articulable grounds for identifying violators,” id., at 883, “a requirement of reasonable suspicion for stops allows the Government adequate means of guarding the public interest and also protects residents of the border areas from indiscriminate official interference.” Ibid.
The constitutionality of stops by Border Patrol agents was again before the Court in United States v. Martinez-Fuerte, supra, in which we addressed the permissibility of checkpoint operations. This practice involved slowing all oncoming traffic “to a virtual, if not a complete, halt,” 428 U. S., at 546, at a highway roadblock, and referring vehicles chosen at the discretion of Border Patrol agents to an area for secondary inspection. See id., at 546, 558. Recognizing that the governmental interest involved was the same as that furthered by roving-patrol stops, the Court nonetheless sustained the constitutionality of the Border Patrol’s checkpoint operations. The crucial distinction was the lesser intrusion upon the motorist’s Fourth Amendment interests:
“[The] objective intrusion- — the stop itself, the questioning, and the visual inspection- — also existed in roving-patrol stops. But we view checkpoint stops in a different light because the subjective intrusion — the generating of concern or even fright on the part of lawful travelers — is appreciably less in the case of a checkpoint stop.” Id., at 558.
Although not dispositive, these decisions undoubtedly provide guidance in balancing the public interest against the individual’s Fourth Amendment interests implicated by the practice of spot checks such as occurred in this case. We cannot agree that stopping or detaining a vehicle on an ordinary city street is less intrusive than a roving-patrol stop on a major highway and that it bears greater resemblance to a permissible stop and secondary detention at a checkpoint near the border. In this regard, we note that Brignoni-Ponce was not limited to roving-patrol stops on limited-access roads, but applied to any roving-patrol stop by Border Patrol agents on any type of roadway on less than reasonable suspicion. See 422 U. S., at 882-883; United States v. Ortiz, 422 U. S. 891, 894 (1975). We cannot assume that the physical and psychological intrusion visited upon the occupants of a vehicle by a random stop to check documents is of any less moment than that occasioned by a stop by border agents on roving patrol. Both of these stops generally entail law enforcement officers signaling a moving automobile to pull over to the side of the roadway, by means of a possibly unsettling show of authority. Both interfere with freedom of movement, are inconvenient, and consume time. Both may create substantial anxiety. For Fourth Amendment purposes, we also see insufficient resemblance between sporadic and random stops of individual vehicles making their way through city traffic and those stops occasioned by roadblocks where all vehicles are brought to a halt or to a near halt, and all are subjected to a show of the police power of the community. “At traffic checkpoints the motorist can see that other vehicles are being stopped, he can see visible signs of the officers’ authority, and he is much less likely to be frightened or annoyed by the intrusion.” Id., at 894-895, quoted in United States v. Martinez-Fuerte, 428 U. S., at 558.
y
But the State of Delaware urges that even if discretionary spot checks such as occurred in this case intrude upon motorists as much as or more than do the roving patrols held impermissible in Brignoni-Ponce, these stops are reasonable under the Fourth Amendment because the State’s interest in the practice as a means of promoting public safety upon its roads more than outweighs the intrusion entailed. Although the record discloses no statistics concerning the extent of the problem of lack of highway safety, in Delaware or in the Nation as a whole, we are aware of the danger to life and property posed by vehicular traffic and of the difficulties that even a cautious and an experienced driver may encounter. We agree that the States have a vital interest in ensuring that only those qualified to do so are permitted to operate motor vehicles, that these vehicles are fit for safe operation, and hence that licensing, registration, and vehicle inspection requirements are being observed. Automobile licenses are issued periodically to evidence that the drivers holding them are sufficiently familiar with the rules of the road and are physically qualified to operate a motor vehicle. The registration requirement and, more pointedly, the related annual inspection requirement in Delaware are designed to keep dangerous automobiles off the road. Unquestionably, these provisions, properly administered, are essential elements in a highway safety program. Furthermore, we note that the State of Delaware requires a minimum amount of insurance coverage as a condition to automobile registration, implementing its legitimate interest in seeing to it that its citizens have protection when involved in a motor vehicle accident.
The question remains, however, whether in the service of these important ends the discretionary spot check is a sufficiently productive mechanism to justify the intrusion upon Fourth Amendment interests which such stops entail. On the record before us, that question must be answered in the negative. Given the alternative mechanisms available, both those in use and those that might be adopted, we are unconvinced that the incremental contribution to highway safety of the random spot check justifies the practice under the Fourth Amendment.
The foremost method of enforcing traffic and vehicle safety regulations, it must be recalled, is acting upon observed violations. Vehicle stops for traffic violations occur countless times each day; and on these occasions, licenses and registration papers are subject to inspection and drivers without them will be ascertained. Furthermore, drivers without licenses are presumably the less safe drivers whose propensities may well exhibit themselves. Absent some empirical data to the contrary, it must be assumed that finding an unlicensed driver among those who commit traffic violations is a much more likely event than finding an unlicensed driver by choosing randomly from the entire universe of drivers. If this were not so, licensing of drivers would hardly be an effective means of promoting roadway safety. It seems common sense that the percentage of all drivers on the road who are driving without a license is very small and that the number of licensed drivers who will be stopped in order to find one unlicensed operator will be large indeed. The contribution to highway safety made by discretionary stops selected from among drivers generally will therefore be marginal at best. Furthermore, and again absent something more than mere assertion to the contrary, we find it difficult to believe that the unlicensed driver would not be deterred by the possibility of being involved in a traffic violation or having some other experience calling for proof of his entitlement to drive but that he would be deterred by the possibility that he would be one of those chosen for a spot check. In terms of actually discovering unlicensed drivers or deterring them from driving, the spot check does not appear sufficiently productive to qualify as a reasonable law enforcement practice under the Fourth Amendment.
Much the same can be said about the safety aspects of automobiles as distinguished from drivers. Many violations of minimum vehicle-safety requirements are observable, and something can be done about them by the observing officer, directly and immediately. Furthermore, in Delaware, as elsewhere, vehicles must carry and display current license plates, which themselves evidence that the vehicle is properly registered; and, under Delaware law, to qualify for annual registration a vehicle must pass the annual safety inspection and be properly insured. It does not appear, therefore, that a stop of a Delaware-registered vehicle is necessary in order to ascertain compliance with the State's registration requirements; and, because there is nothing to show that a significant percentage of automobiles from other States do not also require license plates indicating current registration, there is no basis for concluding that stopping even out-of-state cars for document checks substantially promotes the State’s interest.
The marginal contribution to roadway safety possibly resulting from a system of spot checks cannot justify subjecting, every occupant of every vehicle on the roads to a seizure— limited in magnitude compared to other intrusions but nonetheless constitutionally cognizable — at the unbridled discretion of law enforcement officials. To insist neither upon an appropriate factual basis for suspicion directed at a particular automobile nor upon some other substantial and objective standard or rule to govern the exercise of discretion “would invite intrusions upon constitutionally guaranteed rights based on nothing more substantial than inarticulate hunches . . . .” Terry v. Ohio, 392 U. S., at 22. By hypothesis, stopping apparently safe drivers is necessary only because the danger presented by some drivers is not observable at the time of the stop. When there is not probable cause to believe that a driver is violating any one of the multitude of applicable traffic and equipment regulations — or other articulable basis amounting to reasonable suspicion that the driver is unlicensed or his vehicle unregistered — we cannot conceive of any legitimate basis upon which a patrolman could decide that stopping a particular - driver for a spot check would be more productive than stopping any other driver. This kind of standardless and unconstrained discretion is the evil the Court has discerned when in previous cases it has insisted that the discretion of the official in the field be circumscribed, at least to some extent. Almeida-Sanchez v. United States, 413 U. S. 266, 270 (1973); Camara v. Municipal Court, 387 U. S., at 532-533.
VI
The “grave danger” of abuse of discretion, United States v. Martines-Fuerte, 428 U. S., at 559, does not disappear simply because the automobile is subject to state regulation resulting in numerous instances of police-citizen contact, Cady v. Dombrowski, 413 U. S. 433, 441 (1973). Only last Term we pointed out that “if the government intrudes . . . the privacy interest suffers whether the government’s motivation is to investigate violations of criminal laws or breaches of other statutory or regulatory standards.” Marshall v. Barlow’s, Inc., 436 U. S., at 312-313. There are certain “relatively unique circumstances,” id., at 313, in which consent to regulatory restrictions is presumptively concurrent with participation in the regulated enterprise. See United States v. Biswell, 406 U. S. 311 (1972) (federal regulation of firearms); Colonnade Catering Corp. v. United States, 397 U. S. 72 (1970) (federal regulation of liquor). Otherwise, regulatory inspections unaccompanied by any quantum of individualized, articulable suspicion must be undertaken pursuant to previously specified “neutral criteria.” Marshall v. Barlow’s, Inc., supra, at 323.
An individual operating or traveling in an automobile does not lose all reasonable expectation of privacy simply because the automobile and its use are subject to government regulation. Automobile travel is a basic, pervasive, and often necessary mode of transportation to and from one’s home, workplace, and leisure activities. Many people spend more hours each day traveling in cars than walking on the streets. Undoubtedly, many find a greater sense of security and privacy in traveling in an automobile than they do in exposing themselves by pedestrian or other modes of travel. Were the individual subject to unfettered governmental intrusion every time he entered an automobile, the security guaranteed by the Fourth Amendment would be seriously circumscribed. As Terry v. Ohio, supra, recognized, people are not shorn of all Fourth Amendment protection when they step from their homes onto the public sidewalks. Nor are they shorn of those interests when they step from the sidewalks into their automobiles. See Adams v. Williams, 407 U. S. 143, 146 (1972).
YII
Accordingly, we hold that except in those situations in which there is at least articulable and reasonable suspicion that a motorist is unlicensed or that an automobile is not registered, or that either the vehicle or an occupant is otherwise subject to seizure for violation of law, stopping an automobile and detaining the driver in order to check his driver’s license and the registration of the automobile are unreasonable under the Fourth Amendment. This holding does not preclude the State of Delaware or other States from developing methods for spot checks that involve less intrusion or that do not involve the unconstrained exercise of discretion. Questioning of all oncoming traffic at roadblock-type stops is one possible alternative. We hold only that persons in automobiles on public roadways may not for that reason alone have their travel and privacy interfered with at the unbridled discretion of police officers. The judgment below is affirmed.
So ordered.
In its opinion, the Delaware Supreme Court referred to respondent as the operator of the vehicle, see 382 A. 2d 1359, 1361 (1978). However, the arresting officer testified: “I don’t believe [respondent] was the driver. . . . As I recall, he was in the back seat App. A12; and the trial court in its ruling on the motion to suppress referred to respondent as one of the four “occupants” of the vehicle, id., at A17. The vehicle was registered to respondent. Id., at A10.
United States v. Montgomery, 182 U. S. App. D. C. 426, 561 F. 2d 875 (1977); People v. Ingle, 36 N. Y. 2d 413, 330 N. E. 2d 39 (1975); State v. Ochoa, 23 Ariz. App. 510, 534 P. 2d 441 (1975), rev’d on other grounds, 112 Ariz. 582, 544 P. 2d 1097 (1976); Commonwealth v. Swanger, 453 Pa. 107, 307 A. 2d 875 (1973); United States v. Nicholas, 448 F. 2d 622 (CA8 1971). See also United States v. Cupps, 503 F. 2d 277 (CA6 1974).
State v. Holmberg, 194 Neb. 337, 231 N. W. 2d 672 (1975); State v. Allen, 282 N. C. 503, 194 S. E. 2d 9 (1973); Palmote v. United States, 290 A. 2d 573 (D. C. App. 1972), aff’d on jurisdictional grounds only, 411 U. S. 389 (1973); Leonard v. State, 496 S. W. 2d 576 (Tex. Crim. App. 1973); United States v. Jenkins, 528 F. 2d 713 (CA10 1975); Myricks v. United States, 370 F. 2d 901 (CA5), cert. dismissed, 386 U. S. 1015 (1967).
The court stated:
“The Delaware Constitution Article I, § 6 is substantially similar to the Fourth Amendment and a violation of the latter is necessarily a violation of the former.” 382 A. 2d, at 1362, citing State v. Moore, 55 Del. 356, 187 A. 2d 807 (1963).
Moore was decided less than two years after Mapp v. Ohio, 367 U. S. 643 (1961), applied to the States the limitations previously imposed only on the Federal Government. In setting forth the approach reiterated in the opinion below, Moore noted not only the common purposes and wording of the Fourth Amendment and the state constitutional provision, but also the overriding effect of the former. See 55 Del., at 362-363, 187 A. 2d, at 810-811.
We have found only one case decided after State v. Moore, supra, in which the court relied solely on state law in upholding the validity of a search or seizure, and that case involved not only Del. Const. Art. I, § 6, but also state statutory requirements for issuance of a search warrant. Rossitto v. State, 234 A. 2d 438 (1967). Moreover, every case holding a search or seizure to be contrary to the state constitutional provision relies on cases interpreting the Fourth Amendment and simultaneously concludes that the search or seizure is contrary to that provision. See, e. g., Young v. State, 339 A. 2d 723 (1975); Freeman v. State, 317 A. 2d 540 (1974); cf. Bertomeu v. State, 310 A. 2d 865 (1973).
See Marshall v. Barlow’s, Inc., 436 U. S. 307, 315 (1978); United States v. Brignoni-Ponce, 422 U. S. 873, 878 (1975); Cady v. Dombrowski, 413 U. S. 433, 439 (1973); Terry v. Ohio, 392 U. S. 1, 20-21 (1968); Camara v. Municipal Court, 387 U. S. 523, 539 (1967).
See also United States v. Martinez-Fuerte, 428 U. S. 543, 554 (1976); United States v. Ortiz, 422 U. S. 891, 895 (1975); Almeida-Sanchez v. United States, 413 U. S. 266, 270 (1973); Beck v. Ohio, 379 U. S. 89, 97 (1964); McDonald v. United States, 335 U. S. 451, 455-456 (1948).
See, e. g., United States v. Ramsey, 431 U. S. 606, 616-619 (1977); United States v. Martinez-Fuerte, supra, at 555; cases cited in n. 6, supra.
Terry v. Ohio, supra, at 21. See also Scott v. United States, 436 U. S. 128, 137 (1978); Beck v. Ohio, supra, at 96-97.
See, e. g., United States v. Santana, 427 U. S. 38 (1976); United States v. Watson, 423 U. S. 411 (1976); Ker v. California, 374 U. S. 23 (1963) (warrantless arrests requiring probable cause); United States v. Ortiz, supra; Warden v. Hayden, 387 U. S. 294 (1967); Carroll v. United States, 267 U. S. 132 (1925) (warrantless searches requiring probable cause). See also Gerstein v. Pugh, 420 U. S. 103 (1975).
See Terry v. Ohio, supra; United States v. Brignoni-Ponce, supra.
In addition, the Warrant Clause of the Fourth Amendment generally requires that prior to a search a neutral and detached magistrate ascertain that the requisite standard is met, see, e. g., Mincey v. Arizona, 437 U. S. 385 (1978).
United States v. Martinez-Fuerte, supra, at 560.
In addressing the constitutionality of Border Patrol practices, we reserved the question of the permissibility of state and local officials stopping motorists for document questioning in a manner similar to checkpoint detention, see 428 U. S., at 560 n. 14, or roving-patrol operations, see United States v. Brignoni-Ponce, 422 U. S., at 883 n. 8.
In 1977, 47,671 persons died in motor vehicle accidents in this country. U. S. Dept. of Transportation, Highway Safety A-9 (1977).
See, e. g., Del. Code Ann., Tit. 21, §§2701, 2707 (1974 and Supp. 1977); §2713 (1974) (Department of Public Safety “shall examine the applicant as to his physical and mental qualifications to operate a motor vehicle in such manner as not to jeopardize the safety of persons or property . . .”).
§2143 (a) (1974).
§ 2118 (Supp. 1977); State of Delaware, Department of Public Safety, Division of Motor Vehicles, Driver’s Manual 60 (1976).
It has been urged that additional state interests are the apprehension of stolen motor vehicles and of drivers under the influence of alcohol or narcotics. The latter interest is subsumed by the interest in roadway safety, as may be the former interest to some extent. The remaining governmental interest in controlling automobile thefts is not distinguishable from the general interest in crime control.
Cf. United States v. Brignoni-Ponce, supra, at 883.
Del. Code Ann., Tit. 21, §2126 (1974).
§§ 2121 (b), (d) (1974).
See n. 16, supra; §2109 (1974).
See n. 17, supra; §2109 (1974).
See, e. g., §§4101-4199B (1974 and Supp. 1977).
Cf. Marshall v. Barlow’s, Inc., 436 U. S. 307 (1978) (warrant required for federal inspection under interstate commerce power of health and safety of workplace); See v. Seattle, 387 U. S. 541 (1967) (warrant required for inspection of warehouse for municipal fire code violations); Camara v. Municipal Court, 387 U. S. 523 (1967) (warrant required for inspection of residence for municipal fire code violations).
Nor does our holding today cast doubt on the permissibility of roadside truck weigh-stations and inspection checkpoints, at which some vehicles may be subject to further detention for safety and regulatory inspection than are others.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice White
delivered the opinion of the Court.
The issue before us in this case is whether, consistently with the First and Fourteenth Amendments, a State may extend a cause of action for damages for invasion of privacy caused by the publication of the name of a deceased rape victim which was publicly revealed in connection with the prosecution of the crime.
I
In August 1971, appellee's 17-year-old daughter was the victim of a rape and did not survive the incident. Six youths were soon indicted for murder and rape. Although there was substantial press coverage of the crime and of subsequent developments, the identity of the victim was not disclosed pending trial, perhaps because of Ga. Code Ann. § 26-9901 (1972), which makes it a misdemeanor to publish or broadcast the name or identity of a rape victim. In April 1972, some eight months later, the six defendants appeared in court. Five pleaded guilty to rape or attempted rape, the charge of murder having been dropped. The guilty pleas were accepted by the court, and the trial of the defendant pleading not guilty was set for. a later date.
In the course of the proceedings that day, appellant Wassell, a reporter covering the incident for his employer, learned the name of the victim from an examination of the indictments which were made available for his inspection in the courtroom. That the name of the victim appears in the indictments and that the indictments were public records available for inspection are not disputed. Later that day, Wassell broadcast over the facilities of station WSB-TV, a television station owned by appellant Cox Broadcasting Corp., a news report concerning the court proceedings. The report named the victim of the crime and was repeated the following day.
In May 1972, appellee brought an action for money damages against appellants, relying on § 26-9901 and claiming that his right to privacy had been invaded by the television broadcasts giving the name of his deceased daughter. Appellants admitted the broadcasts but claimed that they were privileged under both state law and the First and Fourteenth Amendments. The trial court, rejecting appellants' constitutional claims and holding that the Georgia statute gave a civil remedy to those injured by its violation, granted summary judgment to appellee as to liability, with the determination of- damages to await trial by jury.
On appeal, the Georgia Supreme Court, in its initial opinion, held that the trial court had erred in construing § 26-9901 to extend a civil cause of action for invasion of privacy and thus found it unnecessary to consider the constitutionality of the statute. 231 Ga. 60, 200 S. E. 2d 127 (1973). The court went on to rule, however, that the complaint stated a cause of action “for the invasion of the appellee’s right of privacy, or for the tort of public disclosure” — a “common law tort exist[ing] in this jurisdiction without the help of the statute that the trial judge in this case relied on.” Id., at 62, 200 S. E. 2d, at 130. Although the privacy invaded was not that of the deceased victim, the father was held to have stated a claim for invasion of his own privacy by reason of the publication of his daughter’s name. The court explained, however, that liability did not follow as a matter of law and that summary judgment was improper; whether the public disclosure of the name actually invaded appellee’s “zone of privacy,” and if so, to what extent, were issues to be determined by the trier of fact. Also, “in formulating such an issue for determination by the fact-finder, it is reasonable to require the appellee to prove that the appellants invaded his privacy with wilful or negligent disregard for the fact that reasonable men would find the invasion highly offensive.” Id., at 64, 200 S. E. 2d, at 131. The Georgia Supreme Court did agree with the trial court, however, that the First and Fourteenth Amendments did not, as a matter of law, require judgment for appellants. The court concurred with the statement in Briscoe v. Reader’s Digest Assn., Inc., 4 Cal. 3d 529, 541, 483 P. 2d 34, 42 (1971), that “the rights guaranteed by the First Amendment do not require total abrogation of the right to privacy. The goals sought by each may be achieved with a minimum of intrusion upon the other.”
Upon motion for rehearing the Georgia court countered the argument that the victim’s name was a matter of public interest and could be published with impunity by relying on J 26-9901 as an authoritative declaration of state policy that the name of a rape victim was not a matter of public concern. This time the court felt compelled to determine the constitutionality of the statute and sustained it as a “legitimate limitation on the right of freedom of expression contained in the First Amendment.” The court could discern “no public interest or general concern about the identity of the victim of such a crime as will make the right to disclose the identity of the victim rise to the level of First Amendment protection.” 231 Ga., at 68, 200 S. E. 2d, at 134.
We postponed decision as to our jurisdiction over this appeal to the hearing on the merits. 415 U. S. 912 (1974). We conclude that the Court has jurisdiction, and reverse the judgment of the Georgia Supreme Court.
II
Appellants invoke the appellate jurisdiction of this Court under 28 U. S. C. § 1257 (2) and, if that jurisdictional basis is found to be absent, through a petition for certiorari under 28 U. S. C. § 2103. Two questions concerning our jurisdiction must be resolved: (1) whether the constitutional validity of § 26-9901 was “drawn in question,” with the Georgia Supreme Court upholding its validity, and (2) whether the decision from which this appeal has been taken is a “[fjinal judgment or decree.”
A
Appellants clearly raised the issue of the constitutionality of § 26-9901 in their motion for rehearing in the Georgia Supreme Court. In denying that motion that court held: “A majority of this court does not consider this statute to be in conflict with the First Amendment.” 231 Ga., at 68, 200 S. E. 2d, at 134. Since the court relied upon the statute as a declaration of the public policy of Georgia that the disclosure of a rape victim’s name was not to be protected expression, the statute was drawn in question in a manner directly bearing upon the merits of the action, and the decision in favor of its constitutional validity invokes this Court’s appellate jurisdiction. Cf. Garrity v. New Jersey, 385 U. S. 493, 495-96 (1967).
B
Since 1789, Congress has granted this Court appellate jurisdiction with respect to state litigation only after the highest state court in which judgment could be had has rendered a “ [f ] inal judgment or decree.” Title 28 U. S. C. § 1257 retains this limitation on our power to review cases coming from state courts. The Court has noted that “[ considerations of English usage as well as those of judicial policy” would justify an interpretation of the final-judgment rule to preclude review “where anything further remains to be determined by a State court, no matter how dissociated from the only federal issue that has finally been adjudicated by the highest court of the State.” Radio Station WOW, Inc. v. Johnson, 326 U. S. 120, 124 (1945). But the Court there observed that the rule had not been administered in such a mechanical fashion and that there were circumstances in which there has been “a departure from this requirement of finality for federal appellate jurisdiction.” Ibid.
These circumstances were said to be “very few,” ibid.; but as the cases have unfolded, the Court has reeurringly encountered situations in which the highest court of a State has finally determined the federal issue present in a particular case, but in which there are further proceedings in the lower state courts to come. There are now at least four categories of such cases in which the Court has treated the decision on the federal issue as a final judgment for the purposes of 28 U. S. C. § 1257 and has taken jurisdiction without awaiting the completion of the additional proceedings anticipated in the lower state courts. In most, if not all, of the cases in these categories, these additional proceedings would not require the decision of other federal questions that might also require review by the Court at a later date, and immediate rather than delayed review would be the best way to avoid “the mischief of economic waste and of delayed justice,” Radio Station WOW, Inc. v. Johnson, supra, at 124, as well as precipitate interference with state litigation. In the cases in the first two categories considered below, the federal issue would not be mooted or otherwise affected by the proceedings yet to be had because those proceedings have little substance, their outcome is certain, or they are wholly unrelated to the federal question. In the other two categories, however, the federal issue would be mooted if the petitioner or appellant seeking to bring the action here prevailed on the merits in the later state-court proceedings, but there is nevertheless sufficient justification for immediate review of the federal question finally determined in the state courts.
In the first category are those cases in which there are further proceedings — even entire trials — yet to occur in the state courts but where for one reason or another the federal issue is conclusive or the outcome of further proceedings preordained. In these circumstances, because the case is for all practical purposes concluded, the judgment of the state court on the federal issue is deemed final. In Mills v. Alabama, 384 U. S. 214 (1966), for example, a demurrer to a criminal complaint was sustained on federal constitutional grounds by a state trial court. The State Supreme Court reversed, remanding for jury trial. This Court took jurisdiction on the reasoning that the appellant had no defense other than his federal claim and could not prevail at trial on the facts or any nonfederal ground. To dismiss the appeal “would not only be an inexcusable delay of the benefits Congress intended to grant by providing for appeal to this Court, but it would also result in a completely unnecessary waste of time and energy in judicial systems already troubled by delays due to congested dockets.” Id., at 217-218 (footnote omitted).
“The designation given the judgment by state practice is not controlling. Department of Banking v. Pink, 317 U. S. 264, 268. The question is whether it can be said that ‘there is nothing more to be decided’ (Clark v. Williard, 292 U. S. 112, 118), that there has been ‘an effective determination of the litigation.’ Market Street Ry. Co. v. Railroad Commission, 324 U. S. 548, 551; see Radio Station WOW v. Johnson, 326 U. S. 120, 123-124. That question will be resolved not only by an examination of the entire record (Clark v. Williard, supra) but, where necessary, by resort to the local law to determine what effect the judgment has under the state rules of practice.” Id., at 72.
Second, there are cases such as Radio Station WOW, supra, and Brady v. Maryland, 373 U. S. 83 (1963), in which the federal issue, finally decided by the highest court in the State, will survive and require decision regardless of the outcome of future state-court proceedings. In Radio Station WOW, the Nebraska Supreme Court directed the transfer of the properties of a federally licensed radio station and ordered an accounting, rejecting the claim that the transfer order would interfere with the federal license. The federal issue was held reviewable here despite the pending accounting on the “presupposition... that the federal questions that could come here have been adjudicated by the State court, and that the accounting which remains to be taken could not remotely give rise to a federal question... that may later come here....” 326 U. S., at 127. The judgment rejecting the federal claim and directing the transfer was deemed “dissociated from a provision for an accounting even though that is decreed in the same order.” Id., at 126. Nothing that could happen in the course of the accounting, short of settlement of the case, would foreclose or make unnecessary decision on the federal question. Older cases in the Court had reached the same result on similar facts. Carondelet Canal & Nav. Co. v. Louisiana, 233 U. S. 362 (1914); Forgay v. Conrad, 6 How. 201 (1848). In the latter case, the Court, in an opinion by Mr. Chief Justice Taney, stated that the Court had not understood the final-judgment rule “in this strict and technical sense, but has given [it] a more liberal, and, as we think, a more reasonable construction, and one more consonant to the intention of the legislature." Id., at 203.
In the third category are those situations where the federal claim has been finally decided, with further proceedings on the merits in the state courts to come, but in which later review of the federal issue cannot be had, whatever the ultimate outcome of the case. Thus, in these cases, if the party seeking interim review ultimately prevails on the merits, the federal issue will be mooted; if he were to lose on the merits, however, the governing state law would not permit him again to present his federal claims for review. The Court has taken jurisdiction in these circumstances prior to completion of the case in the state courts. California v. Stewart, 384 U. S. 436 (1966) (decided with Miranda v. Arizona), epitomizes this category. There the state court reversed a conviction on federal constitutional grounds and remanded for a new trial. Although the State might have prevailed at trial, we granted its petition for certiorari and affirmed, explaining that the state judgment was “final” since an acquittal of the defendant at trial would preclude, under state law, an appeal by the State. Id., at 498 n. 71.
A recent decision in this category is North Dakota State Board of Pharmacy v. Snyder’s Drug Stores, Inc., 414 U. S. 156 (1973), in which the Pharmacy Board rejected an application for a pharmacy operating permit relying on a state statute specifying ownership requirements which the applicant did not meet. The State Supreme Court held the statute unconstitutional and remanded the matter to the Board for further consideration of the application, freed from the constraints of the ownership statute. The Board brought the case here, claiming that the statute was constitutionally acceptable under modern cases. After reviewing the various circumstances under which the finality requirement has been deemed satisfied despite the fact that litigation had not terminated in the state courts, we entertained the case over claims that we had no jurisdiction. The federal issue would not survive the remand, whatever the result of the state administrative proceedings. The Board might deny the license on state-law grounds, thus foreclosing the federal issue, and the Court also ascertained that under state law the Board could not bring the federal issue here in the event the applicant satisfied the requirements of state law except for the invalidated ownership statute. Under these circumstances, the issue was ripe for review.
Lastly, there are those situations where the federal issue has been finally decided in the state courts with further proceedings pending in which the party seeking review here might prevail on the merits on nonfederal grounds, thus rendering unnecessary review of the federal issue by this Court, and where reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action rather than merely controlling the nature and character of, or determining the admissibility of evidence in, the state proceedings still to come. In these circumstances, if a refusal immediately to review the state-court decision might seriously erode federal policy, the Court has entertained and decided the federal issue, which itself has been finally determined by the state courts for purposes of the state litigation.
In Construction Laborers v. Curry, 371 U. S. 542 (1963), the state courts temporarily enjoined labor union picketing over claims that the National Labor Relations Board had exclusive jurisdiction of the controversy. The Court took jurisdiction for two independent reasons. First, the power of the state court to proceed in the face of the preemption claim was deemed an issue separable from the merits and ripe for review in this Court, particularly “when postponing review would seriously erode the national labor policy requiring the subject matter of respondents’ cause to be heard by the... Board, not by the state courts.” Id., at 550. Second, the Court was convinced that in any event the union had no defense to the entry of a permanent injunction other than the preemption claim that had already been ruled on in the state courts. Hence the case was' for all practical purposes concluded in the state tribunals.
In Mercantile National Bank v. Langdeau, 371 U. S. 555 (1963), two national banks were sued, along with others, in the courts of Travis County, Tex. The claim asserted was conspiracy to defraud an insurance company. The banks as a preliminary matter asserted that a special federal venue statute immunized them from suit in Travis County and that they could properly be sued only in another county. Although trial was still to be had and the banks might well prevail on the merits, the Court, relying on Curry, entertained the issue as a “separate and independent matter, anterior to the merits and not enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.” Id., at 558. Moreover, it would serve the policy of the federal statute “to determine now in which state court appellants may be tried rather than to subject them... to long and complex litigation which may all be for naught if consideration of the preliminary question of venue is postponed until the conclusion of the proceedings.” Ibid.
Miami Herald Publishing Co. v. Tornillo, 418 U. S. 241 (1974), is the latest case in this category. There a candidate for public office sued a newspaper for refusing, allegedly contrary to a state statute, to carry his reply to the paper’s editorial critical of his qualifications. The trial court held the act unconstitutional, denying both injunctive relief and damages. The State Supreme Court reversed, sustaining the statute against the challenge based upon the First and Fourteenth Amendments and remanding the case for a trial and appropriate relief, including damages. The newspaper brought the case here. We sustained our jurisdiction, relying on the principles elaborated in the North Dakota case and observing:
“Whichever way we were to decide on the merits, it would be intolerable to leave unanswered, under these circumstances, an important question of freedom of the press under the First Amendment; an uneasy and unsettled constitutional posture of § 104.38 could only further harm the operation of a free press. Mills v. Alabama, 384 U. S. 214, 221-222 (1966) (Douglas, J., concurring). See also Organization for a Better Austin v. Keefe, 402 U. S. 415, 418 n. (1971).” 418 U. S., at 247 n. 6.
In light of the prior cases, we conclude that we have jurisdiction to review the judgment of the Georgia Supreme Court rejecting the challenge under the First and Fourteenth Amendments to the state law authorizing damage suits against the press for publishing the name of a rape victim whose identity is revealed in the course of a public prosecution. The Georgia Supreme Court’s judgment is plainly final on the federal issue and is not subject to further review in the state courts. Appellants will be liable for damages if the elements of the state cause of action are proved. They may prevail at trial on nonfederal grounds, it is true, but if the Georgia court erroneously upheld the statute, there should be no trial at all. Moreover, even if appellants prevailed at trial and made unnecessary further consideration of the constitutional question, there would remain in effect the unre-viewed decision of the State Supreme Court that a civil action for publishing the name of a rape victim disclosed in a public judicial proceeding may go forward despite the First and Fourteenth Amendments. Delaying final decision of the First Amendment claim until after trial will “leave unanswered... an important question of freedom of the press under the First Amendment,” “an uneasy and unsettled constitutional posture [that] could only further harm the operation of a free press.” Tornillo, supra, at 247 n. 6. On the other hand, if we now hold that the First and Fourteenth Amendments bar civil liability for broadcasting the victim's name, this litigation ends. Given these factors — that the litigation could be terminated by our decision on the merits and that a failure to decide the question now will leave the press in Georgia operating in the shadow of the civil and criminal sanctions of a rule of law and a statute the constitutionality of which is in serious doubt — we find that reaching the merits is consistent with the pragmatic approach that we have followed in the past in determining finality. See Gillespie v. United States Steel Corp., 379 U. S. 148 (1964); Radio Station WOW, Inc. v. Johnson, 326 U. S., at 124; Mills v. Alabama, 384 U. S., at 221-222 (Douglas, J., concurring).
Ill
Georgia stoutly defends both § 26-9901 and the State’s common-law privacy action challenged here. Its claims are not without force, for powerful arguments can be made, and have been made, that however it may be ultimately defined, there is a zone of privacy surrounding every individual, a zone within which the State may protect him from intrusion by the press, with all its attendant publicity. Indeed, the central thesis of the root article by Warren and Brandéis, The Right to Privacy, 4 Harv. L. Rev. 193, 196 (1890), was that the press was overstepping its prerogatives by publishing essentially private information and that there should be a remedy for the alleged abuses.
More compellingly, the century has experienced a strong tide running in favor of the so-called right of privacy. In 1967, we noted that “[i]t has been said that a ‘right of privacy' has been recognized at common law in 30 States plus the District of Columbia and by statute in four States.” Time, Inc. v. Hill, 385 U. S. 374, 383 n. 7. We there cited the 1964 edition of Prosser's Law of Torts. The 1971 edition of that same source states that “[i]n one form or another, the right of privacy is by this time recognized and accepted in all but a very few jurisdictions.” W. Prosser, Law of Torts 804 (4th ed.) (footnote omitted). Nor is it irrelevant here that the right of privacy is no recent arrival in the jurisprudence of Georgia, which has embraced the right in some form since 1905 when the Georgia Supreme Court decided the leading case of Pavesich v. New England Life Ins. Co., 122 Ga. 190, 50 S. E. 68.
These are impressive credentials for a right of privacy, but we should recognize that we do not have at issue here an action for the invasion of privacy involving the appropriation of one’s name or photograph, a physical or other tangible intrusion into a private area, or a publication of otherwise private information that is also false although perhaps not defamatory. The version of the privacy tort now before us — termed in Georgia “the tort of public disclosure,” 231 Ga., at 60, 200 S. E. 2d, at 130— is that in which the plaintiff claims the right to be free from unwanted publicity about his private affairs, which, although wholly true, would be offensive to a person of ordinary sensibilities. Because the gravamen of the claimed injury is the publication of information, whether true or not, the dissemination of which is embarrassing or otherwise painful to an individual, it is here that claims of privacy most directly confront the constitutional freedoms of speech and press. The face-off is apparent, and the appellants urge upon us the broad holding that the press may not be made criminally or civilly liable for publishing information that is neither false nor misleading but absolutely accurate, however damaging it may be to reputation or individual sensibilities.
It is true that in defamation actions, where the protected interest is personal reputation, the prevailing view is that truth is a defense; and the message of New York Times Co. v. Sullivan, 376 U. S. 254 (1964); Garrison v. Louisiana, 379 U. S. 64 ( 1964); Curtis Publishing Co. v. Butts, 388 U. S. 130 (1967), and like cases is that the defense of truth is constitutionally required where the subject of the publication is a public official or public figure. What is more, the defamed public official or public figure must prove not only that the publication is false but that it was knowingly so or was circulated with reckless disregard for its truth or falsity. Similarly, where the interest at issue is privacy rather than reputation and the right claimed is to be free from the publication of false or misleading information about one's affairs, the target of the publication must prove knowing or reckless falsehood where the materials published, although assertedly private, are “matters of public interest.” Time, Inc. v. Hill, supra, at 387-388.
The Court has nevertheless carefully left open the question whether the First and Fourteenth Amendments require that truth be recognized as a defense in a defamation action brought by a private person as distinguished from a public official or public figure. Garrison held that where criticism is of a public official and his conduct of public business, “the interest in private reputation is overborne by the larger public interest, secured by the Constitution, in the dissemination of truth,” 379 U. S., at 73 (footnote omitted), but recognized that “different interests may be involved where purely private libels, totally unrelated to public affairs, are concerned; therefore, nothing we say today is to be taken as intimating any views as to the impact of the constitutional guarantees in the discrete area of purely private libels.” Id., at 72 n. 8. In similar fashion, Time, Inc. v. Hill, supra,, expressly saved the question whether truthful publication of very private matters unrelated to public affairs could be constitutionally proscribed. 385 U. S., at 383 n. 7.
Those precedents, as well as other considerations, counsel similar caution here. In this sphere of collision between claims of privacy and those of the free press, the interests on both sides are plainly rooted in the traditions and significant concerns of our society. Rather than address the broader question whether truthful publications may ever be subjected to civil or criminal liability consistently with the First and Fourteenth Amendments, or to put it another way, whether the State may ever define and protect an area of privacy free from unwanted publicity in the press, it is appropriate to focus on the narrower interface between press and privacy that this case presents, namely, whether the State may impose sanctions on the accurate publication of the name of a rape victim obtained from public records — more specifically, from judicial records which are maintained in connection with a public prosecution and which themselves are open to public inspection. We are convinced that the State may not do so.
In the first- place, in a society in which each individual has but limited time and resources with which to observe at first hand the operations of his government, he relies necessarily upon the press to bring to him in convenient form the facts of those operations. Great responsibility is accordingly placed upon the news media to report fully and accurately the proceedings of government, and official records and documents open to the public are the basic data of governmental operations. Without the information provided by the press most of us and many of our representatives would be unable to vote intelligently or to register opinions on the administration of government generally. With respect to judicial proceedings in particular, the function of the press serves to guarantee the fairness of trials and to bring to bear the beneficial effects of public scrutiny upon the administration of justice. See Sheppard v. Maxwell, 384 U. S. 333, 350 (1966).
Appellee has claimed in this litigation that the efforts of the press have infringed his right to privacy by broadcasting to the world the fact that his daughter was a rape victim. The commission of crime, prosecutions resulting from it, and judicial proceedings arising from the prosecutions, however, are without question events of legitimate concern to the public and consequently fall within the responsibility of the press to report the operations of government.
The special protected nature of accurate reports of judicial proceedings has repeatedly been recognized. This Court, in an opinion written by Mr. Justice Douglas, has said:
“A trial is a public event. What transpires in the court room is public property. If a transcript of the court proceedings had been published, we suppose none would claim that the judge could punish the publisher for contempt. And we can see no difference though the conduct of the attorneys, of the jury, or even of the judge himself, may have reflected on the court. Those who see and hear what transpired can report it with impunity. There is no special perquisite of the judiciary which enables it, as distinguished from other institutions of democratic government, to suppress, edit, or censor events which transpire in proceedings before it.” Craig v. Harney, 331 U. S. 367, 374 (1947) (emphasis added).
See also Sheppard v. Maxwell, supra, at 362-363; Estes v. Texas, 381 U. S. 532, 541-542 (1965); Pennekamp v. Florida, 328 U. S. 331 (1946); Bridges v. California, 314 U. S. 252 (1941).
The developing law surrounding the tort of invasion of privacy recognizes a privilege in the press to report the events of judicial proceedings. The Warren and Brandéis article, supra, noted that the proposed new right would be limited in the same manner as actions for libel and slander where such a publication was a privileged communication: “the right to privacy is not invaded by any publication made in a court of justice... and (at least in many jurisdictions) reports of any such proceedings would in some measure be accorded a like privilege.”
The Restatement of Torts, § 867, embraced an action for privacy. Tentative Draft No. 13 of the Second Restatement of Torts, §§ 652A-652E, divides the privacy tort into four branches; and with respect to the wrong of giving unwanted publicity about private life, the commentary to § 652D states: “There is no liability when the defendant merely gives further publicity to information about the plaintiff which is already public. Thus there is no liability for giving publicity to facts about the plaintiff’s life which are matters of public record... The same is true of the separate tort of physically or otherwise intruding upon the seclusion or private affairs of another. Section 652B, Comment c, provides that “there is no liability for the examination of a public record concerning the plaintiff, or of documents which the plaintiff is required to keep and make available for public inspection.” According to this draft, ascertaining and publishing the contents of public records are simply not within the reach of these kinds of privacy actions.
Thus even the prevailing law of invasion of privacy generally recognizes that the interests in privacy fade when the information involved already appears on the public record. The conclusion is compelling when viewed in terms of the First and Fourteenth Amendments and in light of the public interest in a vigorous press. The Georgia cause of action for invasion of privacy through public disclosure of the name of a rape victim imposes sanctions on pure expression — the content of a publication — and not conduct or a combination of speech and nonspeech elements that might otherwise be open to regulation or prohibition. See United States v. O’Brien, 391 U. S. 367, 376-377 (1968). The publication of truthful information available on the public record contains none of the indicia of those limited categories of expression, such as “fighting" words, which “are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.” Chaplinsky v. New Hampshire, 315 U. S. 568, 572 (1942) (footnote omitted).
By placing the information in the public domain on official court records, the State must be presumed to have concluded that the public interest was thereby being served. Public records by their very nature are of interest to those concerned with the administration of government, and a public benefit is performed by the reporting of the true contents of the records by the media. The freedom of the press to publish that information appears to us to be of critical importance to our type of government in which the citizenry is the final judge of the proper conduct of public business. In preserving that form of government the First and Fourteenth Amendments command nothing less than that the States may not impose sanctions on the publication of truthful information contained in official court records open to public inspection.
We are reluctant to embark on a course that would make public records generally available to the media but forbid their publication if offensive to the sensibilities of the supposed reasonable man. Such a rule would make it very difficult for the media to inform citizens about the public business and yet stay within the law. The rule would invite timidity and self-censorship and very likely lead to the suppression of many items that would otherwise be published and that should be made available to the public. At the very least, the First and Fourteenth Amendments will not allow exposing the press to liability for truthfully publishing information released to the public in official court records. If there are privacy interests to be protected in judicial proceedings, the States must respond by means which avoid public documentation or other exposure of private information. Their political institutions must weigh the interests in privacy with the interests of the public to know and of the press to publish. Once true information is disclosed in public court documents open to public inspection, the press cannot be sanctioned for publishing it. In this instance as in others reliance must rest upon the judgment of those who decide what to publish or broadcast. See Miami Herald Publishing Co. v. Tornillo, 418 U. S., at 258.
Appellant Wassell based his televised report upon notes taken during the court proceedings and obtained the name of the victim from the indictments handed to him at his request during a recess in the hearing. Appel-lee has not contended that the name was obtained in an improper fashion or that it was not on an official court document open to public inspection. Under these circumstances, the protection of freedom of the press provided by the First and Fourteenth Amendments bars the State of Georgia from making appellants’ broadcast the basis of civil liability.
Reversed.
Mr. Chief Justice Burger concurs in the judgment.
“It shall be unlawful for any news media or any other person to print and publish, broadcast, televise, or disseminate through any other medium of public dissemination or cause to be printed and published, broadcast, televised, or disseminated in any newspaper, magazine, periodical or other publication published in this State or through any radio or television broadcast originating in the State the name or identity of any female who may have been raped or upon whom an assault with intent to commit rape may have been made. Any person or corporation violating the provisions of this section shall, upon conviction, be punished as for a misdemeanor.”
Three other States have similar statutes. See Fla. Stat. Ann. §§794.03, 794.04 (1965 and Supp. 1974-1975); S. C. Code Ann. § 16-81 (1962); Wis. Stat. Ann. §942.02 (1968). The Wisconsin Supreme Court upheld the constitutionality of a predecessor of §942.02 in State v. Evjue, 253 Wis. 146, 33 N. W. 2
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | C | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Harlan
delivered the opinion of the Court.
The question we decide here is whether a civilian employee and military member of the National Guard is an “employee” of the United States for purposes of the Federal Tort Claims Act when his National Guard unit is not in active federal service.
Petitioners’ decedents were passengers on a Capital Airlines plane that collided over Maryland with a jet trainer assigned to the Maryland Air National Guard. The only survivor of the accident was the pilot of the trainer, Captain McCoy, and it is not disputed that the collision was caused by his negligence. The estates of the pilot and co-pilot of the Capital plane, and Capital Airlines itself, filed suit against the United States under the Federal Tort Claims Act in the District Court for the District of Columbia, and recovered judgments. The Court of Appeals for the District of Columbia Circuit affirmed, United States v. Maryland for the use of Meyer, 116 U. S. App. D. C. 259, 322 F. 2d 1009, cert. denied, 375 U. S. 954, motion for leave to file petition for rehearing pending, No. 543, 1963 Term. Meanwhile, petitioners filed a similar suit in the Western District of Pennsylvania, and all parties agreed to proceed solely on the record made in the Meyer case. The District Court rendered judgment for petitioners, but the Court of Appeals for the Third Circuit reversed. 329 F. 2d 722. We granted certiorari, 379 U. S. 877, to resolve the conflict between the two Circuits on this single record, and, more broadly, to settle authoritatively the basic question stated at the outset of this opinion which is at the core of other litigation arising out of this same disaster, now pending in a number of courts in different parts of the country.
Captain McCoy held a commission from the Governor of Maryland as an officer in the Maryland Air National Guard, and he served on alternate Saturdays as a fighter pilot and Squadron Maintenance Officer with the 104th Fighter Interceptor Squadron. During the rest of the month Captain McCoy -was employed by the Guard in a civilian capacity as Aircraft Maintenance Chief under 32 U. S. C. § 709 (1958 ed.), the so-called federal “caretaker” statute.' In his civilian capacity Captain McCoy supervised the maintenance of the squadron aircraft assigned to the Air National Guard but owned by the United States. On the day of the accident, Captain McCoy had obtained permission from his superior to take a passenger on a flight in order to interest the passenger in joining the Air National Guard. The principal factual dispute below was whether at the time of the accident Captain McCoy was performing his duties with the Guard in a military or civilian capacity. A line of cases in the courts of appeals beginning with United States v. Holly, 192 F. 2d 221 (C. A. 10th Cir., 1951), has held that civilian “caretakers” are employees of the United States for purposes of suit under the Federal Tort Claims Act. Another line of cases has been equally consistent in treating military members of the Guard as employees of the States, not the Federal Government. We do not deal with the factual question, on which the decision below turned, since, in agreement with the views of Judge Smith and in disagreement with the Court of Appeals in the Meyer case, we hold that in both capacities Captain McCoy was an employee of the State of Maryland, and not of the United States. Hence the United States cannot be held liable under the Tort Claims Act for his negligence in either capacity.
I.
The National Guard is the modern Militia reserved to the States by Art. I, § 8, cl. 15, 16, of the Constitution. It has only been in recent years that the National Guard has been an organized force, capable of being assimilated with ease into the regular military establishment of the United States. From the days of the Minutemen of Lexington and Concord until just before World War I, the various militias embodied the concept of a citizen army, but lacked the equipment and training necessary for their use as an integral part of the reserve force of the United States Armed Forces. The passage of the National Defense Act of 1916 materially altered the status of the militias by constituting them as the National Guard. Pursuant to power vested in Congress by the Constitution (see n. 8), the Guard was to be uniformed, equipped, and trained in much the same way as the regular army, subject to federal standards and capable of being “federalized” by units, rather than by drafting individual soldiers. In return, Congress authorized the allocation of federal equipment to the Guard, and provided federal compensation for members of the Guard, supplementing any state emoluments. The Governor, however, remained in charge of the National Guard in each State except when the Guard was called into active federal service; in most instances the Governor administered the Guard through the State Adjutant General, who was required by the Act to report periodically to the National Guard Bureau, a federal organization, on the Guard’s reserve status. The basic structure of the 1916 Act has been preserved to the present day.
Section 90 of the National Defense Act authorized the payment of federal funds for the employment by the Guard of civilian “caretakers” to be responsible for the upkeep of federal equipment allocated to the National Guard. This section was later amended to make explicit that employment as a caretaker could be held by officers in the Guard, who would receive a full-time salary as civilian caretakers, and in addition would receive compensation for service as military members of the Guard.'' The legislative history of these amendments makes clear that the State Adjutant General could appoint officers of the Guard to serve as civilian caretakers, provided only that the appointees met the requirements established by the federal authorities.
II.
It is not argued here that military members of the Guard are federal employees, even though they are paid with federal funds and must conform to strict federal requirements in order to satisfy training and promotion standards. Their appointment by state authorities and the immediate control exercised over them by the States make it apparent that military members of the Guard are employees of the States, and so the courts of appeals have uniformly held. See n. o, supra. Civilian caretakers should not be considered as occupying* a different status. Caretakers, like military members of the Guard, are also paid with federal funds and must observe federal requirements in order to maintain their positions. Although they are employed to maintain federal property, it is property for which the States are responsible, and its maintenance is for the purpose of keeping the state militia in a ready status. The National Defense Act of 1916 authorized the allocation of federal property to the National Guard, but provided
“That as a condition precedent to the issue of any property as provided for by this Act, the State, Territory, or the District of Columbia desiring such issue shall make adequate provision, to the satisfaction of the Secretary of War, for the protection and care of such property . . . .”
The Act also provided that damage or loss of federal property would be charged to the States, unless the Secretary of War determined that the damage or loss was unavoidable. Caretakers appointed under § 90 of the Act were thus to perform a state function, the maintenance of federal equipment allocated to the Guard. The caretakers have been termed the “backbone” of the Guard, and are the only personnel on duty with Guard units during the greater part of the year. Like their military counterpart, caretakers are appointed by the State Adjutant General, and are responsible to him in the performance of their daily duties. They can be discharged and promoted only by him. Civilian caretakers are treated as state employees for purposes of the Social Security Act, for state retirement funds, and under the regulations issued by the Department of the Air Force. As early as 1920 the Comptroller of the Treasury ruled that a civilian caretaker was not a federal employee entitled to the annual leave provisions applicable to the War Department, an opinion that was reiterated in 1941 by the Comptroller General and that reflects the consistent position of the Department of Defense.
United States v. Holly, supra, decided in 1951, held that civilian caretakers were employees of the United States, and has since been followed in other courts of appeals (n. 4, supra). Holly rested on a construction of the National Defense Act which, in our view, is not supported by the legislative history. Although the original section provided that caretakers were to “be detailed by the battery or troop commander” (who was a state employee), n. 14, supra, in 1935 Congress amended the statute to provide that the Secretary of the military establishment concerned (here the Secretary of the Air Force) “shall designate the person to employ” the caretaker. The court in Holly read this amendment to mean that caretakers could be employed directly by federal authorities or by the State Adjutant General acting as a federal agent. However, the purpose of the amendment was simply to permit a State to pool its caretakers, and not to restrict the employment of such personnel only to those on the military roster of the unit where the equipment was allotted. The Senate report indicates that Congress envisaged that caretakers would continue to be employed only by the state authorities. It stated:
“Section 6 of S. 2710 will authorize the pooling of National Guard caretakers. Under present law States are required to select the caretakers from the units that have the material. Section 6 will permit the handling under the adjutant general or other proper State official of the caretakers as a pool.”
It seems clear, then, that no significant distinction was intended between the method of employing military and civilian personnel of the National Guard.
Congress again in 1954 accepted the Defense Department understanding that civilian caretakers were employees of the States. In amending the Social Security Act (68 Stat. 1059, 42 U. S. C. § 418 (b)(5) (1958 ed.)) to provide coverage for civilian caretakers as state employees, the committee reports stated:
“This provision would establish as a separate coverage group civilian employees of State National Guard units who are employed pursuant to section 90 of the National Defense Act . . . and paid from funds allotted to such units by the Department of Defense. These employees would also be deemed to be employees of the State. The Department of Defense does not regard these employees as Federal employees . . . .”
In 1956 Congress authorized federal disbursing officers to withhold from the salaries of civilian caretakers amounts needed by the States for their retirement systems. Although Congress was aware of the Holly line of cases, the Senate report stated that authority was necessary since “[t]hese employees, although paid from Federal funds, are considered to be State rather than Federal employees. Accordingly, State authorities have been unable to make the usual deduction of the employee’s contribution into the retirement system.” S. Rep. No. 2045, 84th Cong., 2d Sess. (1956).
In 1960 it was proposed to extend the coverage of the Federal Tort Claims Act to include civilian and military personnel of the National Guard. This proposal was rejected, and the bill that finally passed provides an administrative procedure whereby the proper Secretary can pay claims up to $5,000 for damage to persons or property caused by National Guard personnel. The Act includes liability for personal injury caused by civilian caretakers, even though the Justice Department called to the attention of Congress the line of cases indicating that acts of civilian caretakers were already covered under the Federal Tort Claims Act. The committee reports of both the House and Senate reflect acceptance of the position advocated by the Department of the Army that civilian caretakers should be included in the bill along with their military counterparts.
In sum, we conclude that the congressional purpose in authorizing the employment by state authorities of civilian caretakers, the administrative practice of the Defense Department in treating caretakers as state employees, the consistent congressional recognition of that status, and the like supervision exercised by the States over both military and civilian personnel of the National Guard, unmistakably lead in combination to the view that civilian as well as military personnel of the Guard are to be treated for the purposes of the Tort Claims Act as employees of the States and not of the Federal Government. This requires a decision that the United States is not liable to petitioners for the negligent conduct of McCoy.
In so holding we are not unmindful that this doubtless leaves those who suffered from this accident without effective legal redress for their losses. It is nevertheless our duty to take the law as we find it, remitting those aggrieved to whatever requitement may be deemed appropriate by Congress, which in affording the administrative remedies, unfortunately not available here (see n. 37), has shown itself not impervious to the moral demands of such distressing situations.
Affirmed.
Mr. Justice Douglas dissents.
The Federal Tort Claims Act provides in pertinent part:
28 U. S. C. § 1346 (1958 ed.):
‘‘(b) Subject to the provisions of chapter 171 of this title, the district courts . . . shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the. place where the act or omission occurred.”
28 U. S. C. §2671:
"As used in this chapter and sections 1346 (b) and 2401 (b) of this title, the term—
“ ‘Federal agency’ includes the executive departments and independent establishment of the United States, and corporations primarily acting as, instrumentalities or agencies of the United States but does not include any contractor with the United States.
“ ‘Employee of the government’ includes officers or employees of any federal agency, members of the military or naval forces of the United States, and persons acting on behalf of a federal agency in an official capacity, temporarily or permanently in the service of the United States, whether with or without compensation.”
28 U.S. C. § 2674:
“The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages.”
We are informed that such litigation is pending in Illinois, Ohio, and New York.
National Defense Act of 1916, §90, 39 Stat. 166; as amended, now 32 U. S. C. § 709 (1958 ed.):
“(a) Under such regulations as the Secretary of the Army may prescribe, funds allotted by him for the Army National Guard may be spent for the compensation of competent persons to care for material, armament, and equipment of the Army National Guard. Under such regulations as the Secretary of the Air Force may prescribe, funds allotted by him for the Air National Guard may be spent for the compensation of competent persons to care for material, armament, and equipment of the Air National Guard. A caretaker employed under this subsection may also perform clerical duties incidental to his employment and other duties that do not interfere with the performance of his duties as caretaker.
“(b) Enlisted members of the National Guard and civilians may be employed as caretakers under this section. However, if a unit has more than one caretaker, one of them must be an enlisted member. Compensation under this section is in addition to compensation otherwise provided for a member of the National Guard.
“(c) Under regulations to be prescribed by the Secretary concerned, material, armament, and equipment of the Army National Guard or Air National Guard of a State or Territory, Puerto Rico, the Canal Zone, or the District of Columbia may be placed in a common pool for care, maintenance, and storage. Not more than 15 caretakers may be employed for each of those pools.
“(d) Under regulations to be prescribed by the Secretary concerned, one commissioned officer of the National Guard in a grade below major may be employed for each pool set up under subsection (c) and for each squadron of the Air National Guard. Commissioned officers may not be otherwise employed under this section.
“(e) Funds appropriated by Congress for the National Guard arc in addition to funds appropriated by the several States and Territories, Puerto Rico, the Canal Zone, and the District of Columbia for the National Guard, and are available for the hire of caretakers and clerks.
“(f) The Secretary concerned shall fix the salaries of clerks and caretakers authorized to be employed under this section, and shall designate the person to employ them.”
Elmo v. United States, 197 F. 2d 230 (C. A. 5th Cir.); United States v. Duncan, 197 F. 2d 233 (C. A. 5th Cir.); Courtney v. United States, 230 F. 2d 112 (C. A. 2d Cir.); United States v. Wendt, 242 F. 2d 854 (C. A. 9th Cir.).
Williams v. United States, 189 F. 2d 607 (C. A. 10th Cir.); Dover v. United States, 192 F. 2d 431 (C. A. 5th Cir.); McCranie v. United States, 199 F. 2d 581 (C. A. 5th Cir.); Storer Broadcasting Co. v. United States, 251 F. 2d 268 (C. A. 5th Cir.); Bristow v. United States, 309 F. 2d 465 (C. A. 6th Cir.); Patino v. United States, 311 F. 2d 604 (C. A. 10th Cir.); Blackwell v. United States, 321 F. 2d 96 (C. A. 5th Cir.).
A majority of the Court of Appeals held, contrary to the District Court, that McCoy was acting in his military capacity at the time .of the accident.
Of the other two members of the panel, Judge Hastie did not reach the question whether civilian Guard emploj^ees were embraced within the Tort Claims Act, and Judge Staley was in accord with the views of the District of Columbia Circuit in Meyer.
“The Congress shall have Power ...
“To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
"To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress."
See generally, Wiener, The Militia. Clause of the Constitution, 54 Harv. L. Rev. 181 (1940).
39 Stat. 166 (1916).
National Defense Act, § 111, now 10 U. S. C. § 672 (1964 ed.). See Wiener, supra, n. 9.
See 32 U. S. C. § 314 (1958 ed.).
National Defense Act, § 66, as amended, now 32 U. S. C. § 314 (d) (1958 ed.).
“Funds allotted by the Secretary of War for the support of the National Guard shall be available ... for the compensation of competent help for the care of the material, animals, and equipment thereof, under such regulations as the Secretary of War may prescribe: Provided, That the men to be compensated, not to exceed five for each battery or troop, shall be duly enlisted therein and shall be detailed by the battery or troop commander, under such regulations as the Secretary of War may prescribe, and shall be paid by the United States disbursing officer in each State, Territory, and the District of Columbia.” 39 Stat. 205.
Act of June 19,1935,49 Stat. 391.
See S. Rep. No. 635, 74th Cong., 1st Sess., pp. 2-3, quoted infra, p. 51.
Detailed requirements for civilian caretakers are set out in Air National Guard Regulation No. 40-01, dated December 20, 1954 (hereinafter ANGR 40-01), and Air National Guard Manual No. 40-01, dated March 1,195S.
National Defense Act, § 83, 39 Stat. 203, 204, now 32 U. S. C. § 702 (d) (1958 ed.).
Id., § 87, now 32 U. S. C. § 710 (1958 ed.).
In 1926 Congress authorized the employment of National Guard officers as caretakers, limited to one per squadron, in order to provide “an officer constantly on duty at the flying field for the supervision of flying training.” H. R. Rep. No. 1031, 69th Cong., 1st Sess., p. 3, explaining the amendment to § 90 of the National Defense Act, enacted as Act of May 28,1926, 44 Stat. 673, now 32 U. S. C. § 709 (d) (1958 ed.). See also S. Rep. No. 785, 69th Cong., 1st Sess. Training, of course, was a duty reserved to the States by § 91 of the National Defense Act and by Art. I, § 8, cl. 16, of the Constitution.
Hearings before the Subcommittee of the House Appropriations Committee, 84th Cong., 2d Sess., p. 1303.
ANGR 40-01, ¶¶ 3 (b), 7 (a).
Id., ¶3.
Act of Aug. 14, 1935, c. 531, 49 Stat. 620, as amended, 42 U. S. C. §418 (b)(5) (1958 ed.).
Act of June 15, 1956, c. 390, 70 Stat. 283, as amended, 5 U. S. C. § 84d (1964 ed.).
ANGR 40-01, ¶ 4, provides:
"Air National Guard civilian personnel are considered to be employees of the State, Territory, Puerto Rico, or the District of Columbia (21 Comp Gen Dec. 305).”
27 Comp. Dec. 344 (1920).
21 Comp. Gen. 305 (1941).
See S. Rep. No. 1502, 86th Cong., 2d Sess., p. 6; H. R. Rep. No. 192S, 86th Cong., 2d Sess., p. 6.
Supra, n. 15, now 32 U. S. C. §709 (f) (1958 ed.) (emphasis supplied).
S. Rep. No. 635, 74th Cong., 1st Sess., pp. 2-3.
S. Rep. No. 1987, 83d Cong., 2d Sess., pp. 45-46; H. R. Rep. No. 1698,83d Cong., 2d Sess., p. 50.
S. Rep. No. 2045,84th Cong., 2d Sess., p. 4.
S. 1764 and H. R. 5435, 86th Cong., 2d Sess.
Act of September 13, 1960, 74 Stat. 878, 32 U. S. C. § 715 (1958 ed., Supp. IV). If the claim is for more than $5,000 and the Secretary deems it meritorious he may award up to $5,000 and certify the balance to Congress for appropriate action.
See S. Rep. No. 1502, 86th Cong., 2d Sess., p. 11; Hearings before Subcommittee No. 2 of the House Committee on the Judiciary on H. R. 5435 and H. R. 9315, 86th Cong., 2d Sess., pp. 6-7.
See S. Rep. No. 1502, supra; H. R. Rep. No. 1928, supra. The 1960 Act does not cover the accident involved in these cases, since the collision occurred in 1958.
Petitioners contend that the judgments of the District of Columbia Circuit in Meyer should be given collateral estoppel effect here, even though petitioners were not parties in Meyer. See Restatement, Judgments §93, comment b; Developments in the Law — Res Judicata, 65 Harv. L. Rev. 818, 865, 870-871 (1952); but see United States v. United Air Lines, Inc., 216 F. Supp. 709, aff’d on other grounds sub nom. United Air Lines, Inc. v. Wiener, 335 F. 2d 379, writ of cert. dismissed under Rule 60, 379 U. S. 951. We reject the Government’s contention that the point was not preserved below. Having regard to the fact that the decision in Meyer came down during the interval between the argument and decision of Levin, we think that the estoppel challenge was properly and timely raised in the petition for rehearing in Levin. However, we need not reach the merits of the challenge since the judgment in Meyer, also pending in this Court (see p. 43, swpra), must, in any event, now fall in consequence of our decision in the cases before us.
The State of Maryland has not, so far as we know, waived its sovereign immunity, and petitioners are not eligible for benefits under 32 U. S. C. § 715, supra, n. 35.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Rehnquist
delivered the opinion of the Court.
Appellant Socialist Labor Party has engaged in a prolonged legal battle to invalidate various Ohio laws restricting minority party access to the ballot. Concluding that “the totality of the Ohio restrictive laws taken as a whole” violated the Equal Protection Clause of the Fourteenth Amendment, this Court struck down those laws in Socialist Labor Party v. Rhodes, 393 U. S. 23, 34 (1968) , Following that decision the Ohio Legislature revised the state election code, but the Party was dissatisfied with the revisions and instituted the present suit in 1970.
The Socialist Labor Party, its officers, and members joined as plaintiffs in requesting a three-judge District Court to invalidate on constitutional grounds various sections of the revised election laws of Ohio. The plaintiffs specifically challenged provisions of the Ohio election laws requiring that a party either receive a certain percentage of the vote cast in the last preceding election or else file petitions of qualified electors corresponding to the same percentage; provisions relating to the organizational structure of a party; provisions requiring that a political party elect a specified number of delegates and alternates to a state convention; and provisions requiring a party to be part of a national political party that holds national conventions at which delegates elected in state primaries nominate presidential and vice-presidential candidates. In addition, they challenged that part of the Ohio election code requiring a political party to file an affidavit under oath stating in substance that the party is not engaged in an attempt to overthrow the government by force or violence, is not associated with a group making such an attempt, and does not carry on a program of sedition or treason as defined by the criminal law.
The case was decided on cross-motions for summary judgment, the three-judge District Court having before it the complaint and answer of the respective parties, and affidavits filed pursuant to Fed. Rule Civ. Proc. 56. The court ruled on the merits in favor of all of appellants’ constitutional challenges to the Ohio election laws except that involving the oath requirement, with respect to which it ruled in favor of the appellees. Both sides appealed to this Court, and we noted probable jurisdiction. 401 U. S. 991 (1971).
Since then, the posture of this litigation has undergone a significant change. On December 23, 1971, the Ohio Legislature enacted Senate Bill No. 460, which embodied an extensive revision of the state election code. Both sides now agree that the passage of this Act renders moot all but one of the issues decided below. The one challenged provision that remains unamended is the State’s requirement that a political party execute the above-described affidavit under oath in order to obtain a position on the ballot.
Appellants’ 1970 complaint represented a broadside attack against interrelated and allegedly overly restrictive provisions of the Ohio election laws. The three-judge District Court, in its ruling for the appellants on the issues that have now become moot, stated:
“The 1969 amendments to the election laws merely perpetuate the restrictive laws enacted between 1948 and 1952. The overall effect of these laws is still to deny to plaintiffs their constitutional right of political association.” 318 F. Supp. 1262, 1269-1270 (footnote omitted).
Thus appellants, at the time they filed their 1970 action, were fenced out of the political process by a series of restrictive provisions that prevented them from making any progress toward a position on the ballot as a designated political party. Their challenge was necessarily of a somewhat abstract character, since under their allegations they were able to comply with very few of the provisions regulating access to the ballot. Now, however, with the enactment of a revised election code, the abstract character of the single remaining challenge to the Ohio election procedures stands out all the more.
Appellants did not in their action that came here in 1968 challenge the loyalty oath. Their 1970 complaint respecting the loyalty oath is singularly sparse in its factual allegations. There is no suggestion in it that the Socialist Labor Party has ever refused in the past, or will now refuse, to sign the required oath. There is no allegation of injury that the party has suffered or will suffer because of the existence of the oath requirement.
It is fairly inferable that the absence of such allegations is not merely an oversight in the drafting of a pleading. The requirement of the affidavit under oath was enacted in 1941, 119 Ohio Laws 586, and has remained continuously in force since that date. The Socialist Labor Party has appeared on the state ballot since the law’s passage, and, unless the state officials have ignored what appear to be mandatory oath provisions, it is reasonable to conclude that the party has in the past executed the required affidavit.
It is axiomatic that the federal courts do not decide abstract questions posed by parties who lack “a personal stake in the outcome of the controversy.” Baker v. Carr, 369 U. S. 186, 204 (1962); Flast v. Cohen, 392 U. S. 83, 101 (1968). Appellants argue that the affidavit requirement violates the First and Fourteenth Amendments, but their pleadings fail to allege that the requirement has in any way affected their speech or conduct, or that executing the oath would impair the exercise of any right that they have as a political party or as members of a political party. They contend that to require it of them but not of the two major political parties denies them equal protection, but they do not allege any particulars that make the requirement other than a hypothetical burden. Finally, they claim that the required affidavit is impermissibly vague and that its enforcement procedures do not comport with due process. But the record before the three-judge District Court, and now before this Court, is extraordinarily skimpy in the sort of proved or admitted facts that would enable us to adjudicate this claim. Since appellants have previously secured a position on the ballot with no untoward consequences, the gravamen of their claim that it injures them remains quite unclear.
In the usual case in which this Court has passed on the validity of similar oath provisions, the party challenging constitutionality was either unable or unwilling to execute the required oath and, in the circumstances of the particular case, sustained, or faced the immediate prospect of sustaining, some direct injury as a result of the penalty provisions associated with the oath. See, e. g., Cole v. Richardson, 405 U. S. 676 (1972); Keyishian v. Board of Regents, 385 U. S. 589 (1967); Wieman v. Updegraff, 344 U. S. 183 (1952).
In Cramp v. Board of Public Instruction, 368 U. S. 278, 283-285 (1961), the appellants were public school teachers who had been threatened with discharge for their refusal to execute the required oath. The Court held that even though appellants might be able to sign the required oath in good conscience, the record there indicated that they would still be subject to possible hazards of a perjury conviction by reason of the vagueness of the oath’s language. In the present case, however, appellants have apparently signed the oath at previous times, and so far as this record shows they have suffered no injury as a result. The State has never questioned the truth of the affidavit, and appellants’ conduct and associations have not been constricted as a result of their having executed the affidavit.
The long and the short of the matter is that we know very little more about the operation of the Ohio affidavit procedure as a result of this lawsuit than we would if a prospective plaintiff who had never set foot in Ohio had simply picked this section of the Ohio election laws out of the statute books and filed a complaint in the District Court setting forth the allegedly offending provisions and requesting an injunction against their enforcement. These plaintiffs may well meet the technical requirement of standing, and they may be parties to a case or controversy, but their case has not given any particularity to the effect on them of Ohio’s affidavit requirement.
This Court has recognized in the past that even when jurisdiction exists it should not be exercised unless the case “tenders the underlying constitutional issues in clean-cut and concrete form.” Rescue Army v. Municipal Court, 331 U. S. 549, 584 (1947). Problems of prematurity and abstractness may well present “insuperable obstacles” to the exercise of the Court’s jurisdiction, even though that jurisdiction is technically present. Id., at 574.
We find that the present posture of this case raises just such an obstacle. All issues litigated below have become moot except for one that received scant attention in appellants’ complaint and was treated not at all in the affidavits filed in support of the cross-motions for summary judgment. Nothing in the record shows that appellants have suffered any injury thus far, and the law’s future effect remains wholly speculative. Notwithstanding the indications that appellants have in the past executed the required affidavit without injury, it is, of course, possible that at some future time they may be able to demonstrate some injury as a result of the application of the provision challenged here. Our adjudication of the merits of such a challenge will await that time. This appeal must be dismissed. Rescue Army v. Municipal Court, supra, at 585.
It is so ordered.
Mr. Justice Douglas, with whom Mr. Justice Brennan and Mr. Justice Marshall concur, dissenting.
The oath required of appellants for political recognition in Ohio is plainly unconstitutional as a denial of equal protection. Because I believe this a proper case for declaratory relief, I would therefore reverse the judgment below.
In order to “be recognized or be given a place on the ballot in any primary or general election,” Ohio requires that members of political parties file a loyalty oath with the Secretary of State. Ohio Rev. Code Ann. § 3517.07 (1960) (see appendix to this opinion). I need not consider the vagueness or overbreadth of the Ohio oath, for my views on that subject have been stated over and over again. For the present case, it is sufficient for my decision that Ohio requires the oath based upon the invidious classification of political allegiance.
An exception from the oath requirement is made for “any political party or group which has had a place on the ballot in each national and gubernatorial election since the year 1900.” Ibid. It is conceded that this exemption applies only to the Democratic and Republican Parties (see Plaintiffs’ Motion for Summary Judgment), and we may properly treat it as if it were written in precisely those terms. See Lane v. Wilson, 307 U. S. 268 (1939); Guinn v. United States, 238 U. S. 347 (1915). This exception is thus part of the broader pattern of Ohio’s discriminatory preference for the two established political parties. We considered this discrimination before in Williams v. Rhodes, 393 U. S. 23, 31 (1968), and said:
“No extended discussion is required to establish that the Ohio laws before us give the two old, established parties a decided advantage over any new parties struggling for existence and thus place substantially unequal burdens on both the right to vote and the right to associate. The right to form a party for the advancement of political goals means little if a party can be kept off the election ballot and thus denied an equal opportunity to win votes. So also, the right to vote is heavily burdened if that vote may be cast only for one of two parties at a time when other parties are clamoring for a place on the ballot. In determining whether the State has power to place such unequal burdens on minority groups where rights of this kind are at stake, the decisions of this Court have consistently held that ‘only a compelling state interest in the regulation of a subject within the State’s constitutional power to regulate can justify limiting First Amendment freedoms.’ ”
In a separate opinion, I noted, “The Equal Protection Clause of the Fourteenth Amendment permits the States to make classifications and does not require them to treat different groups uniformly. Nevertheless, it bans any ‘invidious discrimination.’ ” Id., at 39. Classifications based upon political or religious associations, beliefs, or philosophy are such “invidious” classifications. As Mr. Justice Black said in Cox v. Louisiana, 379 U. S. 559, 581:
“[B]y specifically permitting picketing for the publication of labor union views, Louisiana is attempting to pick and choose among the views it is willing to have discussed on its streets. It thus is trying to prescribe by law what matters of public interest people whom it allows to assemble on its streets may and may not discuss. This seems to me to be censorship in a most odious form, unconstitutional under the First and Fourteenth Amendments. And to deny this appellant and his group use of the streets because of their views against racial discrimination, while allowing other groups to use the streets to voice opinions on other subjects, also amounts, I think, to an invidious discrimination forbidden by the Equal Protection Clause of the Fourteenth Amendment.”
"While I doubt that any state interest can be so compelling as to justify an impairment of associational freedoms in the area of philosophy — political or otherwise,” Lippitt v. Cipollone, 404 U. S. 1032, 1033-1034 (Douglas, J., dissenting); see also Williams v. Rhodes, supra, at 39-40 (separate opinion of Douglas, J.), the ap-pellees have not even offered a colorable explanation for the disparate treatment of the separate political parties. I conclude, therefore, that the unequal burden placed upon appellants is unconstitutional.
The Court does not reach appellants’ challenge to the loyalty oath, however, because it concludes that “they do not allege any particulars that make the [oath] requirement other than a hypothetical burden.” Ante, at 587. In sharp contrast to the decision in Rescue Army v. Municipal Court, 331 U. S. 549 (1947), the only case upon which it relies, the Court does not explain what additional facts it feels are necessary to reach the merits. In basing its decision on this ground, I fear that the Court has taken an unduly narrow view of declaratory relief.
Appellants argue that the oath is facially invalid for the invidious classification it creates, for its overbreadth and its vagueness. Certainly such challenges to the facial validity of a statute are ideally suited for declaratory judgment. Moore v. Ogilvie, 394 U. S. 814. There can be no question of appellants’ stake in the controversy, for if they refuse to subscribe to the oath they will be denied political recognition, cf. Law Students Research Council v. Wadmond, 401 U. S. 154 (1971); Baird v. State Bar of Arizona, 401 U. S. 1 (1971); while, in order to obtain such recognition, they must subscribe to an unconstitutional oath or subject themselves to an invidious classification. Cf. Keyishian v. Board of Regents, 385 U. S. 589 (1967); Cramp v. Board of Public Instruction, 368 U. S. 278 (1961). Under either alternative, appellants have “such a personal stake in the outcome ... as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends.” Baker v. Carr, 369 U. S. 186, 204 (1962). Nor is this a case where appellants’ injury is only speculative, cf. Golden v. Zwickler, 394 U. S. 103 (1969), for they allege that they “will continue to nominate candidates for political office in Ohio in the future.”
Evers v. Dwyer, 358 U. S. 202 (1958), is relevant here. The appellant in that case was a black who sought a declaratory judgment that a state statute requiring the segregation of the races on municipal buses was unconstitutional. In dismissing the complaint, the District Court took the approach this Court takes today and reasoned that appellant “ha[d] not been injured at all” because “he was not a regular or even an occasional user of bus transportation.” We summarily reversed that decision, saying that an individual “subjected by statute to special disabilities necessarily has, we think, a substantial, immediate, and real interest in the validity of the statute which imposes the disability.” 358 U. S., at 204. And see Gooding v. Wilson, 405 U. S. 518.
In Evers, we did not base our decision on any consideration of whether the seats blacks were required to take were better or worse than those available to whites. Rather, we held that members of a disfavored minority could challenge unconstitutional statutory classifications which set them apart. That was the “disability” to which we referred. Appellants are members of an unfavored political minority in Ohio and they too should be able to challenge invidious classifications which set them apart from the favored majority.
Since 1946, appellants and other minority political parties in Ohio have been repressed by legislation enacted by the two dominant parties. In the last four years, they have sought relief from these shackles so that their voices could be heard in the political arena But Ohio has erected innumerable roadblocks to their participation. Under the majority’s decision, each obstacle will require a separate lawsuit because it will only be after they have been frustrated at a particular turn that they will be able to satisfy this new test for declaratory relief.
The modern remedy of declaratory judgments should be used to simplify, not multiply, litigation.
I would reverse the judgment below.
That case was decided together with Williams v. Rhodes, 393 U. S. 23 (1968).
Despite the contrary implication in the dissent, see post, at 592-593, n. 3, the holding of Rescue Army has been applied by this Court to numerous appeals in which no statutory or constitutional impediment to jurisdiction was present. See, e. g., Cowgill v. California, 396 U. S. 371 (1970) (Harlan, J., concurring); Atlanta Newspapers, Inc. v. Grimes, 364 U. S. 290 (1960); Teamsters v. Denver Milk Pro ducers, Inc., 334 U. S. 809 (1948). Nor has there ever been any suggestion that Rescue Army should apply only to appeals from state, rather than federal, courts. See United States v. Fruehauf, 365 U. S. 146, 157 (1961); United States v. CIO, 335 U. S. 106, 125-126 (1948) (Frankfurter, J., concurring). See also Albertson v. Millard, 345 U. S. 242, 245 (1953). Despite this lack of case support, the dissent argues that the Rescue Army doctrine should not apply to the present case, since it is an appeal from a federal court judgment pursuant to 28 U. S. C. § 1253, whereas Rescue Army was an appeal from a state court judgment pursuant to 28 U. S. C. § 1257. This distinction is evanescent. Under both grants of jurisdiction this Court is obligated to rule upon those properly presented questions that are necessary for decision of the case. But when the issues are not presented with the clarity needed for effective adjudication, appellate review of a federal court judgment is every bit as inappropriate as was review of a state court judgment in Rescue Army.
E. g., Cole v. Richardson, 405 U. S. 676, 687 (1972) (dissenting opinion); W. E. B. DuBois Clubs v. Clark, 389 U. S. 309, 313 (1967) (dissenting opinion); Elfbrandt v. Russell, 384 U. S. 11 (1966); Nostrand v. Little, 362 U. S. 474, 476 (1960) (dissenting opinion) ; First Unitarian Church v. Los Angeles, 357 U. S. 545, 547 (1958) (concurring opinion); Speiser v. Randall, 357 U. S. 513, 532 (1958) (concurring opinion).
While the District Court acknowledged that one of appellants’ challenges to the oath was that it “violates the Equal Protection Clause by excepting the Democratic and Republican Parties from its ambit,” 318 F. Supp. 1262, 1270, the court inexplicably did not address this argument.
Rescue Army came on appeal from the Supreme Court of California and involved a complex state statutory scheme.
The present case, by contrast, comes from a United States District Court where our appellate jurisdiction is founded upon 28 U. S. C. § 1253. It is, I think, an undue extension of Rescue Army to apply it to an appeal from a federal court which properly heard and considered a federal constitutional question. See H. Hart & H. Wechsler, The Federal Courts and the Federal System 149 (1953). Our differing treatment of appeals from federal and state courts relates to the difference between the courts from which the appeals are taken. If an appeal from a state court does not fall within Art. Ill, it would in nowise affect the jurisdiction of the court from which the appeal was taken. Doremus v. Board of Education, 342 U. S. 429, 434 (1952). The same cannot be said, however, of appeals from federal courts, e. g., Muskrat v. United States, 219 U. S. 346. Thus, “[t]he established practice of the Court in dealing with a civil case from a court in the federal system which has become moot while on its way here or pending our decision on the merits is to reverse or vacate the judgment' below and remand with a direction to dismiss.” United States v. Munsingwear, 340 U. S. 36, 39 (1950); see R. Robertson & F. Kirkham, Jurisdiction of the Supreme Court §273, p. 501 (1951). “If the proceeding is one to review the decision of a state court,” however, our practice is to “remand the cause to the state court in order that that court may take such further proceedings as may be deemed appropriate.”
The cases cited by the majority, ante, at 588-589, n. 2, do not support today’s treatment of an appeal from an Art. Ill court. In United States v. Fruehauf, 365 U. S. 146 (1961), the District Court dismissed an indictment and we reversed and remanded holding that the provable facts might bring the case within the statute. In United States v. CIO, 335 U. S. 106 (1948), we affirmed the judgment of the District Court which had dismissed an indictment, because the facts alleged did not state an offense; and we did not therefore reach the constitutional issue relied upon by the District Court. Finally, Albertson v. Millard, 345 U. S. 242 (1953), was an abstention case in which we vacated the judgment of the District Court and remanded with directions to hold the case until the state law questions had been resolved. None of these cases, therefore, stands for the proposition that we may dismiss a perfected appeal from a properly entered judgment of an Art. Ill court.
The suggestion that “appellants have apparently signed the oath at previous times,” ante, at 588, and thus somehow have waived their right to object to the oath, is unsupported by the record. Appellants include not only the Socialist Labor Party but also its named officers and members who would be required to execute the oath. Whatever relevance there may be to the fact that the Socialist Labor Party was on the ballot in Ohio in 1946, that fact has no bearing with regard to the individual appellants.
As to Cramp, it is suggested that “the record there indicated that [Cramp] would still be subject to possible hazards of a perjury conviction by reason of the vagueness of the oath’s language.” Ante, at 588. In our opinion in Cramp, however, we noted that Cramp alleged in his complaint “that he ‘is a loyal American and does not decline to execute or subscribe to the aforesaid oath for fear of the penalties provided by law for a false oath,’ ” 368 U. S., at 281. In any event, Ohio also subjects oath takers to the “possible hazards of a perjury conviction,” see Ohio Rev. Code Ann. §§ 3599.36, 2917.25 (1960), so Cramp is not distinguishable.
See, e. g., Liypitt v. Cipollone, 404 U. S. 1032 (1972), aff’g 337 P. Supp. 1405 (ND Ohio 1971); Brockington v. Rhodes, 396 U. S. 41 (1969); Williams v. Rhodes, 393 U. S. 23 (1968), aff’g sub nom. Socialist Labor Party v. Rhodes, 290 P. Supp. 983 (Ohio 1968) ; State ex rel. Bible v. Board of Elections, 22 Ohio St. 2d 57, 258 N. E. 2d 227; see also State ex rel. Beck v. Hummel, 150 Ohio St. 127, 80 N. E. 2d 899.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | C | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice White
delivered the opinion of the Court.
This litigation involves the validity of Order No. 428 of the Federal Power Commission, 45 F. P. C. 454 (1971), which provides a blanket certificate‘procedure for small producers of natural gas, and relieves them of almost all filing requirements. The rates of small producers would no longer be directly regulated but would be subjected to indirect regulation through the review of purchased gas costs of the pipelines and large producers to whom these small producers sell. The Court of Appeals, with one judge dissenting, set aside the order, 154 U. S. App. D. C. 168, 474 F. 2d 416 (1972), concluding that the Commission’s order amounted to "deregulation” of small producers and was unauthorized by the Natural Gas Act (the Act), 52 Stat. 821, 15 U. S. C. § 717 et seg. Because the validity of the order is of obvious importance, we granted the petition for a writ of certiorari filed by the Commission in No. 72-1490 and by the estate of Mrs. James R. Dougherty, an intervenor in the Court of Appeals, in No. 72-1491. 414 U. S. 817 (1973).
I
On July 23, 1970, the Federal Power Commission issued a notice of proposed rulemaking “proposing] prospectively to exempt from regulation under the Natural Gas Act all existing and all future jurisdictional sales made by small producers . . . .” 35 Fed. Reg. 12,220 (1970). Following the filing of comments and informal conferences, the Commission, noting that one of its important responsibilities was "to assure maintenance of an adequate gas supply for the interstate market,” issued Order No. 428, aimed at encouraging “small producers to increase their exploratory efforts which are so important to the discovery of new sources of gas ... to facilitate the entry of the small producer into the interstate market and to stimulate competition among producers to sell gas in interstate commerce.” The small producer was to be assured that “when he enters into a new contract for the interstate sale of gas, the provisions of his contract will not be subject to change. We also want to relieve the small producer of the expenses and burdens relating to regulatory matters.” 45 F. P. C., at 455. Accordingly, the order provided for a nationwide blanket certificate for small producers and relieved them, with some exceptions, from all filing requirements under the Act. Unlike large producers, subject to Commission-fixed ceilings on rates charged, the small producers could sell gas at the price the market would bear, even though in excess of maximum rates set for producers in pertinent area rate proceedings. Furthermore, they would have “no refund obligations with respect to increased rates, if any, collected for sales regulated hereunder to pipelines . . . .” Id., at 457.
The order nevertheless asserted that the “action taken here in our view does not constitute deregulation of sales by small producers,” id., at 455, and that the Commission would continue to regulate such sales in the course of regulating the rates of pipelines and large producers to whom the small producers sell their gas. Pipelines purchasing from small producers at prices in excess of existing ceilings were to be permitted to file “tracking increases” in their rates, but those rates would be subject to refund “with respect to new small producer sales, but only as to that part of the rate which is unreasonably high considering appropriate comparisons with highest contract prices for sales by large producers or the prevailing market price for intrastate sales in the same producing area.” Id., at 457. The issue would be resolved either in pipeline rate cases, a proceeding limited to the tracking increase, or in certificate cases. “The Commission shall consider all relevant factors.” Id., at 458. Review of tracking increases by pipelines was not anticipated as to existing contracts with small producers; the order authorized small producers to increase their rates under these contracts, terms permitting.
Large producers buying from small producers would be permitted tracking increases to the extent authorized by their contracts and without refund obligation “as long as the price differential is consistent with prevailing price differentials in the area and as long as the small producer prices for new gas are not unreasonably high, considering appropriate comparisons with highest contract prices by large producers or the prevailing market price for intrastate sales in the same producing area.” Id., at 456. To the extent that they reflected small-producer prices in excess of that standard, large-producer tracking increases would be subject to refund.
The Commission finally asserted that “[w]e intend to review the prices established in new contracts or contract amendments relating to sales by small producers to assure the reasonableness of the rates charged by such producers pursuant to the action we are taking herein. In the event we determine that this approach is inimical to the interests of consumers, we shall take further action to protect the consumers.” Id., at 459. The Commission apparently remained free to institute separate proceedings under § 5 (a) of the Act, 15 U. S. C. § 717d (a), to reduce the producer’s rates prospectively.
The Commission also made clear that small producers remain subject to the requirements of § 7 (b) of the Act, 15 U. S. C. § 717f (b), with respect to the abandonment of jurisdictional sales, including those sales dealt with in the order. The order also limited the use of indefinite price escalation clauses in small-producer contracts and excluded from the reach of the order small-producer sales made from reserves transferred by large producers.
The Court of Appeals set aside the Commission order, holding that under the statute all natural gas sold in interstate commerce must carry just and reasonable rates and that even if indirect regulation was permissible under the statute, Order No. 428 was infirm because nothing in it satisfied the Commission's “duty to insure that all rates are 'just and reasonable.''' 154 U. S. App. D. C., at 173, 474 F. 2d, at 421. Instead, the order was thought merely to call for rates that were not unreasonably high as compared with the highest contract prices for large-producer sales or the prevailing market price in the intrastate market — “factors which [the Commission] does not regulate or which derive solely from market forces.'' Ibid. Nor could the court accept the possible argument that market forces themselves would produce just and reasonable rates, particularly when it understood the Commission itself to take the position that the just- and-reasonable standard was in no event mandatory. The Court of Appeals accordingly set aside the Commission's order.
II
The Commission does not contend in this Court that the Act permits it to exempt small-producer rates from regulation or to regulate those rates by any criterion less demanding than the just-and-reasonable standard mandated by §§ 4 and 5 of the Act, 15 U. S. C. §§ 717c and 717d. Its major propositions are, first, that Order No. 428, when properly understood, provides for just and reasonable rates but through the means of indirect, rather than direct, regulation; and, second, that the Act does not forbid this kind of indirect regulation. Respondents, on the other hand, contend that the duty imposed by the Act to provide just and reasonable rates cannot be satisfied by indirect regulation and that Order No. 428 in any event abandons the just-and-reasonable standard with respect to small-producer rates.
We face first the issue as to the validity of indirect regulation of small-producer rates: on the assumption that Order No. 428 allows pipelines and large producers to reflect in their rates only just and reasonable charges for gas purchased from small producers, is the order valid? We hold that it is, for we see nothing in the Act which requires the Commission to fix the rates chargeable by small producers by orders directly addressed to them or which proscribes the kind of indirect regulation undertaken here.
The Act directs that all producer rates be just and reasonable but it does not specify the means by which that regulatory prescription is to be attained. That every rate of every natural gas company must be just and reasonable does not require that the cost of each company be ascertained and its rates fixed with respect to its own costs. Although for a time following Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672 (1964), the Commission proceeded to regulate rates company by company, there was soon a shift to the technique of setting area rates based on composite cost considerations. We sustained this mode of rate regulation.
In Wisconsin v. FPC, 373 U. S. 294, 309 (1963), the Court affirmed the Commission's decision to abandon the individual cost-of-service method of fixing rates and to substitute area ratemaking. The Court said:
“To declare that a particular method of rate regulation is so sanctified as to make it highly unlikely that any other method could be sustained would be wholly out of keeping with this Court's consistent and clearly articulated approach to the question of the Commission's power to regulate rates. It has repeatedly been stated that no single method need be followed by the Commission in considering the justness and reasonableness of rates . . .
This was wholly consistent with the Court’s prior views, see FPC v. Natural Gas Pipeline Co., 315 U. S. 575 (1942); FPC v. Hope Natural Gas Co., 320 U. S. 591 (1944); Colorado Interstate Gas Co. v. FPC, 324 U. S. 581 (1945), and reaffirmed the principle which had been clearly stated in the Hope ease: “Under the statutory standard of 'just and reasonable’ it is the result reached not the method employed which is controlling." 320 U. S., at 602.
The principles of these prior cases were recognized and applied in the Permian Basin Area Rate Cases, 390 U. S. 747 (1968), where we sustained a two-tier system of rates for natural gas producers. In the course of doing so, we recognized that encouraging the exploration for and development of new sources of natural gas was one of the aims of the Act and one of the functions of the Commission. The performance of this role obviously involved the rate structure and implied a broad discretion for the Commission. The Court summarized the principles controlling the judicial review of Commission orders in terms very pertinent here:
“The Act was intended to create, through the exercise of the national power over interstate commerce, 'an agency for regulating the wholesale distribution to public service companies of natural gas moving interstate’; Illinois Gas Co. v. Public Service Co., 314 U. S. 498, 506; it was for this purpose expected to ‘balanc[e] ... the investor and the consumer interests.’ FPC v. Hope Natural Gas Co. [320 U. S.], at 603. This Court has repeatedly held that the width of administrative authority must be measured in part by the purposes for which it was conferred; see, e. g., Piedmont & Northern R. Co. v. Comm’n, 286 U. S. 299; Phelps Dodge Corp. v. Labor Board, 313 U. S. 177, 193-194; National Broadcasting Co. v. United States, 319 U. S. 190; American Trucking Assns. v. United States, 344 U. S. 298, 311. Surely the Commission’s broad responsibilities therefore demand a generous construction of its statutory authority. [Footnote omitted.]
“Such a construction is consistent with the view of administrative rate making uniformly taken by this Court. The Court has said that the 'legislative discretion implied in the rate making power necessarily extends to the entire legislative process, embracing the method used in reaching the legislative determination as well as that determination itself.’ Los Angeles Gas Co. v. Railroad Comm’n, 289 U. S. 287, 304. And see San Diego Land & Town Co. v. Jasper, 189 U. S. 439, 446. It follows that rate-making agencies are not bound to the service of any single regulatory formula; they are permitted, unless their statutory authority otherwise plainly indicates, 'to make the pragmatic adjustments which may be called for by particular circumstances.’ FPC v. Natural Gas Pipeline Co. [316 U. S.], at 586.’’ 390 U. S., at 776-777.
It followed that Commission action taken in the pursuit of a legitimate statutory goal enjoyed the presumption of validity, id., at 767, and that he who would upset the rate order under the Act carries “ 'the heavy burden of making a convincing shewing that it is invalid because it is unjust and unreasonable in its consequences.’ ” Ibid.
Accepting these views of our role as a court sitting in review, we cannot at this point say that the Commission has exceeded its powers by instituting a regime of indirect regulation of small-producer rates. Surely it is not fatal to Order No. 428 that it does not, as an initial matter, consider the costs of each company and the reasonableness of its rates. Nor is the order vulnerable because there will be one level of just and reasonable rates for small producers and another for large producers. As previously noted, the Court approved two sets of just and reasonable rates in the Permian Basin cases, the justification being the necessity to stimulate exploration for and the development of new supplies of natural gas. Id., at 796-797.
Indirect regulation through the mechanism of controlling large-producer costs will not merely recreate the situation which the Court in the Phillips case found to be inconsistent with the Natural Gas Act. In the pre-Phillips era, although asserting the right to pass on the prudentiality of various items of the pipelines’ costs, the Commission did not purport to regulate the rates of producers with the aim of keeping them within just and reasonable limits, as the Commission now asserts it is doing under Order No. 428.
It is argued that permitting the small producers initially to charge what the market will bear and relying on later regulation of pipeline rates to protect the consumer is contrary to Atlantic Refining Co. v. Public Service Comm’n, 360 U. S. 378 (1959) (CATCO). But pipelines and large producers must file with the Commission their new contracts with the small producers, and their rates will be subject to suspension and refund within the limits set out in Order No. 428. As the Court noted in FPC v. Sunray DX Oil Co., 391 U. S. 9, 26 (1968), the basic assumption which must have underlain the Court’s CATCO decision was “that the purchasing pipeline, whose cost of purchase is a current operating expense which the pipeline is entitled to pass on to its customers as part of its rates, lacks sufficient incentive to bargain prices down.” Here, on the other hand, the incentive is provided — pipeline rates are subject to refund to the extent that the purchased gas cost component of their rates is excessive.
This leads to the contention of the pipelines and the large producers that the scheme of indirect regulation envisioned by Order No. 428 unfairly subjects them to the risk of later determination that their gas costs are unjust and unreasonable and to the obligation to make refunds which they cannot in turn recover from the small producers whose rates have been found too high. But those whose rates are regulated characteristically bear the burden and the risk of justifying their rates and their costs. Rate regulation unavoidably limits profits as well as income. “The fixing of prices, like other applications of the police power, may reduce the value of the property which is being regulated. But the fact that the value is reduced does not mean that the regulation is invalid.” FPC v. Hope Natural Gas Co., 320 U. S., at 601. All that is protected against, in a constitutional sense, is that the rates fixed by the Commission be higher than a confiscatory level. FPC v. Natural Gas Pipeline Co., 315 U. S., at 585. In the context of the Act’s rate regulation, whether any rate is confiscatory, or for that matter “just and reasonable,” can only be judged by “the result reached, not the method employed.” FPC v. Hope Natural Gas Co., supra, at 602. In the Permian Basin Area Rate Cases, 390 U. S., at 769, we stated a truism of rate regulation: “Regulation may, consistently with the Constitution limit stringently the return recovered on investment, for investors’ interests provide only one of the variables in the constitutional calculus of reasonableness.”
Here, requiring pipelines and the large producers to assume the risk in bargaining for reasonable prices from small producers is within the Commission’s discretion in working out the balance of the interests necessarily involved. The consumer would be protected from current excessive rates, but at the expense of the pipeline, rather than the producer, who is engaged in necessary exploratory activity, thus serving the public interest in getting greater gas production but at just and reasonable rates. Under such circumstances, it is surely not an abuse of the discretion the Commission retains under § 4 (e) of the Act, see Permian Basin Area Rate Cases, supra, at 826-827, to refrain from imposing a refund obligation on the small producers.
Any broadside assertion that indirect regulation will be confiscatory is premature. The consequences of indirect regulation can only be viewed in the entirety of the rate of return allowed on investment, and this effect will be unknown until the Commission has applied its scheme in individual cases over a period of time. Moreover, the “regulation of producer prices is avowedly still experimental,” id., at 772, and Order No. 428 asserts the Commission’s intention to keep the experiment under close review. The Commission claims and is entitled to no license to be arbitrary or capricious in disallowing purchased gas costs of large producers and pipelines. The Commission may not exceed its authority under the Act; its orders are subject to judicial review; and reviewing courts must determine whether Commission orders, issued pursuant to indirect regulation, are supported by substantial evidence and whether it is rational to expect them “to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risk they have assumed, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable.” Id., at 792.
If, in the course of the necessary bargaining with small producers, the large producers and the pipelines are given no guidance whatsoever as to what the standards of the Commission may be, the risk of incurring unrefundable expenses that may later be disallowed is considerably enhanced. The scope of this possible difficulty is measured by the standards, or lack of them, by which the Commission will review the purchased gas costs of the large producers and the pipelines. As Order No. 428 reveals, the Commission is surely aware of the problem, and we would expect additional attention to be given this question in the course of the remand proceedings which, as explained in Part III, we think are necessary here.
Ill
We turn now to whether Order No. 428 is invalid for failure to comply with the Act's requirement that the sale price for gas sold in interstate commerce be just and reasonable. The Court of Appeals rejected what it apparently understood was “the Commission’s basic contention all along . . . that the 'just and reasonable’ standard was not mandatory and that the FPC can simply choose not to regulate rates.” 154 U. S. App. D. C., at 175, 474 F. 2d, at 422. Whatever the position of the Commission heretofore has been, it wisely does not challenge that aspect of the Court of Appeals judgment. Sections 4 and 5 of the Act require that all gas rates be just and reasonable; and the Court held in Phillips that this very prescription applies to the rates of all gas producers. The Commission may have great discretion as to how to insure just and reasonable rates, but it is plain enough to us that the Act does not empower it to exempt small-producer rates from compliance with that standard.
Section 16, 15 U. S. C. § 717o, upon which the Commission relies, is not to the contrary. It authorizes the Commission to perform any and all acts and to issue any and all rules and regulations “as it may find necessary or appropriate to carry out the provisions of this Act”; and “[f]or the purposes of its rules and regulations, the Commission may classify persons and matters within its jurisdiction and prescribe different requirements for different classes of persons or matters.” But § 16 obviously does not vest authority in the Commission to set unjust and unreasonable rates, even for small producers. It does not authorize the Commission to set at naught an explicit provision of the Act. No producer is exempt from §§ 4 and 5. Neither the Permian Basin Area Rate Cases nor FPC v. Louisiana Power & Light Co., 406 U. S. 621 (1972), on which the Government relies, suggests or holds that § 16 permits the Commission to ignore the specific mandates of those sections.
The Court of Appeals also read Order No. 428 as failing to provide a mechanism for insuring that small-producer rates will be just and reasonable. In its view, the order provided a pure market standard for the approval of the purchased gas costs of large producers and pipelines, a standard which fell short of the requirements of the Act. Accordingly, it set aside the order.
The Commission does not assert here that it is free under the Act to equate just and reasonable rates with the prices for gas prevailing in the market place. Its major remaining contention is that the Court of Appeals misread Order No. 428 and that the order, properly understood, contemplates a scheme of indirect regulation that would assure just and reasonable small-producer rates for natural gas and that would judge small-producer rates not only by market factors but by all the relevant considerations necessary to arrive at the considered judgment contemplated by the Act. For present purposes, then, the Commission accepts the Court of Appeals’ construction of the Act; but insists that the order is consistent with the statute as so construed.
In this posture of the case, we think it clear that Order No. 428 cannot stand in its present form and that the cases should be remanded for further proceedings before the Commission. We have studied the order with care, and we cannot accept the construction of it that the Commission now presses upon us. At the very least, the order is so ambiguous that it falls short of that standard of clarity that administrative orders must exhibit. The Commission was bound to exercise its discretion within the limits of the standards expressed by the Act; and “for the courts to determine whether the agency has done so, it must ‘disclose the basis of its order' and ‘give clear indication that it has exercised the discretion with which Congress has empowered it.’ ” Burlington Truck Lines v. United States, 371 U. S. 156, 167-168 (1962), quoting in part from Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 197 (1941). We shall indicate briefly our basis for this conclusion.
In the first place, Order No. 428 does not expressly mention the just-and-reasonable standard. It comes no closer than to subject pipeline rates to reduction and refund “only as to that part of the rate which is unreasonably high considering appropriate comparisons with highest contract prices for sales by large producers or the prevailing market price for intrastate sales . . . .” 45 F. P. C., at 457. (Emphasis added.) The order took a very similar approach to the tracking increases by large producers. Moreover, under the order, contractually authorized increases in rates for flowing gas under existing contracts could be automatically passed through by the pipelines and would not be subject to examination under the standard proposed by the order with respect to new sales by small producers. There was no finding that these contemplated increased rates for flowing gas would be just and reasonable. The Commission merely asserts in its brief here that it was familiar with the existing contracts and must have considered the rates reserved to be acceptable under the Act.
It is true that pipeline and large-producer costs for new small-producer gas were not to be “unreasonable” but the implication appears to be that reasonableness would be judged by the standard of the marketplace. It is also true that the Commission asserted that it was not deregulating small-producer rates, that the Commission “shall consider all relevant factors” in determining whether proposed rates were consistent with the “public convenience and necessity,” and that the Commission intended to review new contract prices charged by small producers “to assure . . . the reasonableness of the rates charged by such producers pursuant to the action we are taking herein.” But these generalities do not supply the requisite clarity to the order or convince us that it should be sustained.
Had the order unambiguously provided what the Commission now asserts it was intended to provide, we would have a far different case to decide. But as it is, we cannot “accept appellate counsel's post hoc rationalizations for agency action”; for an agency's order must be upheld, if at all, “on the same basis articulated in the order by the agency itself.” Burlington Truck Lines, 371 U. S., at 168-169; SEC v. Chenery Corp., 332 U. S. 194, 196 (1947).
IV
For the purposes of the proceedings that may occur on remand, we should also stress that in our view the prevailing price in the marketplace cannot be the final measure of “just and reasonable” rates mandatéd by the Act. It is abundantly clear from the history of the Act and from the events that prompted its adoption that Congress considered that the natural gas industry was heavily concentrated and that monopolistic forces were distorting the market price for natural gas. Hence, the necessity for regulation and hence the statement in Sunray DX, 391 U. S., at 25, that if contract prices for gas were set at the market price, this
“would necessarily be based on a belief that the current contract prices in an area approximate closely the ‘true’ market price — the just and reasonable rate. Although there is doubtless some relationship, and some economists have urged' that it is intimate, such a belief would contradict the basic assumption that has caused natural gas production to be subjected to regulation . . . (Footnote omitted.)
In subjecting producers to regulation because of anti-competitive conditions in the industry, Congress could not have assumed that "just and reasonable” rates could conclusively be determined by reference to market price. Our holding in Phillips implies just the opposite. This does not mean that the market price of gas would never, in an individual case, coincide with just and reasonable rates or not be a relevant consideration in the setting of area rates, see Permian Basin Area Rate Cases, 390 U. S., at 793-795; it may certainly be taken into account along with other factors, Southern Louisiana Area Rate Cases, 428 F. 2d 407, 441 (CA5), cert. denied sub nom. Associated Gas Distributors v. Austral Oil Co., 400 U. S. 950 (1970). It does require, however, the conclusion that Congress rejected the identity between the “true” and the “actual” market price.
The Court is not unresponsive to the special needs of small producers who play a critical role in exploratory efforts in the natural gas industry and ameliorating the supply shortage. The requirements of the Act, however, do not distinguish between small and large producers with respect to just and reasonable rates. Even if the effect of increased small-producer prices would make a small dent in the consumer’s pocket, when compared with the rates charged by the large producers, the Act makes unlawful all rates which are not just and reasonable, and does not say a little unlawfulness is permitted. Moreover, there is no finding in the Commission’s order as to the actual impact the projected market price increases would have on consumer expenditures for gas, and the Commission is previously on record in its Permian decision, as stating: “[T]he impact of small producer prices on consumers is by no means de minimis on an area basis, and is of great impact in some situations.” 34 F. P. C. 159, 235 (1965).
V
In concluding that the Commission lacks the authority to place exclusive reliance on market prices, we bow to our perception of legislative intent. It may be, as some economists have persuasively argued, that the assumptions of the 1930’s about the competitive structure of the natural gas industry, if true then, are no longer true today. It may also be that control of prices in this industry, in a time of shortage, if such there be, is counterproductive to the interests of the consumer in increasing the production of natural gas. It is not the Court’s role, however, to overturn congressional assumptions embedded into the framework of regulation established by the Act. This is a proper task for the Legislature where the public interest may be considered from the multifaceted points of view of the representational process.
Attempts haye been made in the past to exempt producers from the coverage of the Act, but these attempts have been unsuccessful. The Court realized as much in the Phillips case. 347 U. S., at 685, and n. 14. In 1950, Congress had passed a bill, H. R. 1758, 81st Cong., 2d Sess., to exempt gas producers from the Act, but President Truman vetoed the bill stating that “there is a clear possibility that competition will not be effective, at least in some cases, in holding prices to reasonable levels. Accordingly, to remove the authority to regulate, as this bill would do, does not seem to me to be wise public policy.” The President made this judgment despite the arguments that imposition of price control would discourage exploration and development of new wells. Public Papers of the Presidents, Harry S. Truman, 1950, p. 257 (1965). For the Court to step outside its role in construing this statute, and insert itself into the debate on economics and the public interest, would be an unwarranted intrusion into the legislative forum where the debate again rages on the question of deregulation of natural gas producers.
We do, however, make clear that under the present Act the Commission is free to engage in indirect regulation of small producers by reviewing pipeline costs of purchased gas, providing that it insures that the rates paid by pipelines, and ultimately borne by the consumer, are just and reasonable. It may be, as some of the respondents suggest, that ensuring just and reasonable rates by means of indirect regulation will not be administratively feasible, but this is a matter for the Commission to consider.
We agree with the Court of Appeals that the order of the Commission must be set aside; but for reasons previously stated, we vacate the judgment of the Court of Appeals and remand the cases to that court with instructions to remand the cases to the Commission for further proceedings consistent with this opinion.
Vacated and remanded.
Mr. Justice Stewart took no part in the consideration or decision of these cases.
A “small producer” was defined as an independent producer, not affiliated with a natural gas pipeline company, whose total jurisdictional sales on a nationwide basis, together with sales of affiliated producers, did not exceed 10,000,000 Mcf at 14.65 psia during any calendar year. New small-producer sales included any sale made pursuant to a contract dated after March 18,1971.
The Commission found that small producers produce about 10% of the gas purchased by pipelines, excluding all pipeline-to-pipeline sales. It appears, however, that they also account for 80% of the natural gas exploration in this country.
Subsequently, the Commission issued two supplemental orders, Order No. 428-A, 45 F. P. C. 548, revising the annual statement requirements for small producers and Order No. 428-B, 46 F. P. C. 47, which denied applications for rehearing and modified Order No. 428 in respects that need not be mentioned here.
The large producers also contend that they are put at a disadvantage by the Commission’s order because their contracts may not permit them to pass on the increased costs of gas purchased from small producers, whereas the pipelines will be in a position to do so. This is, however, a function of the producers’ contracts, and the Commission has no authority, absent a finding that the existing contract rate “is so low as to have an adverse effect on the public interest,” to permit large producers or pipelines to raise their rates in excess of the maximum authorized in their contracts, FPC v. Sierra Pacific Power Co., 350 U. S. 348, 355 (1956); United Gas Co. v. Mobile Gas Corp., 350 U. S. 332 (1956). We think other claims of the large producers, as to unfair treatment or discrimination, are equally ill-founded.
The New York Public Service Commission also questions whether it is administratively feasible for the FPC, on review of individual pipelines’ costs, to make sure rates are just and reasonable, claiming that this would be a return with a vengeance to the administrative morass which led to the adoption of area rates for producers in the first instance. This claim is also premature in light of possible regulatory approaches the FPC may take on remand.
The Commission’s position is not advanced by FPC v. Hunt, 376 U. S. 515, 527 (1964). The Court in that case merely questioned whether exemption might prove, after study, to be an available alternative.
The Commission, in its brief, has indicated that the standard will not be limited to comparisons with appropriate market prices, but will include (1) producer’s costs, (2) the pipeline’s need for gas, (3) the availability of other gas supplies, (4) the amount of gas dedicated under the contract, and (5) the rates of other recent small-producer sales previously approved for flowthrough.
fAs appears from § 1 (a) of the Act, 15 U. S. C. §717 (a), the legislation stemmed from the 1935 Report of the Federal Trade Commission. S. Doc. No. 92, pt. 84r-A, 70th Cong., 1st Sess. (published 1936). That report concluded that there was heavy concentration both in the production and distribution of natural gas. “The 4 largest producer groups account for about 72 percent of the output of natural gas produced by 32 holding company groups in 1930.” Id., at 589. The heavy concentration of pipeline ownership “accentuates whatever control the pipeline interests have of the available gas supply.” Id., at 590. The Commission concluded, on the basis of its detailed investigation of the industry, that “[t]he prime characteristic of the situation described is that of a steadily developing concert of interests dominating the producing, transporting, and distributing branches of the industry.” Id., at 600. The heart of the problem was at the pipeline end, since the concentration of ownership there allowed the concert of interests “to determine the amount of natural gas which may be marketed by fixing the amount which may be transported. That in turn gives it power to say how much shall be produced.” Ibid. Based upon these findings, the Commission singled out as “Specific Evils Existing in the Natural-Gas Industry” both the “ [u] nregulated monopolistic control of certain natural-gas production areas” and the "[u] nregulated control of pipeline transmission and of wholesale distribution.” Id., at 615. It concluded that regulation, at least of pipelines, see id., at 616, was required.
See C. Hawkins, Structure of the Natural Gas Producing Industry, and P. MacAvoy, The Regulation-Induced Shortage of Natural Gas, in Regulation of the Natural Gas Producing Industry 137-191 (K. Brown ed. 1972). See also Statement of John N. Nassikas, Chairman, Federal Power Commission, Hearing on the Natural Gas Industry before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 93d Cong., 1st Sess., 43-72 (1973).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Black
delivered the opinion of the Court.
The American Foreign Service at Stockholm issued to petitioner an immigration visa to come to the United States as a Swedish quota immigrant. On the ground that she was a mental defective, authorities of the Immigration and Naturalization Service declined to admit her into this country and ordered her detention at Ellis Island pending deportation to Sweden. She filed this habeas corpus proceeding contending that she was not a mental defective and challenging in several respects the legality of the exclusion order. The District Court discharged the writ and ordered petitioner remanded to the immigration authorities. 82 F. Supp. 36. The Court of Appeals affirmed, one judge dissenting. 170 F. 2d 1009. Certiorari was granted because important questions were raised concerning administration of the immigration laws.
Section 3 of the Immigration Act of 1917 excludes from admission into this country certain classes of aliens deemed undesirable. Among those excluded are persons “who are found to be and are certified by the examining surgeon as being mentally . . . defective . . . 39 Stat. 874, 875, 8 U. S. C. § 136 (d). Section 16 of the Act provides that mental examinations of arriving aliens shall be made by not less than two United States Public Health Service medical officers especially trained in the diagnosis of insanity and mental defects. The same section authorizes an appeal to a special board of medical officers of the Public Health Service for any alien who is certified by the two medical officers as a mental defective. Finally § 17 of the Act as amended, 8 U. S. C. § 153, provides that boards of special inquiry shall be appointed by the Immigration and Naturalization Service, subject to approval of the Attorney General. These boards of special inquiry are granted “authority to determine whether an alien who has been duly held shall be allowed to land or shall be deported.” It was a board of special inquiry of this kind that ordered petitioner excluded from the United States.
First. Two medical officers of the Public Health Service signed a certificate that petitioner was a mental defective. On appeal a board of three Public Health medical officers affirmed the finding of this certificate. Later when her case was under consideration by a board of special inquiry of the Immigration and Naturalization Service, petitioner asked for time to produce additional evidence to show that she was not a mental defective. The board refused to hear such evidence holding that it was bound by § 17 of the Immigration Act to accept as final the medical certification that she was a mental defective. Petitioner contends that this holding was error which invalidates the exclusion order. We hold that the Court of Appeals correctly rejected this contention.
Section 17 provides, with an exception not here relevant, that “the decision of a board of special inquiry shall be based upon the certificate of the examining medical officer and . . . shall be final as to the rejection of aliens affected with . . . any mental . . . disability which would bring such aliens within any of the classes excluded from admission to the United States under section three of this Act.” We agree with the following statement of the Court of Appeals. “A certificate by the medical board if its action conformed to the statute and regulations and its decision was made after a fair hearing was plainly intended to be conclusive.” 170 F. 2d 1009, 1012. This conclusion is particularly compelling in the light of the legislative history referred to in that court’s opinion. We therefore turn to the medical certificates to consider the contention that they were not issued as the result of the kind of examinations required by the statute and regulations, and that the certificates themselves failed to conform to those requirements.
Second. Petitioner attacks the validity of both the initial medical certificate and that of the appellate medical board, contending that they provide an inadequate basis for excluding her from the United States. The importance of these medical certificates is underscored by our holding that Congress has made the findings and conclusions in the certificates final on the question of whether an alien is so mentally defective that admission into the country must be denied. Congress has taken note of the crucial importance of this medical determination by prescribing certain minimum procedural requirements that the Public Health Service must follow, such as special qualifications of examining doctors, the minimum number of doctors that must examine the applying alien, and the right of an alien to have an initial adverse certificate reviewed by a special board of doctors. In order that further safeguards might be provided, Congress authorized the Surgeon General of the Public Health Service to prescribe additional regulations governing the procedure to be observed in the exercise of that Service’s exclusive authority over medical questions.
Pursuant to this statutory authority the Surgeon General issued regulations which detail the manner in which medical examinations shall be held and the type of certificates by which examining doctors and boards shall report their findings and conclusions. As shown by the dissenting opinion below, serious challenges have been made to the sufficiency of the certificate of the medical appeal board as well as to the initial medical certificate in which two doctors certified petitioner to be a mental defective. The shortcomings of the initial certificate, however, probably could have been rendered harmless by a proper examination and certificate by the medical board of appellate review. Since our conclusion is that the appellate review failed to meet the requisite standards prescribed by statute and regulations, we need not consider the challenges directed against the original certificate standing alone.
Regulations of the Public Health Service provide the way in which medical appeal boards shall be convened and detail a procedure for the boards to follow. The regulations impose a duty on such boards “to re-examine an alien”; they further provide that “re-examination shall include ... a medical examination by the board”; that the “findings and conclusions of the board shall be based on its medical examination of the alien”; and that “The board shall report its findings and conclusions to the Immigration Service . ...” The report of the medical appeal board here shows only that it “considered the appeal . . . and after taking into consideration the certificate of Mar. 11, 1948 and the testimony given by Dr. Carlton Simon, reports that it concurs with the above dated certificate.” The report of this medical board therefore wholly failed to show any compliance with the requirement of § 34.13 (g) that the board base its “findings and conclusions ... on its medical examination of the alien . . . .” We think the record makes clear that the appeal board made no such medical examination as was required by the regulations.
The report itself shows that the appellate board based its conclusion on two considerations: (1) the initial certificate of the two public health doctors; (2) testimony given by Dr. Carlton Simon. But the appellate board could not rest its finding that petitioner was a mental defective on the original certificate without denying petitioner the independent review and re-examination which Congress and the Surgeon General had prescribed. Nor could the appellate board relieve itself of its duty to make an independent re-examination by relying on the testimony of Dr. Simon. Moreover, Dr. Simon testified that petitioner was not a mental defective. His testimony was that she was “normal.” It hardly seems necessary to add that the statement of the appellate board that it had “considered the appeal,” cannot be treated as a certification that petitioner had been given an independent medical examination. We therefore hold that the appellate board's certificate is an inadequate basis on which to rest the exclusion order of the board of special inquiry.
The Government contends, however, that additional data in the record shows that the board did re-examine the petitioner. We may assume without deciding that the defects in the appellate board's report could be cured by additional record data, but we find no such data in the record sufficient to cure the defect. The data on which the Government relies is contained in a stenographic report of evidence given by petitioner and Dr. Simon, petitioner’s witness. Petitioner’s evidence, like that of Dr. Simon, was an emphatic denial of any condition which could justify her classification as a mental defective. The stenographic report thus falls far short of showing that the medical appeal board made an independent medical examination of petitioner’s mental qualities. That report tends to confirm the fact that the board’s conclusions were rested only on the report of the initial examination by the two Public Health Service doctors and on a report of the physician of the ship on which petitioner came to this country. This makes necessary a short statement concerning this report by the ship’s doctor and the circumstances under which the record discloses that report was made.
Apparently the second day after petitioner had commenced her voyage to America the ship’s doctor visited her. He found her weak and dizzy. She stated that “she could not stand the sea” and would not go to the dining room. The doctor’s impression after his first visit was that she was seasick. The next day, according to the doctor’s report, she admitted hallucinations, stating that at night she heard cries and saw faces, said she had given the consul “wrong information,” and thought this sinful. At this time the ship’s doctor wrote down his “impression of an incipient psychosis” and transferred her to the isolation ward of the ship’s hospital. The next day according to the doctor, petitioner stated that she had been treated for insanity at her home in Sweden for a six-month period two years before. On the last day of the sea trip, the ship’s doctor reported that she had cleared up “remarkably,” that she had no recollection of “a lot of strange things she had said before,” was sleeping well, denied having any hallucinations, and looked “considerably better.”
In her evidence before the medical board petitioner stated that she spoke “terribly bad English”; that prior to boarding the ship she had been to a number of parties and was very tired when she came aboard; that after coming aboard and during the voyage she had taken bromides and sleeping tablets; and that in her condition she just slept and said “yes” to every question the doctor asked.
From the foregoing it appears that the data relied on by the Government was totally inadequate to show that the appellate medical board “re-examined” petitioner. The sum total of that data is testimony given by petitioner and her medical specialist to the effect that petitioner was mentally normal, plus petitioner’s admissions that while seasick and under the influence of drugs she had said things that prompted the ship’s doctor at one time to suspect “incipient psychosis.”
So far as the medical findings and evidence here show, the daily reports made by the ship’s doctor while petitioner was a passenger constitute the only affirmative evidence that petitioner is or was a mental defective. The Public Health regulations plainly prohibit the issuance of exclusion orders resting on nothing but a single episode reported by a non-Public-Health doctor. For Congress has provided that before aliens suspected of mental defects are excluded, findings and conclusions shall be made by Public Health doctors based on their own examinations made in compliance with procedural safeguards defined or authorized by Congress. Medical certificates barring aliens are even then to be issued “only if the presence of such . . . defect is clearly established.” 42 Code Fed. Reg. § 34.4 (1947 Supp.) . And such certificates “shall in no case be issued with respect to an alien having only mental shortcomings due to ignorance, or suffering only from a mental condition attributable to remedial physical causes, or from a psychosis of a temporary nature caused by a toxin, drug, or disease.” 42 Code Fed. Reg. § 34.7 (1947 Supp.). So far as appears from the appellate certificate here, the board made no examination to determine whether the ship episode, as reported by the physician, was the result of petitioner’s ignorance of English plus temporary debility or was the result of a mental defect justifying exclusion. Even the report of the ship physician contained no finding on this point, and it is not amiss to add that the verified petition for habeas corpus contains an undenied allegation that the ship’s doctor has now stated that “in his opinion the alien is not mentally defective.”
Our holding that the appellate board’s medical certificate and additional data are inadequate to support the exclusion order makes it unnecessary to decide other questions relating to applicability of the Administrative Procedure Act to hearings before the board of special inquiry. 60 Stat. 237, 239, 5 U. S. C. §§ 1001, 1004.
The judgment is reversed and the cause is remanded to the District Court for entry of an order affording petitioner a proper hearing and medical examination before the appropriate public health authorities.
Reversed and remanded.
Mr. Justice Reed, with whom The Chief Justice and Mr. Justice Burton join, dissenting.
This Court affirms the decision that a proper medical finding of a physical defect which excludes an alien from entrance into the United States is final and not subject to further inquiry. With the Court’s ruling on this point, I agree.
(1) The reversal of the dismissal of the writ of habeas corpus is founded on the Court’s premise that the report of the reviewing board of medical officers “shows that the appellate board based its conclusion on two considerations: (1) the initial certificate of the two public health doctors; (2) testimony given by Dr. Carlton Simon [a psychiatrist chosen by the alien].” The Court then concludes that “the appellate board could not rest its finding that petitioner was a mental defective on the original certificate without denying petitioner the independent review and re-examination which Congress and the Surgeon General had prescribed.” That is to say, the report, as the Court phrases it, “makes clear that the appeal board made no such medical examination as was requirecLby the regulations.” My reading of the opinion is that the Court thinks the record affirmatively shows a failure to comply with the statute and regulation § 34.13 (g) and (h) as to findings and examination.
There is a suggestion that a medical appeal board must certify that the alien had been examined I assume, however, that if the Court intended to require specific certification by the medical board of the steps leading to its findings and conclusions it would have made such a holding definitive.
I disagree with the Court’s interpretation of the report. A strong presumption exists that public officials perform their duty. If the report had added the phrase, “in accordance with the regulations,” after the word “considered,” there could be no doubt as to the sufficiency of the report. The presumption of regularity until rebutted requires courts to adopt such an interpretation. The statement of the board of medical officers that it “has considered the appeal” means to me that the board has proceeded conformably to the statute and regulations.
(2) There is a graver error in the Court’s holding, however, which may interfere with sound administrative procedure. Although petitioner was represented by counsel, no objection to the form of the report was made during the administrative process. This case heretofore has centered around the issue of finality disposed of by the Court. Even in the several hearings of her effort to get relief by habeas corpus, petitioner has never asserted, in this or any other court, that she was not examined by the physicians of the medical review board. This is made plain by the Court’s statement of the generalized objections on other grounds to the report of the medical review board, see opinion at note 2, and from the affidavits and objections appearing in the record. The dissenting judge, 170 F. 2d 1009, 1013, did not refer to the failure to examine petitioner. He spoke only of the failure of the Board of Special Inquiry and the medical board to require adequate and revealing certificates and reports. Even the petition for certiorari does not present the question. The brief does not discuss it.
The administrative remedy must be exhausted by fair effort to correct administrative errors before resort to habeas corpus or other judicial remedies. To permit occasional reversal of administrative orders on points not brought to the attention of the agency hampers administrative routine and, if adopted as a rule of law, would disorganize administrative procedure. Afterthought cannot take the place of required objection. This is not a case where rules of practice and procedure defeat the ends of justice. There is nothing in this record to indicate that disabilities of petitioner, or difficulties of procedure or practice, the emergence of a new rule of law or any other change of circumstance has affected the course of petitioner's pleas. She has had advantage of every method of relief known to the law but has not seen fit to bring forward the ground upon which this Court reverses.
It is obvious that had objection been made to the form of the report of the Board of Medical Officers at the hearing before the Board of Special Inquiry, April 6, 1948, a prompt elaboration of the report could have been obtained or, if no examination such as is required by the regulations had already been made, it could have been done promptly. Proper administrative procedure requires that objection to certificates be made at the earliest opportunity which in this case was during the administrative hearing before the Board of Special Inquiry. A litigant’s unexplained failure to raise an issue does not justify capricious judicial intervention on behalf of an individual.
I would affirm the judgment below.
39 Stat. 885, as amended, 8 U. S. C. § 152.
During the hearings before the Board of Special Inquiry counsel for petitioner stated to this board “that from an examination of the record it appears that the only positive finding of mental defectiveness appears in the record of the ship’s surgeon Counsel insisted that petitioner was suffering from no “mental disturbance whatsoever.” In her behalf he asked for an opportunity to produce further medical testimony. In response to this request the board’s chairman asked counsel whether petitioner would be able to bear the expenses of her continued detention should the board grant her request for an opportunity to produce further medical testimony. Counsel replied that he believed she could. The board immediately thereafter closed the hearing, made its findings and ordered her excluded.
The dissenting opinion stated: “I would reverse the order and direct that the writ be sustained because of inadequacy of the original certificate of the examining surgeons and total failure of the reviewing Board of Medical Officers to comply with the regulations.” 170 F. 2d 1009,1014.
“(c) Re-examination shall include:
“ (1) A medical examination by the board ;
“(2) A review of all records submitted;
“(3) Use of any laboratory or diagnostic methods or tests deemed advisable; and
“(4) Consideration of .statements regarding the alien’s physical or mental condition made by a reputable physician after his examination of the alien.
“(e) An alien being re-examined may introduce as witnesses before the board such physicians or medical experts as the board may in its discretion permit, at his own cost and expense, . . . .” 42 Code Fed. Reg. §34.13 (1947 Supp.).
The report reads as follows:
“Pursuant to the request of the District Director of Immigration and the order of the Medical Officer in Charge, the following Board of Medical Officers of the U. S. Public Health Service, has considered the appeal regarding subject-named alien May Gunborg Johnson and after taking into consideration the certificate of Mar. 11, 1948 and the testimony given by Dr. Carlton Simon, reports that it concurs with the above dated certificate.”
39 Stat. 885, as amended, 8 U. S. C. § 152:
“Sec. 16. The physical and mental examination of all arriving aliens shall be made by medical officers of the United States Public Health Service who shall conduct all medical examinations and shall certify, for the information of the immigration officers and the boards of special inquiry hereinafter provided for, any and all physical and mental defects or diseases observed by said medical officers in any such alien; .... Any alien certified for insanity or mental defect may appeal to the board of medical officers of the United States Public Health Service, which shall be convened by the Surgeon General of the United States Public Health Service, and said alien may introduce before such board one expert medical witness at his own cost and expense. . . .”
42 C. F. R. §34.13 (1947 Supp.). ‘‘Re-examination; convening of boards; expert witnesses; reports, (a) The Surgeon General, or when authorized, a medical officer in charge, shall convene a board of medical officers to re-examine an alien
“(2) Upon an appeal by the alien from a certificate of insanity or mental defect, issued at a port of entry.
“(c) Re-examination shall include:
“(1) A medical examination by the board;
“(2) A review of all records submitted;
“(3) Use of any laboratory or diagnostic methods or tests deemed advisable; and
“(4) Consideration of statements regarding the alien’s physical or mental condition made by a reputable physician after his examination of the alien.
“(g) The findings and conclusions of the board shall be based on its medical examination of the alien and on the evidence presented to it and made a part of the record of its proceedings.
“(h) The board shall report its findings and conclusions to the Immigration Service, and shall also give prompt notice thereof to the alien if the re-examination has been held upon his appeal. The board’s report to the Immigration Service shall specifically affirm, modify, or reject the findings and conclusions of prior examining medical officers.”
It will be noted that the evidence presented to the board was made a part of the report to the Board of Special Inquiry as required by the regulation.
“It hardly seems necessary to add that the statement of the appellate board that it had ‘considered the appeal,’ cannot be treated as a certification that petitioner had been given an independent medical examination.”
Lewis v. United States, 279 U. S. 63, 73: “It is the settled general rule that all necessary prerequisites to the validity of official action are presumed to have been complied with, and that where the contrary is asserted it must be affirmatively shown.”
Stearns Co. v. United States, 291 U. S. 54, 63, and authorities cited; United States v. Chemical Foundation, 272 U. S. 1, 14.
We refused to review an issue not raised before an administrative body in Unemployment Commission v. Aragon, 329 U. S. 143, 155: “A reviewing court usurps the agency’s function when it sets aside the administrative determination upon a ground not theretofore presented and deprives the Commission of an opportunity to consider the matter, make its ruling, and state the reasons for its action.” Tri-State Broadcasting Co. v. F. C. C., 107 F. 2d 956, 958. Cf. Myers v. Bethlehem Corp., 303 U. S. 41, 51, note 9; Blair v. Oesterlein Co., 275 U. S. 220.
The Administrative Procedure Act contemplates presentation before the administrative agency of every issue that may be made the subject of judicial review by habeas corpus or appellate process. 60 Stat. 237, §§7 (c), 8 (b) (2), 10 (b), (c) and (e). The rule against raising questions on judicial review that were not raised in administrative proceedings has general application, see Caldarone v. Zoning Board of Review, 74 R. I. 196, 199, 60 A. 2d 158, 159; Reisberg v. Board of Standards and Appeals, 81 N. Y. S. 2d 511, 513; General Transp. Co. v. United States, 65 F. Supp. 981, 984.
Cf. Hormel v. Helvering, 312 U. S. 552, 557.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Clark
delivered the opinion of the Court.
Petitioner challenges on constitutional grounds the validity on its face of that portion of § 155-4 of the Municipal Code of the City of Chicago which requires submission of all motion pictures for examination prior to their public exhibition. Petitioner is a New York corporation owning the exclusive right to publicly exhibit in Chicago the film known as “Don Juan.” It applied for a permit, as Chicago’s ordinance required, and tendered the license fee but refused to submit the film for examination. The appropriate city official refused to issue the permit and his order was made final on appeal to the Mayor. The sole ground for denial was petitioner’s refusal to submit the film for examination as required. Petitioner then brought this suit seeking injunctive relief ordering the issuance of the permit without submission of the film and restraining the city officials from interfering with the exhibition of the picture. Its sole ground is that the provision of the ordinance requiring submission of the film constitutes, on its face, a prior restraint within the prohibition of the First and Fourteenth Amendments. The District Court dismissed the complaint on the grounds, inter alia, that neither a substantial federal question nor even a justiciable controversy was presented. 180 F. Supp. 843. The Court of Appeals affirmed, finding that the case presented merely an abstract question of law since neither the film nor evidence of its content was submitted. 272 F. 2d 90. The precise question at issue here never having been specifically decided by this Court, we granted certiorari, 362 U. S. 917 (1960).
We are satisfied that a justiciable controversy exists. The section of Chicago’s ordinance in controversy specifically provides that a permit for the public exhibition of a motion picture must be obtained; that such “permit shall be granted only after the motion picture film for which said permit is requested has been produced at the office of the commissioner of police for examination”; that the commissioner shall refuse the permit if the picture does not meet certain standards; and that in the event of such refusal the applicant may appeal to the mayor for a de novo hearing and his action shall be final. Violation of the ordinance carries certain punishments. The petitioner complied with the requirements of the ordinance, save for the production of the film for examination. The claim is that this concrete and specific statutory requirement, the production of the film at the office of the Commissioner for examination, is invalid as a previous restraint on freedom of speech. In Joseph Burstyn, Inc., v. Wilson, 343 U. S. 495, 502 (1952), we held that motion pictures are included “within the free speech and free press guaranty of the First and Fourteenth Amendments.” Admittedly, the challenged section of the ordinance imposes a previous restraint, and the broad justiciable issue is therefore present as to whether the ambit of constitutional protection includes complete and absolute freedom to exhibit, at least once, any and every kind of motion picture. It is that question alone which we decide. We have concluded that § 155-4 of Chicago’s ordinance requiring the submission, of films prior to their public exhibition is not, on the grounds set forth, void on its face.
Petitioner’s narrow attack upon the ordinance does not require that any consideration be given to the validity of the standards set out therein. They are not challenged and are not before us. Prior motion picture censorship cases which reached this Court involved questions of standards. The films had all been submitted to the authorities and permits for their exhibition were refused because of their content. Obviously, whether a particular statute is “clearly drawn,” or “vague,” or “indefinite,” or whether a clear standard is in fact met by a film are different questions involving other constitutional challenges to be tested by considerations not here involved.
Moreover, there is not a word in the record as to the nature and content of “Don Juan.” We are left entirely in the dark in this regard, as were the city officials and the other reviewing courts. Petitioner claims that the nature of the film is irrelevant, and that even if this film contains the basest type of pornography, or incitement to riot, or forceful overthrow of orderly government, it may nonetheless be shown without prior submission for examination. The challenge here is to the censor’s basic authority ; it does not go to any statutory standards employed by the censor or procedural requirements as to the submission of the film.
In this perspective we consider the prior decisions of this Court touching on the problem. Beginning over a third of a century ago in Gitlow v. New York, 268 U. S. 652 (1925), they have consistently reserved for future decision possible situations in which the claimed First Amendment privilege might have to give way to the necessities of the public welfare. It has never been held that liberty- of speech is absolute. Nor has it been suggested that all previous restraints on speech are invalid. On the contrary, in Near v. Minnesota, 283 U. S. 697, 715-716 (1931), Chief Justice Hughes, in discussing the classic legal statements concerning the immunity of the press from censorship, observed that the principle forbidding previous restraint “is stated too broadly, if every such restraint is deemed to be prohibited. . . . [T]he protection even as to previous restraint is not absolutely unlimited. But the limitation has been recognized only in exceptional cases.” These included, the Chief Justice found, utterances creating “a hindrance” to the Government’s war effort, and “actual obstruction to its recruiting service'or the publication of the sailing dates of transports or the number and location of troops.” In addition, the Court said that “the primary requirements of decency may be enforced against obscene publications” and the “security of the community life may be protected against incitements to acts of violence and the overthrow by force of orderly government.” Some years later, a unanimous Court, speaking through Mr. Justice Murphy, in Chaplinsky v. New Hampshire, 315 U. S. 568, 571-572 (1942), held that there were “certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or ‘fighting’ words — those which by their very utterance inflict injury or tend to incite an immediate breach of the peace.” Thereafter, as we have mentioned, in Joseph Burstyn, Inc., v. Wilson, supra, we found motion pictures to be within the guarantees of the First and Fourteenth Amendments, but we added that this was “not the end of our problem. It does not follow that the Constitution requires absolute freedom to exhibit every motion picture of every kind at all times and all places.” At p. 502. Five years later, in Roth v. United States, 354 U. S. 476, 483 (1957), we held that “in light of . . . history, it is apparent that the unconditional phrasing of the First Amendment was not intended to protect every utterance.” Even those in dissent there found that “Freedom of expression can be suppressed if, and to the extent that, it is so closely brigaded with illegal action as to be an inseparable part of it.” Id., at 514. And, during the same Term, in Kingsley Books, Inc., v. Brown, 354 U. S. 436, 441 (1957), after characterizing Near v. Minnesota, supra, as “one of the landmark opinions” in its area, we took notice that Near “left no doubts that ‘Liberty of speech, and of the press, is also not an absolute right . . . the protection even as to previous restraint is not absolutely unlimited.’. . . The judicial angle of vision,” we said there, “in testing the validity of a statute like § 22-a [New York’s injunctive remedy against certain forms of obscenity] is ‘the operation and effect of the statute in substance.’ ” And as if to emphasize the point involved here, we added that “The phrase ‘prior restraint’ is not a self-wielding sword. Nor can it serve as a talismanic test.” Even as recently as our last Term we again observed the principle, albeit in an allied area, that the State possesses some measure of power “to prevent the distribution of obscene matter.” Smith v. California, 361 U. S. 147, 155 (1959).
Petitioner would have us hold that the public exhibition of motion pictures must be allowed under any circumstances. The State’s sole remedy, it says, is the invocation of criminal process under the Illinois pornography statute, Ill. Rev. Stat. (1959), c. 38, § 470, and then only after a transgression. But this position, as we have seen, is founded upon the claim of absolute privilege against prior restraint under the First Amendment — a claim without sanction in our cases. To illustrate its fallacy, we need only point, to one of the “exceptional cases” which Chief Justice Hughes enumerated in Near v. Minnesota, supra, namely, “the primary requirements of decency [that] may be enforced against obscene publications.” Moreover, we later held specifically “that obscenity is not within the area of constitutionally protected speech or press.” Roth v. United States, 354 U. S. 476, 485 (1957). Chicago emphasizes here its duty to protect its people against the dangers of obscenity in the public exhibition of motion pictures. To this argument petitioner’s only answer is that regardless of the capacity for, or extent of, such an evil, previous restraint cannot be justified. With this we cannot agree. We recognized in Burstyn, supra, that “capacity for evil . . . may be relevant in determining the permissible scope of community control,” at p. 502, and that motion pictures were not “necessarily subject to the precise rules governing any other particular method of expression. Each method,” we said, “tends to present its own peculiar problems.” At p. 503. Certainly petitioner’s broadside attack does not warrant, nor could it justify on the record here, our saying that — aside from any consideration of the other “exceptional cases” mentioned in our decisions— the State is stripped of all constitutional power to prevent, in the most effective fashion, the utterance of this class of speech. It is not for this Court to limit the State in its selection of the remedy it deems most effective to cope with such a problem, absent, of course, a showing of unreasonable strictures on individual liberty resulting from its application in particular circumstances. Kingsley Books, Inc., v. Brown, supra, at p. 441. We, of course, are not holding that city officials may be granted the power to prevent the showing of any motion picture they deem unworthy of a license. Joseph Burstyn, Inc., v. Wilson, supra, at 504-505.
As to what may be decided when a concrete case involving a specific standard provided by this ordinance is presented, we intimate no opinion. The petitioner has not challenged all — or for that matter any — of the ordinance’s standards. Naturally we could not say that every one of the standards, including those which Illinois’ highest court has found sufficient, is so vague on its face that the entire ordinance is void. At this time we say no more than this — that we are dealing only with motion pictures and, even as to them, only in the context of the broadside attack presented on this record.
Affirmed.
The portion of the section here under attack is as follows:
“Such permit shall be granted only after the motion picture film for which said permit is requested has been produced at the office of the commissioner of police for examination or censorship. . . .”
That portion of § 155-4 of the Code providing standards is as follows:
“If a picture or series of pictures, for the showing or exhibition of which an application for a permit is made, is immoral or obscene, or portrays depravity, criminality, or lack of virtue of a class of citizens of any race, color, creed, or religion and exposes them to contempt, derision, or obloquy, or tends to produce a breach of the peace or riots, or purports to represent any hanging, lynching, or burning of a human being, it shall be the duty of the commissioner of police to refuse such permit; otherwise it shall be his duty to grant such permit.
“In case the commissioner of police shall refuse to grant a permit as hereinbefore provided, the applicant for the same may appeal to the mayor. Such appeal shall be presented in the same manner as the original application to the commissioner of police. The action of the mayor on any application for a permit shall be final.”
It should be noted that the Supreme Court of Illinois, in an opinion by Schaefer, C. J., has already considered and rejected an argument against the same Chicago ordinance, similar to the claim advanced here by petitioner. The same court also sustained certain of the standards set out above. American Civil Liberties Union v. City of Chicago, 3 Ill. 2d 334, 121 N. E. 2d 585 (1954).
Joseph Burstyn, Inc., v. Wilson, supra (“sacrilegious”); Gelling v. Texas, 343 U. S. 960 (1952) (“prejudicial to the best interests of the people of said City”); Commercial Pictures Corp. v. Regents, 346 U. S. 587 (1954) (“immoral”); Superior Films, Inc., v. Department of Education, 346 U. S. 587 (1954) (“harmful”); Kingsley International Pictures Corp. v. Regents, 360 U. S. 684 (1959) (“sexual immorality”).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | C | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Fortas
delivered the opinion of the Court.
Petitioner was charged by information with the armed robbery of a Western Union office in violation of California Penal Code § 211a. The day after the robbery one of the robbers, Clay, surrendered to the police and implicated Foster and Grice. Allegedly, Foster and Clay had entered the office while Grice waited in a car. Foster and Grice were tried together. Grice was acquitted. Foster was convicted. The California District Court of Appeal affirmed the conviction; the State Supreme Court denied review. We granted certiorari, limited to the question whether the conduct of the police lineup resulted in a violation of petitioner’s constitutional rights. 390 U. S. 994 (1968).
Except for the robbers themselves, the only witness to the crime was Joseph David, the late-night manager of the Western Union office.- After Foster had been arrested, David was called to the police station to view a lineup. There were three men in the lineup. One was petitioner. He is a tall man — close to six feet in height. The other two men were short — five feet, five or six inches. Petitioner wore a. leather jacket which David said was similar to the one he had seen underneath the coveralls worn by the robber. After seeing this lineup, David could not positively identify petitioner as the robber. He “thought” he was the man, but he was not sure. David then asked to speak to petitioner, and petitioner was brought into an office and sat across from David at a table. Except for prosecuting officials there was no one else in the room. Even after this one-to-one confrontation David still was uncertain whether petitioner was one of the robbers: “truthfully — I was not sure,” he testified at trial. A week or 10 days later, the police arranged for David to view a second lineup. There were five men in that lineup. Petitioner was the only person in the second lineup who had appeared in the first lineup. This time David was “convinced” petitioner was the man.
At trial, David testified to his identification of petitioner in the lineups, as summarized above. He also repeated his identification of petitioner in the courtroom. The only other evidence against petitioner which concerned the particular robbery with which he was charged was the testimony of the alleged accomplice Clay.
In United States v. Wade, 388 U. S. 218 (1967), and Gilbert v. California, 388 U. S. 263 (1967), this Court held that because of the possibility of unfairness to the accused in the way a lineup is conducted, a lineup is a “critical stage” in the prosecution, at which the accused must be given the opportunity to be represented by counsel. That holding does not, however, apply to petitioner’s case, for the lineups in which he appeared occurred before June 12, 1967. Stovall v. Denno, 388 U. S. 293 (1967). But in declaring the rule of Wade and Gilbert to be applicable only to lineups conducted after those cases were decided, we recognized that, judged by the “totality of the circumstances,” the conduct of identification procedures may be “so unnecessarily suggestive and conducive to irreparable mistaken identification” as to be a denial of due process of law. Id., at 302. See Simmons v. United States, 390 U. S. 377, 383 (1968); cf. P. Wall, Eye-Witness Identification in Criminal Cases; J. Frank & B. Frank, Not Guilty; 3 J. Wigmore, Evidence § 786a (3d ed. 1940); 4, id., § 1130.
Judged by that standard, this case presents a compelling example of unfair lineup procedures. In the first lineup arranged by the police, petitioner stood out from the other two men by the contrast of his height and by the fact that he was wearing a leather jacket similar to that worn by the robber. See United States v. Wade, supra, at 233. When this did not lead to positive identification, the police permitted a one-to-one confrontation between petitioner and the witness. This Court pointed out in Stovall that “[t]he practice of showing suspects singly to persons for the purpose of identification, and not as part of a lineup, has been widely condemned.” 388 U. S., at 302. Even after this the witness’ identification of petitioner was tentative. So some days later another lineup was arranged. Petitioner was the only person in this lineup who had also participated in the first lineup. See Wall, supra, at 64. This finally produced a definite identification.
The suggestive elements in this identification procedure made it all but inevitable that David would identify petitioner whether or not he was in fact “the man.” In effect, the police repeatedly said to the witness, “This is the man.” See Biggers v. Tennessee, 390 U. S. 404, 407 (dissenting opinion). This procedure so undermined the reliability of the eyewitness identification as to violate due process.
In a decision handed down since the Supreme Court of California declined to consider petitioner’s case, it reversed a conviction because of the unfair makeup of a lineup. In that case, the California court said: “[W]e do no more than recognize . . . that unfairly constituted lineups have in the past too often brought about the conviction of the innocent.” People v. Caruso, 68 Cal. 2d 183, 188, 436 P. 2d 336, 340 (1968). In the present case the pretrial confrontations clearly were so arranged as to make the resulting identifications virtually inevitable.
The respondent invites us to hold that any error was harmless under Chapman v. California, 386 U. S. 18 (1967). We decline to rule upon this question in the first instance. Accordingly, the judgment is reversed and the case remanded for further proceedings not inconsistent with this opinion.
Reversed and remanded.
Mr. Justice White, with whom Mr. Justice Harlan and Mr. Justice Stewart concur, being unwilling in this case to disagree with the jury on the weight of the evidence, would affirm the judgment.
California law requires that an accomplice’s testimony be corroborated. California Penal Code § 1111. There was also evidence that Foster had been convicted for a similar robbery committed six years before.
The reliability of properly admitted eyewitness identification, like the credibility of the other parts of the prosecution’s case is a matter for the jury. But it is the teaching of Wade, Gilbert, and Stovall, supra, that in some cases the procedures leading to an eyewitness identification may be so defective as to make the identification constitutionally inadmissible as a matter of law.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Stevens
delivered the opinion of the Court.
Appellants challenge the constitutionality of a Nebraska statutory restriction on the withdrawal of ground water from any well within Nebraska intended for use in an adjoining State. The challenge presents three questions under the Commerce Clause: (1) whether ground water is an article of commerce and therefore subject to congressional regulation; (2) whether the Nebraska restriction on the interstate transfer of ground water imposes an impermissible burden on commerce; and (3) whether Congress has granted the States permission to engage in ground water regulation that otherwise would be impermissible.
Appellants jointly own contiguous tracts of land in Chase County, Nebraska, and Phillips County, Colorado. A well physically located on the Nebraska tract pumps ground water for irrigation of both the Nebraska tract and the Colorado tract. Previous owners of the land registered the well with the State of Nebraska in 1971, but neither they nor the present owners applied for the permit required by Neb. Rev. Stat. §46-613.01 (1978). That section provides:
“Any person, firm, city, village, municipal corporation or any other entity intending to withdraw ground water from any well or pit located in the State of Nebraska and transport it for use in an adjoining state shall apply to the Department of Water Resources for a permit to do so. If the Director of Water Resources finds that the withdrawal of the ground water requested is reasonable, is not contrary to the conservation and use of ground water, and is not otherwise detrimental to the public welfare, he shall grant the permit if the state in which the water is to be used grants reciprocal rights to withdraw and transport ground water from that state for use in the State of Nebraska.”
Appellee brought this action to enjoin appellants from transferring the water across the border without a permit. The trial court rejected the defense that the statute imposed an undue burden on interstate commerce and granted the injunction. The Nebraska Supreme Court affirmed. 208 Neb. 703, 305 N. W. 2d 614 (1981). It held that, under Nebraska law, ground water is not “a market item freely transferable for value among private parties, and therefore [is] not an article of commerce.” Id., at 705, 305 N. W. 2d, at 616. The Chief Justice, while agreeing that the statutory criteria governing the transfer of water to an adjoining State did not violate the Commerce Clause, dissented on the narrow ground that appellee violated both the Federal and Nebraska Constitutions by attempting “to absolutely prohibit the transfer of water, without regard to its need or availability, based solely upon the acts of another state oyer which citizens of this state have no control.” Id., at 713, 305 N. W. 2d, at 620.
I
In holding that ground water is not an article of commerce, the Nebraska Supreme Court and appellee cite as controlling precedent Hudson County Water Co. v. McCarter, 209 U. S. 349 (1908). In that case a New Jersey statute prohibited the interstate transfer of any surface water located within the State. The Hudson County Water Co. nevertheless contracted with New York City to supply one of its boroughs with water from the Passaic River in New Jersey. The State Attorney General sought from the New Jersey courts an injunction against fulfillment of the contract. Over the water company’s objections that the statute impaired the obligation of contract, took property without just compensation, interfered with interstate commerce, denied New York citizens the privileges afforded New Jersey citizens, and denied New York citizens the equal protection of the laws, the injunction was granted. This Court, in an opinion by Justice Holmes, affirmed.
Most of the Court’s opinion addresses the just compensation claim. Justice Holmes refused to ground the Court’s holding, as did the New Jersey state courts, on “the more or less attenuated residuum of title that the State may be said to possess.” Id,., at 355. For the statute was justified as a regulatory measure that, on balance, did not amount to a taking of property that required just compensation. Putting aside the “problems of irrigation,” the State’s interest in preserving its waters was well within its police power. That interest was not dependent on any demonstration that the State’s water resources were inadequate for present or future use. The State “finds itself in possession of what all admit to be a great public good, and what it has it may keep and give no one a reason for its will.” Id., at 357.
Having disposed of the just compensation claim, Justice Holmes turned very briefly to the other constitutional challenges. In one paragraph, he rejected the Contract Clause claim. In the remaining paragraph of the opinion, he rejected all the other defenses. His treatment of the Commerce Clause challenge consists of three sentences: “A man cannot acquire a right to property by his desire to use it in commerce among the States. Neither can he enlarge his otherwise limited and qualified right to the same end. The case is covered in this respect by Geer v. Connecticut, 161 U. S. 519 [(1896)].” Ibid.
While appellee relies upon Hudson County, appellants rest on our summary affirmance of a three-judge District Court judgment in City of Altus v. Carr, 255 F. Supp. 828 (WD Tex.), summarily aff’d, 385 U. S. 35 (1966). The city of Altus is located near the southern border of Oklahoma. Large population increases rendered inadequate its source of municipal water. It consequently obtained from the owners of land in an adjoining Texas county the contractual right to pump the ground water underlying that land and to transport it across the border. The Texas Legislature thereafter enacted a statute that forbade the interstate exportation of ground water without the approval of that body. The city filed suit in Federal District Court, claiming that the statute violated the Commerce Clause.
The city relied upon West v. Kansas Natural Gas Co., 221 U. S. 229 (1911), which invalidated an Oklahoma statute that prevented the interstate transfer of natural gas produced within the State, and Pennsylvania v. West Virginia, 262 U. S. 553 (1923), which invalidated a West Virginia statute that accorded a preference to the citizens of that State in the purchase of natural gas produced therein. The Texas Attorney General defended the statute on two grounds. First, he asserted that its purpose was to conserve and protect the State’s water resources by regulating the withdrawal of ground water. The District Court rejected that defense because similar conservation claims had met defeat in West v. Kansas Natural Gas Co., supra, and Pennsylvania v. West Virginia, supra. Second, the State argued that the statute regulated ground water and that ground water is not an article of commerce, citing Geer v. Connecticut, 161 U. S. 519 (1896), and Hudson County Water Co. v. McCarter, 209 U. S. 349 (1908). The court rejected this argument since the statute directly regulated the interstate transportation of water that had been pumped from the ground, and under Texas law such water was an article of commerce. The court then had little difficulty in concluding that the statute imposed an impermissible burden on interstate commerce.
In summarily affirming the District Court in City of Altus, we did not necessarily adopt the court’s reasoning. Our affirmance indicates only our agreement with the result reached by the District Court. Metromedia, Inc. v. San Diego, 453 U. S. 490, 499 (1981). That result is not necessarily inconsistent with the Nebraska Supreme Court’s holding in this case. For Texas law differs significantly from Nebraska law regarding the rights of a surface owner to ground water that he has withdrawn. According to the District Court in City ofAltus, the “rule in Texas was that an owner of land could use all of the percolating water he could capture from the wells on his land for whatever beneficial purposes he needed it, on or off the land, and could likewise sell it to others for use on or off the land and outside the basin where produced, just as he could sell any other species of property.” 255 F. Supp., at 833, n. 8. Since ground water, once withdrawn, may be freely bought and sold in States that follow this rule, in those States ground water is appropriately regarded as an article of commerce. In Nebraska the surface owner has no comparable interest in ground water. As explained by the Nebraska Supreme Court, “ ‘the owner of land is entitled to appropriate subterranean waters found under his land, but he cannot extract and appropriate them in excess of a reasonable and beneficial use upon the land which he owns, especially if such use is injurious to others who have substantial rights to the waters, and if the natural underground supply is insufficient for all owners, each is entitled to a reasonable proportion of the whole.’” 208 Neb., at 705, 305 N. W. 2d, at 617 (quoting Olson v. City of Wahoo, 124 Neb. 802, 811, 248 N. W. 304, 308 (1933)).
City of Altus, however, is inconsistent with Hudson County. For in the latter case the Court found Geer v. Connecticut, supra, to be controlling on the Commerce Clause issue. Geer, which sustained a Connecticut ban on the interstate transportation of game birds captured in that State, was premised on the theory that the State owned its wild animals and therefore was free to qualify any ownership interest it might recognize in the persons who capture them. One such restriction is a prohibition against interstate transfer of the captured animals. This theory of public ownership was advanced as a defense in City of Altus. The State argued that it owned all subterranean water and therefore could recognize ownership in the surface owner who withdraws the water, but restrict that ownership to use of the water within the State. That theory, upon which the Commerce Clause issue in Hudson County was decided, was rejected by the District Court in City of Altus. In expressly overruling Geer three years ago, this Court traced the demise of the public ownership theory and definitively recast it as “ ‘but a fiction expressive in legal shorthand of the importance to its people that a State have power to preserve and regulate the exploitation of an important resource.’” Hughes v. Oklahoma, 441 U. S. 322, 334 (1979) (quoting Toomer v. Witsell, 334 U. S. 385, 402 (1948)). See also Baldwin v. Montana Fish and Game Comm’n, 436 U. S. 371, 384-387 (1978); Douglas v. Seacoast Products, Inc., 431 U. S. 265, 284r-285 (1977). In Hughes the Court found the State’s interests insufficient to sustain a ban on the interstate transfer of natural minnows seined from waters within the State.
Appellee insists, however, that Nebraska water is distinguishable from other natural resources. The surface owner who withdraws Nebraska ground water enjoys a lesser ownership interest in the water than the captor of game birds in Connecticut or minnows in Oklahoma or ground water in Texas, for in Geer, Hughes, and City of Altus the States permitted intrastate trade in the natural resources once they were captured. Although appellee’s greater ownership interest may not be irrelevant to Commerce Clause analysis, it does not absolutely remove Nebraska ground water from such scrutiny. For appellee’s argument is still based on the legal fiction of state ownership. The fiction is illustrated by municipal water supply arrangements pursuant to which ground water is withdrawn from rural areas and transferred to urban areas. Such arrangements are permitted in Nebraska, see Metropolitan Utilities District v. Merritt Beach Co., 179 Neb. 783, 140 N. W. 2d 626 (1966), but the Nebraska Supreme Court distinguished them on the ground that the transferor was only permitted to charge as a price for the water his costs of distribution and not the value of the water itself. 208 Neb., at 708, 305 N. W. 2d, at 618. Unless demand is greater than supply, however, this reasoning does not distinguish minnows, the price of which presumably is derived from the costs of seining and of transporting the catch to market. Even in cases of shortage, in which the seller of the natural resource can demand a price that exceeds his costs, the State’s rate structure that requires the price to be cost-justified is economically comparable to price regulation. A State’s power to regulate prices or rates has never been thought to depend on public ownership of the controlled commodity. It would be anomalous if federal power to regulate economic transactions in natural resources depended on the characterization of the payment as compensation for distribution services, on the one hand, or as the price of goods, on the other. Cf. In re Rahrer, 140 U. S. 545, 558 (1891).
The second asserted distinction is that water, unlike other natural resources, is essential for human survival. Appellee, and the amici curiae that are vitally interested in conserving and preserving scarce water resources in the arid Western States, have convincingly demonstrated the desirability of state and local management of ground water. But the States’ interests clearly have an interstate dimension. Although water is indeed essential for human survival, studies indicate that over 80% of our water supplies is used for agricultural purposes. The agricultural markets supplied by irrigated farms are worldwide. They provide the archtypical example of commerce among the several States for which the Framers of our Constitution intended to authorize federal regulation. The multistate character of the Ogallala aquifer — underlying appellants’ tracts of land in Colorado and Nebraska, as well as parts of Texas, New Mexico, Oklahoma, and Kansas — confirms the view that there is a significant federal interest in conservation as well as in fair allocation of this diminishing resource. Cf. Arizona v. California, 373 U. S. 546 (1963).
The Western States’ interests, and their asserted superior competence, in conserving and preserving scarce water resources are not irrelevant in the Commerce Clause inquiry. Nor is appellee’s claim to public ownership without significance. Like Congress’ deference to state water law, see infra, at 958-960, these factors inform the determination whether the burdens on commerce imposed by state ground water regulation are reasonable or unreasonable. But appellee’s claim that Nebraska ground water is not an article of commerce goes too far: it would not only exempt Nebraska ground water regulation from burden-on-commerce analysis, it would also curtail the affirmative power of Congress to implement its own policies concerning such regulation. See Philadelphia v. New Jersey, 437 U. S. 617, 621-623 (1978). If Congress chooses to legislate in this area under its commerce power, its regulation need not be more limited in Nebraska than in Texas and States with similar property laws. Ground water overdraft is a national problem and Congress has the power to deal with it on that scale.
II
Our conclusion that water is an article of commerce raises, but does not answer, the question whether the Nebraska statute is unconstitutional. For the existence of unexercised federal regulatory power does not foreclose state regulation of its water resources, of the uses of water within the State, or indeed, of interstate commerce in water. Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 766-767 (1945); United States v. South-Eastern Underwriters Assn., 322 U. S. 533, 548-549 (1944); Cooley v. Board of Wardens, 12 How. 299, 319 (1852). Determining the validity of state statutes affecting interstate commerce requires a more careful inquiry:
“Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.” Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970) (citation omitted).
The only purpose that appellee advances for §46-613.01 is to conserve and preserve diminishing sources of ground water. The purpose is unquestionably legitimate and highly important, and the other aspects of Nebraska’s ground water regulation demonstrate that it is genuine. Appellants’ land in Nebraska is located within the boundaries of the Upper Republican Ground Water Control Area, which was designated as such by the Director of the Nebraska Department of Water Resources based upon a determination that there is “[a]n inadequate ground water supply to meet present or reasonably foreseeable needs for beneficial use of such water supply.” Neb. Rev. Stat. §46-658(1) (Supp. 1981); see App. 56-60. Pursuant to §46-666(1), the Upper Republican Natural Resources District has promulgated special rules and regulations governing ground water withdrawal and use. See App. 61-82. The rules and regulations define as “critical” those townships in the control area in which the annual decline of the ground water table exceeds a fixed percentage; appellants’ Nebraska tract is located within a critical township. The rules and regulations require the installation of flow meters on every well within the control area, specify the amount of water per acre that may be used for irrigation, and set the spacing that is required between wells. They also strictly limit the intrastate transfer of ground water: transfers are only permitted between lands controlled by the same ground water user, and all transfers must be approved by the District Board of Directors. Id., at 68-69.
The State’s interest in conservation and preservation of ground water is advanced by the first three conditions in §46-613.01 for the withdrawal of water for an interstate transfer. Those requirements are “that the withdrawal of the ground water requested is reasonable, is not contrary to the conservation and use of ground water, and is not otherwise detrimental to the public welfare.” Although Commerce Clause concerns are implicated by the fact that §46-613.01 applies to interstate transfers but not to intrastate transfers, there are legitimate reasons for the special treatment accorded requests to transport ground water across state lines. Obviously, a State that imposes severe withdrawal and use restrictions on its own citizens is not discriminating against interstate commerce when it seeks to prevent the uncontrolled transfer of water out of the State. An exemption for interstate transfers would be inconsistent with the ideal of evenhandedness in regulation. At least in the area in which appellants’ Nebraska tract is located, the first three standards of §46-613.01 may well be no more strict in application than the limitations upon intrastate transfers imposed by the Upper Republican Natural Resources District.
Moreover, in the absence of a contrary view expressed by Congress, we are reluctant to condemn as unreasonable, measures taken by a State to conserve and preserve for its own citizens this vital resource in times of severe shortage. Our reluctance stems from the “confluence of [several] realities.” Hicklin v. Orbeck, 437 U. S. 518, 534 (1978). First, a State’s power to regulate the use of water in times and places of shortage for the purpose of protecting the health of its citizens — and not simply the health of its economy — is at the core of its police power. For Commerce Clause purposes, we have long recognized a difference between economic protectionism, on the one hand, and health and safety regulation, on the other. See H. P. Hood & Sons v. Du Mond, 336 U. S. 525, 533 (1949). Second, the legal expectation that under certain circumstances each State may restrict water within its borders has been fostered over the years not only by our equitable apportionment decrees, see, e. g., Wyoming v. Colorado, 353 U. S. 953 (1957), but also by the negotiation and enforcement of interstate compacts. Our law therefore has recognized the relevance of state boundaries in the allocation of scarce water resources. Third, although appellee’s claim to public ownership of Nebraska ground water cannot justify a total denial of federal regulatory power, it may support a limited preference for its own citizens in the utilization of the resource. See Hicklin v. Orbeck, supra, at 533-534. In this regard, it is relevant that appellee’s claim is logically more substantial than claims to public ownership of other natural resources. See supra, at 950-951. Finally, given appellee’s conservation efforts, the continuing availability of ground water in Nebraska is not simply happenstance; the natural resource has some indicia of a good publicly produced and owned in which a State may favor its own citizens in times of shortage. See Reeves, Inc. v. Stake, 447 U. S. 429 (1980); cf. Philadelphia v. New Jersey, 437 U. S., at 627-628, and n. 6; Baldwin v. Montana Fish and Game Comm’n, 436 U. S. 371 (1978). A facial examination of the first three conditions set forth in §46-613.01 does not, therefore, indicate that they impermissibly burden interstate commerce. Appellants, indeed, seem to concede their reasonableness.
Appellants, however, do challenge the requirement that “the state in which the water is to be used grants reciprocal rights to withdraw and transport ground water from that state for use in the State of Nebraska” — the reciprocity provision that troubled the Chief Justice of the Nebraska Supreme Court. Because Colorado forbids the exportation of its ground water, the reciprocity provision operates as an explicit barrier to commerce between the two States. The State therefore bears the initial burden of demonstrating a close fit between the reciprocity requirement and its asserted local purpose. Hughes v. Oklahoma, 441 U. S., at 336; Dean Milk Co. v. City of Madison, 340 U. S. 349, 354 (1951).
The reciprocity requirement fails to clear this initial hurdle. For there is no evidence that this restriction is narrowly tailored to the conservation and preservation rationale. Even though the supply of water in a particular well may be abundant, or perhaps even excessive, and even though the most beneficial use of that water might be in another State, such water may not be shipped into a neighboring State that does not permit its water to be used in Nebraska. If it could be shown that the State as a whole suffers a water shortage, that the intrastate transportation of water from areas of abundance to areas of shortage is feasible regardless of distance, and that the importation of water from adjoining States would roughly compensate for any exportation to those States, then the conservation and preservation purpose might be credibly advanced for the reciprocity provision. A demonstrably arid State conceivably might be able to marshal evidence to establish a close means-end relationship between even a total ban on the exportation of water and a purpose to conserve and preserve water. Appellee, however, does not claim that such evidence exists. We therefore are not persuaded that the reciprocity requirement — when superimposed on the first three restrictions in the statute — significantly advances the State’s legitimate conservation and preservation interest; it surely is not narrowly tailored to serve that purpose. The reciprocity requirement does not survive the “strictest scrutiny” reserved for facially discriminatory legislation. Hughes v. Oklahoma, supra, at 337.
III
Appellee’s suggestion that Congress has authorized the States to impose otherwise impermissible burdens on interstate commerce in ground water is not well founded. The suggestion is based on 37 statutes in which Congress has deferred to state water law, and on a number of interstate compacts dealing with water that have been approved by Congress.
Abstracts of the relevant sections of the 37 statutes relied upon by appellee were submitted in connection with the Hearings on S. 1275 before the Subcommittee on Irrigation and Reclamation of the Senate Committee on Interior and Insular Affairs, 88th Cong., 2d Sess., 302-310 (1964). Appellee refers the Court to that submission but only discusses § 8 of the Reclamation Act of 1902, 32 Stat. 390. That section, it turns out, is typical of the other 36 statutes. It contains two parts. The first provides that “nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation.” Such language defines the extent of the federal legislation’s pre-emptive effect on state law. New England Power Co. v. New Hampshire, 455 U. S. 331, 341 (1982); Lewis v. BT Investment Managers, Inc., 447 U. S. 27, 49 (1980). The second part provides that “the Secretary of the Interior, in carrying out the provisions of this Act, shall proceed in conformity with such laws.” Such language mandates that questions of water rights that arise in relation to a federal project are to be determined in accordance with state law. See California v. United States, 438 U. S. 645 (1978).
The interstate compacts to which appellee refers are agreements among States regarding rights to surface water. See The Council of State Governments, Interstate Compacts and Agencies 25-29, 31-32 (1979). Appellee emphasizes a compact between Nebraska and Colorado involving water rights to the South Platte River, see 44 Stat. (part 2) 195, and a compact among Nebraska, Colorado, and Kansas involving water rights to the Republican River, see 57 Stat. 86.
Although the 37 statutes and the interstate compacts demonstrate Congress’ deference to state water law, they do not indicate that Congress wished to remove federal constitutional constraints on such state laws. The negative implications of the Commerce Clause, like the mandates of the Fourteenth Amendment, are ingredients of the valid state law to which Congress has deferred. Neither the fact that Congress has chosen not to create a federal Water law to govern water rights involved in federal projects, nor the fact that Congress has been willing to let the States settle their differences over water rights through mutual agreement, constitutes persuasive evidence that Congress consented to the unilateral imposition of unreasonable burdens on commerce. In the instances in which we have found such consent, Congress’ “ ‘intent and policy’ to sustain state legislation from attack under the Commerce Clause” was “‘expressly stated.’” New England Power Co. v. New Hampshire, supra, at 343 (quoting Prudential Ins. Co. v. Benjamin, 328 U. S. 408, 427 (1946)). Cf. Merrion v. Jicarilla Apache Tribe, 455 U. S. 130, 155, n. 21 (1982).
The reciprocity requirement of Neb. Rev. Stat. §46-613.01 (1978) violates the Commerce Clause. We leave to the state courts the question whether the invalid portion is severable. The judgment of the Nebraska Supreme Court is reversed, and the case is remanded for proceedings not inconsistent with this opinion.
It is so ordered.
Article I, §8, cl. 3, of the United States Constitution provides: “The Congress shall have Power... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” For general explanations of Commerce Clause analysis, see, e. g., Western & Southern Life Insurance Co. v. State Board of Equalization, 451 U. S. 648, 652-653 (1981); Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 766-770 (1945).
Because of the reciprocity requirement of § 46-613.01, appellants would not have been granted a permit had they applied for one. Their failure to submit an application therefore does not deprive them of standing to challenge the legality of the reciprocity requirement. Cf. Larson v. Valente, 456 U. S. 228 (1982).
The Nebraska Supreme Court also rejected appellants’ equal protection and due process challenges. Appellants renew those challenges before this Court, but we need not reach these issues in light of our disposition of the Commerce Clause claim.
The Court quoted the statute: “ ‘It shall be unlawful for any person or corporation to transport or carry, through pipes, conduits, ditches or canals, the waters of any fresh water lake, pond, brook, creek, river or stream of this State into any other State, for use therein.’ ” 209 U. S., at 353.
“The Courts below assumed or decided and we shall assume that the defendant represents the rights of a riparian proprietor, and on the other hand, that it represents no special chartered powers that give it greater rights than those. On these assumptions the Court of Errors and Appeals pointed out that a riparian proprietor has no right to divert waters for more than a reasonable distance from the body of the stream or for other than the well-known ordinary uses, and that for any purpose anywhere he is narrowly limited in amount. It went on to infer that his only right in the body of the stream is to have the flow continue, and that there is a residuum of public ownership in the State. It reinforced the State’s rights by the State’s title to the bed of the stream where flowed-by the tide, and concluded from the foregoing and other considerations that, as against the rights of riparian owners merely as such, the State was warranted in prohibiting the acquisition of the title to water on a larger scale.” Id., at 354.
“The problems of irrigation have no place here. Leaving them on one side, it appears to us that few public interests are more obvious, indisputable and independent of particular theory than the interest of the public of a State to maintain the rivers that are wholly within it substantially undiminished, except by such drafts upon them as the guardian of the public welfare may permit for the purpose of turning them to a more perfect use.” Id., at 356.
The District Court quoted the statute: ‘“No one shall withdraw water from any underground source in this State for use in any other state by drilling a well in Texas and transporting the water outside the boundaries of the State unless the same be specifically authorized by an Act of the Texas Legislature and thereafter as approved by it.’” 255 F. Supp., at 830.
Justiee Holmes, the author of the Court’s opinion in Hudson County, noted his dissent. See 221 U. S., at 262.
Justice Holmes dissented, expressing the view that the Court’s decision was inconsistent with Hudson County. See 262 U. S., at 603.
The District Court opinion, 255 F. Supp., at 839, included these quotations from the two cases:
“The statute of Oklahoma recognizes [natural gas] to be a subject of intrastate commerce, but seeks to prohibit it from being the subject of interstate commerce, and this is the purpose of its conservation. In other words, the purpose of its conservation is in a sense commercial — the business welfare of the State, as coal might be, or timber. Both of these products might be limited in amount, and the same consideration of the public welfare which would confine gas to the use of the inhabitants of a State would confine them to the inhabitants of the State. If the States have such power a singular situation might result. Pennsylvania might keep its coal, the Northwest its timber, the mining States their minerals. And why may not the products of the field be brought within the principle?” West v. Kansas Natural Gas Co., 221 U. S., at 255.
“Another consideration advanced to the same end is that natural gas is a natural product of the State and has become a necessity therein, that the supply is waning and no longer sufficient to satisfy local needs and be used abroad, and that the act is therefore a legitimate measure of conservation in the interest of the people of the State. If the situation be as stated, it affords no ground for the assumption by the State of the power to regulate interstate commerce, which is what the act attempts to do. That power is lodged elsewhere.” Pennsylvania v. West Virginia, 262 U. S., at 598.
“Considering the statute in question only with regard to whether it regulates the transportation and use of water after it has been withdrawn from a well and becomes personal property, such statute constitutes an unreasonable burden upon and interference with interstate commerce. Moreover, on the facts of this case it appear[s] to us that [the Texas statute] does not have for its purpose, nor does it operate to conserve water resources of the State of Texas except in the sense that it does so for her own benefit to the detriment of her sister States as in the case of West v. Kansas Natural Gas Co. In the name of conservation, the statute seeks to prohibit interstate shipments of water while indulging in the substantial discrimination of permitting the unrestricted intrastate production and transportation of water between points within the State, no matter how distant; for example, from Wilbarger County to El Paso County, Texas. Obviously, the statute had little relation to the cause of conservation.” 255 F. Supp., at 839-840.
“This statute, however, seeks to prohibit the production of underground water for the purpose of transporting same in interstate commerce, and has the effect of prohibiting the interstate transportation of such water after it has become personal property. Whether a statute by its phraseology prohibits the interstate transportation of an article of commerce after it has become the personal property of someone as in the Pennsylvania and West cases, or prohibits the withdrawal of such substance where the intent is to transport such in interstate commerce, the result upon interstate commerce is the same. In both situations, the purpose and intent of the statute and the end result thereof is to prohibit the interstate transportation of an article of commerce.” Id., at 840.
In California v. United States, 438 U. S. 645, 648 (1978), we explained some of the circumstances that support a general policy of local water management under differing legal systems:
“The very vastness of our territory as a Nation, the different times at which it was acquired and settled, and the varying physiographic and climate regimes which obtain in its different parts have all but necessitated the recognition of legal distinctions corresponding to these differences. Those who first set foot in North America from ships sailing the tidal estuaries of Virginia did not confront the same problems as those who sailed flat boats down the Ohio River in search of new sites to farm. Those who cleared the forests in the old Northwest Territory faced totally different physiographic problems from those who built sod huts on the Great Plains. The final expansion of our Nation in the 19th century into the arid lands beyond the hundredth meridian of longitude, which had been shown on early maps as the ‘Great American Desert,’ brought the participants in that expansion face to face with the necessity for irrigation in a way that no previous territorial expansion had.”
Soil Conservation Service, U. S. Dept. of Agriculture, America’s Soil and Water: Conditions and Trends 21 (1980).
Comptroller General, Report to Congress, Ground Water Overdrafting Must Be Controlled 7-8 (1980).
See Cities Service Gas Co. v. Peerless Oil & Gas Co., 340 U. S. 179, 188 (1950) (“Insofar as conservation is concerned, the national interest and the interest of producing states may well tend to coincide”).
Colorado Rev. Stat. § 37-90-136 (1973) provides as follows:
“For the purpose of aiding and preserving unto the state of Colorado and all its citizens the use of all ground waters of this state, whether tributary or nontributary to a natural stream, which waters are necessary for the health and prosperity of all the citizens of the state of Colorado, and for the growth, maintenance, and general welfare of the state, it is unlawful for any person to divert, carry, or transport by ditches, canals, pipelines, conduits, or
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | J | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Chief Justice Burger
delivered the opinion of the Court.
We granted the writ of certiorari in this case to resolve whether the Federal Reserve Board exceeded its authority-under § 105 of the Truth in Lending Act in promulgating that portion of Regulation Z commonly referred to as the “Four Installment Rule.”
Respondent is a Delaware corporation which solicits subscriptions to several well-known periodicals. In 1969, one of respondent's door-to-door salesmen called on the petitioner, a 73-year-old widow residing in Florida, and sold her a five-year subscription to four magazines. Petitioner agreed to pay $3.95 immediately and to remit a similar amount monthly for 30 months. The contract form she signed contained a clause stating that the subscriptions could not be canceled and an acceleration provision similar to that found in many installment undertakings, providing that any default in installment payments would render the entire balance due. The contract did not recite the total purchase price of the subscriptions or the amount which remained unpaid after the initial remittance, and made no reference to service or finance charges. The total debt assumed by the petitioner was $122.45; the balance due after the initial payment was $118.50.
Petitioner made the initial payment, began to receive the magazines for which she had contracted, and then defaulted. Respondent declared the entire balance of $118.50 due and threatened legal action. Petitioner brought this suit in United States District Court, alleging that respondent had failed to comply with the disclosure provisions of the Truth in Lending Act. She sought recovery of the statutory penalty and reimbursement for the costs of the litigation, including reasonable attorney’s fees.
In support of her claim, petitioner submitted to the District Court a series of “dunning” letters which she had received from respondent. One letter, dated December 16, 1969, stated:
“After making the terms of our contract clear to you, we went ahead in good faith and had your subscriptions entered for the entire periods you had agreed to take. The contract you signed is: Not subject to cancellation after acceptance or verification.
“Knowing, therefore, the obligations we have incurred in your name, we feel confident that you will continue your magazine subscriptions and make the convenient monthly payments regularly and promptly.”
A second letter, received a week later from respondent’s agent, declared:
“After an account is three months delinquent it is brought to my attention. I feel that you should realize that you are receiving our merchandise which we have paid for. Had you dealt directly with the publishers yourself, you would have had to pay them in advance for the magazines.
“Again, let me remind you that we have ordered these magazines in advance and that you have incurred an obligation to repay us. This is a credit account, and as such must be repaid by you on a monthly basis, much the same as if you had purchased any other type of merchandise on a monthly budget plan. [Emphasis supplied; underlined words are emphasized in the original letter].”
Respondent admitted sending each of the above letters to petitioner. In addition, respondent submitted one affidavit to the District Court, describing the nature of the contracts which it offered to its clients. The affidavit stated that a customer who ordered magazine subscriptions from respondent was required to pay for all magazines during the first half of the contract term. Thus, according to the affidavit, at all times during the course of a contract, a purchaser who has complied with the terms of the contract has paid for more magazines than he has received. Respondent did not, however, submit any affidavit to the court contesting any of the facts stated in its “dunning” letters. On this record, both parties moved for summary judgment, declaring explicitly that no factual question remained undecided.
Section 121 of the Truth in Lending Act requires merchants who regularly extend credit, with attendant finance charges, to disclose certain contract information “to each person to whom consumer credit is extended and upon whom a finance charge is or may be imposed....” Among other relevant facts, the merchant must, where applicable, list the cash price of the merchandise or service sold, the amount of finance and other charges, and the rate of the charges. Failure to disclose renders the seller liable to the consumer for a penalty of twice the amount of the finance charge, but in no event less than $100 or more than $1,000. The creditor may also be assessed for the costs of the litigation, including reasonable attorney’s fees and, in certain circumstances not relevant here, may be the subject of criminal charges.
Section 105 of the Act provides:
“The [Federal Reserve] Board shall prescribe regulations to carry out the purposes of [the Act]. These regulations may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of [the Act], to prevent circumvention or evasion thereof, or to facilitate compliance therewith.”
Accordingly, the Board has promulgated Regulation Z, which defines the circumstances in which a seller who regularly extends credit must make the disclosures outlined in § 128. The regulation provides that disclosure is necessary whenever credit is offered to a consumer “for which either a finance charge is or may be imposed or which pursuant to an agreement, is or may be payable in more than four installments.”
Relying on the rule governing credit transactions of more than four installments, the District Court granted summary judgment for petitioner. The court found that respondent had extended credit to petitioner, which by agreement was payable in more than four installments, but had failed to comply with the disclosure provisions of the Act.
The Court of Appeals reversed, holding that the Board had exceeded its statutory authority in promulgating the regulation upon which the District Court relied. The regulation was found to conflict with § 121 of the Act since it required that disclosure be made in regard to some credit transactions in which a finance charge had not been imposed. As an alternative ground for its decision, the Court of Appeals held that the regulation created a conclusive presumption that credit payments made in more than four installments included a finance charge. Relying on Schlesinger v. Wisconsin, 270 U. S. 230 (1926), and Heiner v. Donnan, 285 U. S. 312 (1932), the court concluded that such an irrebuttable presumption of fact violated the Due Process Clause of the Fifth Amendment.
I
Passage of the Truth in Lending Act in 1968 culminated several years of congressional study and debate as to the propriety and usefulness of imposing mandatory disclosure requirements on those who extend credit to consumers in the American market. By the time of passage, it had become abundantly clear that the use of consumer credit was expanding at an extremely rapid rate. From the end of World War II through 1967, the amount of such credit outstanding had increased from $5.6 billion to $95.9 billion, a rate of growth more than 4% times as great as that of the economy. Yet, as the congressional hearings revealed, consumers remained remarkably ignorant of the nature of their credit obligations and of the costs of deferring payment. Because of the divergent, and at times fraudulent, practices by which consumers were informed of the terms of the credit extended to them, many consumers were prevented from shopping for the best terms available and, at times, were prompted to assume liabilities they could not meet. Joseph Barr, then Under Secretary of the Treasury, noted in testifying before a Senate subcommittee that such blind economic activity is inconsistent with the efficient functioning of a free economic system such as ours, whose ability to provide desired material at the lowest cost is dependent on the asserted preferences and informed choices of consumers.
The Truth in Lending Act was designed to remedy the problems which had developed. The House Committee on Banking and Currency reported, in regard to the then proposed legislation:
“[B]y requiring all creditors to disclose credit information in a uniform manner, and by requiring all additional mandatory charges imposed by the creditor as an incident to credit be included in the computation of the applicable percentage rate, the American consumer will be given the information he needs to compare the cost of credit and to make the best informed decision on the use of credit.”
This purpose was stated explicitly in § 102 of the legislation enacted:
“The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.”
The hearings held by Congress reflect the difficulty of the task it sought to accomplish. Whatever legislation was passed had to deal not only with the myriad forms in which credit transactions then occurred, but also with those which would be devised in the future. To accomplish its desired objective, Congress determined to lay the structure of the Act broadly and to entrust its construction to an agency with the necessary experience and resources to monitor its operation. Section 105 delegated to the Federal Reserve Board broad authority to promulgate regulations necessary to render the Act effective. The language employed evinces the awareness of Congress that some creditors would attempt to characterize their transactions so as to fall one step outside whatever boundary Congress attempted to establish. It indicates as well the clear desire of Congress to insure that the Board had adequate power to deal with such attempted evasion. In addition to granting to the Board the authority normally given to administrative agencies to promulgate regulations designed to “carry out the purposes” of the Act, Congress specifically provided, as noted earlier, that the regulations may define classifications and exceptions to insure compliance with the Act.
See supra, at 361-362. The Board was thereby empowered to define such classifications as were reasonably necessary to insure that the objectives of the Act were fulfilled, no matter what adroit or unscrupulous practices were employed by those extending credit to consumers.
One means of circumventing the objectives of the Truth in Lending Act, as passed by Congress, was that of “burying” the cost of credit in the price of goods sold. Thus in many credit transactions in which creditors claimed that no finance charge had been imposed, the creditor merely assumed the cost of extending credit as an expense of doing business, to be recouped as part of the price charged in the transaction. Congress was well aware, from its extensive studies, of the possibility that merchants could use such devices to evade the disclosure requirements of the Act. The Committee hearings are replete with suggestions that such manipulation would render the Act a futile gesture in the case of goods normally sold by installment contract. Opponents of the bill contended that the reporting provisions would actually encourage merchants who had formerly segregated their credit costs not to do so. They predicted that the effect of the Act would thus be to reduce the amount of information available to the consumer, a result directly contrary to that which was intended. Proponents of the legislation claimed that the Act would enhance the consumer’s ability to make an informed choice even if finance charges were hidden. In response to a claim that credit costs would be incorporated in the price of goods, Senator Douglas, who first proposed the Truth in Lending Act, stated:
“I would like to call to your attention, Senator, for purposes of the record, that this bill does not provide for judgment solely on the basis of the... annual interest rate or the total finance charges. It also provides that there shall be a statement of the cash price or delivery price of the property or service to be acquired. Both things are to be stated, price and finance charges, and the judgment of the consumer can be on the basis of both of these factors, not merely on one alone; and if a merchant tries to have a low finance charge and bury it in a high cash price or delivered price, then the purchaser can shop on price just as much as on the finance charges.”
It was against this legislative background that the Federal Reserve Board promulgated regulations governing enforcement of the Truth in Lending Act. In September 1968, with the aid of an advisory board composed of representatives of diverse retail, lending, and consumer groups, the Board compiled and released a draft of proposed regulations. Comments and criticisms from interested parties were invited. After more than 1,800 responses were received and considered by the Board, the regulations were reviewed and published in the Federal Register.
The Four Installment Rule was included in the original published draft of the regulations and was not amended prior to its final adoption. The Board's objective in promulgating the rule was to prevent the Act from fulfilling the prophecy which its opponents had forecast. As J. L. Robertson, vice chairman of the Board of Governors, stated in an advisory letter issued a year later:
“The Board felt that it was imperative to include transactions involving more than four instalments under the Regulation since without this provision the practice of burying the finance charge in the cash price, a. practice which already exists in many cases, would have been encouraged by Truth in Lending. Obviously this would have been directly contrary to Congressional intent.”
Furthermore, even as to sales in which it was impossible to determine what, if any, portion of the price recompensed the creditor for deferring payment, the regulation at least required that the consumer be provided with some information which would enable him to make an informed economic choice.
II
The standard to be applied in determining whether the Board exceeded the authority delegated to it under the Truth in Lending Act is well established under our prior cases. Where the empowering provision of a statute states simply that the agency may “make... such rules and regulations as may be necessary to carry out the provisions of this Act,” we have held that the validity of a regulation promulgated thereunder will be sustained so long as it is “reasonably related to the purposes of the enabling legislation.” Thorpe v. Housing Authority of the City of Durham, 393 U. S. 268, 280-281 (1969). See also American Trucking Assns. v. United States, 344 U. S. 298 (1953).
We have also construed enabling provisions similar to § 105 of the Truth in Lending Act, in which Congress has stressed the agency’s power to counteract attempts to evade the purposes of a statute. In Gemsco, Inc. v. Walling, 324 U. S. 244 (1945), we were asked to determine whether the Administrator of the Wage and Hour Division of the Department of Labor was empowered under the Fair Labor Standards Act of 1938 to prohibit companies from allowing or requiring their employees to do industrial homework. The Act required the Administrator to approve orders which were designed to raise the minimum wage to 40 cents an hour. While the Act did not specifically mention industrial homework, § 8 (f) stated that the Administrator’s orders
“shall contain such terms and conditions as the Administrator finds necessary to carry out the purposes of such orders, to prevent the circumvention or evasion thereof, and to safeguard the minimum wage rates established therein.”
After hearings, the Administrator determined that homework furnished “a ready means” of evading his orders, and prohibited certain companies subject thereto from employing this means of production. The Court concluded that the Administrator had not exceeded his authority under the Act, noting that a more restrictive interpretation of the enabling provision would have rendered the Act inoperable. Focusing on the mandate provided by § 8 (f), the Court stated:
“When command is so explicit and, moreover, is reinforced by necessity in order to make it operative, nothing short of express limitation or abuse of discretion in finding that the necessity exists should undermine the action taken to execute it. When neither such limitation nor such abuse exists, but the necessity is conceded to be well founded in fact, there would seem to be an end of the matter.” 324 U. S., at 255.
In light of our prior holdings and the legislative history of the Truth in Lending Act, we cannot agree with the conclusion of the Court of Appeals that the Board exceeded its statutory authority in promulgating the Four Installment Rule. Congress was clearly aware that merchants could evade the reporting requirements of the Act by concealing credit charges. In delegating rulemaking authority to the Board, Congress emphasized the Board’s authority to prevent such evasion. To hold that Congress did not intend the Board to take action against this type of manipulation would require us to believe that, despite this emphasis, Congress intended the obligations established by the Act to be open to evasion by subterfuges of which it was fully aware. As in Gemsco, the language of the enabling provision precludes us from accepting so narrow an interpretation of the Board’s power.
Given that some remedial measure was authorized, the question remaining is whether the measure chosen is reasonably related to its objectives. We see no reason to doubt the Board’s conclusion that the rule will deter creditors from engaging in the conduct which the Board sought to eliminate. The burdens imposed on creditors are not severe, when measured against the evils which are avoided. Furthermore, were it possible or financially feasible to delve into the intricacies of every credit transaction, it is clear that many creditors to whom the rule applies would be found to have charged for deferring payment, while claiming they had not. That some other remedial provision might be preferable is irrelevant. We have consistently'held that where reasonable minds may differ as to which of several remedial measures should be chosen, courts should defer to the informed experience and judgment of the agency to whom Congress delegated appropriate authority. Northwestern Co. v. FPC, 321 U. S. 119, 124 (1944); National Broadcasting Co. v. United States, 319 U. S. 190, 224 (1943); American Telephone & Telegraph Co. v. United States, 299 U. S. 232, 236 (1936).
Respondent contends, however, that the Four Installment Rule must be abrogated since it is “inconsistent” with portions of the enabling statute. The purported conflict arises because the statute specifically mentions disclosure only in regard to transactions in which a finance charge is in fact imposed, although the rule requires disclosure in some cases in which no such charge exists. Respondent argues that, in requiring disclosure as to some transactions, Congress intended to preclude the Board from imposing similar requirements as to any other transactions.
To accept respondent’s argument would undermine the flexibility sought in vesting broad rulemaking authority in an administrative agency. In American Trucking Assns. v. United States, supra, we noted that it was not
“a reasonable canon of interpretation that the draftsmen of acts delegating agency powers, as a practical and realistic matter, can or do include specific consideration of every evil sought to be corrected.... [N]o great acquaintance with practical affairs is required to know that such prescience, either in fact or in the minds of Congress, does not exist. Its very absence, moreover, is precisely one of the reasons why regulatory agencies such as the Commission are created, for it is the fond hope of their authors that they bring to their work the expert’s familiarity with industry conditions which members of the delegating legislatures cannot be expected to possess.” 344 U. S., at 309-310 (citations omitted).
Neither the sections of the Truth in Lending Act which refer specifically to transactions involving finance charges nor any other sections of the Act indicate that Congress attempted to list comprehensively all types of transactions to which the Board’s regulations might apply. To the contrary, § 105’s broad grant of rulemaking authority reflects an intention to rely on those attributes of agency administration recognized in American Trucking. We cannot then infer that references in the Act to transactions involving credit charges were intended to limit the deterrent measures which the Board might choose.
Since the deterrent effect of the challenged rule clearly implements the objectives of the Act, respondent’s contention is reduced to a claim that the rule is void because it requires disclosure by some creditors who do not charge for credit and thus need not be deterred. The fact that the regulation may affect such individuals does not impair its otherwise valid purpose. A similar contention was made in Gemsco, and rejected by the Court. Gemsco claimed that the Administrator was not attempting to enforce the requirements of the statute but was attempting to advance “experimental social legislation” which Congress had not approved. Responding to that argument the Court stated:
“Section 8 (f), in directing the Administrator to include ‘such terms and conditions’ as he ‘finds necessary to carry out the purposes of such orders,’ did not forbid him to take the only measures which would be effective, merely because other consequences necessarily would follow. The language neither states expressly nor implies that he is to do only what will achieve the stated ends and nothing more. The statute does not direct the Administrator to make the rate effective by all necessary means except those which may have other social or economic consequences.” 324 U. S., at 257.
There the Court was referring to the regulation of subject matter not specifically mentioned in the enabling legislation. A similar rule applies when a remedial provision requires some individuals to submit to regulation who do not participate in the conduct the legislation was intended to deter or control. In Village of Euclid v. Ambler Realty Co., 272 U. S. 365, 388-389 (1926), the Court held that, in defining a class subject to regulation, “[t]he inclusion of a reasonable margin to insure effective enforcement, will not put upon a law, otherwise valid, the stamp of invalidity.” See also North American Co. v. SEC, 327 U. S. 686 (1946). Nothing less will meet the demands of our complex economic system. Where, as here, the transactions or conduct which Congress seeks to administer occur in myriad and changing forms, a requirement that a line be drawn which insures that not one blameless individual will be subject to the provisions of an act would unreasonably encumber effective administration and permit many clear violators to escape regulation entirely. That this rationale applies to administrative agencies as well as to legislatures is implicit in both Gemsco and American Trucking Assns. In neither case was every individual engaged in the regulated activity responsible for the specific consequences the agency sought to eliminate.
Respondent argues that such an interpretation of the Truth in Lending Act is inconsistent with our holding in FCC v. American Broadcasting Co., 347 U. S. 284 (1954). In that case, the Court considered whether, in establishing regulations to govern programing, the FCC had properly interpreted a criminal provision prohibiting the broadcasting of lotteries. After noting that a given statute could not be construed one way for purposes of an administrative proceeding and another for criminal prosecution, the Court stated:
“If we should give [the criminal provision] the broad construction urged by the Commission, the same construction would likewise apply in criminal cases.” Id., at 296.
Since, in drafting its regulation, the Commission had failed to apply the well-established rule that penal provisions must be construed narrowly, the Court held the regulation invalid.
Relying on American Broadcasting, respondent contends that the Truth in Lending Act must be construed narrowly since it contains penal provisions, and that a narrow interpretation requires that the Board’s rule be nullified. We cannot agree, however, that every section of an act establishing a broad regulatory scheme must be construed as a “penal” provision, as that term is used in American Broadcasting, merely because two sections of the Act provide for civil and criminal penalties. Penal statutes are construed narrowly to insure that no individual is convicted unless “a fair warning [has first been] given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.” McBoyle v. United States, 283 U. S. 25, 27 (1931). Where, as here, the language of the challenged rule is explicit, that risk is not present. See Kraus & Bros,, Inc. v. United States, 327 U. S. 614, 621-622 (1946).
We are also unable to accept respondent’s argument that § 130 does not allow imposition of a civil penalty-in cases where no finance charge is involved but where a regulation requiring disclosure has been violated. Section 130 provides that the penalty assessed shall be twice the amount of the finance charge imposed, but not less than $100. Since the civil penalty prescribed is modest and the prohibited conduct clearly set out in the regulation, we need not construe this section as narrowly as a criminal statute providing graver penalties, such as prison terms. We have noted above that the objective sought in delegating rulemaking authority to an agency is to relieve Congress of the impossible burden of drafting a code explicitly covering every conceivable future problem. Congress cannot then be required to tailor civil penalty provisions so as to deal precisely with each step which the agency thereafter finds necessary. In light of the emphasis Congress placed on agency rulemaking and on private and administrative enforcement of the Act, we cannot conclude that Congress intended those who failed to comply with regulations to be subject to no penalty or to criminal penalties alone. As the District Court concluded, imposition of the minimum sanction is proper in cases such as this, where the finance charge is nonexistent or undetermined.
Finally, the Four Installment Rule does not conflict with the Fifth Amendment under our holdings in Schlesinger v. Wisconsin, 270 U. S. 230 (1926), and Heiner v. Donnan, 285 U. S. 312 (1932). In Schlesinger and Heiner, we held that certain taxing provisions violated the Due Process Clauses of the Fifth and Fourteenth Amendments because they conclusively presumed the existence of determinative facts. The challenged rule contains no comparable presumption. The rule was intended as a prophylactic measure; it does not presume that all creditors who are within its ambit assess finance charges, but, rather, imposes a disclosure requirement on all members of a defined class in order to discourage evasion by a substantial portion of that class.
The Truth in Lending Act reflects a transition in congressional policy from a philosophy of “Let the buyer beware” to one of “Let the seller disclose.” By erecting a barrier between the seller and the prospective purchaser in the form of hard facts, Congress expressly sought “to... avoid the uninformed use of credit.” 15 U. S. C. § 1601. Some may claim that it is a relatively easy matter to calculate the total payments to which petitioner was committed by her contract with respondent; but at the time of sale, such computations are often not encouraged by the solicitor or performed by the purchaser. Congress has determined that such purchasers are in need of protection; the Four Installment Rule serves to insure that the protective disclosure mechanism chosen by Congress will not be circumvented.
That the approach taken may reflect what respondent views as an undue paternalistic concern for the consumer is beside the point. The statutory scheme is within the power granted to Congress under the Commerce Clause. It is not a function of the courts to speculate as to whether the statute is unwise or whether the evils sought to be remedied could better have been regulated in some other manner.
Reversed and remanded.
82 Stat. 148, 15 U. S. C. § 1604.
12 CFR § 226.2 (k) (1972 rev.).
App. 21.
App. 20.
Petitioner also submitted to the court a letter sent to her legal counsel by respondent’s office manager. The letter stated:
“Whereas, FPS, acts initialy [sic] as agent for the various publishers; upon acceptance of her contract, FPS thereafter acts solely as financier, and co-guaranter [sic] of service with the various publishers; whereas, FPS, has fully invested in Mrs. Mourning’s contract and does not receive refund in part or full from any, or, all publishers; for said FPS, investment, we therefore, must insist on compliance of your client to the terms of said contract until fullfilment [sic] of said terms in the aforementioned contract result [sic] in mutual resolve [sic] of liability.” App. 14.
Respondent admitted that this letter had been written on its stationery by its employee, but denied that the employee was authorized to send it. Consequently, we do not consider the facts stated in the letter to have been admitted by respondent.
Affidavit of Stanley R. Swanson, Vice President of Family Publications Service, Inc., Aug. 26, 1970, p. 2 (District Court Record 198, 199). The affidavit also stated that, while customers of respondent were free to pay the entire price of their magazine subscriptions when their contract with respondent was signed, the price charged would be equal to the aggregate of the payments that would have been made had the customer elected to pay in installments. Respondent now admits that this statement was not true. In some cases, customers who agreed to pay the entire contract price immediately were charged less than the aggregate amount of the installment payments.
§ 103 (f), 15 U. S. C. § 1602 (f). Certain transactions, not here relevant, are exempt under § 104, 15 U. S. C. § 1603.
15 U. S. C. § 1631.
§ 128, 15 U. S. C. § 1638.
§ 130, 15 U. S. C. § 1640.
Ibid.
§ 112, 15 U. S. C. § 1611.
15 U. S. C. § 1604.
15 U. S. C. § 1638.
12 CFR § 226.2 (k) (1972 rev.).
Respondent challenges the finding of the District Court that credit was extended to petitioner. In some cases in which a consumer pays in installments for a magazine subscription, credit may not have been extended to the consumer. However, in view of the admissions by respondent which were before the District Court, respondent’s failure to controvert those admissions by affidavit, and the litigation posture which respondent has consistently maintained beginning in the District Court, i. e., that no factual matters remained unresolved, we conclude that summary judgment on this issue was properly granted. Fed. Rule Civ. Proc. 56 (e).
15 U. S. C. § 1631.
H. R. Rep. No. 1040, 90th Cong., 1st Sess., 10-11 (1967).
Id., at 13; S. Rep. No. 392, 90th Cong., 1st Sess., 2-3 (1967).
H. R. Rep. No. 1040, supra, n. 18, at 13; S. Rep. No. 392, supra, n. 19, at 1-2.
Hearings on H. R. 11601 before the Subcommittee on Consumer Affairs of the House Committee on Banking and Currency, 90th Cong., 1st Sess., pt. 1, p. 76 (1967).
H. R. Rep. No. 1040, supra, n. 18, at 13.
15 U. S. C. § 1601.
See letter from Paul R. Dixon, Chairman of the Federal Trade Commission, to Senator A. Willis Robertson, Chairman of the Senate Committee on Banking and Currency, Feb. 18, 1964, in Hearings on S. 750 before the Subcommittee on Production and Stabilization of the Senate Committee on Banking and Currency, 88th Cong., 1st and 2d Sess., pt. 2, p. 1303 (1963-1964).
15 U. S. C. § 1604.
For example, two merchants might buy watches at wholesale for $20 which normally sell at retail for $40. Both might sell immediately to a consumer who agreed to pay $1 per week for 52 weeks. In one case, the merchant might claim that the price of the watch was $40 and that the remaining $12 constituted a charge for extending credit to the consumer. From the consumer's point of view, the credit charge represents the cost which he must pay for the privilege of deferring payment of the debt he has incurred. From the creditor’s point of view, much simplified, the charge may represent the return which he might have earned had he been able to invest the proceeds from the sale of the watch from the date of the sale until the date of payment. The second merchant might claim that the price of the watch was $52 and that credit was free. The second merchant, like the first, has forgone the profits which he might have achieved by investing the sale proceeds from the day of the sale on. The second merchant may be. said to have “buried” this cost in the price of the item sold. By whatever name, the $12 differential between the total payments and the price at which the merchandise could have been acquired is the cost of deferring payment.
Hearings on S. 1740 before the Subcommittee on Production and Stabilization of the Senate Committee on Banking and Currency, 87th Cong., 1st Sess., 49, 56-57, 127, 389-390, 447-448, 563, 1155-1156 (1961); Hearings on S. 1740 before the Subcommittee on Production and Stabilization of the Senate Committee on Banking and Currency, 87th Cong., 2d Sess., 16, 45, 265, 267-268, 287, 341-342, 360-361, 365-367, 376, 407, 415 (1962); Senate Hearings on S. 750, 88th Cong., 1st and 2d Sess., supra, n. 24, pts. 1 and 2, pp. 13-14, 749, 1284-1285; Hearings on S. 5 before the Subcommittee on Financial Institutions of the Senate Committee on Banking and Currency, 90th Cong., 1st Sess., 41-42, 123-134, 377-379, 513, 699 (1967); House Hearings on H. R. 11601, 90th Cong., 1st Sess., supra, n. 21, pts. 1 and 2, pp. 583, 590-591, 802, 825-826.
Senate Hearings on S. 1740, 87th Cong., 2d Sess., supra, n. 27, at 287; Senate Hearings on S. 750, 88th Cong., 1st and 2d Sess., supra, n. 24, pt. 1, pp. 13-14; House Hearings on H. R. 11601, 90th Cong., 1st Sess., supra, n. 21, pt. 2, p. 596.
Senate Hearings on S. 1740, 87th Cong., 1st Sess., supra, n. 27, at 447-448. See also Senate Hearings on S. 1740, 87th Cong., 2d Sess., supra, n. 27, at 45.
33 Fed. Reg. 15506-15516 (1968).
34 Fed. Reg. 2002-2011 (1969).
Compare § 226.2 (h), 33 Fed. Reg. 15507 (1968), with §226.2 (k), 34 Fed. Reg. 2003 (1969).
Federal Reserve Board Advisory Letter of Mar. 3, 1970, by J. L. Robertson. See also Federal Reserve Board Advisory Letter of Aug. 26, 1969, by J. L. Robertson.
Statement of J. L. Robertson, Vice Chairman, Board of Governors of the Federal Reserve System, in Hearings on Consumer Credit Regulations before the Subcommittee on Consumer Affairs of the House Committee on Banking and Currency, 91st Cong., 1st Sess., pt. 2, pp. 380-381 (1969).
E. g., § 8 of the United States Housing Act of 1937, as amended, 42 U. S. C. § 1408.
52 Stat. 1060.
52 Stat. 1065.
§ 103(f), 15 U.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Me. Justice Brennan
delivered the opinion of the Court.
This direct appeal under the Expediting Act, 15 U. S. C. § 29, is taken by the United States from a judgment of the District Court for the District of New Jersey dismissing, after full hearing, the Government’s complaint seeking to enjoin as a violation of § 7 of the Clayton Act, 15 U. S. C. § 18, the proposed merger of appellees, Phillipsburg National Bank and Trust Co. (PNB) and the Second National Bank of Phillipsburg (SNB), both located in Phillipsburg, New Jersey. The Comptroller of the Currency, also an appellee here, approved the merger in December 1967 and intervened in this action to defend it, as he was authorized to do by the Bank Merger Act of 1966, 12 U. S. C. § 1828 (c) (7) (D) (1964 ed., Supp. V). The Bank Merger Act required that the District Court engage in a two-step process, United States v. First City National Bank of Houston, 386 U. S. 361 (1967); United States v. Third National Bank in Nashville, 390 U. S. 171 (1968), the first of which was to decide whether the merger would violate the antitrust prohibitions of § 7 of the Clayton Act. If the court found that § 7 would be violated, then the Bank Merger Act required that the District Court decide whether “the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.” 12 U. S. C. § 1828 (c) (5) (B). The District Court found that the United States “failed to establish by a preponderance of the evidence that the proposed merger would have any anticompetitive effect and, further, that even if there were de minimis anticompetitive effect in the narrowly drawn market proposed by the government, such effect is clearly outweighed by the convenience and needs of the community to be served by the merged bank.” 306 F. Supp. 645, 667 (1969). We noted probable jurisdiction. 397 U. S. 933 (1970). We reverse. We have concluded from our examination of the record that the District Court erred in its definitions of the relevant product and geographic markets and that these errors invalidate the court’s determination that the merger would have no significant anticompetitive effects.
I
The Factual Setting
Phillipsburg is a small industrial city on the Delaware River in the southwestern corner of Warren County, New Jersey. Its population was 18,500 in 1960, 28,500 counting the population of its bordering suburbs. Although the population of the suburbs is and has been increasing, Phillipsburg itself has not grown. Easton, Pennsylvania, lies directly across the river. It had a population of 32,000 in 1960, 60,000 counting its bordering suburbs. Its population growth pattern has paralleled that of Phillipsburg. The cities are linked by two bridges and the testimony was that they are “in effect... one town.”
This “one town” has seven commercial banks, four in Easton and three in Phillipsburg. PNB and SNB are respectively the third and fifth largest in overall banking business. All seven fall within the category of small banks, their assets in 1967 ranging from $13,200,000 to $75,600,000. PNB, with assets then of approximately $23,900,000, and SNB with assets of approximately $17,300,000, are the first and second largest of the three Phillipsburg banks. The merger would produce a bank with assets of over $41,100,000, second in size of the six remaining commercial banks in “one town.”
PNB and SNB are direct competitors. Their main offices are opposite one another on the same downtown street. SNB’s only branch is across a suburban highway from one of PNB’s two branches. Both banks offer the wide range of services and products available at commercial banks, including, for instance, demand deposits,
savings and time deposits, consumer loans, commercial and industrial loans, real estate mortgages, trust services, safe deposit boxes, and escrow services. As is characteristic of banks of their size operating in small communities, PNB and SNB have less of their assets in commercial and industrial loans than do larger banks. They emphasize real estate loans and mortgages, and they have relatively more time and savings deposits than demand deposits. Similarly, their trust assets are quite small. In short, both banks are oriented toward the needs of small depositors and small borrowers. Thus, in 1967 75% of PNB’s number of deposits and 73% of SNB’s were $1,000 or less; 98% of PNB’s number of deposits and 97% of SNB’s were $10,000 or less. Similarly, 75% of PNB’s number of loan accounts and 59% of SNB’s were $2,500 or less, and 93% and 87% respectively were $10,000 or less.
Both banks serve predominantly Phillipsburg residents. In 1967, although 91.6% of PNB’s and 92% of SNB’s depositors were residents of “one town,” only 5,3% of PNB’s and 9% of SNB’s depositors lived in Easton. And, although 78.6% of PNB’s and 87.2% of SNB’s number of loans were made to residents of “one town,” only 14.8% and 11.6% respectively went to persons living in Easton. A witness testified that all of the approximately 8,500 Phillipsburg families deal with one or another of the three commercial banks in that city. The town’s businessmen prefer to do the same. The preference for local banks was strikingly evidenced by the fact that PNB and SNB substantially increased their savings deposit accounts during 1962-1967, even though their passbook savings rates were lower than those being paid by other readily accessible banks. At a time when Phil-lipsburg banks were paying 3.5% interest and Easton banks only 3%, other banks within a 13-mile radius were offering 4%.
Phillipsburg-Easton is in the northeastern part of the Lehigh Valley, a region of approximately 1,000 square miles, with a population of 492,000 in 1960 and 38 commercial banks in June 1968. There is considerable mobility among residents of the area for social, shopping, and employment purposes. Customer preference and conservative banking practices, however, have tended to limit the bulk of each commercial bank’s business to its immediate geographic area. Neither PNB nor SNB has aggressively sought business outside “one town.” Similarly, most other banks in the Lehigh Valley have shown little interest in seeking customers in Phillipsburg-Easton. The District Court found that “[t]here is an attitude of complacency on the part of many banks [in the Valley]. They are content to continue outmoded banking practice and reluctant to risk changes which would improve service and extend services over a greater area to a larger segment of the population.” 306 F. Supp., at 661.
The merger would reduce the number of commercial banks in “one town” from seven to six, and from three to two in Phillipsburg. The merged bank would have five of the seven banking offices in Phillipsburg and its environs and would be three times as large as the other Phillipsburg bank; it would have 75.8% of the city’s banking assets, 76.1% of its deposits, and 84.1% of its loans. Within Phillipsburg-Easton PNB-SNB would become the second largest commercial bank, having 19.3% of the total assets, 23.4% of total deposits, 19.2% of demand deposits, and 27.3% of total loans. This increased concentration would give the two largest banks 54.8% of the “one town” banking assets, 64.8% of its total deposits, 63.3% of demand deposits, 63% of total loans, and 10 of the 16 banking offices.
We entertain no doubt that this factual pattern requires a determination whether the merger passes muster under the antitrust standards of United States v. Philadelphia National Bank, 374 U. S. 321 (1963), which were preserved in the Bank Merger Act of 1966. United States v. First National Bank of Houston, supra; United States v. Third National Bank in Nashville, supra. Mergers of directly competing small commercial banks in small communities, no less than those of large banks in large communities, are subject to scrutiny under these standards. Indeed, competitive commercial banks, with their cluster of products and services, play a particularly significant role in a small community unable to support a large variety of alternative financial institutions. Thus, if anything, it is even more true in the small town than in the large city that “if the businessman is denied credit because his banking alternatives have been eliminated by mergers, the whole edifice of an entrepreneurial system is threatened; if the costs of banking services and credit are allowed to become excessive by the absence of competitive pressures, virtually all costs, in our credit economy, will be affected....” Philadelphia Bank, 374 U. S., at 372.
When PNB and SNB sought the Comptroller’s approval of their merger, as required by the Bank Merger Act, 12 U. S. C. § 1828 (c), independent reports on the competitive factors involved were obtained, as required by § 1828 (c)(4), from the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Attorney General. All three viewed the problem as involving commercial banking in Phillipsburg-Easton and reported that the merger would have a significantly harmful effect upon competition in that area. The Comptroller nevertheless approved the merger, finding that the agencies had defined the product and geographic markets too narrowly. He treated not Phillipsburg-Easton but most of the Lehigh Valley as the relevant geographic area, and evaluated competition from 34 finance companies and 13 savings and loan institutions, as well as from the more than 30 commercial banks in the area. The Comptroller concluded that the merger would have no significant anticompetitive effect and, further, that it would enable the resultant bank to serve more effectively the convenience and needs of the community.
II
The Product Market
In Philadelphia Bank we said that the “cluster of products (various kinds of credit) and services (such as checking accounts and trust administration) denoted by the term 'commercial banking’... composes a distinct line of commerce.” 374 U. S., at 356. As indicated, PNB and SNB offer the wide range of products and services customarily provided by commercial banks. The District Court made no contrary finding, and, in its actual evaluation of the effect of the merger upon competition, the court looked only to commercial banking as the relevant product market. See 306 F. Supp., at 655-661.
Earlier in its opinion, however, the District Court appeared to reject commercial banking as the appropriate line of commerce. Rather than focusing its attention upon the effect of the merger in diminishing competition among commercial banks, the court emphasized the competition between PNB-SNB and other types of financial institutions — for example, savings and loan associations, pension funds, mutual funds, insurance, and finance companies. The court expressed its view that “[i]n terms of function the defendant banks are more comparable to savings institutions than to large commercial banks,” 306 F. Supp., at 648, and continued: “So, while the term 'commercial banking’ may be used to designate the general line of commerce embracing all bank services, attention must be given in analysis of competition to different groupings within the line of commerce separating those products and services where absence of competition may be significant from those in which competition from many sources is so widespread that no question of significant diminution of competition by the merger could be raised.” 306 F. Supp., at 650-651.
The District Court erred. It is true, of course, that the relevant product market is determined by the nature of the commercial entities involved and by the nature of the competition that they face. See, e. g., United States v. Continental Can Co., 378 U. S. 441, 456-457 (1964). Submarkets such as the District Court defined would be clearly relevant, for example, in analyzing the effect on competition of a merger between a commercial bank and another type of financial institution. But submarkets are not a basis for the disregard of a broader line of commerce that has economic significance. See, e. g., Brown Shoe Co. v. United States, 370 U. S. 294, 326 (1962).
Philadelphia Bank emphasized that it is the duster of products and services that full-service banks offer that as a matter of trade reality makes commercial banking a distinct line of commerce. Commercial banks are the only financial institutions in which a wide variety of financial products and services — some unique to commercial banking and others not — are gathered together in one place. The clustering of financial products and services in banks facilitates convenient access to them for all banking customers. For some customers, full-service banking makes possible access to certain products or services that would otherwise be unavailable to them; the customer without significant collateral, for example, who has patronized a particular bank for a variety of financial products and services is more likely to be able to obtain a loan from that bank than from a specialty financial institution to which he turns simply to borrow money. In short, the cluster of products and services termed commercial banking has economic significance well beyond the various products and services involved.
Customers of small banks need and use this cluster of services and products no less than customers of large banks. A customer who uses one service usually looks to his bank for others as well, and is encouraged by the bank to do so. Thus, as was the case here, customers are likely to maintain checking and savings accounts in the same local bank even when higher savings interest is available elsewhere. See also Philadelphia Bank, supra, at 357 n. 34. This is perhaps particularly true of banks patronized principally by small depositors and borrowers for whom the convenience of one-stop banking and the advantages of a good relationship with the local banker — and thus of favorable consideration for loans — are especially important. See id., at 358 n. 35, 369.
Moreover, if commercial banking were rejected as the line of commerce for banks with the same or similar ratios of business as those of the appellee banks, the effect would likely be to deny customers of small banks — and thus residents of many small towns — the antitrust protection to which they are no less entitled than customers of large city banks. Indeed, the need for that protection may be greater in the small town since, as we have already stated, commercial banks offering full-service banking in one institution may be peculiarly significant to the economy of communities whose population is too small to support a large array of differentiated savings and credit businesses.
Ill
The Relevant Geographic Market
In determining the relevant geographic market, we held in Philadelphia Bank, supra, at 357, that “[t]he proper question to be asked... is not where the parties to the merger do business or even where they compete, but where, within the area of competitive overlap, the effect of the merger on competition will be direct and immediate.... This depends upon ‘the geographic structure of supplier-customer relations.’ ” More specifically we stated that “the ‘area of effective competition in the known line of commerce must be charted by careful selection of the market area in which the seller operates, and to which the purchaser can practicably turn for supplies....’” Id., at 359.
The District Court selected as the relevant geographic market an area approximately four times as large as Phillipsburg-Easton, with a 1960 population of 216,000 and 18 banks. The area included the city of Bethlehem, Pennsylvania. 306 F. Supp., at 652-653, 656-658. The court explicitly rejected the claim of the United States that Phillipsburg-Easton constitutes the relevant market. We hold that the District Court erred.
Commercial realities in the banking industry make clear that banks generally have a very localized business. We observed in Philadelphia Bank, supra, at 358, that “[i]n banking, as in most service industries, convenience of location is essential to effective competition. Individuals and corporations typically confer the bulk of their patronage on banks in their local community; they find it impractical to conduct their banking business at a distance.... The factor of inconvenience localizes banking competition as effectively as high transportation costs in other industries.” In locating “the market area in which the seller operates,” it is important to consider the places from which it draws its business, the location of its offices, and where it seeks business. As indicated, the appellee banks' deposit and loan statistics show that in 1967 they drew over 85% of their business from the Phillipsburg-Easton area and, of that, only about 10% from Easton. It has been noted that nearly every family in Phillipsburg deals with one of the city’s three banks, and the town’s businessmen prefer to do the same. All of PNB and SNB’s banking offices are located within Phillipsburg or its immediate suburbs; although the city is sufficiently small that there is easy access to its downtown area where the banks have their main offices, the banks found it necessary to open branches in the suburbs because, as a witness testified, that is “where the customers are.” See also Philadelphia Bank, supra, at 358 n. 35. The “one town” banks generally compete for deposits within a radius of only a few miles.
The localization of business typical of the banking industry is particularly pronounced when small customers are involved. We stated in Philadelphia Bank, supra, at 361, that “in banking the relevant geographical market is a function of each separate customer’s economic scale” — that “the smaller the customer, the smaller is his banking market geographically,” id., at 359 n. 36. Small depositors have little reason to deal with a bank other than the one most geographically convenient to them. For such persons, geographic convenience can be a more powerful influence than the availability of a higher rate of interest at a more distant, though still nearby, bank. The small borrower, if he is to have his needs met, must often depend upon his community reputation and upon his relationship with the local banker. PNB, for instance, has made numerous unsecured loans on the basis of character, which are difficult for local borrowers to get elsewhere. And, as we said in Philadelphia Bank, supra, at 369, “[s]mall businessmen especially are, as a practical matter, confined to their locality for the satisfaction of their credit needs.... If the number of banks in the locality is reduced, the vigor of competition for filling the marginal small business borrower's needs is likely to diminish.” Thus, the small borrower frequently cannot “practicably turn for supplies” outside his immediate community; and the small depositor — because of habit, custom, personal relationships, and, above all, convenience — is usually unwilling to do so. See id., at 357 n. 34. The patrons of PNB and SNB, of course, are small customers: almost 75°/o of the banks’ deposits are for amounts less than $1,000, and virtually all of their loans are for less than $10,000, most falling below $2,500.
We observed in Philadelphia Bank, supra, at 361, that we were helped to our conclusion regarding geographic market “by the fact that the three federal banking agencies regard the area in which banks have their offices as an ‘area of effective competition.’ ” Here the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Attorney General found that a relevant banking market exists in the Phillipsburg-Easton area and that the proposed merger’s competitive effect should be judged within it. We agree. We find that the evidence shows that Phillipsburg-Easton constitutes a geographic market in which the proposed merger’s effect would be “direct and immediate.” It is the market area in which PNB and SNB operate, and, as a practical matter, it is the area in which most of the merging banks’ customers must, or will, do their banking. Thus, we hold that the District Court mistakenly rejected the Government’s contention that Phillipsburg-Easton is an appropriate “section of the country” under § 7.
Appellee banks argue that Phillipsburg-Easton “cannot conceivably be considered a'market’ for antitrust purposes,” on the ground that it is not an “economically significant section of the country.” They cite our language in Brown Shoe, supra, at 320, that “[t]he deletion of the word ‘community’ in the original [Clayton] Act’s description of the relevant geographic market is another illustration of Congress’ desire to indicate that its concern was with the adverse effects of a given merger on competition only in an economically significant ‘section’ of the country.” In Brown Shoe, however, we found “relevant geographic markets” in cities “with a population exceeding 10,000 and their environs.” Id., at 339. Phillipsburg-Easton and their immediate environs had a population of almost 90,000 in 1960. Seven banks compete for their business. This market is clearly an economically significant section of the country for the purposes of §7.
IV
The Anticompetitive Effects of the Merger
We turn now to the ultimate question under § 7: whether the effect of the proposed merger “may be substantially to lessen competition.” We pointed out in Philadelphia Bank, supra, at 362, that a prediction of anticompetitive effects “is sound only if it is based upon a firm understanding of the structure of the relevant market; yet the relevant economic data are both complex and elusive.... And unless businessmen can assess the legal consequences of a merger with some confidence, sound business planning is retarded.... So also, we must be alert to the danger of subverting congressional intent by permitting a too-broad economic investigation.... And so in any case in which it is possible, without doing violence to the congressional objective embodied in § 7, to simplify the test of illegality, the courts ought to do so in the interest of sound and practical judicial administration.” We stated in Brown Shoe, supra, at 315, that “[t]he dominant theme pervading congressional consideration of the 1950 amendments [to § 7] was a fear of what was considered to be a rising tide of economic concentration in the American economy.” In Philadelphia Bank, supra, at 363, we held that “[t]his intense congressional concern with the trend toward concentration warrants dispensing, in certain cases, with elaborate proof of market structure, market behavior, or probable anticompetitive effects. Specifically, we think that a merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market, is so inherently likely to lessen competition substantially that it must be enjoined in the absence of evidence clearly showing that the merger is not likely to have such anti-competitive effects.” That principle is applicable to this case.
The commercial banking market in Phillipsburg-Easton is already concentrated. Of its seven banks, the two largest in 1967 — Easton National Bank and Lafayette Trust Co. — had 49% of its total banking assets, 56% of its total deposits, 49% of its total loans and seven of its 16 banking offices. Easton National is itself the product of the merger of two smaller banks in 1959. The union of PNB-SNB would, in turn, significantly increase commercial banking concentration in “one town.” The combined bank would become the second largest in the area, with assets of over $41,100,000 (19.3% of the area’s assets), total deposits of $38,400,000 (23.4%), and total loans of $24,900,000 (27.3%). The assets held by the two largest banks would then increase from 49% to 55%, the deposits from 56% to 65%, the loans from 49% to 63%, and the banking offices from seven to 10. The assets held by the three largest banks would increase from 60% to 6,8%', the deposits from 70% to 80%, the loans from 64% to 76%, and the banking offices from 10 to 12. In Phillipsburg alone, of course, the impact would be much greater: banking alternatives would be reduced from three to two; the resultant bank would be three times larger than the only other remaining bank, and all but two of the banking offices in the city would be controlled by one firm. Thus, we find on this record that the proposed merger, if consummated, “is... inherently likely to lessen competition substantially.” Cf. Philadelphia Bank, supra; Nashville Bank, supra; United States v. Von's Grocery Co., 384 U. S. 270 (1966); United States v. Pabst Brewing Co., 384 U. S. 546 (1966).
Appellee banks argue that they are presently so small that they lack the personnel and resources to serve their community effectively and to compete vigorously. Thus, they contend that the proposed merger could have pro-competitive effects: by enhancing their competitive position, it would stimulate other small banks in the area to become more aggressive in meeting the needs of the area and it would enable PNB-SNB to meet an alleged competitive challenge from large, outside banks., Although such considerations are certainly relevant in determining the “convenience and needs of the community” under the Bank Merger Act, they are not persuasive in the context of the Clayton Act. As we said in Philadelphia Bank, supra, at 371, for the purposes of § 7, “a merger the effect of which'may be substantially to lessen competition’ is not saved because, on some ultimate reckoning of social or economic debits and credits, it may be deemed beneficial.”
The District Court stated: “Ease of access to the market is also a factor that deserves consideration in evaluating the anticompetitive effects of a merger. It is not difficult for a small group of business men to raise sufficient capital to establish a new small bank when the banking needs of the community are sufficient to warrant approval of the charter.” 306 F. Supp., at 659. Appellees, however, made no attempt to show that a group of businessmen would move to start a new bank in Phillipsburg-Easton, should the proposed merger be approved. The banking laws of New Jersey and Pennsylvania severely restrict the capacity of existing banks to establish operations in “one town.” Relying on a recent New Jersey banking statute, N. J. Stat. Ann. §17:9A-19 (Supp. 1969), appellees contend that “[t]here is no doubt that the three banks in Phillips-burg... are fair game for attractive merger proposals by the large banks from Bergen, Passaic, Essex, Hudson and Morris Counties.” But, as the District Court pointed out, “Large city banks in Newark and in other well populated cities in the counties mentioned can now establish branch banks in Warren County [only] in any municipality in which no banking institution has its principal office or a branch office and in any municipality which has a population of 7,500 or more where no banking institution has its principal office....” 306 F. Supp., at 660. Thus, mergers under § 17:9A-19 are possible in Phillips-burg only with the three banks now in existence there. Accordingly, mergers under this statute would not bear upon the anticompetitive effects in question, because they could not increase the number of banking alternatives in “one town.”
Since the decision below, the Court of Appeals for the Third Circuit has held that a national bank may avoid the New Jersey bar against branching, N. J. Stat. Ann. § 17:9A-19 (B)(3) (Supp. 1969), by moving its headquarters into a protected community, such as Phil-lipsburg, while simultaneously reopening its former main office as a branch. Ramapo Bank v. Camp, 425 F. 2d 333 (1970). We intimate no view upon the correctness of that decision. We do observe, however, that the District Court decision in Ramapo Bank, affirmed in the recent Court of Appeals ruling, was handed down almost five months before the present District Court decision. Both opinions were written by the same District Judge. Accordingly, had an outside national bank been interested in moving its main office to Phillipsburg, no doubt this fact would have been made known to the District Court or to this Court. Nothing in the present record suggests that any national bank now located outside Phillipsburg will apply to move its main office to that city; therefore, on the record before us, that possibility does not bear on the anticompetitive effects of the merger.
Y
Meeting the Convenience and Needs of the Community
The District Court’s errors necessarily require reexamination of its conclusion that any anticompetitive effects caused by the proposed merger would be outweighed by the merger’s contribution to the community’s convenience and needs. The District Court’s conclusion, moreover, is undermined by the court’s erroneous application of the convenience-and-needs standard. In the balancing of competitive effect against benefit to community convenience and needs, “[t]o weigh adequately one of these factors against the other requires a proper conclusion as to each.” Nashville Bank, supra, at 183.
The District Court misapplied the convenience-and-needs standard by assessing the competitive effect of the proposed merger in the broad, multi-community area that it adopted as the relevant geographic market, while assessing the merger’s contribution to community convenience and needs in Phillipsburg alone. Appellees argue that “[njowhere does the district court equate ‘community’ with Phillipsburg.” We disagree. In determining convenience and needs, the court stated that “[t]here are two banking services which must be improved in the area to satisfy present and rapidly increasing need. Lending limits of the small banks are not sufficient to satisfy loan requirements for substantial industrial and commercial enterprise.... There is a definite lack of competent trust service and... servicing of substantial trust accounts must be obtained outside the community.... If the merger is approved, the merged bank can establish [loan and trust] departments and staff them with personnel capable of the kind of loan and trust service that patrons must, in large part, now seek outside the community.” 306 F. Supp., at 661. The court then cited examples of persons in Phillipsburg who found the existing loan and trust services in that city inadequate. Id., at 662-666. Since several Easton banks already provide appreciable trust services and have legal lending limits greater than those of PNB-SNB combined, it is obvious that the court was primarily concerned with loan and trust possibilities in Phillipsburg. We hold, however, that evaluation must be in terms of the convenience and needs of Phillipsburg-Easton as a whole.
Section 1828 (c)(5)(B) provides that “any... proposed merger transaction whose effect in any section of the country may be substantially to lessen competition... [shall not be approved by the responsible banking agency] unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.” Representative Reuss explained during debate on the Bank Merger Act that “[w]hat is meant by [§ (c) (5) (B)] and what counts is the effect of the transaction in meeting the needs and conveniences of the community which that particular sought-to-be merged bank serves.” 112 Cong. Rec. 2457. He indicated that “in a community having say, 10 banks of relatively equal size, and where one of the banks was in difficulty — say with regard to a problem of management succession — the ‘convenience and needs of the community’ would be best served if that bank were permitted to merge with one of the other 9 banks despite some resulting anticompetitive effects.” Id., at 2445.
These comments support our conclusion that the geographic market — the “community which that particular sought-to-be merged bank serves” — is the area in which convenience and needs must be evaluated. Commercial realities, moreover, make clear that the “community to be served” is virtually always as large, or larger, than the geographic market. Although the area in which merging banks compete while they are still separate entities is often smaller than the area in which the resultant bank will compete, it is rare that the community served by a merged bank is smaller than that served by its constituent firms prior to their merger. Further, evaluation of convenience and needs in an area smaller than the geographic market could result in the approval of a merger that, though it has anticompetitive effects throughout the market, has countervailing beneficial impact in only part of the market. Under the approach taken by the District Court, anticompetitive effects in some parts of a relevant geographic market could be justified by community benefits in other parts of it. Such a result would subvert the clear congressional purpose in the Bank Merger Act that convenience and needs not be assessed in only a part of the community to be served, and such a result would unfairly deny the benefits of the merger to some of those who sustain its direct and immediate anticompetitive effects. Cf. Philadelphia Bank, supra, at 370. Accordingly, we hold that the District Court erred in failing to assess the proposed merger’s effect in terms of the convenience and needs of the relevant geographic market.
We held in Nashville Bank, supra, at 190, that “before a merger injurious to the public interest is approved, a showing [must] be made that the gain expected from the merger cannot reasonably be expected through other means.” Thus, before approving such a merger, a district court must “reliably establish the unavailability of alternative solutions to the woes” faced by the merging banks. Ibid. Accordingly, on remand, the District Court should consider in concrete detail the adequacy of attempts by PNB and SNB to overcome their loan, trust, and personnel difficulties by methods short of their own merger. Beyond careful consideration of alternative methods of serving the convenience and needs of Phillips-burg-Easton, the court should deal specifically with whether the proposed merger is likely to benefit all seekers of banking services in the community, rather than simply those interested in large loan and trust services.
The judgment of the District Court is reversed and the case is remanded for further proceedings consistent with this opinion. No costs shall be assessed against appellee banks. T,.,,
T, It is so ordered.
Mr. Justice Stewart took no part in the decision of this case, and Mr. Justice Blackmun took no part in its consideration or decision.
Section 7, as amended by the 1950 Celler-Kefauver Antimerger Act, provides in pertinent part: “No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section, of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”
The merger was automatically stayed by the filing of this action. 12 U. S. C. § 1828 (c) (7) (A) (1964 ed., Supp. V). The District Court continued the statutory stay pending disposition of the appeal.
See table at 355. The table, in millions of dollars, as of December 30, 1967, shows the relationship of the seven
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Reed
delivered the opinion of the Court.
These are criminal cases in which conviction of various defendants has been obtained in the District Court of the United States for the Northern District of California, Southern Division, and affirmed by the Circuit Court of Appeals for the Ninth Circuit, 144 F. 2d 546. They were charged with conspiracy to violate the Sherman Act, § 1. The parties to the alleged conspiracy were of two groups: on the one hand, local manufacturers of and dealers in the commodities affected and their incorporated trade associations and officials thereof; and, on the other, unincorporated trade unions and their officials or business agents. The indictment charged that the defendants below unlawfully combined and conspired together, successfully, to monopolize unduly a part of interstate commerce in mill-work and patterned lumber. The purpose and effect of the conspiracy was alleged to be to restrain out-of-state manufacturers from shipping and selling these commodities within the San Francisco Bay area of California and to prevent the dealers in that area from freely handling them. It was alleged that the conspiracy also sought to raise the prices of the products affected. To achieve the purpose, a contract was entered into between the defendants for a wage scale for members of labor unions working on the articles involved, combined with a restrictive clause, “. . .. no material will be purchased from, and no work will be done on any material or article that has had any operation performed on same by Saw Mills, Mills or Cabinet Shops, or their distributors that do not conform to the rates of wage and working conditions of this Agreement,” with specified exceptions not here material. This clause, it is alleged, was enforced to the mutual advantage of the conspirators by some of the parties through conference or picketing or acquiescence in the arrangement. By means of the conspiracy, union workmen obtained better wages, the employers higher profits and manufacturers against whom the conspiracy was directed were largely prevented from sharing in the Bay Area business, all to the price disadvantage of the consumer and the unreasonable restraint of interstate commerce. The legal theory which was followed in their conviction was that conspiracies between employers and employees to restrain interstate commerce violate the Sherman Act.
Five petitions for certiorari were presented to this Court by different defendants either singly or jointly with others. It is sufficient for the purposes of this review to say that they raised the question of the application of § 1 of the Sherman Act to conspiracies between employers and employees to restrain commerce and, except the petitions in the employer group, the application of § 6 of the Norris-LaGuardia Act in a trial of such an indictment. On account of the importance of the federal questions raised and asserted conflicts in the circuits, the writs of certiorari were granted.
Since these cases were taken the important question of the application of the Sherman Act to a conspiracy between labor union and business groups has been decided by us. We held that such a conspiracy to restrain trade violated the Sherman Act. Allen Bradley Co. v. Local Union No. 3, 325 U. S. 797. This holding causes us to approve the ruling of the trial and appellate courts on the first question presented by the certiorari but it left unresolved the question as to the application of § 6 of the Norris-LaGuardia Act, the point to which this decision is directed.
The indictment charges a conspiracy forbidden by the Sherman Act. On that issue, the power of the trial court is limited by § 6 of the Norris-LaGuardia Act. Note 2, supra. The limitations of that section are upon all courts of the United States in all matters growing out of labor disputes, covered by the Act, which may come before them. It properly is conceded that this agreement grew out of such a labor dispute and that all parties defendant participated or were interested in that dispute. See § 13, 47 Stat. 73. Section 6 of the Norris-LaGuardia Act first appeared in a draft bill of the Senate Committee on the Judiciary as § 6 thereof. At that time its form was precisely the same as at present. The draft was drawn as a comprehensive substitute for S. 1482 of the 70th Congress, a bill providing only for a limitation on the jurisdiction of equity courts in the issuance of injunctions. In the 71st Congress, a similarly limited bill on the same subject, S. 2497, was reintroduced and a like comprehensive substitute proposed. Neither substitute was reported out of the Committee. These substitute bills are quite similar in form to the Norris-LaGuardia Act. In substance, and therefore in effectiveness, they are the same.
In the next, the 72d Congress, the bill, H. R. 5315, which was to become the Norris-LaGuardia Act, was introduced. Section 2 succinctly states the public policy that it was designed to further—a definition of and limitation upon the jurisdiction and authority of courts of the United States in labor disputes. That purpose was in accord with that behind the earlier drafts referred to above. As the new bill was practically identical with these long considered committee substitutes, the hearings on H. R. 5315 were short. But even so, the attack continued on § 6 as a restriction on the general law of agency in labor disputes. The reply of the House Committee was that it did “not affect the general law of agency” and was necessary “under the circumstances” so that “the courts should know that Congress expects them not to hold officers or associations liable for the unlawful acts of a member without clear proof of actual participation in, or authorization of, any unlawful acts by the officer or association.” The Senate Committee was of the view that it was a “rule of evidence,” not a “new law of agency.”
“There is no provision made relieving an individual from responsibility for his acts, but provision is made that a person shall not be held responsible for an ‘unlawful act’ except upon ‘clear proof’ of participation or authorization or ratification. Thus a rule of evidence, not a rule of substantive law, is established.”
We need not determine whether § 6 should be called a rule of evidence or one that changes the substantive law of agency. We hold that its purpose and effect was to relieve organizations, whether of labor or capital, and members of those organizations from liability for damages or imputation of guilt for lawless acts done in labor disputes by some individual officers or members of the organization, without clear proof that the organization or member charged with responsibility for the offense actually participated, gave prior authorization, or ratified such acts after actual knowledge of their perpetration.
Thus § 6 limited responsibility for acts of a co-conspirator—a matter of moment to the advocates of the bill. Before the enactment of § 6, when a conspiracy between labor unions and their members, prohibited under the Sherman Act, was established, a widely publicized case had held both the unions and their members liable for all overt acts of their co-conspirators. This liability resulted whether the members or the unions approved of the acts or not or whether or not the acts were offenses under the criminal law. While of course participants in a conspiracy that is covered by § 6 are not immunized from responsibility for authorized acts in furtherance of such a conspiracy, they now are protected against liability for unauthorized illegal acts of other participants in the conspiracy.
The legislative history makes the intended meaning of the word “authorization,” we think, almost equally clear. The rule of liability for acts of an agent within the scope of his authority, based on the Danbury Hatters Case, was urged as an argument against the language of § 6. When the Senate Committee on the Judiciary reported the bill, it dealt with this contention.
“But the argument is made that a man is held legally responsible for the acts of his agents taken in due course of employment. This argument is evidently based upon a doctrine of the civil law of negligence. It has no application to the criminal law. If a man is held responsible for an unlawful act, his responsibility rests on the basis of actual or implied participation. He is responsible for conspiring to do an unlawful act or for setting in motion forces intended to result, or necessarily resulting, in an unlawful act.
... it is high time that, by legislative action, the courts should be required to uphold the long established law that guilt is personal and that men can only be held responsible for the unlawful acts of associates because of participation in, authorization or ratification of such acts. As a rule of evidence, clear proof should be required, so that criminal guilt and criminal responsibility should not be imputed but proven beyond reasonable doubt in order to impose liability.”
We hold, therefore, that “authorization” as used in § 6 means something different from corporate criminal responsibility for the acts of officers and agents in the course or scope of employment. We are of the opinion that the requirement of “authorization” restricts the responsibility or liability in labor disputes of employer or employee associations, organizations or their members for unlawful acts of the officers or members of those associations or organizations, although such officers or members are acting within the scope of their general authority as such officers or members, to those associations, organizations or their officers or members who actually participate in the unlawful acts, except upon clear proof that the particular act charged, or acts generally of that type and quality, had been expressly authorized, or necessarily followed from a granted authority, by the association or non-participating member sought to be charged or was subsequently ratified by such association, organization or member after actual knowledge of its occurrence.
In this prosecution the United Brotherhood of Carpenters and Joiners and all the local unions who were convicted requested an instruction or instructions that embodied the above interpretation of § 6. A similar request was made by the individual members by requested instruction No. 58. These requested instructions were refused and instead instructions were given that stated a different concept of law as is evidenced by the excerpts in the marginal note.
So far as the Unions, both local and national, are concerned, the necessity under our construction for an instruction based on § 6 is apparent. The United Brotherhood was not a party to any of the agreements. Local unions took a more definitive part than the United Brotherhood. In some instances the name of a local union was signed to the agreement that contained the restrictive clause. Necessarily acts performed by or for the unions were done by their individual officers, members or agents. We do not enter into an analysis of the evidence that was relied upon to show the participation of the unions in the conspiracy. The evidence in any new trial may be quite different. No matter how strong the evidence may be of an association’s or organization’s participation through its agents in the conspiracy, there must be a charge to the jury setting out correctly the limited liability under § 6 of such association or organization for acts of its agents. For a judge may not direct a verdict of guilty no matter how conclusive the evidence. There is no way of knowing here whether the jury’s verdict was based on facts within the condemned instructions, note 19 above, or on actual authorization or ratification of such acts, note 18. A failure to charge correctly is not harmless, since the verdict might have resulted from the incorrect instruction. We are of the opinion, therefore, that the judge should have instructed the jury as to the limitations upon the association’s liability for the acts of its agents under § 6. The error is aggravated by the failure to give the correct charge upon request.
The suggestion is made that the alert and powerful unions and corporations gain the greatest degree of immunity under our interpretation of § 6. That is not the case. Section 6 draws no distinction as to liability for unauthorized acts between the large and the small, between national unions and local unions, between powerful unions and weak unions, between associations or organizations and their members. And we draw no such distinctions.
There is no implication in what we have said that an association or organization in circumstances covered by § 6 must give explicit authority to its officers or agents to violate in a labor controversy the Sherman Act or any other law or to give antecedent approval to any act that its officers may do. Certainly an association or organization cannot escape responsibility by standing orders disavowing authority on the part of its officers to make any agreements in violation of the Sherman Act and disclaiming union responsibility for such agreements. Facile arrangements do not create immunity from the act, whether they are made by employee or by employer groups. The conditions of liability under § 6 are the same in the case of each. The grant of authority to an officer of a union to negotiate agreements with employers regarding hours, wages, and working conditions may well be sufficient to make the union liable. An illustrative but nonrestrictive example might be where there was knowing participation by the union in the operation of the illegal agreement after its execution. And the custom or traditional practice of a particular union can also be a source of actual authorization of an officer to act for and bind the union.
Our only point is this: Congress in § 6 has specified the standards by which the liability of employee and employer groups is to be determined. No matter how clear the evidence, they are entitled to have the jury instructed in accordance with the standards which Congress has prescribed. To repeat, guilt is determined by the jury, not the court. The problem is not materially different from one where the evidence against an accused charged with a crime is well-nigh conclusive and the court fails to give the reasonable-doubt instruction. It could not be said that the failure was harmless error.
It is suggested that since “conscious participation” was required for conviction by the instructions given, error as to the individual defendants cannot be found under any theory of the rule of § 6. But we think that failure to instruct the jury on the imputation of guilt from the acts of others as limited in labor disputes by § 6 affects the individuals as well as the associations. The section covers organizations and their members alike. Individuals, without association authority, may be guilty of such a conspiracy as this under the Sherman Act, but under § 6 they will not be guilty merely because they are members or officers of a guilty association. Nor are individuals guilty because of acts of other individuals in which they did not participate, or which they did not authorize or ratify. Although an illegal conspiracy under the Sherman Act was proven at the trial, the individuals are entitled to have their participation weighed by a jury under an instruction explaining the circumstances under which § 6 permits acts of other individuals or of associations or of organizations in labor disputes to create personal liability. To instruct only that conscious participation of the individual is required leaves a jury free to weigh an individual’s guilt in the light of unauthorized and unratified acts of others with whom he is associated but in whose acts he has not participated. As the evidence of any individual’s activities in the alleged conspiracy is a minor part of the evidence as to the entire scheme, this delimitation of his responsibility is important.
Certiorari was granted to two employer groups, Nos. 8 and 10, each containing an incorporated trade association and its officers and members, both individual and corporate. Both groups combatted the indictment by demurrer on the ground that, as the restrictive agreement was directed at the maintenance of proper working conditions, it did not state a crime under the Sherman Act. The demurrer was overruled by the trial court. Our decision in Allen Bradley Company requires us to uphold this conclusion. Thereafter pleas of nolo contendere were entered by each defendant in the employer petitioner groups.
Each of the employer petitioners, if they had stood trial, as we have indicated hereinbefore, would have been entitled to the same instruction under § 6 as we have held the union group should have received. And though the failure so to charge was not excepted to, we would not be precluded from entertaining the objection. The erroneous charge was on a vital phase of the case and affected the substantial rights of the defendants. We have the power to notice a “plain error” though it is not assigned or specified. In view of their plea of nolo contendere, does justice require that these employer groups should now be given an opportunity to stand trial in the situation created by our subsequent rulings in the Allen Bradley case and in this case ? We think that it does.
This present decision furnishes a guide for the application of § 6 to liability for acts of agents in labor disputes. Ordinarily a plea of nolo contendere leaves open for review only the sufficiency of an indictment. However, in view of the then existing uncertainty as to liability for contracts between groups of employers and groups of employees that restrained interstate commerce and the application of § 6 of the Norris-LaGuardia Act, we conclude that in this exceptional situation the employer groups, also, should have an opportunity to make defense to the indictment.
The judgments in each case are reversed and the causes remanded to the District Court.
Mr. Justice Jackson took no part in the consideration or decision of this case.
15 U. S. C. § 1:
“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal: . . . Every person who shall make any contract or engage in any combination or conspiracy declared by sections 1-7 of this title to be illegal shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.”
47 Stat. 70, 71:
“Sec. 6. No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.”
323 U. S. 706-7. Compare Allen Bradley Co. v. Local Union No. 3, 145 F. 2d 215, and United States v. International Fur Workers Union, 100 F. 2d 541, 547, with the opinion of the Circuit Court of Appeals in this case, 144 F. 2d 546.
These cases were argued in the Supreme Court of the United States first on March 8, 1945. On June 18, 1945, they were restored to the docket and assigned-for reargument, counsel being requested to discuss (1) the scope of § 6 of the Norris-LaGuardia Act in relation to prosecutions under the Antitrust Act; (2) the scope of § 6 in relationship to § 13 (b); (3) the scope of the words “association or organization” appearing in § 6, in that section’s relationship to § 13 (b); and (4) consideration of the Court’s oral charge and written charges requested and refused involving § 6, in the light of objections and exceptions by each and all of the defendants and the state of the evidence on that issue as to each of them. Journal, Sup. Ct., U. S., October Term 1944, pp. 284-5. The cases were reargued on April 29-30, 1946, and again restored to the docket on June 10, 1946, for a third argument.
S. Rep. No. 1060, 71st Cong., 2d Sess., p. 4.
In the hearings on the proposed substitute, the language now incorporated into § 6 of the Norris-LaGuardia Act was criticized as changing the rules of agency, so as to relieve organizations of responsibility for acts of their agents in labor disputes. It was defended as intended to apply the law of agency to labor unions. Hearings, Subcommittee of the Committee on the Judiciary, U. S. Senate, 70th Cong., 2d Sess., on S. 1482, Part 5, p. 759, et seq.
47 Stat. 70.
S. Rep. No. 163, 72d Cong., 1st Sess.; H. Rep. No. 669, 72d Cong., 1st Sess.; S. Rep. No. 1060, 71st Cong., 2d Sess.; Hearings, Subcommittee of the Committee on the Judiciary, U. S. Senate, 70th Cong., 1st Sess., on S. 1482; Hearing, Subcommittee of the Committee on the Judiciary, U. S. Senate, 71st Cong., 2d Sess., on S. 2497.
Hearing, Committee on the Judiciary, House of Representatives, 72d Cong., 1st Sess., on H. R. 5315.
Id., p. 16:
“But section 6 effects a revolution in the substantive law of agency. By that section no officer or member of any organization, participating in a labor dispute, and this applies equally to employers, is to be held liable in any court of the United States for the unlawful act of agents acting in such dispute, unless there be clear proof of actual participation, authorization, or ratification of the agents’ acts after actual knowledge. The general law of agency is thus repealed or restricted to a labor dispute, and it applies equally to employers and employees. It applies to men who by collusion enter into agreements which may harmfully affect the public interests, and which in some instances might be violations of the antitrust act, although they may be the result, or grow out of, or involve terms of a labor dispute.”
See also pp. 33 and 39.
H. Rep. No. 669, 72d Cong., 1st Sess., p. 9.
S. Rep. No. 163, 72d Cong., 1st Sess., p. 19.
“Section 6 of the bill relates to damages for unlawful acts arising out of labor disputes. It is provided that officers and members of any labor organization, and officers and members of any employers’ organization, shall not be held liable for damages unless it is proven that the defendant either participated in or authorized such unlawful acts, or ratified such unlawful acts after actual knowledge thereof.” S. Rep. No. 163, supra, p. 19; 75 Cong. Rec. 4507; 47 Stat. 70, 73:
“Sec. 13. . . .
"(b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it, and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation.”
See the full statement in S. Rep. No. 163, supra, pp. 19-21. Nothing has been found to give definition to the word "organization” as used in the act. We see no reason to restrict its meaning to unincorporated entities. Apparently it was employed by the draftsmen to cover, generically, all organizations that take part in labor disputes. See note 11, supra. We so apply the word. The corporate form, as is true in this case, is frequently employed for trade groups.
The Danbury Hatters Case—Loewe v. Lawlor, 208 U. S. 274, and Lawlor v. Loewe, 235 U. S. 522—involving damages against union members for their union’s acts in an Unlawful conspiracy, was in their minds. Hearings on S. 1482, supra, p. 760, et seq. Compare the partnership in crime theory. United States v. Kissel, 218 U. S. 601, 608; United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 253.
United States v. Railway Employees’ Dept. A. F. L., 283 F. 479, 492.
Hearings on S. 1482, supra, p. 760:
“When that came before the Supreme Court of the United States Justice Holmes—I do not remember the exact language, but he had in mind that it might not be necessary to show that they knew or ought to have known or that they ought to have been warranted in their belief—that under the rule of agency as prevailing in all other activities, including bankers’ associations, to which you refer, and all other associations, it is the common accepted proposition, as fundamental as any I know in Anglo-Saxon jurisprudence, that a principal may be liable for the acts of his agent, even though he never knew or heard of them and actually forbade them, provided he was acting within the general scope of his authority, in furtherance of the purpose of the association. That is the law laid down by the Supreme Court of the United States, and that is the. law that I am afraid is curtailed by this provision in this section 6.”
Excerpts from Lawlor v. Loewe, 235 U. S. at 534-35, will explain the reference: “We agree with the Circuit Court of Appeals that a combination and conspiracy forbidden by the statute were proved, and that the question is narrowed to the responsibility of the defendants for what was done by the sanction and procurement of the societies above named.
“The court in substance instructed the jury that if these members paid their dues and continued to delegate authority to their officers unlawfully to interfere with the plaintiffs’ interstate commerce in such circumstances that they knew or ought to have known, and such officers were warranted in the belief that they were acting in the matters within their delegated authority, then such members were jointly liable, and no others. It seems to us that this instruction sufficiently guarded the defendants’ rights; and that the defendants got all that they were entitled to ask in not being held chargeable with knowledge as matter of law. ... If the words of the documents on their face and without explanation did not authorize what was done, the evidence of what was done publicly and habitually showed their meaning and how they were interpreted. The jury could not but find that by the usage of the unions the acts complained of were authorized, and authorized without regard to their interference with commerce among the States.”
S. Rep. No. 163, supra, p. 20.
See New York Central R. Co. v. United States, 212 U. S. 481, 494.
These cases now being passed upon have not involved the liability of an employer, whether a member or not of an association or organization of employers, for the acts, in a labor dispute, of his or its own officers. We express no opinion upon that.
A fair example, requested instruction No. 56, is as follows:
“You are instructed that no labor union or organization can be found guilty in this case for an unlawful act or acts, if any, of individual officers, members or agents, unless you find upon clear proof from the evidence that such labor organization actually participated in, or actually authorized such unlawful act, if any, or ratified such an act, if any, after actual knowledge thereof.”
“The act of an agent done for or on behalf of a corporation and within the scope of his authority, or an act which an agent has assumed to do for a corporation while performing duties actually delegated to him, is deemed to be the act of the corporation.
“If you find that there did exist a combination and conspiracy such as is charged in the indictment, and that any defendant corporation participated therein, then I instruct you that such act of participation is deemed to be also the act of the individual director, officer or agent of such defendant corporation who authorized, ordered or did such act in whole or in part.
“Likewise, the list of defendants includes a number of labor union organizations and several members thereof. It has been stipulated in this case that these labor unions are associations. Like corporations, associations are separate entities within the meaning of the Sherman Act, and may be found guilty of violations of that act, separately and apart from the guilt or innocence of their members.
“You are to determine the guilt or innocence of the labor unions which are defendants in this case in the same manner as you determine that of the corporations, that is, by an examination of the acts of their agents.
“In this case, several individuals are named as defendants, together with a number of corporations. While these defendants have been jointly indicted and charged with the offenses contained in the indictment, each defendant is entitled to an independent consideration by you of the evidence as it relates to his conscious participation in the alleged unlawful acts, and it is your duty to determine the guilt or innocence of each individual separately.”
See Battle v. United States, 209 U. S. 36, 38.
Sparf and Hansen v. United States, 156 U. S. 51, 105, dissent 173. Compare Capital Traction Company v. Hof, 174 U. S. 1, 13.
Bird v. United States, 180 U. S. 356, 361: “The chief object contemplated in the charge of the judge is to explain the law of the case, to point out the essentials to be proved on the one side and the other, and to brihg into view the relations of the particular evidence adduced to the particular issues involved.” See Pierce v. United States, 314 U. S. 306.
Weiler v. United States, 323 U. S. 606; Bruno v. United States, 308 U. S. 287.
Wiborg v. United States, 163 U. S. 632, 658; Brasfield v. United States, 272 U. S. 448, 450; see also United States v. Atkinson, 297 U. S. 157, 160. And see Rules of the Supreme Court, Rule 27.
Weems v. United States, 217 U. S. 349, 362; Mahler v. Eby, 264 U. S. 32, 45; Sibbach v. Wilson & Co., 312 U. S. 1, 16; see also Kessler v. Strecker, 307 U. S. 22, 34. And see Rules of Criminal Procedure, Rule 52 (b).
Nolo contendere “is an admission of guilt for the purposes of the case.” Hudson v. United States, 272 U. S. 451, 455; United States v. Norris, 281 U. S. 619, 622. And like pleas of guilty may be reviewed to determine whether a crime is stated by the indictment. Hocking Valley R. Co. v. United States, 210 F. 735, 738; Tucker v. United States, 196 F. 260, 262.
See Husty v. United States, 282 U. S. 694, 703; Ashcraft v. Tennessee, 322 U. S. 143, 155-56; R. F. C. v. Prudence Group, 311 U. S. 579, 582; Watts, Watts & Co. v. Unione Austriaca, 248 U. S. 9, 21; Montgomery Ward & Co. v. Duncan, 311 U. S. 243, 254.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | G | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Marshall
delivered the opinion of the Court.
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). 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. 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, 183 S. E. 2d 710. We noted probable jurisdiction, 405 U. S. 952 (1972), and now affirm. We hold that Heublein’s activities within South Carolina exceed the minimum standards established in 15 U. S. C. § 381 (a), 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. (1962 and Supp. 1971). Under that Act, only registered producers of registered brands of alcoholic beverages may ship those brands of alcoholic beverages into the State. §§ 4U134, 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 Commission. Immediately after accepting delivery, the representative must furnish the Commission a copy of the invoice showing the time and place of delivery. Ibid. 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, A-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 & French v. Tax Comm’n, 241 Ore. 50, 403 P. 2d 375 (1965), with Clairol, Inc. v. Kingsley, 109 N. J. Super. 22, 262 A. 2d 213, aff’d, 57 N. J. 199, 270 A. 2d 702 (1970), appeal dismissed, 402 U. S. 902 (1971). 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 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 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 Co. v. Minnesota, 358 U. S. 450 (1950). 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.” 358 U. S., at 452. Congress promptly responded to the “considerable concern and uncertainty” and the “serious apprehension in the commercial community” generated by this decision by enacting Pub. L. 86-272, 73 Stat. 555, 15 TJ. 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. 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.
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. More comprehensive legislation could only follow careful study, in the Committees’ view. Congress agreed, and in Title II of Pub. L. 86-272, provided that the Committee on the Judiciary of the House of Representatives and the Committee on Finance of the Senate study the entire problem of state taxation of interstate commerce.
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 clearly, it will not be deemed to have significantly changed the Federal-State balance.” United States v. Bass, 404 U. S. 336, 349 (1971).
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.
Ill
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 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 (Supp. 1971). 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 Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324, 330 (1964):
“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, distribution, or consumption within its borders.”
The requirement that, before engaging in the liquor business in South Carolina, a manufacturer do more than merely solicit sales there, is an appropriate element in the State’s system of regulating the sale of liquor. The regulation in question here is therefore valid, and § 381 (a) does not apply. The judgment of the Supreme Court of South Carolina is
Affirmed.
Mr. Justice Stewart took no part in the consideration or decision of this case.
Mr. Justice Blackmun, being of the opinion that the Twenty-first Amendment provides the sole authority for what South Carolina has required of Heublein by its Alcoholic Beverage Control Act and, to that extent, overrides what otherwise would be proscribed by 15 U. S. C. § 381, concurs in the result.
Title 15 U. S. C. §381 (a) provides in pertinent part:
“No State . . . shall have power to impose ... a net income tax on the income derived within such State by any person from interstate commerce if the only business activities within such State by or on behalf of such person ... are either, or both, of the following:
“(1) the solicitation of orders by such person, or his representative, 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; and
“(2) the solicitation of orders by such person, or his representative, in such State in the name of or for the benefit of a prospective customer of such person, if orders by such customer to such person to enable such customer to fill orders resulting from such solicitation are orders described in paragraph (1).”
A license tax, which is predicated upon liability for income taxes, was also assessed and paid. S. C. Code Aim. § 65-606 (1962). There is no dispute over the amount for which Heublein is liable under this statute.
S. Rep. No. 658, 86th Cong., 1st Sess., 2.
H. R. Rep. No. 936, 86th Cong., 1st Sess., 1.
See, e. g., S. Rep. No. 658, supra, n. 3, pp. 2-3: “Persons engaged in interstate commerce are in doubt as to the amount of local activities within a State that will be regarded as forming a sufficient ‘nexus/ that is, connection, with the State to support the imposition of a tax on net income from interstate operations and ‘properly apportioned’ to the State.”
That Congress was untroubled by those questions is suggested by its emphasis on the increased overhead and recordkeeping that local taxation of minimal activities would cause. See, e. g., id., at 4; H. R. Rep. No. 936, supra, n. 4, p. 2: “These businesses are concerned not only with the costs of taxation, but also with the inescapable fact that compliance with the diverse tax laws of every jurisdiction in which income is produced will require the maintenance of records for each jurisdiction and the retention of legal counsel and accountants who are familiar with the tax practice of each jurisdiction.” Where a valid regulatory scheme requires that records be kept, the overhead costs about which Congress was concerned might not rise substantially when a state income tax was imposed. South Carolina’s scheme for regulating liquor does little more than require that Heublein keep certain records.
H. R. Rep. No. 936, supra, n. 4, p. 2; S. Rep. No. 658, supra, n. 3, pp. 4-5: “Your committee recognizes that the bill it has reported is not a permanent solution to the problem that exists. It was not intended to be. Your committee . . . recognizes that the problem is a complex one which requires extensive and exhaustive study in arriving at a permanent solution fair alike to the States and to the Nation. Your committee believes, however, that the bill it has reported will serve as an effective stopgap or temporary solution while further studies are made of the problem.”
This report is published as H. R. Rep. No. 1480, 88th Cong., 2d Sess., H. R. Rep. No. 565, 89th Cong., 1st Sess., and H. R. Rep. No. 952, 89th Cong., 1st Sess.
MR. Justice Blackmun, in his separate statement, suggests that § 381 does proscribe what South Carolina has done here, but that the Twenty-first Amendment prohibits such an action by Congress. In his view, to the extent that § 381 prohibits taxing activities undertaken in order to comply with a regulation valid under the Twenty-first Amendment, it is unconstitutional. We prefer to read the statute and its legislative history, ambiguous though they may be, to avoid such a holding. Cf. United States v. Jin Fuey Moy, 241 U. S. 394, 401 (1916). And, though the relation between the Twenty-first Amendment and the force of the Commerce Clause in the absence of congressional action has occasionally been explored by this Court, we have never squarely determined how that Amendment affects Congress’ power under the Commerce Clause. Cf. Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384 (1951).
In upholding a comprehensive scheme of liquor regulation rather similar to South Carolina’s, this Court said:
“[The State] has seen fit to permit manufacture of whiskey only upon condition that it be sold to an indicated class of customers and transported in definitely specified ways. These conditions are not unreasonable and are clearly appropriate for effectuating the policy of limiting traffic in order to minimize well-known evils . . . .” Ziffrin, Inc. v. Beeves, 308 U. S. 132, 139 (1939). Cf. Duckworth v. Arkansas, 314 U. S. 390 (1941); Carter v. Virginia, 321 U. S. 131 (1944).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Brennan
delivered the opinion of the Court.
The question for decision is whether respondents’ state-law complaint for breach of individual employment contracts is completely pre-empted by §301 of the Labor Management Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U. S. C. § 185, and therefore removable to Federal District Court.
h-i
At various times between 1956 and 1968, Caterpillar Tractor Company (Caterpillar) hired respondents to work at its San Leandro, California, facility. Complaint ¶¶ 10-26, App. to Pet. for Cert. (App.) A-40 — A-42. Initially, each respondent filled a position covered by the collective-bargaining agreement between Caterpillar and Local Lodge No. 284, International Association of Machinists (Union). Each eventually became either a managerial or a weekly salaried employee, positions outside the coverage of the collective-bargaining agreement. Respondents held the latter positions for periods ranging from 3 to 15 years; all but two respondents served 8 years or more. App. A-97 — A-98.
Respondents allege that, “[djuring the course of [their] employment, as management or weekly salaried employees,” Caterpillar made oral and written representations that “they could look forward to indefinite and lasting employment with the corporation and that they could count on the corporation to take care of them.” Complaint 1ffl27A, 27D, App. A-43. More specifically, respondents claim that, “while serving Caterpillar as managers or weekly salaried employees, [they] were assured that if the San Leandro facility of Caterpillar ever closed, Caterpillar would provide employment opportunities for [them] at other facilities of Caterpillar, its subsidiaries, divisions, or related companies.” Id. ¶27F, App. A-48. Respondents maintain that these “promises were continually and repeatedly made,” and that they created “a total employment agreement wholly independent of the collective-bargaining agreement pertaining to hourly employees.” Id. ¶29, App. A-49. In reliance on these promises, respondents assert, they “continued to remain in Caterpillar’s employ rather than seeking other employment.” Id. ¶ 31, App. A-49.
Between May 1980 and January 1984, Caterpillar downgraded respondents from managerial and weekly salaried positions to hourly positions covered by the collective-bargaining agreement. Respondents allege that, at the time they were downgraded to unionized positions, Caterpillar supervisors orally assured them that the downgrades were temporary. Id. ¶ 27F, App. A-48. On December 15, 1983, Caterpillar notified respondents that its San Leandro plant would close and that they would be laid off.
On December 17, 1984, respondents filed an action based solely on state law in California state court, contending that Caterpillar “breached [its] employment agreement by notifying [respondents] that the San Leandro plant would be closed and subsequently advising [respondents] that they would be terminated” without regard to the individual employment contracts. Id. ¶32, App. A-49. Caterpillar then removed the action to federal court, arguing that removal was proper because any individual employment contracts made with respondents “were, as a matter of federal substantive labor law, merged into and superseded by the . . . collective bargaining agreements.” Petition for Removal, App. A-36. Respondents denied that they alleged any federal claim and immediately sought remand of the action to the state court. In an oral opinion, the District Court held that removal to federal court was proper, and dismissed the case when respondents refused to amend their complaint to attempt to state a claim under § 301 of the LMRA. App. A-4.
The Court of Appeals for the Ninth Circuit reversed, holding that the case was improperly removed. 786 F. 2d 928 (1986). The court determined that respondents’ state-law claims were not grounded, either directly or indirectly, upon rights or liabilities created by the collective-bargaining agreement. Caterpillar’s claim that its collective-bargaining agreement with the Union superseded and extinguished all previous individual employment contracts alleged by respondents was deemed irrelevant. The court labeled this argument a “defensive allegation,” “raised to defeat the [respondents’] claims grounded in those independent contracts.” Id., at 936. Since respondents’ cause of action did not require interpretation or application of the collective-bargaining agreement, the court concluded that the complaint did not arise under § 301 and was not removable to federal court.
We granted certiorari, 479 U. S. 960 (1986), and now affirm.
II
A
The Court recently set forth in some detail “[t]he century-old jurisdictional framework governing removal of federal question cases from state into federal courts,” Metropolitan Life Insurance Co. v. Taylor, 481 U. S. 58, 63 (1987) (citing Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1 (1983)), and we sketch only its outline here.
Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant. Absent diversity of citizenship, federal-question jurisdiction is required. The presence or absence of federal-question jurisdiction is governed by the “well-pleaded complaint rule,” which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint. See Gully v. First National Bank, 299 U. S. 109, 112-113 (1936). The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.
Ordinarily federal pre-emption is raised as a defense to the allegations in a plaintiff’s complaint. Before 1887, a federal defense such as pre-emption could provide a basis for removal, but, in that year, Congress amended the removal statute. We interpret that amendment to authorize removal only where original federal jurisdiction exists. See Act of Mar. 3, 1887, ch. 373, 24 Stat. 552, as amended by Act of Aug. 13, 1888, ch. 866, 25 Stat. 433. Thus, it is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense is the only question truly at issue. See Franchise Tax Board, 463 U. S., at 12.
There does exist, however, an “independent corollary” to the well-pleaded complaint rule, id., at 22, known as the “complete pre-emption” doctrine. On occasion, the Court has concluded that the pre-emptive force of a statute is so “extraordinary” that it “converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” Metropolitan Life Insurance Co., supra, at 65. Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law. See Franchise Tax Board, supra, at 24 (“[I]f a federal cause of action completely pre-empts a state cause of action any complaint that comes within the scope of the federal cause of action necessarily ‘arises under’ federal law”).
The complete pre-emption corollary to the well-pleaded complaint rule is applied primarily in cases raising claims preempted by § 301 of the LMRA. Section 301 provides:
“Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect of the amount in controversy or without regard to the citizenship of the parties.” 29 U. S. C. § 185(a).
In Avco Corp. v. Machinists, the Court of Appeals decided that “[s]tate law does not exist as an independent source of private rights to enforce collective bargaining contracts.” 376 F. 2d 337, 340 (CA6 1967), aff’d, 390 U. S. 557 (1968). In affirming, we held that, when “[t]he heart of the [state-law] complaint [is] a . . . clause in the collective bargaining agreement,” id., at 558, that complaint arises under federal law:
“[T]he pre-emptive force of § 301 is so powerful as to displace entirely any state cause of action ‘for violation of contracts between an employer and a labor organization.’ Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301.” Franchise Tax Board, supra, at 23.
B
Caterpillar asserts that respondents’ state-law contract claims are in reality completely pre-empted §301 claims, which therefore arise under federal law. We disagree. Section 301 governs claims founded directly on rights created by collective-bargaining agreements, and also claims “substantially dependent on analysis of a collective-bargaining agreement.” Electrical Workers v. Hechler, 481 U. S. 851, 859, n. 3 (1987); see also Allis-Chalmers Corp. v. Lueck, 471 U. S. 202, 220 (1985). Respondents allege that Caterpillar has entered into and breached individual employment contracts with them. Section 301 says nothing about the content or validity of individual employment contracts. It is true that respondents, bargaining unit members at the time of the plant closing, possessed substantial rights under the collective agreement, and could have brought suit under § 301. As masters of the complaint, however, they chose not to do so.
Moreover, contrary to Caterpillar’s assertion, see Reply Brief for Petitioner 10, respondents’ complaint is not substantially dependent upon interpretation of the collective-bargaining agreement. It does not rely upon the collective agreement indirectly, nor does it address the relationship between the individual contracts and the collective agreement. As the Court has stated, “it would be inconsistent with congressional intent under [§301] to pre-empt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.” Allis-Chalmers Corp., supra, at 212.
Caterpillar next relies on this Court’s decision in J. I. Case Co. v. NLRB, 321 U. S. 332 (1944), arguing that when respondents returned to the collective-bargaining unit, their individual employment agreements were subsumed into, or eliminated by, the collective-bargaining agreement. Thus, Caterpillar contends, respondents’ claims under their individual contracts actually are claims under the collective agreement and pre-empted by § 301.
Caterpillar is mistaken. First, J. I. Case does not stand for the proposition that all individual employment contracts are subsumed into, or eliminated by, the collective-bargaining agreement. In fact, the Court there held:
“Individual contracts cannot subtract from collective ones, and whether under some circumstances they may add to them in matters covered by the collective bargain, we leave to be determined by appropriate forums under the law of contracts applicable, and to the Labor Board if they constitute unfair labor practices.” 321 U. S., at 339.
Thus, individual employment contracts are not inevitably superseded by any subsequent collective agreement covering an individual employee, and claims based upon them may arise under state law. Caterpillar’s basic error is its failure to recognize that a plaintiff covered by a collective-bargaining agreement is permitted to assert legal rights independent of that agreement, including state-law contract rights, so long as the contract relied upon is not a collective-bargaining agreement. See Allis-Chalmers Corp., supra. Caterpillar im-permissibly attempts to create the prerequisites to removal by ignoring the set of facts (i. e., the individual employment contracts) presented by respondents, along with their legal characterization of those facts, and arguing that there are different facts respondents might have alleged that would have constituted a federal claim. In sum, Caterpillar does not seek to point out that the contract relied upon by respondents is in fact a collective agreement; rather it attempts to justify removal on the basis of facts not alleged in the complaint. The “artful pleading” doctrine cannot be invoked in such circumstances.
Second, if an employer wishes to dispute the continued legality or viability of a pre-existing individual employment contract because an employee has taken a position covered by a collective agreement, it may raise this question in state court. The employer may argue that the individual employment contract has been pre-empted due to the principle of exclusive representation in § 9(a) of the National Labor Relations Act (NLRA), 29 U. S. C. § 159(a). See Machinists v. Wisconsin Employment Relations Comm’n, 427 U. S. 132, 146 (1976) (quoting Teamsters v. Morton, 377 U. S. 252, 260 (1964)) (NLRA pre-empts state law that “ ‘upset[s] the balance of power between labor and management expressed in our national labor policy’”). Or the employer may contend that enforcement of the individual employment contract arguably would constitute an unfair labor practice under the NLRA, and is therefore pre-empted. See San Diego Build ing Trades Council v. Garmon, 359 U. S. 236 (1959) (state law that infringes upon the National Labor Relations Board’s primary jurisdiction over unfair labor practice charges is preempted). The fact that a defendant might ultimately prove that a plaintiff’s claims are pre-empted under the NLRA does not establish that they are removable to federal court.
Finally, Caterpillar argues that § 301 pre-empts a state-law claim even when the employer raises only a defense that requires a court to interpret or apply a collective-bargaining agreement. Caterpillar asserts such a defense claiming that, in its collective-bargaining agreement, its unionized employees waived any pre-existing individual employment contract rights.
It is true that when a defense to a state claim is based on the terms of a collective-bargaining agreement, the state court will have to interpret that agreement to decide whether the state claim survives. But the presence of a federal question, even a § 301 question, in a defensive argument does not overcome the paramount policies embodied in the well-pleaded complaint rule — that the plaintiff is the master of the complaint, that a federal question must appear on the face of the complaint, and that the plaintiff may, by eschewing claims based on federal law, choose to have the cause heard in state court. When a plaintiff invokes a right created by a collective-bargaining agreement, the plaintiff has chosen to plead what we have held must be regarded as a federal claim, and removal is at the defendant’s option. But a defendant cannot, merely by injecting a federal question into an action that asserts what is plainly a state-law claim, transform the action into one arising under federal law, thereby selecting the forum in which the claim shall be litigated. If a defendant could do so, the plaintiff would be master of nothing. Congress has long since decided that federal defenses do not provide a basis for removal. See supra, at 392, and n. 5, 392-393.
III
Respondents’ claims do not arise under federal law and therefore may not be removed to federal court. The judgment of the Court of Appeals is
Affirmed.
The complaint also avers that Caterpillar “made clear ... its intention to employ [respondents] indefinitely by promoting them from entry level hourly positions to mid-level technical or weekly positions and to management positions,” and by giving respondents “favorable performance evaluations,” “payment increases and bonuses,” and “training ... to provide additional job security.” Complaint ¶¶ 27A, 27B, 27C, App. A-43. Written representations with respect to job security were allegedly contained in employment memoranda, manuals, brochures, handbooks, and in Caterpillar’s “Code of Worldwide Business Conduct and Operating Principles.” Id. ¶27£, App. A-43-A-48.
Under California law, an implied contract of employment may arise from a combination of factors, including longevity of service, commendations and promotions, oral and written assurances of stable and continuous employment, and an employer’s personnel practices. See Pugh v. See’s Candies, Inc., 116 Cal. App. 3d 311, 327-329 (1981); Cleary v. American Airlines, Inc., 111 Cal. App. 3d 443, 455-456 (1980).
Respondents also brought state-law causes of action for breach of a covenant of good faith and fair dealing, intentional infliction of mental distress, and fraud. See Complaint ¶¶ 36-55, App. A-51 — A-55. Petitioners principally rely on the breach-of-contract claim to support removal to federal court.
The Court of Appeals also appears to have held that a ease may not be removed to federal court on the ground that it is completely pre-empted unless the federal cause of action relied upon provides the plaintiff with a remedy. For example, the court stated:
“[A] state law cause of action has been ‘completely pre-empted’ when federal law both displaces and supplements the state law — that is, when federal law provides both a superseding remedy replacing the state cause of action and preempts that state law cause of action. These are two distinct inquiries, both of which must be satisfied to permit removal of an action to federal court.” 786 F. 2d, at 932 (emphasis in original; citations omitted).
This analysis is squarely contradicted by our decision in Avco Corp. v. Machinists, 390 U. S. 567 (1968). We there held that a § 301 claim was properly removed to federal court although, at the time, the relief sought by the plaintiff could be obtained only in state court. We reasoned as follows:
“The nature of the relief available after jurisdiction attaches is, of course, different from the question whether there is jurisdiction to adjudicate the controversy. . . . [T]he breadth or narrowness of the relief which may be granted under federal law in § 301 cases is a distinct question from whether the court has jurisdiction over the parties and the subject matter.” Id., at 561.
Thus, although we affirm the Court of Appeals’ judgment, we reject its reasoning insofar as it is inconsistent with Avco. See also Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U. S. 1, 23 (1983) (“The Court of Appeals held, [in Arco,] and we affirmed,. . . that the petitioner’s action ‘arose under’ § 301, and thus could be removed to federal court, although the petitioner had undoubtedly pleaded an adequate claim for relief under the state law of contracts and had sought a remedy available only under state law”) (emphasis in original; citation omitted).
Title 28 U. S. C. § 1441 provides:
“(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.”
Federal district courts have original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U. S. C. § 1331.
See The Fair v. Kohler Die & Specialty Co., 228 U. S. 22, 25 (1913) (“Of course, the party who brings a suit is master to decide what law he will rely upon”) (Holmes, J.); see also Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U. S. 804, 809, n. 6 (1986) (“Jurisdiction may not be sustained on a theory that the plaintiff has not advanced”); Great North R. Co. v. Alexander, 246 U. S. 276, 282 (1918) (“[T]he plaintiff may by the allegations of his complaint determine the status with respect to removability of a case”).
See, e. g., Metropolitan Life Insurance Co. v. Taylor (state contract and tort claims completely pre-empted by §§ 502(a)(1)(B) and 502(f) of the Employee Retirement Income Security Act of 1974, 88 Stat. 891, 892); Oneida Indian Nation v. County of Oneida, 414 U. S. 661, 675 (1974) (state-law complaint that alleges a present right to possession of Indian tribal lands necessarily “asserts a present right to possession under federal law,” and is thus completely pre-empted and arises under federal law); Avco, supra (discussed infra).
Caterpillar contends for example, that, under California law governing implied contracts of employment, the state court will have to examine the collective-bargaining agreement as part of its evaluation of the “totality of the parties’ relationship.” Brief for Petitioners 35, n. 24. But respondents rely on contractual agreements made while they were in managerial or weekly salaried positions — agreements in which the collective-bargaining agreement played no part. The irrelevance of the collective-bargaining agreement to these individual employment contracts is illustrated by the District Court’s disposition of the claim of Mr. Chambers, who was not in the bargaining unit at the time he was laid off. His claim was deemed solely a matter of state law (and, by implication, not intertwined with the collective-bargaining agreement), and thus was remanded to state court. See App. A-22. Moreover, it is unclear whether an examination of the collective-bargaining agreement is truly required by California law. See Youngman v. Nevada Irrigation Dist., 70 Cal. 2d 240, 246-247, 449 P. 2d 462, 466 (1969) (“In pleading a cause of action on an agreement implied from conduct, only the facts from which the promise is implied must be alleged”); 2 J. Chadbourn, H. Grossman, & A. Van Alstyne, California Pleading § 1011, p. 159 (1961) (same).
Section 301 does not, as Caterpillar suggests, require that all “employment-related matters involving unionized employees” be resolved through collective bargaining and thus be governed by a federal common law created by § 301. Brief for Petitioners 26. The Court has stated that “not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by § 301 or other provisions of the federal labor law.” Allis-Chalmers Corp. v. Lueck, 471 U. S. 202, 211 (1986). Claims bearing no relationship to a collective-bargaining agreement beyond the fact that they are asserted by an individual covered by such an agreement are simply not pre-empted by §301. See also Franchise Tax Board, 463 U. S., at 25, n. 28 (“[E]ven under § 301 we have never intimated that any action merely relating to a contract within the coverage of § 301 arises exclusively under that section. For instance, a state battery suit growing out of a violent strike would not arise under §301 simply because the strike may have been a violation of an employer-union contract”).
Cf. Federated Department Stores, Inc. v. Moitie, 462 U. S. 394, 410, n. 6 (1981) (BRENNAN, J., dissenting) (Although “occasionally the removal court will seek to determine whether the real nature of the claim is federal, regardless of plaintiff’s characterization, . . . most of them correctly confine this practice to areas of the law pre-empted by federal substantive law”) (internal quotations omitted).
Caterpillar also contends that enforcement of individual employment contracts negotiated with employees covered by the collective-bargaining agreement would violate §9(a) of the NLRA, 49 Stat. 463, 29 U. S. C. § 159(a), because, with exceptions not here relevant, it is an unfair labor practice “for the employer to disregard the bargaining representative by negotiating with individual employees, whether a majority or a minority, with respect to wages, hours, and working conditions.” Medo Photo Supply Corp. v. NLRB, 321 U. S. 678, 684 (1944). Even if these individual employment contracts were negotiated with respondents while the latter were covered by a collective agreement (which is disputed), this fact is irrelevant to the removal question. For reasons similar to those stated in text, see supra, at 394-397, and this page, respondents’ state-law claims might be pre-empted by the NLRA, but they would not be transformed into claims arising under federal law.
We intimate no view on the merits of this or any of the pre-emption arguments discussed above. These are questions that must be addressed in the first instance by the state court in which respondents filed their claims.
See, e. g., Cook v. Georgetown Steel Corp., 770 F. 2d 1272 (CA4 1985); Medlin v. Boeing Vertol Co., 620 F. 2d 957 (CA3 1980).
Caterpillar contends that the Court of Appeals’ decision offends the paramount national labor policy of referring disputes to arbitration, since its collective-bargaining agreement with the Union contains an arbitration cause. Brief for Petitioners 36. This argument presumes that respondents’ claims are arbitrable, when, in fact, they are alleged to grow out of individual employment contracts to which the grievance-arbitration procedures in the collective-bargaining agreement have no application.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | J | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice White
delivered the opinion of the Court.
The question for decision in this case is whether a State whose federally approved implementation plan forbids an air contaminant source to operate without a state permit may require existing federally owned or operated installations to secure such a permit. The case presents an issue of statutory construction requiring examination of the Clean Air Act, as amended, 42 U. S. C. § 1857 et seq., and its legislative history in light of established constitutional principles governing the determination of whether and the extent to which federal installations have been subjected to state regulation. The specific question is whether obtaining a permit to operate is among those “requirements respecting control and abatement of air pollution” with which existing federal facilities must comply under § 118 of the Clean Air Act.
I
Last Term in Train v. Natural Resources Defense Council, 421 U. S. 60 (1975), we reviewed the development of federal air pollution legislation through the Clean Air Amendments of 1970 (Amendments) and observed that although the Amendments “sharply increased federal authority and responsibility in the continuing effort to combat air pollution,” they “explicitly preserved the principle” that “ ‘[e]ach State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State id., at 64, quoting from § 107 (a) of the Clean Air Act, as added, 84 Stat. 1678, 42 U. S. C. § 1857c-2 (a). Consistently with this principle, the Amendments required that within nine months after the Environmental Protection Agency (EPA) promulgated the primary and secondary ambient air quality standards required by § 109 (a) of the Clean Air Act, as added, 84 Stat. 1679, 42 U. S. C. § 1857c-4 (a), for certain air pollutants, each State submit to the EPA a plan by which it would implement and maintain those standards within its territory. § 110 (a)(1) of the Clean Air Act, as added, 84 Stat. 1680, 42 U. S. C. § 1857c-5 (a)(1).' See 40 CFR pt. 51 (1975). The EPA was required to approve each State’s implementation plan as long as it was adopted after public hearings and satisfied the conditions specified in § 110(a) (2).
For existing sources the State must propose “emission limitations, schedules, and timetables for compliance with such limitations” necessary to meet the air quality standards. §110(a)(2)(B). As we observed in Train, supra, at 78-79, given the EPA’s nationwide air quality standards, the State is to adopt a plan setting
“the specific rules to which operators of pollution sources are subject, and which if enforced should result in ambient air which meets the national standards.
“[The EPA] is relegated by the Act to a secondary role in the process of determining and enforcing the specific, source-by-source emission limitations which are necessary if the national standards it has set are to be met.... The Act gives [the EPA] no authority to question the wisdom of a State’s choices of emission limitations if they are part of a plan which satisfies the standards of § 110 (a) (2).... Thus, so long as the ultimate effect of a State’s choice of emission limitations is compliance with the national standards for ambient air, the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation.” (Footnote omitted.)
Along with increasing federal authority and “taking a stick to the States” by requiring them to implement the federal standards promulgated pursuant to that authority, Congress also intended the Amendments “to strengthen the strictures against air pollution by federal facilities.” Before 1970, § 111 (a) of the Clean Air Act simply declared “the intent of Congress” to be that federal installations “shall, to the extent practicable and consistent with the interests of the United States and within any available appropriations, cooperate with” federal and state air pollution control authorities “in preventing and controlling the pollution of the air in any area insofar as the discharge of any matter from or by such” federal installation “may cause or contribute to pollution of the air in such area.”
Experience with performance by federal sources of air pollution under this voluntary scheme led the Congress to conclude that admonishing federal agencies to prevent and control air pollution was inadequate, because “ [instead of exercising leadership in controlling or eliminating air pollution” “Federal agencies have been notoriously laggard in abating pollution.” Both to provide the leadership to private industry and to abate violations of air pollution standards by federal facilities, in 1970 Congress added § 118 to the Clean Air Act. The first sentence of the section provides:
“Each department, agency, and instrumentality of the executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge of air pollutants, shall comply with Federal, State, interstate, and local requirements respecting control and abatement of air pollution to the same extent that any person is subject to such requirements.” 42 U. S. C. § 1857f.
The remainder of § 118 authorizes the President, upon a determination that it is “in the paramount interest of the United States to do so” and subject to several limitations, to exempt certain federal emission sources from “compliance with such a requirement.”
After enactment of § 118 there is no longer any question whether federal installations must comply with established air pollution control and abatement measures. The question has become how their compliance is to be enforced.
II
In February 1972, Kentucky submitted its implementation plan to the EPA. On May 31, 1972, the plan was approved by the Administrator in relevant part. Chapter 7 of the plan included Kentucky Air Pollution Control Commission (Commission) Regulation No. AP-1, §5(1), which provides:
“No person shall construct, modify, use, operate, or maintain an air contaminant source or maintain or allow physical conditions to exist on property owned by or subject to the control of such person, resulting in the presence of air contaminants in the atmosphere, unless a permit therefor has been issued by the Commission and is currently in effect.”
An applicant for a permit must complete a form supplied by the Commission and, “when specifically requested by the Commission, include an analysis of the characteristics, properties, and volume of the air contaminants based upon source or stack samples of the air contaminants taken under normal operating conditions.” The process of review of the application may include hearings. Permits are denied if the applicant does not supply the “information required or deemed necessary by the Commission to enable it to act upon the permit application,” or when “the air contaminant source will prevent or interfere with the attainment or maintenance of state or federal air quality standards.” When granted, a permit may be “subject to such terms and conditions set forth and embodied in the permit as the Commission shall deem necessary to insure compliance with its standards.” Once issued, a permit may be revoked or modified for failure to comply with the terms and conditions of the permit, with emission standards applicable to the air contaminant source, or with the ambient air standards for the area in which the air contaminant source is located. Reg. AP-1, § 5 (5), CA App. 122.
Soon after the implementation plan was approved, a Commission official wrote to numerous officials responsible for various Kentucky facilities of the United States Army, of the Tennessee Valley Authority (TVA), and of the Atomic Energy Commission (AEC) requesting that they apply for and obtain permits as requested by the EPA-approved plan. The responses to these requests were to the effect that federally owned or operated facilities located in Kentucky were not required to secure an operating permit. Each response, however, either offered to or did supply the information and data requested on the standard permit application form.
The Commission continued to press the federal officials to apply for operating permits. In October 1972, the Regional Administrator of the EPA sent a letter to the operators of all federal facilities in the region, including those to which the Kentucky officials had addressed their requests, and to the Commission. Setting forth EPA policy and the agency’s interpretation of § 118 of the Clean Air Act, the Regional Administrator stated: “It is clear that Section 118... requires Federal facilities to meet state air quality standards and emission limitations and to comply with deadlines established in the approved state air implementation plans.” App. 57. To aid the States in accomplishing these objections, wrote the Administrator, each federal facility should develop a' compliance schedule and should provide “reasonable and specific” data requested by the State. Id., at 58. On the question whether federal facilities must apply for state permits, the letter reiterated the EPA position that although “Federal agencies are [not] required to apply for state operating permits... [o]ur aim is to encourage Federal agencies to provide the states with all the information required to assess compliance of pollution sources with standards, emission and discharge limitations and the needs for additional abatement measures.” Ibid.
Kentucky then brought this suit in the United States District Court for the Western District of Kentucky. The complaint sought declaratory and injunctive relief requiring the Army, TVA, and AEC facilities to secure operating permits. Kentucky also named several EPA officials as defendants and asked the District Court to order them to commence appropriate actions under § 113 of the Clean Air Act, directing the Army, the TVA, and the AEC facilities to comply with the provisions of Regulation AP-1, § 5 (l). On cross-motions for summary judgment, the District Court ordered the complaint dismissed. Kentucky ex rel. Hancock v. Ruckelshaus, 362 F. Supp. 360 (1973).
The Court of Appeals affirmed, 497 F. 2d 1172 (CA6 1974). Like the District Court, 362 F. Supp., at 363 n. 3, the Court of Appeals found it unnecessary to determine whether the federal installations were in compliance with Kentucky’s emission limitations or had adopted adequate compliance schedules, for it was Kentucky’s position that notwithstanding possible compliance “the Kentucky Plan is so formulated that the State cannot meet its primary responsibility under the Clean Air Act without the use of permits.” 497 F. 2d, at 1174^-1175. After examining § 118 and its purposes in relation to other provisions of the Clean Air Act, the court concluded:
“We do not believe the congressional scheme for accomplishment of these purposes included subjection of federal agencies to state or local permit requirements. Congress did commit the United States to compliance with air quality and emission standards, and it is undisputed in this record that the federal facilities in Kentucky have cooperated with the Commission toward this end.” 497 F. 2d, at 1177.
We granted Kentucky’s petition for certiorari, 420 U. S. 971 (1975), to resolve a conflict in the Courts of Appeals, and now affirm.
Ill
It is a seminal principle of our law “that the constitution and the laws made in pursuance thereof are supreme; that they control the constitution and laws of the respective States, and cannot be controlled by them.” M’Culloch v. Maryland, 4 Wheat. 316, 426 (1819). From this principle is deduced the corollary that
“[i]t is of the very essence of supremacy to remove all obstacles to its action within its own sphere, and so to modify every power vested in subordinate governments, as to exempt its own operations from their own influence.” Id., at 427.
The effect of this corollary, which derives from the Supremacy Clause and is exemplified in the Plenary Powers Clause giving Congress exclusive legislative authority over federal enclaves purchased with the consent of a State, is “that the activities of the Federal Government are free from regulation by any state.” As Mr. Justice Holmes put it in Johnson v. Maryland, 254 U. S. 51, 57 (1920):
“[T]he immunity of the instruments of the United States from state control in the performance of their duties extends to a requirement that they desist from performance until they satisfy a state officer upon examination that they are competent for a necessary part of them....”
Taken with the “old and well-known rule that statutes which in general terms divest pre-existing rights or privileges will not be applied to the sovereign” “without a clear expression or implication to that effect,” this immunity means that where “Congress does not affirmatively declare its instrumentalities or property subject to regulation,” “the federal function must be left free” of regulation. Particular deference should be accorded that “old and well-known rule” where, as here, the rights and privileges of the Federal Government at stake not only find their origin in the Constitution, but are to be divested in favor of and subjected to regulation by a subordinate sovereign. Because of the fundamental importance of the principles shielding federal installations and activities from regulation by the States, an authorization of state regulation is found only when and to the extent there is “a clear congressional mandate,” “specific congressional action” that makes this authorization of state regulation “clear and unambiguous.” Neither the Supremacy Clause nor the Plenary Powers Clause bars all state regulation which may touch the activities of the Federal Government. See Penn Dairies v. Pennsylvania Milk Control Comm’n, 318 U. S. 261 (1943); Alabama v. King & Boozer, 314 U. S. 1, 9 (1941), and cases cited. “Here, however, the State places a prohibition on the Federal Government.” The permit requirement is not intended simply to regulate the amount of pollutants which the federal installations may discharge. Without a permit, an air contaminant source is forbidden to operate even if it is in compliance with every other state measure respecting air pollution control and abatement. It is clear from the record that prohibiting operation of the air contaminant sources for which the State seeks to require permits, App. 14-17, is tantamount to prohibiting operation of the federal installations on which they are located. Id., at 89-93.
Kentucky, like the Court of Appeals for the Fifth Circuit in Alabama v. Seeber, 502 F. 2d 1238, 1247-1248 (1974), finds in § 118 a sufficient congressional authorization to the States, not only to establish the amount of pollutants a federal installation may discharge, but also to condition operation of federal installations on securing a state permit. We disagree because we are not convinced that Congress intended to subject federal agencies to state permits. We are unable to find in § 118, on its face or in relation to the Clean Air Act as a whole, or to derive from the legislative history of the Amendments any clear and unambiguous declaration by the Congress that federal installations may not perform their activities unless a state official issues a permit. Nor can congressional intention to submit federal activity to state control be implied from the claim that under Kentucky’s EPA-approved implementation plan it is only through the permit system that compliance schedules and other requirements may be administratively enforced against federal installations.
IV
The parties rightly agree that § 118 obligates federal installations to conform to state air pollution standards or limitations and compliance schedules. With the enactment of the Amendments in 1970 came the end of the era in which it was enough for federal facilities to volunteer their cooperation with federal and state officials. In Kentucky’s view that era has been replaced by one in which federal installations are not only required to limit their air pollutant emissions to the same extent as their nonfederal neighbors, but also, subject only to case-by-case Presidential exemption, to submit themselves completely to the state regime by which the necessary information to promulgate emission limitations and compliance schedules is gathered and by which collection of that information and enforcement of the emission limitations and compliance schedules are accomplished. Respondents (hereafter sometimes EPA) take the position that the Congress has not gone so far. While federal and nonfederal installations are governed by the same emission standards, standards which the States have the primary responsibility to develop, the EPA maintains that the authority to compel federal installations to provide necessary information to the States and to conform to state standards necessary to carry out the federal policy to control and regulate air pollution has not been extended to the States.
Analysis must begin with § 118. Although the language of this provision is notable for what it states in comparison with its predecessor, it is also notable for what it does not state. It does not provide that federal installations “shall comply with all federal, state, interstate, and local requirements to the same extent as any other person.” Nor does it state that federal installations “shall comply with all requirements of the applicable state implementation plan.” Section 118 states only to what extent — the same as any person— federal installations must comply with applicable state requirements; it does not identify the applicable requirements. There is agreement that § 118 obligates existing federal installations to join nonfederal sources in abating air pollution, that comparable federal and nonfederal sources are expected to achieve the same levels of performance in abating air pollution, and that those levels of performance are set by the States. Given agreement that § 118 makes it the duty of federal facilities to comply with state-established air quality and emission standards, the question is, as the Fifth Circuit put it in another case, “whether Congress intended that the enforcement mechanisms of federally approved state implementation plans, in this case permit systems, would be” available to the States to enforce that duty. Alabama v. Seeber, 502 F. 2d, at 1247. In the case before us the Court of Appeals concluded that federal installations were obligated to comply with state substantive requirements, as opposed to state procedural requirements, 497 F. 2d, at 1177, but Kentucky rejects the distinction between procedural and substantive requirements, saying that whatever is required by a state implementation plan is a “requirement” under § 118.
The heart of the argument that the requirement that all air contaminant sources secure an operating permit is a “requirement respecting control and abatement of air pollution” is that Congress necessarily implied the power to enforce from the conceded authority to develop and set emission standards. Under Kentucky’s EPA-approved implementation plan, the permit requirement “is the mechanism through which [it] is able to compel the production of data concerning air contaminant sources, including the ability to prescribe the monitoring techniques to be employed, and it is the only mechanism which allows [it] to develop and review a source’s compliance schedule and insure that schedule is followed.” When a State is without administrative means of implementing and enforcing its standards against federal sources, a duty to comply with those standards is said to be utterly meaningless.
The difficulty with this position is threefold. First, it assumes that only the States are empowered to enforce federal installations’ compliance with the standards. Second, it assumes the Congress intended to grant the States such authority over the operation of federal installations. Third, it unduly disregards the substantial change in the responsibilities of federal air contaminant sources under § 118 in comparison with 42 U. S. C. § 1857f (a) (1964 ed., Supp. V), supra, at 171. Contrary to Kentucky’s contention that Congress necessarily intended to subject federal facilities to the enforcement mechanisms of state implementation plans, our study of the Clean Air Act not only discloses no clear declaration or implication of congressional intention to submit federal installations to that degree of state regulation and control but also reveals significant indications that in preserving a State’s “primary responsibility for assuring air quality within [its] entire geographic area” the Congress did not intend to extend that responsibility by subjecting federal installations to such authority.
The Clean Air Act, as amended, does not expressly provide for a permit system as part of a State’s implementation plan. It is true that virtually every State has adopted a form of permit system much like that adopted by Kentucky, see 40 CFR pt. 52 (1975), as a means of gathering information to determine what emission standards to set and compliance schedules to approve and of assuring compliance with them. Also, only an implementation plan enabling a State to meet these— and other — objectives can be approved by the EPA. Nonetheless we find in the 1970 Amendments several firm indications that the Congress intended to treat emission standards and compliance schedules — those requirements which when met work the actual reduction of air pollut-. ant discharge — differently from administrative and enforcement methods and devices — those provisions by which the States were to establish and enforce emission standards, compliance schedules, and the like. This is so in spite of the absence of any definition of the word “requirements” or of the phrase “requirements respecting control and abatement of air pollution.”
In § 110 (e) (1) (A), for example, the EPA is authorized to extend for two years a State’s three-year deadline for attaining a national primary air quality standard if, upon timely application, it is determined that an emission source is unable to meet “the requirements of such plan which implement such primary standard because the necessary technology” is unavailable. 42 U. S. C. § 1857c-5 (e)(1)(A). Although compiling the information necessary for a permit may require familiarity with technology, it is plain that the “requirements” to which this section refers are those for which technologically adequate industrial processes might not be available. Section 110 (e) (2) (A) necessarily contemplates the same meaning of “requirements,” that is, emission standards and compliance schedules, as does § 110 (f) which provides for one-year postponement of the application of “requirements” to sources the continued operation of which is “essential to national security or to the public health.” 42 U. S. C. § 1857c-5 (f)(1) (D). See Train, 421 U. S., at 80-84.
Stronger indications that the term “requirements” as used in § 118 does not embrace every measure incorporated in a State’s implementation limitations and cona-pliance schedules appear in the emergence of § 118 from the House bill and Senate amendment from which it was derived.
The House bill provided that federal installations “shall comply with applicable Federal, State, interstate, and local emission standards.” The House Report stated that this “legislation directs Federal agencies in the executive, legislative, and judicial branches to comply with applicable Federal, State, interstate, and local emission standards.” The Senate amendment provided that federal agencies “shall provide leadership in carrying out the policy and purposes of this Act and shall comply with the requirements of this Act in the same manner as any person... The Senate Report stated that this provision “requires that Federal facilities meet the emission standards necessary to achieve ambient air quality standards as well as those established in other sections of Title I.”
Thus while the House bill spoke of “emission standards,” the Senate amendment, like § 118 as enacted, spoke of “requirements.” In accommodating the different language in the two bills and formulating what is now § 118, the Conference Committee simply combined the House and Senate provisions. If, as Kentucky argues, the Conference Committee in taking the Senate language of “requirements” meant thereby to subject federal facilities to enforcement measures obviously not embraced in the language of the House bill, it is remarkable that it made no reference to its having reconciled this difference in favor of extending state regulation over federal installations. Given the interchangeable use of “emission standards” and “emission requirements” in the Senate amendment, see n. 52, supra, the predominance of the language of the Senate version in § 118 as enacted, and the absence of any mention of disagreement between the two bills, it is moré probable that the Conference Committee intended only that federal installations comply with emission standards and compliance schedules than that its intention was to empower a State to require federal installations to comply with every measure in its implementation plan. See Alabama v. Seeber, 502 P. 2d, at 1247.
The impression that Congress intended only that federal agencies comply with emission limitations and standards is strengthened by the Conference Report, which stated in full:
“The House bill and the Senate amendment declared that Federal departments and agencies should comply with applicable standards of air quality and emissions.
“The conference substitute modifies the House provision to require that the President rather than the Administrator be responsible for assuring compliance by Federal agencies.”
This examination of § 118 and the central phrase “requirements respecting control or abatement of air pollution,” discloses a regime of divided responsibility for the mobilization of federal installations in the effort to abate air pollution. Kentucky agrees but persists in its contention that existing federal sources have been subjected to state regulation by differing on where that division places authority to enforce compliance by existing federal facilities — “'sources with respect to which state implementation plans establish the criteria for enforcement.’ ” For such — existing—sources, Kentucky maintains, the States are granted primary enforcement authority while “ 'the responsibility and authority for enforcement... is granted to EPA in those instances (i. e., new sources and hazardous pollutants) where EPA establishes the criteria.’ ” Perhaps we could agree if the issue were not whether there is a clear and unambiguous congressional authorization for the regulatory authority petitioner seeks, for as the Fifth Circuit has said, such a “scheme is a reasonable one.” Alabama v. Seeber, supra, at 1244. But that is the issue, and the implications Kentucky draws from its evaluation of the manner in which the Congress divided responsibility for regulation of new sources and of hazardous air pollutants do not persuade us.
In drawing on the manner in which the Clean Air Act has divided the authority to regulate new sources of air pollutants and the emission of hazardous air pollutants in comparison with existing air pollutant sources, Kentucky makes two separate though related arguments. The first is that when Congress wanted to exempt federal facilities from compliance with a state requirement, it did so by express exclusionary language. Thus § 111 (c)(1) authorizes the Administrator to delegate to a State “any authority he has under this Act to implement and enforce” new-source standards of performance — with which new sources owned or operated by the United States must comply (§111 (b)(4)) — '“except with respect to new sources owned or operated by the United States.” 42 U. S. C. § 1857c-6 (c)(1). Section 114 (b) (1) of the Clean Air Act, as added, 84 Stat. 1688, is to the same effect respecting inspections, monitoring, and entry of an emission source. 42 U. S. C. § 1857c-9 (b) (1). Similarly, §112 (d)(1) authorizes the Administrator, upon finding that a State’s plan to enforce emission standards for hazardous pollutants is adequate to the task, to delegate to that State “any authority he has under this Act to implement and enforce such standards (except with respect to stationary sources owned or operated by the United States).” 42 U. S. C. § 1857o-7 (d)(1). The argument that these specific exemptions of federal facilities from state enforcement and implementation methods are necessary only because § 118 has, as a general matter, subjected federal installations to all state requirements fails on several counts. First, as we have demonstrated, by itself § 118 does not have the effect petitioner claims. Second, the relevant portions of §§111, 112, and 114 assume that the Administrator possesses the authority to enforce and implement the respective requirements against sources owned or operated by the United States. See §§111 (c)(2), 112(d)(2), and 114(b)(2). Third, just as in providing for Presidential exemptions in § 118 Congress separated the requirements of §§111 and 112 from other requirements, Congress naturally treated the submission of federal installations to state regulation under §§111, 112, and 114 separately from general provisions for meeting ambient air quality standards under § 110 implementation plans devised by the States and approved by the EPA. A State must promulgate an implementation plan. § 110 (a). The delegation provisions of §§ 111, 112, and 114, on the other hand, are permissive, providing that “[e]ach State may develop and submit to the Administrator a procedure” to carry out the section. (Emphasis added.)
Kentucky’s second argument is that the manner in which Congress differentiated treatment of new sources and existing sources in §§ 111 and 114 clearly implies that existing federal sources were to be subject to the enforcement provisions of a State’s implementation plan. The implication is said to arise from the different nature of the control required for the two types of installations. The difference is explained as follows: For existing sources the first step for a State is to determine the general quality of air in the relevant air quality region and then to compute the amounts of pollution attributable to each source. Next, appropriate emission standards necessary to meet the national ambient air quality standards must be assigned to the various sources, followed by determining the compliance schedule by which each installation will achieve the assigned standards by the attainment date prescribed in the Act. To carry out this process of gathering information and coordinating control throughout the State, it is said to be necessary for the States to have ready administrative authority over all sources, federal and nonfederal. This administrative authority, concededly a major part of an implementation plan as to nonfederal sources, must therefore have been intended to extend to federal sources as well.
In contrast, controlling “new sources” is described as a straightforward task. This is because “standards of performance” for such sources, which are established in light of technologically feasible emission controls and not in relation to ambient air quality standards are set by the EPA for various categories of sources and are uniform throughout the Nation. A comprehensive enforcement mechanism to develop and coordinate application of these standards is unnecessary, especially because all new sources must be in compliance before operation begins, § 111 (e). The Congress is said, therefore, to have exempted new federal installations from state enforcement of federally promulgated standards of performance because it was unnecessary to submit those installations to the same kind of coordinated control to which existing sources had been submitted.
The Act itself belies this contention. It recognizes that a “new source,” even one in full compliance with applicable standards of performance, may hinder or prevent attainment or maintenance of air quality standards within the air quality region in which it is located, and requires a state implementation plan to include procedures for averting such problems. See §§110 (a) (2) CD), (a)(4).
The arguments respecting the federal new-source exception in § 114 also fail to bear the weight they must carry if Kentucky is to prevail. Section 114 provides for the establishment of various means by which to collect information
“[f]or the purpose (i) of developing or assisting in the development of any implementation plan under section 110 or 111 (d), any standard of performance under section 111, or any emission standard under section 112, [or] (ii) of determining whether any person is in violation of any such standard or any requirement of such a plan... 84 Stat. 1687, as added, 42 U. S. C. § 1857c-9 (a).
Unlike §§111 and 112, § 114 is doubly permissive. First, although the Administrator “shall” publish § 111 new-source standards of performance and § 112 hazardous air-pollutant-emission standards, under § 114 (a) the Administrator “may,” but need not, require operators of emission sources to keep records, to make reports, to install, use, and maintain monitoring equipment, and to sample its emissions. Second, as with §§111 and 112, the States “may” develop procedures to carry out the section. That Congress provided for this slight possibility that existing federal sources would be obliged to conform to state procedures for carrying out § 114 in addition to emission standards and compliance schedules scarcely implies, as petitioner suggests, that Congress. intended existing federal sources to comply with all state regulatory measures, not only emission standards and compliance schedules. Rather than exempting new federal sources from an obligation to which they would otherwise have been subject, Congress may as well have been extending the obligation to conform to state § 114 regulatory procedures to existing — but not to new — federal sources which would not otherwise have been thought subject to such regulation.
Finally, we reject the argument that § 304 of the Clean Air Act, reveals congressional intention to grant the States authority to subject existing federal sources to the enforcement mechanisms of their enforcement plan. The section provides in part:
“(a) Except as provided in subsection (b), any person may commence a civil action on his own behalf—
“(1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the Eleventh Amendment to the Constitution) who is alleged to be in violation of (A) an emission standard or limitation under this Act or (B) an order issued by the Administrator or a State with respect to such a standard or limitation... 42 U. S. C. §1857h-2.
Section 302 (e) includes a “State” in the definition of a “person,” 42 U. S. C. § 1857h (e), and § 304 (f) provides:
“For purposes of this section, the term 'emission standard or limitation under this Act’ means — -(1) a schedule or timetable of compliance, emission limitation, standard of performance or emission standard... which is in effect under this Act (including a requirement applicable by reason of section 118) or under an applicable implementation plan.” 42 U. S. C. § 1857h-2 (f).
Although it is argued that § 304 was not intended to permit a State to sue violators under the Act, we agree with the EPA that § 304 is the only means provided by the Act for the States to remedy noncompliance by federal facilities with § 118. That § 304 was so intended is plain from both the language of § 304(f) and the legislative origins of § 304. The Senate version of § 118 provided that a State “in which any Federal property, facility, or activity is located may seek to enforce the provisions of this section pursuant to section 304 of this Act.” When the Conference Committee eliminated this subsection from the Senate amendment, it retained the definition of “person,” which included a “State” in § 302 (e), and added § 304 (f) with the parenthetical phrase “including a requirement applicable by reason of section 118.” This made clear that § 118 was to be enforced through § 304, and § 304 is the only provision in the Act for state enforcement of the duties of a federal installation under § 118. In short, § 118 establishes the duty of federal installations to comply with state “requirements,” and § 304 provides the means of enforcing that duty in federal court. In light of this close relationship between the two sections, we find it significant that § 304 (f) extends the enforcement power only to “a schedule or timetable of compliance, emission limitation, standard of performance or emission standard/' and not to all state implementation measures. Thus circumscribed, the scope of the § 304 power to enforce § 118 strongly suggests that § 118 duties themselves are similarly limited, for it seems most unlikely that in providing that a State might bring suit i'n district court to enforce the duties of federal installations under § 118, the Congress would not make all of those duties enforceable in district court. Yet this is exactly what Kentucky argues, saying: “There can be no explanation for the existence of Section 118 if it imposes no obligations other than those imposed under Section 304.”
The argument is defective on another count. Even if, standing alone, § 304 could be read to require federal facilities to comply with the matters within § 304 (f), the assumption that the two sections independently impose duties on federal installations conflicts with the legislative history. Section 304 (a) was first extended to apply to federal sources of pollution in Conference, at the same point at which the express provision for enforcement authority over federal installations was removed from § 118. Given this relationship between the two measures, we cannot credit the argument that § 118 was intended to impose on federal installations any broader duty to comply with state
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | J | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Stewart
delivered the opinion of the Court.
The respondents in this case were state prisoners who were deprived of good-conduct-time credits by the New York State Department of Correctional Services as a result of disciplinary proceedings. They then brought actions in a federal district court, pursuant to the Civil Rights Act of 1871, 42 U. S. C. § 1983. Alleging that the Department had acted unconstitutionally in depriving them of the credits, they sought injunctive relief to compel restoration of the credits, which in each case would result in their immediate release from confinement in prison. The question before us is whether state prisoners seeking such redress may obtain equitable relief under the Civil Rights Act, even though the federal habeas corpus statute, 28 U. S. C. § 2254, clearly provides a specific federal remedy.
The question is of considerable practical importance. For if a remedy under the Civil Rights Act is available, a plaintiff need not first seek redress in a state forum. Monroe v. Pape, 365 U. S. 167, 183 (1961); McNeese v. Board of Education, 373 U. S. 668, 671 (1963); Damico v. California, 389 U. S. 416 (1967); King v. Smith, 392 U. S. 309, 312 n. 4 (1968); Houghton v. Shafer, 392 U. S. 639 (1968). If, on the other hand, habeas corpus is the exclusive federal remedy in these circumstances, then a plaintiff cannot seek the intervention of a federal court until he has first sought and been denied relief in the state courts, if a state remedy is available and adequate. 28 U. S. C. §2254 (b).
The present consolidated case originated in three separate actions, brought individually by the three respondents. The respondent Rodriguez, having been convicted in a New York state court of perjury and attempted larceny, was sentenced to imprisonment for an indeterminate term of from one and one-half to four years. Under New York Correction Law § 803 and Penal Law §§ 70.30 (4) (a), 70.40 (1)(b), a prisoner serving an indeterminate sentence may elect to participate in a conditional-release program by which he may earn up to 10 days per month good-behavior-time credit toward reduction of the maximum term of his sentence. Rodriguez elected to participate in this program. Optimally, such a prisoner may be released on parole after having served approximately two-thirds of his maximum sentence (20 days out of every 30); but accrued good-behavior credits so earned may at any time be withdrawn, in whole or in part, for bad behavior or for violation of the institutional rules. N. Y. Correction Law § 803 (1).
Rodriguez was charged in two separate disciplinary-action reports with possession of contraband material in his cell. The deputy warden determined that as punishment, 120 days of Rodriguez' earned good-conduct-time credits should be canceled, and that Rodriguez should be placed in segregation, where he remained for more than 40 days. In the “Remarks” section of the deputy warden's determination was a statement that Rodriguez had refused to disclose how he had managed to obtain possession of the items in question.
Rodriguez then filed in the District Court a complaint pursuant to § 1983, combined with a petition for a writ of habeas corpus. He asserted that he was not really being punished for possession of the contraband material, but for refusal to disclose how he had obtained it, and that he had received no notice or hearing on the charges for which he had ostensibly been punished. Thus, he contended that he had been deprived of his good-conduct-time credits without due process of law.
After a hearing, the District Court held that Rodriguez' suit had properly been brought under the Civil Rights Act, that the habeas corpus claim was “merely a proper adjunct to insure full relief if [Rodriguez] prevails in the dominant civil rights claim,” 307 F. Supp. 627, 628-629 (1969), and that therefore Rodriguez was not required to exhaust his state remedies, as he would have had to do if he had simply filed a petition for habeas corpus. On the merits, the District Court agreed with Rodriguez that the questioning of him by prison officials related solely to the issue of how he had obtained the contraband materials, and that he had been ostensibly punished for something different — possession of the materials — on which he had had no notice or opportunity to answer. This, the court found, denied him due process of law, particularly in light of the fact that the prison regulations prescribed no penalty for failure to inform. The District Court further found that the Prison Commutation Board had failed to forward to the Commissioner of Correction written reasons for the cancellation of Rodriguez’ good-conduct time, as required by former N. Y. Correction Law § 236, and that this, too, had deprived Rodriguez of due process and equal protection of the laws. Accordingly, the court declared the cancellation of 120 days’ good-behavior-time credits unconstitutional, and directed the Commissioner of Correction to restore those credits to Rodriguez. Since, at that time, Rodriguez’ conditional-release date had already passed, the District Court’s order entitled him to immediate release from prison on parole.
The Court of Appeals reversed this decision by a divided vote. The appellate court not only disagreed with the District Court on the merits, but also held that Rodriguez’ action was really a petition for habeas corpus and, as such, should not have been entertained by the District Court because Rodriguez had not exhausted his state remedies in accordance with § 2254(b). As the Court of Appeals put it:
“The present application, since it seeks release from custody, is in fact an application for habeas corpus. '[R]elease from penal custody is not an available remedy under the Civil Rights Act.’ Peinado v. Adult Authority of Dept, of Corrections, 405 F. 2d 1185, 1186 (9th Cir.), cert, denied, 395 U. S. 968 (1969). In Johnson v. Walker, 317 F. 2d 418, 419-420 (5th Cir. 1963) the court said: Use of the Civil Rights Statutes to secure release of persons imprisoned by State Courts would thus have the effect of repealing 28 U. S. C. § 2254; of course, such was not the intent of Congress.’ ” Rodriguez v. McGinnis, 451 F. 2d 730, 731 (1971).
The judgment of the Court of Appeals was subsequently set aside, and the ease was reheard en banc, as explained below.
The respondent Katzoff, who was serving a sentence of one to three years in prison following his conviction for possession of a dangerous weapon, also elected to participate in New York’s conditional-release program. Disciplinary charges were brought against him for making derogatory comments about prison officials in his diary. As punishment, the deputy warden deprived him of 30 days’ good-conduct time for these diary entries and confined him in segregation for 57 days. Katzoff ultimately lost 50 days’ good-behavior-time credits — 30 days directly and 20 additional days because he was unable to earn any good-conduct time while in segregation. He brought a civil rights complaint under § 1983, joined with a petition for habeas corpus, in Federal District Court, alleging that the prison officials had acted unconstitutionally.
The District Court held, in an unreported opinion, that Katzoff’s failure to exhaust state remedies was no bar to his suit, since it was a civil rights action and the petition for a writ of habeas corpus was only an incidental adjunct to assure enforcement of the judgment. On the merits, the District Court found that there was no prison regulation against the keeping of a diary; that punishment for entries in a private diary violated Katzoff’s constitutional rights to due process, equal protection, and freedom of thought; and that confining Katzoff in segregation for this offense constituted cruel and unusual punishment. The court, therefore, ordered that the 50 days’ good-behavior-time credits be restored to Katzoff, and since this restoration entitled him to immediate release on parole, the court ordered such release.
The Court of Appeals reversed by a divided vote. Without reaching the merits of Katzoff’s complaint, the appellate court held that his action was in essence an application for habeas corpus since it sought and obtained his immediate release from custody, and that therefore his complaint should have been dismissed because Katzoff had sought no relief whatever in the state courts and had made no showing that an adequate state remedy was unavailable. United States ex rel. Katzoff v. McGinnis, 441 F. 2d 558 (1971). This judgment of the Court of Appeals was subsequently set aside, and the case was reheard en banc, as explained below.
The respondent Kritsky’s case is similar. While serving a prison sentence of 15 to 18 years under a state court conviction for armed robbery, he was charged by prison officials with being a leader in a prison-wide protest demonstration and with advocating insurrection during that demonstration. When brought before the warden and asked how he would plead, Kritsky stated “Not guilty.” The warden then immediately and summarily imposed punishment on him — deprivation of 545 days’ good-conduct-time credits, and confinement in segregation for four and one-half months, where he lost another 45 days’ good time.
Kritsky subsequently filed a civil rights action, combined with a petition for habeas corpus, in Federal District Court, alleging that his summary punishment had deprived him of his good-time credits without due process of law. The District Court found Kritsky’s complaint to be a proper civil rights action, and went on to rule that he had been denied due process by the imposition of summary punishment and by the failure of the Prison Commutation Board to file with the Commissioner written reasons for cancellation of Kritsky’s good-time credits, as required by New York law. 313 F. Supp. 1247 (1970). Accordingly, the court ordered restoration of the 590 days’ good-conduct-time credits, which entitled Kritsky to immediate release on parole.
An appeal was argued before a panel of the Court of Appeals; but, before decision, that Court ordered the case to be reheard en banc, together with the Rodriguez and Katzoff cases. After rehearing en banc of the three now-consolidated cases, the Court of Appeals, with three dissents, affirmed the judgments of the District Court in all of the cases “upon consideration of the merits and upon the authority of Wilwording v. Swenson, [404 U. S. 249] decided by the Supreme Court of the United States on December 14, 1971.” Rodriguez v. McGinnis, 456 F. 2d 79, 80 (1972). Although eight judges wrote separate opinions, it is clear that the majority of the Court relied primarily on our opinion in the Wilwording case, holding that complaints of state prisoners relating to the conditions of their confinement were cognizable either in federal habeas corpus or under the Civil Rights Act, and that as civil rights actions they were not subject to any requirement of exhaustion of state remedies.
We granted certiorari sub nom. Oswald v. Rodriguez, 407 U. S. 919, in order to- consider the bearing of the Wilwording decision upon the situation before us — where state prisoners have challenged the actual duration of their confinement on the ground that they have been unconstitutionally deprived of good-conduct-time credits, and where restoration of those credits would result in their immediate release from prison or in shortening the length of their confinement. In that context, the question whether a state prisoner may bring an action for equitable relief pursuant to § 1983, or whether he is limited to the specific remedy of habeas corpus, presents an unresolved and important problem in the administration of federal justice.
The problem involves the interrelationship of two important federal laws. The relevant habeas corpus statutes are 28 U. S. C. §§ 2241 and 2254. Section 2241 (c) provides that “[t]he writ of habeas corpus shall not extend to a prisoner unless... (3) [h]e is in custody in violation of the Constitution or laws or treaties of the United States....” Section 2254 provides in pertinent part:
“(a) The Supreme Court, a Justice thereof, a circuit judge, or a district court shall entertain an application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment of a State court only on the ground that he is in custody in violation of the Constitution or laws or treaties of the United States.
“(b) An application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment of a State court shall not be granted unless it appears that the applicant has exhausted the remedies available in the courts of the State, or that there is either an absence of available State corrective process or the existence of circumstances rendering such process ineffective to protect the rights of the prisoner.
“(c) An applicant shall not be deemed to have exhausted the remedies available in the courts of the State, within the meaning of this section, if he has the right under the law of the State to raise, by any available procedure, the question presented.”
The Civil Rights Act, 42 U. S. C. § 1983, provides:
“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen... or other person... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”
It is clear, not only from the language of §§ 2241 (c) (3) and 2254 (a), but also from the common-law history of the writ, that the essence of habeas corpus is an attack by a person in custody upon the legality of that custody, and that the traditional function of the writ is to secure release from illegal custody. By the end of the 16th century, there were in England several forms of habeas corpus, of which the most important and the only one with which we are here concerned was habeas corpus ad subjiciendum, — the writ used to “inquir[e] into illegal detention with a view to an order releasing the petitioner.” Fay v. Noia, 372 U. S. 391, 399 n. 5 (1963). Whether the petitioner had been placed in physical confinement by executive direction alone, or by order of a court, or even by private parties, habeas corpus was the proper means of challenging that confinement and seeking release. Indeed, in 1670, the Chief Justice of the Common Pleas was able to say, in ordering the immediate discharge of a juror who had been jailed by a trial judge for bringing in a verdict of not guilty, that “[t]he writ of habeas corpus is now the most usual remedy by which a man is restored again to his liberty, if he have been against law deprived of it.” Bushell’s Case, Vaughan 135, 136, 124 Eng. Rep. 1006, 1007.
By the time the American Colonies achieved independence, the use of habeas corpus to secure release from unlawful physical confinement, whether judicially imposed or not, was thus an integral part of our common-law heritage. The writ was given explicit recognition in the Suspension Clause of the Constitution, Art. I, § 9, cl. 2; was incorporated in the first congressional grant of jurisdiction to the federal courts, Act of Sept. 24, 1789, c. 20, § 14, 1 Stat. 81-82; and was early recognized by this Court as a “great constitutional privilege.” Ex parte Bollman, 4 Cranch 75, 95 (1807). See Fay v. Noia, supra, at 399-415.
The original view of a habeas corpus attack upon detention under a judicial order was a limited one. The relevant inquiry was confined to determining simply whether or not the committing court had been possessed of jurisdiction. E. g., Ex parte Kearney, 7 Wheat. 38 (1822); Ex parte Watkins, 3 Pet. 193 (1830). But, over the years, the writ of habeas corpus evolved as a remedy available to effect discharge from any confinement contrary to the Constitution or fundamental law, even though imposed pursuant to conviction by a court of competent jurisdiction. See Ex parte Lange, 18 Wall. 163 (1874); Ex parte Siebold, 100 U. S. 371 (1880); Ex parte Wilson, 114 U. S. 417 (1885); Moore v. Dempsey, 261 U. S. 86 (1923); Johnson v. Zerbst, 304 U. S. 458 (1938); and Waley v. Johnston, 316 U. S. 101 (1942). See also Fay v. Noia, supra, at 405-409, and cases cited at 409 n. 17. Thus, whether the petitioner’s challenge to his custody is that the statute under which he stands convicted is unconstitutional, as in Ex parte Siebold, supra; that he has been imprisoned prior to trial on account of a defective indictment against him, as in Ex parte Royall, 117 U. S. 241 (1886)that he is unlawfully confined in the wrong institution, as in In re Bonner, 151 U. S. 242 (1894), and Humphrey v. Cady, 405 U. S. 504 (1972); that he was denied his constitutional rights at trial, as in Johnson v. Zerbst, supra; that his guilty plea was invalid, as in Von Moltke v. Gillies, 332 U. S. 708 (1948); that he is being unlawfully detained by the Executive or the military, as in Parisi v. Davidson, 405 U. S. 34 (1972); or that his parole was unlawfully revoked, causing him to be reincarcerated in prison, as in Morrissey v. Brewer, 408 U. S. 471 (1972) — in each case his grievance is that he is being unlawfully subjected to physical restraint, and in each case habeas corpus has been accepted as the specific instrument to obtain release from such confinement. In the case before us, the respondents’ suits in the District Court fell squarely within this traditional scope of habeas corpus. They alleged that the deprivation of their good-conduct-time credits was causing or would cause them to be in illegal physical confinement, i. e., that once their conditional-release date had passed, any further detention of them in prison was unlawful; and they sought restoration of those good-time credits, which, by the time the District Court ruled on their petitions, meant their immediate release from physical custody.
Even if the restoration of the respondents’ credits would not have resulted in their immediate release, but only in shortening the length of their actual confinement in prison, habeas corpus would have been their appropriate remedy. For recent cases have established that habeas corpus relief is not limited to immediate release from illegal custody, but that the writ is available as well to attack future confinement and obtain future releases. In Peyton v. Rowe, 391 U. S. 54 (1968), the Court held that a prisoner may attack on habeas the second of two consecutive sentences while still serving the first. The Court pointed out that the federal habeas corpus statute “does not deny the federal courts power to fashion appropriate relief other than immediate release. Since 1874, the habeas corpus statute has directed the courts to determine the facts and dispose of the case summarily, ‘as law and justice require.’ Rev. Stat. § 761 (1874), superseded by 28 U. S. C. § 2243.” Id., at 66-67. See also Walker v. Wainwright, 390 U. S. 335 (1968); Carafas v. LaVallee, 391 U. S. 234, 239 (1968); Braden v. 30th Judicial Circuit Court of Kentucky, 410 U. S. 484 (1973). So, even if restoration of respondents’ good-time credits had merely shortened the length of their confinement, rather than required immediate discharge from that confinement, their suits would still have been within the core of habeas corpus in attacking the very duration of their physical confinement itself. It is beyond doubt, then, that the respondents could have sought and obtained fully effective relief through federal habeas corpus proceedings.
Although conceding that they could have proceeded by way of habeas corpus, the respondents argue that the Court of Appeals was correct in holding that they were nonetheless entitled to bring their suits under § 1983 so as to avoid the necessity of first seeking relief in a state forum. Pointing to the broad language of § 1983, they argue that since their complaints plainly came within the literal terms of that statute, there is no justifiable reason to exclude them from the broad remedial protection provided by that law. According to the respondents, state prisoners seeking relief under the Civil Rights Act should be treated no differently from any other civil rights plaintiffs, when the language of the Act clearly covers their causes of action.
The broad language of § 1983, however, is not conclusive of the issue before us. The statute is a general one, and, despite the literal applicability of its terms, the question remains whether the specific federal habeas corpus statute, explicitly and historically designed to provide the means for a state prisoner to attack the validity of his confinement, must be understood to be the exclusive remedy available in a situation like this where it so clearly applies. The respondents’ counsel acknowledged at oral argument that a state prisoner challenging his underlying conviction and sentence on federal constitutional grounds in a federal court is limited to habeas corpus. It was conceded that he cannot bring a § 1983 action, even though the literal terms of § 1983 might seem to cover such a challenge, because Congress has passed a more specific act to cover that situation, and, in doing so, has provided that a state prisoner challenging his conviction must first seek relief in a state forum, if a state remedy is available. It is clear to us that the result must be the same in the case of a state prisoner’s challenge to the fact or duration of his confinement, based, as here, upon the alleged unconstitutionality of state administrative action. Such a challenge is just as close to the core of habeas corpus as an attack on the prisoner’s conviction, for it goes directly to the constitutionality of his physical confinement itself and seeks either immediate release from that confinement or the shortening of its duration.
In amending the habeas corpus laws in 1948, Congress clearly required exhaustion of adequate state remedies as a condition precedent to the invocation of federal judicial relief under those laws. It would wholly frustrate explicit congressional intent to hold that the respondents in the present case could evade this requirement by the simple expedient of putting a different label on their pleadings. In short, Congress has determined that habeas corpus is the appropriate remedy for state prisoners attacking the validity of the fact or length of their confinement, and that specific determination must override the general terms of § 1983.
The policy reasons underlying the habeas corpus statute support this conclusion. The respondents concede that the reason why only habeas corpus can be used to challenge a state prisoner’s underlying conviction is the strong policy requiring exhaustion of state remedies in that situation — to avoid the unnecessary friction between the federal and state court systems that would result if a lower federal court upset a state court conviction without first giving the state court system an opportunity to correct its own constitutional errors. Fay v. Noia, supra, at 419-420. But they argue that this concern applies only to federal interference with state court convictions; and to support this argument, they quote from Ex parte Royall, supra, the case that first mandated exhaustion of state remedies as a precondition to federal habeas corpus:
“The injunction to hear the case summarily, and thereupon ‘to dispose of the party as law and justice require’ does not deprive the court of discretion as to the time and mode in which it will exert the powers conferred upon it. That discretion should be exercised in the light of the relations existing, under our system of government, between the judicial tribunals of the Union and of the States, and in recognition of the fact that the public good requires that those relations be not disturbed by unnecessary conflict between courts equally bound to guard and protect rights secured by the- Constitution.” 117 U. S., at 251 (emphasis added).
In the respondents’ view, the whole purpose of the exhaustion requirement, now codified in § 2254 (b), is to give state courts the first chance at remedying their own mistakes, and thereby to avoid “the unseemly spectacle of federal district courts trying the regularity of proceedings had in courts of coordinate jurisdiction.” Parker, Limiting the Abuse of Habeas Corpus, 8 P. R. D. 171, 172-173 (1948) (emphasis added). This policy, the respondents contend, does not apply when the challenge is not to the action of a state court, but, as here, to the action of a state administrative body. In that situation, they say, the concern with avoiding unnecessary interference by one court with the courts of another sovereignty with concurrent powers, and the importance of giving state courts the first opportunity to correct constitutional errors made by them, do not apply; and hence the purpose of the exhaustion requirement of the habeas corpus statute is inapplicable.
We cannot agree. The respondents, we think, view the reasons for the exhaustion requirement of § 2254 (b) far too narrowly. The rule of exhaustion in federal habeas corpus actions is rooted in considerations of federal-state comity. That principle was defined in Younger v. Harris, 401 U. S. 37, 44 (1971), as “a proper respect for state functions,” and it has as much relevance in areas of particular state administrative concern as it does where state judicial action is being attacked. That comity considerations are not limited to challenges to the validity of state court convictions is evidenced by cases such as Morrissey v. Brewer, supra, where the petitioners’ habeas challenge was to a state administrative decision to revoke their parole, and Braden v. 30th Judicial Circuit Court of Kentucky, supra, where the petitioner’s habeas attack was on the failure of state prosecutorial authorities to afford him a speedy trial.
It is difficult to imagine an activity in which a State has a stronger interest, or one that is more intricately bound up with state laws, regulations, and procedures, than the administration of its prisons. The relationship of state prisoners and the state officers who supervise their confinement is far more intimate than that of a State and a private citizen. For state prisoners, eating, sleeping, dressing, washing, working, and playing are all done under the watchful eye of the State, and so the possibilities for litigation under the Fourteenth Amendment are boundless. What for a private citizen would be a dispute with his landlord, with his employer, with his tailor, with his neighbor, or with his banker becomes, for the prisoner, a dispute with the State. Since these internal problems of state prisons involve issues so peculiarly within state authority and expertise, the States have an important interest in not being bypassed in the correction of those problems. Moreover, because most potential litigation involving state prisoners arises on a day-to-day basis, it is most efficiently and properly handled by the state administrative bodies and state courts, which are, for the most part, familiar with the grievances of state prisoners and in a better physical and practical position to deal with those grievances. In New York, for example, state judges sit on a regular basis at all but one of the State’s correctional facilities, and thus inmates may present their grievances to a court at the place of their confinement, where the relevant records are available and where potential witnesses are located. The strong considerations of comity that require giving a state court system that has convicted a defendant the first opportunity to correct its own errors thus also require giving the States the first opportunity to correct the errors made in the internal administration of their prisons.
Requiring exhaustion in situations like that before us means, of course, that a prisoner’s state remedy must be adequate and available, as indeed § 2254 (b) provides. The respondents in this case concede that New York provided them with an adequate remedy for the restoration of their good-time credits, through § 79-c of the New York Civil Rights Law, which explicitly provides for injunctive relief to a state prisoner “for improper treatment where such treatment constitutes a violation of his constitutional rights.” (Supp. 1972-1973.)
But while conceding the availability in the New York courts of an opportunity for equitable relief, the respondents contend that confining state prisoners to federal habeas corpus, after first exhausting state remedies, could deprive those prisoners of any damages remedy to which they might be entitled for their mistreatment, since damages are not available in federal habeas corpus proceedings, and New York provides no damages remedy at all for state prisoners. In the respondents’ view, if habeas corpus is the exclusive federal remedy for a state prisoner attacking his confinement, damages might never be obtained, at least where the State makes no provision for them. They argue that even if such a prisoner were to bring a subsequent federal civil rights action for damages, that action could be barred by principles of res judicata where the state courts had previously made an adverse determination of his underlying claim, even though a federal habeas court had later granted him relief on habeas corpus.
The answer to this contention is that the respondents here sought no damages, but only equitable relief — restoration of their good-time credits — and our holding today is limited to that situation. If a state prisoner is seeking damages, he is attacking something other than the fact or length of his confinement, and he is seeking something other than immediate or more speedy release — the traditional purpose of habeas corpus. In the case of a damages claim, habeas corpus is not an appropriate or available federal remedy. Accordingly, as petitioners themselves concede, a damages action by a state prisoner could be brought under the Civil Rights Act in federal court without any requirement of prior exhaustion of state remedies. Cf. Ray v. Fritz, 468 F. 2d 586 (CA2 1972).
The respondents next argue that to require exhaustion of state remedies in a case such as the one at bar would deprive a state prisoner of the speedy review of his grievance which is so often essential to any effective redress. They contend that if, prior to bringing an application for federal habeas corpus, a prisoner must exhaust state administrative remedies and then state judicial remedies through all available appeals, a very significant period of time might elapse before the prisoner could ever get into federal court. By that time, no matter how swift and efficient federal habeas corpus relief might be, the prisoner might well have suffered irreparable injury and his grievances might no longer be remediable.
It is true that exhaustion of state remedies takes time. But there is no reason to assume, that state prison administrators or state courts will not act expeditiously. Indeed, new regulations established by the New York Department of Correctional Services provide for administrative review of a prisoner’s record in the institution shortly before the earliest possible release date, 7 N. Y. Codes, Rules & Regulations § 261.3 (b), and, as previously noted, state judges in New York actually sit in the institutions to hear prisoner complaints. Moreover, once a state prisoner arrives in federal court with his petition for habeas corpus, the federal habeas statute provides for a swift, flexible, and summary determination of his claim. 28 U. S. C. § 2243. See also Harris v. Nelson, 394 U. S. 286 (1969); and Hens ley v. Municipal Court, ante, at 349-350. By contrast, the filing of a complaint pursuant to § 1983 in federal court initiates an original plenary civil action, governed by the full panoply of the Federal Rules of Civil Procedure. That such a proceeding, with its discovery rules and other procedural formalities, can take a significant amount of time, very frequently longer than a federal habeas corpus proceeding, is demonstrated by the respondents’ actions in the present case. Although both Rodriguez and Kritsky initiated their actions before their conditional-release dates, the District Court did not reach its decisions until three and 10 months later, respectively — in both cases well after the conditional-release dates had passed. Only in Katzoff’s case was there a speedy determination, and his action was not initiated until after his alleged release date.
In any event, the respondents’ time argument would logically extend to a state prisoner who challenges the constitutionality of a conviction that carried a relatively short sentence; and yet such a prisoner is clearly covered by § 2254 (b). Arguably, in either case, if the prisoner could make out a showing that, because of the time factor, his otherwise adequate state remedy would be inadequate, a federal court might entertain his habeas corpus application immediately, under § 2254 (b)’s language relating to “the existence of circumstances rendering such [state] process ineffective to protect the rights of the prisoner.” But we need not reach that issue here.
Principles of res judicata are, of course, not wholly applicable to habeas corpus proceedings. 28 U. S. C. §2254 (d). See Salinger v. Loisel, 265 U. S. 224, 230 (1924). Hence, a state prisoner in the respondents’ situation who has been denied relief in the state courts is not precluded from seeking habeas relief on the same claims in federal court. On the other hand, res judicata has been held to be fully applicable to a civil rights action brought under § 1983. Coogan v. Cincinnati Bar Assn., 431 F. 2d 1209, 1211 (CA6 1970); Jenson v. Olson, 353 F. 2d 825 (CA8 1965); Rhodes v. Meyer, 334 F. 2d 709, 716 (CA8 1964); Goss v. Illinois, 312 F. 2d 257 (CA7 1963). Accordingly, there would be an inevitable incentive for a state prisoner to proceed at once in federal court by way of a civil rights action, lest he lose his right to do so. This would have the unfortunate dual effect of denying the state prison administration and the state courts the opportunity to correct the errors committed in the State’s own prisons, and of isolating those bodies from an understanding of and hospitality to the federal claims of state prisoners in situations such as those before us. Federal habeas corpus, on the other hand, serves the important function of allowing the State to deal with these peculiarly local problems on its own, while preserving for the state prisoner an expeditious federal forum for the vindication of his federally protected rights, if the State has denied redress.
The respondents place a great deal of reliance on our recent decisions upholding the right of state prisoners to bring federal civil rights actions to challenge the conditions of their confinement. Cooper v. Pate, 378 U. S. 546 (1964); Houghton v. Shafer, 392 U. S. 639 (1968); Wilwording v. Swenson, 404 U. S. 249 (1971); Haines v. Kerner, 404 U. S. 519 (1972). But none of the state prisoners in those cases was challenging the fact or duration of his physical confinement itself, and none was seeking immediate release or a speedier release from that confinement — the heart of habeas corpus. In Cooper, the prisoner alleged that, solely because of his
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The judgment is affirmed by an equally divided Court.
Mr. Justice Douglas took no part in the decision of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Ginsburg
delivered the opinion of the Court.
This case involves two federal prescriptions: the one-year limitation period imposed on federal habeas corpus petitioners by the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), 28 U. S. C. § 2244(d)(1); and the rule that pleading amendments relate back to the filing date of the original pleading when both the original plea and the amendment arise out of the same “conduct, transaction, or occurrence,” Fed. Rule Civ. Proc. 15(c)(2).
Jacoby Lee Felix, California prisoner and federal habeas petitioner, was convicted in California state court of first-degree murder and second-degree robbery, and received a life sentence. Within the one-year limitation period AEDPA allows for habeas petitions, Felix filed a pro se petition in federal court. He initially alleged, inter alia, that the admission into evidence of videotaped testimony of a witness for the prosecution violated his rights under the Sixth Amendment’s Confrontation Clause. Five months after the expiration of AEDPA’s time limit, and eight months after the federal court appointed counsel to represent him, Felix filed an amended petition in which he added a new claim for relief: He asserted that, in the course of pretrial interrogation, the police used coercive tactics to obtain damaging statements from him, and that admission of those statements at trial violated his Fifth Amendment right against self-incrimination. The question presented concerns the timeliness of Felix’s Fifth Amendment claim.
In ordinary civil proceedings, the governing Rule, Rule 8 of the Federal Rules of Civil Procedure, requires only "a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2). Rule 2(c) of the Rules Governing Habeas Corpus Cases requires a more detailed statement. The habeas rule instructs the petitioner to “specify all the grounds for relief available to [him]” and to “state the facts supporting each ground.” By statute, Congress provided that a habeas petition “may be amended... as provided in the rules of procedure applicable to civil actions.” 28 U. S. C. §2242. The Civil Rule on amended pleadings, Rule 15 of the Federal Rules of Civil Procedure, instructs: “An amendment of a pleading relates back to the date of the original pleading when... the claim... asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading.” Fed. Rule Civ. Proc. 15(c)(2).
The issue before us is one on which federal appellate courts have divided: Whether, under Federal Rule of Civil Procedure 15(c)(2), Felix’s amended petition, filed after AEDPA’s one-year limitation and targeting his pretrial statements, relates back to the date of his original timely filed petition, which targeted the videotaped witness testimony. Felix urges, and the Court of Appeals held, that the amended petition qualifies for relation back because both the original petition and the amended pleading arose from the same trial and conviction. We reverse the Court of Appeals’ judgment in this regard. An amended habeas petition, we hold, does not relate back (and thereby escape AEDPA’s one-year time limit) when it asserts a new ground for relief supported by facts that differ in both time and type from those the original pleading set forth.
I
In 1995, after a jury trial in Sacramento, California, respondent Jacoby Lee Felix was found guilty of murder and robbery stemming from his participation in a carjacking in which the driver of the car was shot and killed. App. E to Pet. for Cert. 2-7. He was sentenced to life imprisonment without the possibility of parole. App. C to Pet. for Cert. 1-2. The current controversy centers on two alleged errors at Felix’s trial. Both involve the admission of out-of-court statements during the prosecutor’s case in chief, but the two are otherwise unrelated. One prompted a Fifth Amendment self-incrimination objection originally raised in the trial court, the other, a Sixth Amendment Confrontation Clause challenge, also raised in the trial proceedings.
Felix’s Fifth Amendment claim rested on the prosecution’s introduction of statements Felix made during pretrial police interrogation. These statements were adduced at trial on direct examination of the investigating officer. Felix urged that the police used coercive tactics to elicit the statements. Id., at 8-9. His Sixth Amendment claim related to the admission of the videotaped statements prosecution witness Kenneth Williams made at a jailhouse interview. The videotape records Williams, a friend of Felix, telling the police that he had overheard a conversation in which Felix described the planned robbery just before it occurred. When Williams testified at trial that he did not recall the police interview, the trial court determined that Williams’ loss of memory was feigned, and that the videotape was admissible because it contained prior inconsistent statements. App. E to Pet. for Cert. 10-13.
On direct appeal, Felix urged, inter alia, that the admission of Williams’ videotaped statements violated Felix’s constitutional right to confront the witnesses against him. He did not,, however, argue that admission of his own pretrial statements violated his right to protection against self-incrimination. The intermediate appellate court affirmed Felix’s conviction and sentence, id., at 10-13,17, and the California Supreme Court denied his petition for review, App. F to Pet. for Cert. 2. Felix’s conviction became final on August 12,1997. App. C to Pet. for Cert. 10.
Under AEDPA’s one-year statute of limitations, Felix had until August 12, 1998, to file a petition for a writ of ha-beas corpus in federal district court. See § 2244(d)(1)(A). Within the one-year period, on May 8,1998, he filed a pro se petition for federal habeas relief. Felix’s federal petition repeated his Sixth Amendment objection to the admission of the Williams videotape, but he again failed to reassert the objection he made in the trial court to the admission of his own pretrial statements. App. G to Pet. for Cert. 1-7. On May 29,1998, a Magistrate Judge appointed counsel to represent Felix. App. C to Pet. for Cert. 6; App. H to Pet. for Cert. 2. Thereafter, on September 15,1998, the Magistrate Judge ordered Felix to file an amended petition within 30 days. Id., at 3. On Felix’s unopposed requests, that period was successively extended. Id., at 4-5. Pending the filing of an amended petition, the State was not required to interpose an answer.
On January 28, 1999, over five months after the August 12, 1998 expiration of AEDPA’s time limit, and eight months after the appointment of counsel to represent him, Felix filed an amended petition. Id., at 5. In this pleading, he reasserted his Confrontation Clause claim, and also asserted, for the first time post-trial, that his own pretrial statements to the police were coerced and therefore inadmissible at trial. App. I to Pet. for Cert. 4. Further, he alleged that his counsel on appeal to the California intermediate appellate court was ineffective in failing to raise the coerced confession claim on direct appeal. Id., at 18-19. In its answer to the amended petition, the State asserted that the Fifth Amendment claim was time barred because it was initially raised after the expiration of AEDPA’s one-year limitation period. Felix argued in response that the new claim related back to the date of his original petition. Because both Fifth Amendment and Confrontation Clause claims challenged the constitutionality of the same criminal conviction, Felix urged, the Fifth Amendment claim arose out of the “conduct, transaction, or occurrence set forth... in the original pleading,” Fed. Rule Civ. Proc. 15(c)(2). App. C to Pet. for Cert. 16.
The Magistrate Judge recommended dismissal of Felix’s Fifth Amendment coerced statements claim. Relation back was not in order, the Magistrate said, because Felix’s “allegedly involuntary statements to police d[id] not arise out of the same conduct, transaction or occurrence as the videotaped interrogation of [prosecution witness] Kenneth Williams.” Ibid. It did not suffice, the Magistrate observed, that Felix’s Fifth and Sixth Amendment claims attack the same criminal conviction. Ibid. Adopting the Magistrate Judge’s report and recommendation in full, the District Court dismissed the Fifth Amendment claim as time barred, and rejected the Confrontation Clause claim on its merits. App. B to Pet. for Cert. 1-3.
A divided panel of the Court of Appeals for the Ninth Circuit affirmed the District Court’s dismissal of Felix’s Confrontation Clause claim, but reversed the dismissal of his coerced statements claim and remanded that claim for further proceedings. 379 F. 3d 612 (2004). In the majority’s view, the relevant “transaction” for purposes of Rule 15(c)(2) was Felix’s “trial and conviction in state court.” Id., at 615. Defining the transaction at any greater level of specificity, the majority reasoned, would “unduly strai[n] the usual meaning of ‘conduct, transaction, or occurrence’ ” by dividing the “trial and conviction [into] a series of perhaps hundreds of individual occurrences.” Ibid. Judge Tallman concurred in part and dissented in part. In his view, defining “conduct, transaction, or occurrence” under Rule 15(c)(2) “so broadly that any claim stemming from pre-trial motions, the trial, or sentencing relates back to a timely-filed habeas petition” would “obliterate] AEDPA’s one year statute of limitation.” Id., at 618. “While an amendment offered to clarify or amplify the facts already alleged in support of a timely claim may relate back,” he reasoned, “an amendment that introduces a new legal theory based on facts different from those underlying the timely claim may not.” Id., at 621.
We granted certiorari, 543 U. S. 1042 (2005), to resolve the conflict among Courts of Appeals on relation back of habeas petition amendments. Compare 379 F. 3d, at 614 (if original petition is timely filed, amendments referring to the same trial and conviction may relate back); Ellzey v. United States, 324 F. 3d 521, 525-527 (CA7 2003) (same), with United States v. Hicks, 283 F. 3d 380, 388-389 (CADC 2002) (relevant transaction must be defined more narrowly than the trial and conviction); United States v. Espinoza-Saenz, 235 F. 3d 501, 503-505 (CA10 2000) (same); Davenport v. United States, 217 F. 3d 1341, 1344-1346 (CA11 2000) (same); United States v. Pittman, 209 F. 3d 314, 317-318 (CA4 2000) (same); United States v. Duffus, 174 F. 3d 333, 337 (CA3 1999) (same); United States v. Craycraft, 167 F. 3d 451, 457 (CA8 1999) (same). We now reverse the Ninth Circuit’s judgment to the extent that it allowed relation back of Felix’s Fifth Amendment claim.
II
A
In enacting AEDPA in 1996, Congress imposed for the first time a fixed time limit for collateral attacks in federal court on a judgment of conviction. Section 2244(d)(1) provides: “A 1-year period of limitation shall apply to an application for a writ of habeas corpus by a person in custody pursuant to the judgment of a State court.” See also §2255, ¶ 6 (providing one-year limitation period in which to file a motion to vacate a federal conviction).
A discrete set of Rules governs federal habeas proceedings launched by state prisoners. See Rules Governing Section 2254 Cases in the United States District Courts. The last of those Rules, Habeas Corpus Rule 11, permits application of the Federal Rules of Civil Procedure in habeas cases “to the extent that [the civil rules] are not inconsistent with any statutory provisions or [the habeas] rules.” See also Fed. Rule Civ. Proc. 81(a)(2) (The civil rules “are applicable to proceedings for... habeas corpus.”). Rule 11, the Advisory Committee’s Notes caution, “permits application of the civil rules only when it would be appropriate to do so,” and would not be “inconsistent or inequitable in the overall framework of habeas corpus.” Advisory Committee’s Note on Habeas Corpus Rule 11, 28 U. S. C., p. 480. In addition to the general prescriptions on application of the civil rules in federal habeas cases, § 2242 specifically provides that habeas applications “may be amended... as provided in the rules of procedure applicable to civil actions.”
The Civil Rule governing pleading amendments, Federal Rule of Civil Procedure 15, made applicable to habeas proceedings by § 2242, Federal Rule of Civil Procedure 81(a)(2), and Habeas Corpus Rule 11, allows pleading amendments with “leave of court” any time during a proceeding. See Fed. Rule Civ. Proc. 15(a). Before a responsive pleading is served, pleadings may be amended once as a “matter of course,” i. e., without seeking court leave. Ibid. Amendments made after the statute of limitations has run relate back to the date of the original pleading if the original and amended pleadings “ar[i]se out of the conduct, transaction, or occurrence.” Rule 15(c)(2).
The “original pleading” to which Rule 15 refers is the complaint in an ordinary civil case, and the petition in a habeas proceeding. Under Rule 8(a), applicable to ordinary civil proceedings, a complaint need only provide “fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U. S. 41, 47 (1957). Habeas Corpus Rule 2(c) is more demanding. It provides that the petition must “specify all the grounds for relief available to the petitioner” and “state the facts supporting each ground.” See also Advisory Committee’s Note on subd. (c) of Habeas Corpus Rule 2,28 U. S. C., p. 469 (“In the past, petitions have frequently contained mere conclusions of law, unsupported by any facts. [But] it is the relationship of the facts to the claim asserted that is important....”); Advisory Committee’s Note on Habeas Corpus Rule 4, 28 U. S. C., p. 471 (“ ‘[N]otice’ pleading is not sufficient, for the petition is expected to state facts that point to a real possibility of constitutional error.” (internal quotation marks omitted)). Accordingly, the model form available to aid prisoners in filing their habeas petitions instructs in boldface:
“CAUTION: You must include in this petition all the grounds for relief from the conviction or sentence that you challenge. And you must state the facts that support each ground. If you fail to set forth all the grounds in this petition, you may be barred from presenting additional grounds at a later date.” Petition for Relief From a Conviction or Sentence By a Person in State Custody, Habeas Corpus Rules, Forms App., 28 U. S. C., p. 685 (2000 ed., Supp. V) (emphasis in original).
A prime purpose of Rule 2(c)’s demand that habeas petitioners plead with particularity is to assist the district court in determining whether the State should be ordered to “show cause why the writ should not be granted.” §2243. Under Habeas Corpus Rule 4, if “it plainly appears from the petition... that the petitioner is not entitled to relief in the district court,” the court must summarily dismiss the petition without ordering a responsive pleading. If the court orders the State to file an answer, that pleading must “address the allegations in the petition.” Rule 5(b).
B
This case turns on the meaning of Federal Rule of Civil Procedure 15(c)(2),s relation-back provision in the context of federal habeas proceedings and AEDPA’s one-year statute of limitations. Rule 15(c)(2), as earlier stated, provides that pleading amendments relate back to the date of the original pleading when the claim asserted in the amended plea “arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading.” The key words are “conduct, transaction, or occurrence.” The Ninth Circuit, whose judgment we here review, in accord with the Seventh Circuit, defines those words to allow relation back of a claim first asserted in an amended petition, so long as the new claim stems from the habeas petitioner’s trial, conviction, or sentence. Under that comprehensive definition, virtually any new claim introduced in an amended petition will relate back, for federal habeas claims, by their very nature, challenge the constitutionality of a conviction or sentence, and commonly attack proceedings anterior thereto. See Espinoza-Saenz, 235 F. 3d, at 505 (A “majority of amendments” to habeas petitions raise issues falling under the “broad umbrella” of “a defendant’s trial and sentencing.”); Hicks, 283 F. 3d, at 388.
The majority of Circuits, mindful of “Congress’ decision to expedite collateral attacks by placing stringent time restrictions on [them],” ibid., define “conduct, transaction, or occurrence” in federal habeas cases less broadly. See id., at 388-389; Espinoza-Saenz, 235 F. 3d, at 503-505; Davenport, 217 F. 3d, at 1344-1346; Pittman, 209 F. 3d, at 317-318; Duffus, 174 F. 3d, at 337; Cray craft, 167 F. 3d, at 457. They allow relation back only when the claims added by amendment arise from the same core facts as the timely filed claims, and not when the new claims depend upon events separate in “both time and type” from the originally raised episodes. Ibid. Because Felix’s own pretrial statements, newly raised in his amended petition, were separated in time and type from witness Williams’ videotaped statements, raised in Felix’s original petition, the former would not relate back under the definition of “conduct, transaction, or occurrence” to which most Circuits adhere.
We are not aware, in the run-of-the-mine civil proceedings Rule 15 governs, of any reading of “conduct, transaction, or occurrence” as capacious as the construction the Ninth and Seventh Circuits have adopted for habeas cases. Compare Maegdlin v. International Assn, of Machinists and Aerospace Workers, 309 F. 3d 1051, 1052 (CA8 2002) (allowing relation back where original complaint alleged that defendant union had breached its duty of fair representation by inadequately representing plaintiff because of his gender, and amended complaint asserted a Title VII gender discrimination claim based on the same differential treatment); Clip per Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F. 2d 1240, 1246, 1259, n. 29 (CA9 1982) (claim asserting that defendant included fraudulent information in rate protests filed with the Interstate Commerce Commission related back to original complaint, which asserted that defendant filed the same rate protests “for the purpose of... restricting... competition” (internal quotation marks omitted)); Santana v. Holiday Inns, Inc., 686 F. 2d 736, 738 (CA9 1982) (original complaint alleging slander and amendment alleging interference with employment relations arose out of the same conduct or occurrence because both were based on defendant’s making allegedly untruthful statements about plaintiff’s behavior to plaintiff’s employer); Rural Fire Protection Co. v. Hepp, 366 F. 2d 355, 361-362 (CA9 1966) (in a Fair Labor Standards Act of 1938 suit alleging minimum wage violations for certain pay periods, amendment asserting the same type of violation during an additional pay period related back), with Nettis v. Levitt, 241 F. 3d 186, 193 (CA2 2001) (disallowing relation back where Nettis’ original complaint alleged that his employer retaliated in response to Nettis’ objections to employer’s sales tax collection procedure, and amendment alleged retaliation for Nettis’ report of payroll and inventory irregularities); In re Coastal Plains, Inc., 179 F. 3d 197, 216 (CA5 1999) (Coastal Plains’s claim that creditor interfered with business relations by attempting to sell Coastal Plains to a third party did not relate back to claim based on creditor’s failure to return inventory to Coastal Plains, even though both claims were linked to creditor’s alleged “broader plan to destroy Coastal [Plains]”); Sierra Club v. Penfold, 857 F. 2d 1307, 1315-1316 (CA9 1988) (where original complaint challenged the manner in which an agency applied a regulation, an amendment challenging the agency’s “conduct in adopting the regulatio[n]” did not relate back). See also Jackson v. Suffolk County Homicide Bureau, 135 F. 3d 254, 256 (CA2 1998) (although all of plaintiff’s 42 U. S. C. § 1983 claims arose out of a single state-court criminal proceeding, plaintiff’s First Amendment claims did not arise out of the same conduct as the originally asserted excessive force claims, and therefore did not relate back). As these decisions illustrate, Rule 15(c)(2) relaxes, but does not obliterate, the statute of limitations; hence relation back depends on the existence of a common “core of operative facts” uniting the original and newly asserted claims. See Clipper Exxpress, 690 F. 2d, at 1259, n. 29; 6A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 1497, p. 85 (2d ed. 1990).
Felix asserts that he seeks, and the Ninth Circuit accorded, no wider range for Rule 15(c)’s relation-back provision than this Court gave to the Rule’s key words “conduct, transaction, or occurrence” in Tiller v. Atlantic Coast Line R. Co., 323 U. S. 574, 580-581 (1945). We disagree. In Tiller, a railroad worker was struck and killed by a railroad car. His widow sued under the Federal Employers’ Liability Act, 45 U. S. C. § 51 et seq., to recover for his wrongful death. She initially alleged various negligent acts. In an amended complaint, she added a claim under the Federal Boiler Inspection Act for failure to provide the train’s locomotive with a rear light. We held that the amendment related back, and therefore avoided a statute of limitations bar, even though the amendment invoked a legal theory not suggested by the original complaint and relied on facts not originally asserted.
There was but one episode-in-suit in Tiller, a worker’s death attributed from the start to the railroad’s failure to provide its employee with a reasonably safe place to work. The federal rulemakers recognized that personal injury plaintiffs often cannot pinpoint the precise cause of an injury prior to discovery. See 5 C. Wright & A. Miller, Federal Practice and Procedure §1215, pp. 138-143 (2d ed. 1990). They therefore included in the Appendix to the Federal Rules an illustrative form indicating that a personal injury plaintiff could adequately state a claim for relief simply by alleging that the defendant negligently operated a certain instrumentality at a particular time and place. See Form 9, Complaint for Negligence, Forms App., Fed. Rule Civ. Proc., 28 U. S. C. App., p. 829. The widow in Tiller met that measure. She based her complaint on a single “occurrence,” an accident resulting in her husband’s death. In contrast, Felix targeted separate episodes, the pretrial police interrogation of witness Williams in his original petition and his own interrogation at a different time and place in his amended petition.
Felix contends, however, that his amended petition qualifies for relation back because the trial itself is the “transaction” or “occurrence” that counts. See Brief for Respondent 21-23. Citing Chavez v. Martinez, 538 U. S. 760 (2003) (plurality opinion), Felix urges that neither the videotaped interview with witness Williams nor the pretrial police interrogation to which Felix himself was exposed transgressed any constitutional limitation. Until the statements elicited by the police were introduced at trial, Felix argues, he had no actionable claim at all. Both the confrontation right he timely presented and the privilege against self-incrimination he asserted in his amended petition are “trial right[s],” Felix underscores. Brief for Respondent 21 (emphasis deleted). His claims based on those rights, he maintains, are not “separate,” id., at 22; rather, they are related in time and type, for “they arose on successive days during the trial and both challenged [on constitutional grounds] admission of pretrial statements,” id., at 22-23.
Felix artificially truncates his claims by homing in only on what makes them actionable in a habeas proceeding. We do not here question his assertion that his Fifth Amendment right did not ripen until his statements were admitted against him at trial. See Chavez, 538 U. S., at 766-767. Even so, the essential predicate for his self-incrimination claim was an extrajudicial event, i. e., an out-of-court police interrogation. The dispositive question in an adjudication of that claim would be the character of Felix’s conduct, not in court, but at the police interrogation, specifically, did he answer voluntarily or were his statements coerced. See Haynes v. Washington, 873 U. S. 503, 513-514 (1963) (vol-untariness is evaluated by examining the “totality of circumstances” surrounding the “making and signing of the challenged confession”).
Habeas Corpus Rule 2(c), we earlier noted, see supra, at 655-656, instructs petitioners to “specify all [available] grounds for relief” and to “state the facts supporting each ground.” Under that Rule, Felix’s Confrontation Clause claim would be pleaded discretely, as would his self-incrimination claim. Each separate congeries of facts supporting the grounds for relief, the Rule suggests, would delineate an “occurrence.” Felix’s approach, the approach that prevailed in the Ninth Circuit, is boundless by comparison. A miscellany of claims for relief could be raised later rather than sooner and relate back, for “conduct, transaction, or occurrence” would be defined to encompass any pretrial, trial, or post-trial error that could provide a basis for challenging the conviction. An approach of that breadth, as the Fourth Circuit observed, “views ‘occurrence’ at too high a level of generality.” Pittman, 209 F. 3d, at 318.
Congress enacted AEDPA to advance the finality of criminal convictions. See Rhines v. Weber, 544 U. S. 269, 276 (2005). To that end, it adopted a tight time line, a one-year limitation period ordinarily running from “the date on which the judgment became final by the conclusion of direct review or the expiration of the time for seeking such review,” 28 U. S. C. § 2244(d)(1)(A). If claims asserted after the one-year period could be revived simply because they relate to the same trial, conviction, or sentence as a timely filed claim, AEDPA’s limitation period would have slim significance. See 379 F. 3d, at 619 (Tallman, J., concurring in part and dissenting in part) (Ninth Circuit’s rule would permit “the ‘relation back’ doctrine to swallow AEDPA’s statute of limitation”); Pittman, 209 F. 3d, at 318 (“If we were to craft such a rule, it would mean that amendments... would almost invariably be allowed even after the statute of limitations had expired, because most [habeas] claims arise from a criminal defendant’s underlying conviction and sentence.”); Duffus, 174 F. 3d, at 338 (“A prisoner should not be able to assert a claim otherwise barred by the statute of limitations merely because he asserted a separate claim within the limitations period.”). The very purpose of Rule 15(c)(2), as the dissent notes, is to “qualify a statute of limitations.” Post, at 666. But “qualify” does not mean repeal. See Fuller v. Marx, 724 F. 2d 717, 720 (CA8 1984). Given AEDPA’s “finality” and “federalism” concerns, see Williams v. Taylor, 529 U. S. 420, 436 (2000); Hicks, 283 F. 3d, at 389, it would be anomalous to allow relation back under Rule 15(c)(2) based on a broader reading of the words “conduct, transaction, or occurrence” in federal habeas proceedings than in ordinary civil litigation, see supra, at 657-659.
Felix urges that an unconstrained reading of Rule 15(c)(2) is not problematic because Rule 15(a) arms district courts with “ample power” to deny leave to amend when justice so requires. See Brief for Respondent 31-33. Under that Rule, once a responsive pleading has been filed, a prisoner may amend the petition “only by leave of court or by written consent of the adverse party.” Rule 15(a); see Ellzey v. United States, 324 F. 3d, at 526 (AEDPA’s aim to “expedite resolution of collateral attacks... should influence the exercise of discretion under Rule 15(a) — which gives the district judge the right to disapprove proposed amendments that would unduly prolong or complicate the case.”). This argument overlooks a pleader’s right to amend without leave of court “any time before a responsive pleading is served.” Rule 15(a). In federal habeas cases that time can be rather long, as indeed it was in the instant case. See supra, at 651. Under Habeas Corpus Rule 4, a petition is not immediately served on the respondent. The judge first examines the pleading to determine whether “it plainly appears... that the petitioner is not entitled to relief.” Only if the petition survives that preliminary inspection will the judge “order the respondent to file an answer.” In the interim, the petitioner may amend his pleading “as a matter of course,” as Felix did in this very case. Rule 15(a). Accordingly, we do not regard Rule 15(a) as a firm.check against petition amendments that present new claims dependent upon discrete facts after AEDPA’s limitation period has run.
Our rejection of Felix’s translation of same “conduct, transaction, or occurrence” to mean same “trial, conviction, or sentence” scarcely leaves Rule 15(c)(2) “meaningless in the habeas context,” 379 F. 3d, at 615. So long as the original and amended petitions state claims that are tied to a common core of operative facts, relation back will be in order. Our reading is consistent with the general application of Rule 15(c)(2) in civil cases, see supra, at 657-659, with Habeas Corpus Rule 2(c), see supra, at 655-656, and with AEDPA’s installation of a tight time line for §2254 petitions, see supra, at 662-663.
H: * *
As to the question presented, for the reasons stated, the judgment of the Court of Appeals for the Ninth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
The Habeas Corpus Rules were recently amended, effective December 1, 2004. Because the amended Rules are not materially different from those in effect when Felix filed his habeas petition, this opinion refers to the current version of the Rules.
Because Felix had not presented his coerced statements Fifth Amendment claim on appeal to the California courts, the State moved to dismiss the amended petition on the ground that it contained both exhausted and unexhausted claims. See 28 U. S. C. § 2254(b)(1)(A); Brief for Respondent 6-7. Before the Magistrate Judge acted on the motion, Felix presented the coerced statements/ineffective-assistance claim to the California Supreme Court in a habeas petition. Opposition to Respondents’ Motion to Dismiss in No. Civ. S-98-0828 WBS GGH P (ED Cal.), p. 3. After that court denied the petition without comment, the State withdrew its motion to dismiss. See Request to Vacate Hearing on Motion to Dismiss in No. Civ. S-98-0828 WBS GGH P (ED Cal.), pp. 1-2.
Section 2255 establishes a separate avenue for postconviction challenges to federal, as opposed to state, convictions.
Habeas corpus proceedings are characterized as civil in nature. See, e. g., Fisher v. Baker, 203 U. S. 174, 181 (1906).
The dissent asserts that Clipper Exxpress is comparable to this case in according Rule 15(c)(2) a ‘“capacious”' reading. Post, at 668, n. 2. Clipper Exxpress involved a series of allegedly sham protests, commonly designed to restrain trade, a charge of the pattern or practice type. The amendment in question added a fraud charge, a new legal theory tied to the same operative facts as those initially alleged. 690 F. 2d, at 1259, n. 29. That unremarkable application of the relation-back rule bears little resemblance to the argument made by Felix and embraced by the dissent — that all manner of factually and temporally unrelated conduct may be raised after the statute of limitations has rim and relate back, so long as the new and originally pleaded claims challenge the same conviction. See infra, at 659-661.
The dissent builds a complex discussion on an apparent assumption that claim preclusion operates in habeas cases largely as it does in mine-run civil cases. See post, at 673-674. Ironically, few habeas petitions would survive swift dismissal were that so, for the very objective of the petition is to undo a final judgment after direct appeals have been exhausted or are time barred. On judicial and legislative development of standards governing successive habeas petitions, standards that do not track the Restatement of Judgments, see Schlup v. Delo, 513 U. S. 298, 317-320 (1995); 2 R. Hertz & J. Liebman, Federal Habeas Corpus Practice and Procedure § 28.2b, pp. 1270-1275 (4th ed. 2001); Note, Developments in the Law — Federal Habeas Corpus, 83 Har
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Stewart
delivered the opinion of the Court.
Since the admission of California to the Union in 1850, the southeastern boundary of the State has been the middle of the channel of the Colorado River. Act of Sept. 9, 1850, 9 Stat 452. Neither the Gadsden Purchase in 1853 nor the admission of Arizona to statehood in 1912 changed the location of this 229-mile border. The location of the river did change, however, from causes both natural and artificial. These shifts created confusion about the location of the political boundary between California and Arizona. This problem was resolved through an interstate compact, ratified by the Congress in 1966. The Compact fixed the boundary by stations of longitude and latitude, divorced from the continuing shifts of the Colorado River.
California has taken the position, however, that the Compact settled only questions of political jurisdiction, not questions of ownership of real property, since, under the “equal-footing doctrine,” California holds title to all lands beneath the navigable waters within its boundaries at the time of its admission to the Union. Pollard’s Lessee v. Hagan, 3 How. 212, 219. See Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co., 429 U. S. 363. In the early 1970’s the California State Lands Commission made a study of a stretch of 11.3 miles along the river to determine what land California owns. Both Arizona and the United States have a direct interest in such a determination. Arizona, of course, has the same rights under the equal-footing doctrine as does California. The United States is the principal riparian owner in this region, and determination of the width and location of the old riverbed thus will necessarily affect its property interests. California has presented the determinations of its Lands Commission to both Arizona and the United States; neither has acquiesced in the Commission’s conclusions.
California seeks to invoke the Court’s original jurisdiction in this suit to quiet title to the lands it claims, and thus resolve its dispute with Arizona and the United States. To ■sue Arizona, it relies on 28 U. S. C. § 1251 (a), which confers on this Court “original and exclusive jurisdiction of . . . [a] 11 controversies between two or more States.” To sue the United States, it relies on 28 U. S. C. § 1251 (b), which confers on this Court “original but not exclusive jurisdiction of ... [a] 11 controversies between the United States and a State.” Both these heads of original jurisdiction find their source in Art. Ill, §2, of the Constitution: “In all Cases ... in which a State shall be Party, the supreme Court shall have original Jurisdiction.”
It is undisputed that both Arizona and the United States are indispensable parties to this litigation, and it is California’s need to sue both Arizona and the United States that creates the problem before us. Specifically, Arizona and the United States contend that the United States has not agreed to be a defendant in a quiet-title action in this Court Yet this is the only federal court in which California can sue Arizona, because Congress has conferred upon it “original and exclusive jurisdiction” (emphasis added) over controversies between States. 28 U. S. C. § 1251 (a)(1).
It is settled that the United States must give its consent to be sued even when one of the States invokes this Court’s original jurisdiction:
“It does not follow that because a State may be sued by the United States without its consent, therefore the United States may be sued by a State without its consent. Public policy forbids that conclusion.” Kansas v. United States, 204 U. S. 331, 342.
See Oregon v. Hitchcock, 202 U. S. 60; Minnesota v. Hitchcock, 185 U. S. 373, 387 (dicta). But cf. United States v. Texas, 143 U. S. 621. Yet the Court has recognized that an action in equity cannot be maintained without the joinder of indispensable parties. Shields v. Barrow, 17 How. 130; Mallow v. Hinde, 12 Wheat. 193. Thus, if the United States has not consented to be sued in an action such as this, California’s motion for leave to file a complaint • must be denied. “A bill of complaint will not be entertained which, if filed, could only be dismissed because of the absence of the United States as a party.” Arizona v. California, 298 U. S. 558, 572. See Texas v. New Mexico, 352 U. S. 991; but see Florida v. Georgia, 17 How. 478, 494-496 (Taney, C. J.).
The suit, then, could not be maintained in any court. This Court could not hear the claims against the United States because it has not waived its sovereign immunity, and a district court could not hear the claims against Arizona, because this Court has exclusive jurisdiction over such claims. To resolve this asserted dilemma, the Solicitor General has made an undertaking on behalf of the United States. He has agreed that, if California is granted leave to file its complaint in this Court against Arizona, the United States will intervene with respect to the controversy over part of the area in question. Because, however, we have concluded that the United States has already waived its sovereign immunity to suit in this case, we need not assess the wisdom or validity of the Solicitor General's suggestion.
In 1972 Congress passed Pub. L. 92-562, 86 Stat. 1176. The Act made two relevant changes in Title 28 of the United States Code. First, it created a new § 2409a.’ Subsection (a) of this new section provides:
“The United States may be named as a party defendant in a civil action under this section to adjudicate a disputed title to real property in which the United States claims an interest, other than a security interest or water rights. . .
The remainder of the section defines the procedures to be followed in such suits. Second, the Congress amended 28 U. S. C. § 1346 to add a new subsection (f). That subsection provides:
“The district courts shall have exclusive original jurisdiction of civil actions under section 2409a to quiet title to an estate or interest in real property in which an interest is claimed by the United States.”
It is thus clear that the United States has waived its immunity to suit in actions brought against it to quiet title to land. The question is whether suits brought under that waiver may be heard in this Court. The Solicitor General argues that they may not, that § 1346 (f) operates both to confer original jurisdiction over such a case on the federal district courts and simultaneously to withdraw the original jurisdiction of this Court. If this contention were accepted, a grave constitutional question would immediately arise. That question, quite simply, is whether Congress can deprive this Court of original jurisdiction conferred upon it by the Constitution.
The original jurisdiction of the Supreme Court is conferred not by the Congress but by the Constitution itself. This jurisdiction is self-executing, and needs no legislative implementation. Kentucky v. Dennison, 24 How. 66, 96; Florida v. Georgia, 17 How., at 492; Martin v. Hunter’s Lessee, 1 Wheat. 304, 332. It is clear, of course, that Congress could refuse to waive the Nation’s sovereign immunity in all cases or only in some cases but in all courts. Either action would bind this Court even in the exercise of its original jurisdiction. It is similarly clear that the original jurisdiction of this Court is not constitutionally exclusive — that other courts can be awarded concurrent jurisdiction by statute. Börs v. Preston, 111 U. S. 252; Ames v. Kansas ex rel. Johnston, 111 U. S. 449. But once Congress has waived the Nation’s sovereign immunity, it is far from clear that it can withdraw the constitutional jurisdiction of this Court over such suits.
The constitutional grant to this Court of original jurisdiction is limited to cases involving the States and the envoys of foreign nations. The Eramers seem to have been concerned with matching the dignity of the parties to the status of the court:
“The evident purpose [of the grant of original jurisdiction] was to open and keep open the highest court of the nation for the determination, in the first instance, of suits involving a State or a diplomatic or commercial representative of a foreign government. So much was due to the rank and dignity of those for whom the provision was made . . . Id., at 464.
See The Federalist No. 81, pp. 507-509 (H. Lodge ed. 1888) (A. Hamilton). Elimination of this Court’s original jurisdiction would require those sovereign parties to go to another court, in derogation of this constitutional purpose. Congress has broad powers over the jurisdiction of the federal courts and over the sovereign immunity of the United States but it is extremely doubtful that they include the power to limit in this manner the original jurisdiction conferred upon this Court by the Constitution.
Happily, we need not decide this constitutional question, for the statute in question can readily be construed in such a way as to obviate it. In so construing the statute, we no more than follow the long practice of the Court to forgo the resolution of constitutional issues except when absolutely necessary. “When the validity of an act of the Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.” Crowell v. Benson, 285 U. S. 22, 62.
The legislative history of § 1346 (f) is sparse, but the intent of Congress seems reasonably clear. The congressional purpose was simply to confine jurisdiction to the federal courts and to exclude the courts of the States, which otherwise might be presumed to have jurisdiction over quiet-title suits against the United States, once its sovereign immunity had been waived. Charles Dowd Box Co. v. Courtney, 368 U. S. 502; Claflin v. Houseman, 93 U. S. 130, 136. The legislative history shows no intention to divest this Court of jurisdiction over quiet-title actions against the United States in cases otherwise within our original jurisdiction. We find, therefore, that § 1346 (f), by vesting “exclusive original jurisdiction” of quiet-title actions against the United States in the federal district courts, did no more than assure that such jurisdiction was not conferred upon the courts of any State.
For these reasons we conclude that there is no bar to this original suit in the Supreme Court between California as plaintiff, and Arizona and the United States as defendants. Accordingly, the motion of California for leave to file its complaint is granted, and the defendants are allowed 45 days in which to answer or otherwise respond.
It is so ordered.
Interstate Compact Defining the Boundary Between the States of Arizona and California, 80 Stat. 340.
California points out that other title questions may arise along the entire stretch of the Califomia-Arizona border. It urges the Court to retain jurisdiction of this case for adjudication of these potential additional controversies. We leave that suggestion for a later date.
Federal Rule Civ. Proc. 19 (a) provides that a person is to be joined in an action if
“(1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.”
Rule 19 (b) provides that when a person described by Rule 19 (a) cannot be joined, “the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable.”
Rule 9 (2) of this Court provides:
“The form of pleadings and motions in original actions shall be governed, so far as may be, by the Federal Rules of Civil Procedure, and in other respects those rules, where their application is appropriate, may be taken as a guide to procedure in original actions in this court.”
This Court has dismissed cases in its original jurisdiction for want of an indispensable party, Arizona v. California, 298 U. S. 558, 572; California v. Southern Pacific Co., 157 U. S. 229, 256. Here, all three parties have agreed that their interests in the land in question are inextricably linked.
The Solicitor General maintains that the Government has a valid statute of limitations defense as to that part of this controversy that concerns the northern 2.7 miles of the 11.3-mile stretch of original riverbed in controversy. He has undertaken to intervene, therefore, only with respect to the remainder of the tract.
The Act also included a venue provision, codified at 28 U. S. C. § 1402(d).
Title 28 U. S. C. § 2409a reads:
“(a) The United States may be named as a party defendant in a civil action under this section to adjudicate a disputed title to real property in which the United States claims an interest, other than a security interest or water rights. This section does not apply to trust or restricted Indian lands, nor does it apply to or affect actions which may be or could have been brought under sections 1346, 1347, 1491, or 2410 of this title, sections 7424, 7425, or 7426 of the Internal Revenue Code of 1954, as amended . . . or section 208 of the Act of July 10, 1952 ....
"(b) The United States shall not be disturbed in possession or control of any real property involved in any action under this section pending a final judgment or decree, the conclusion of any appeal therefrom, and sixty days; and if the final determination shall be adverse to the United States, the United States nevertheless may retain such possession or control of the real property or of any part thereof as it may elect, upon payment to the person determined to be entitled thereto of an amount which upon such election the district court in the same action shall determine to be just compensation for such possession or control.
“(c) The complaint shall set forth with particularity the nature of the right, title, or interest which the plaintiff claims in the real property, the circumstances under which it was acquired, and the right, title, or interest claimed by the United States.
“(d) If the United States disclaims all interest in the real property or interest therein adverse to the plaintiff at any time prior to the actual commencement of the trial, which disclaimer is confirmed by order of the court, the jurisdiction of the district court shall cease unless it has jurisdiction of the civil action or suit on ground other than and independent of the authority conferred by section 1346 (f) of this title.
“(e) A civil action against the United States under this section shall be tried by the court without a jury.
“(f) Any civil action under this section shall be barred unless it is commenced within twelve years of the date upon which it accrued. Such action shall be "deemed to have accrued on the date the plaintiff or his predecessor in interest knew or should have known of the claim of the United States.
“(g) Nothing in this section shall be construed to permit suits against the United States based upon adverse possession.”
This legislation resulted from a title dispute between the United States and landowners along the Snake River in Idaho. In 1971 the Senators from Idaho introduced three bills in response to this dispute. One of the bills, S. 216, waived the Government’s immunity to suit in quiet-title actions. As originally drafted, the bill would have created a new section, 28 U. S. C. § 2408a, providing:
“The United States may be named a party in any civil action brought by any person to quiet title to lands claimed by the United States.”
Hearing before the Subcommittee on Public Lands of the Senate Committee on Interior and Insular Affairs on S. 216, 92d Cong., 1st Sess., 1 (1971).
At the hearing the administration opposed S. 216 but offered to propose an acceptable substitute. The promised changes were set forth in a letter from the Attorney General to the Senate Committee in October 1971. S. Rep. No. 92-575, pp. 5-7 (1971). Most of the changes were concerned with the waiver section and now make up subsections (b) through (g) of § 2409a. The administration also suggested a change in the bill’s jurisdictional section. Rather than simply confer “original jurisdiction” on the federal district courts to hear quiet-title actions against the United States, as the original bill had provided, the administration suggested that the bill confer upon the district courts “exclusive original jurisdiction” (emphasis added). The Attorney General’s letter explained the requested change as follows:
“Since we believe it is the better policy to litigate questions of the Government’s title in the Federal courts, the draft bill provides for .exclusive jurisdiction of suits under the statute in the U. S. district courts.” S. Rep. No. 92-575, supra, at 7.
The administration’s suggestions were, for the most part, accepted. There was no discussion of the jurisdictional section in the Report of either the House Committee, H. R. Rep. No. 92-1559 (1972), or the Senate Committee, supra. Nor was that provision the subject of any debate on the floor of either House. 117 Cong. Rec. 46380-46381 (1971) (passage by the Senate); 118 Cong. Rec. 35530-35531 (1972) (passage by the House of Representatives); id., at 35993 (concurrence by the Senate in the amendments made by the House).
Arizona argues that this is not an appropriate case for this Court’s original jurisdiction, both because of its factual complexity and because it involves only title to land rather than the location of a political boundary. Such considerations are hardly relevant to the exercise of this Court’s original and exclusive jurisdiction, and the fact is that several cases decided by the Court under its original jurisdiction have involved complicated questions of title to land. In Massachusetts v. New York, 271 U. S. 65, for example, the Court decided that Massachusetts did not have title to lands within New York along and within Lake Ontario. In Minnesota v. Hitchcock, 185 U. S. 373, and Wisconsin v. Lane, 245 U. S. 427, the Court decided bills brought by States to quiet title against the United States. The Congress had expressly waived sovereign immunity for those suits. Cases in which the Court has entertained actions by the United States to quiet title to lands claimed by the States include United States v. Utah, 279 U. S. 816; United States v. Oregon, 282 U. S. 804; United States v. Alabama, 313 U. S. 274; United States v. Wyoming, 333 U. S. 834; United States v. California, 332 U. S. 19; United States v. Louisiana, 339 U. S. 699; and United States v. Texas, 339 U. S. 707.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Marshall
delivered the opinion of the Court.
In 1945, taxpayer and E. B. Bradley organized a corporation. In exchange for property transferred to the new company, Bradley received 500 shares of common stock, and taxpayer and his wife similarly each received 250 such shares. Shortly thereafter, taxpayer made an additional contribution to the corporation, purchasing 1,000 shares of preferred stock at a par value of $25 per share.
The purpose of this latter transaction was to increase the company’s working capital and thereby to qualify for a loan previously negotiated through the Reconstruction Einance Corporation. It was understood that the corporation would redeem the preferred stock when the RFC loan had been repaid. Although in the interim taxpayer bought Bradley’s 500 shares and divided them between his son and daughter, the total capitalization of the company remained the same until 1963. That year, after the loan was fully repaid and in accordance with the original understanding, the company redeemed taxpayer’s preferred stock.
In his 1963 personal income tax return taxpayer did not report the $25,000 received by him upon the redemption of his preferred stock as income. Rather, taxpayer considered the redemption as a sale of his preferred stock to the company — a capital gains transaction under § 302 of the Internal Revenue Code of 1954 resulting in no tax since taxpayer’s basis in the stock equaled the amount he received for it. The Commissioner of Internal Revenue, however, did not approve this tax treatment. According to the Commissioner, the redemption of taxpayer’s stock was essentially equivalent to a dividend and was thus taxable as ordinary income under §§301 and 316 of the Code. Taxpayer paid the resulting deficiency and brought this suit for a refund. The District Court ruled in his favor, 274 F. Supp. 466 (D. C. M. D. Tenn. 1967), and on appeal the Court of Appeals affirmed. 408 F. 2d 1139 (C. A. 6th Cir. 1969).
The Court of Appeals held that the $25,000 received by taxpayer was “not essentially equivalent to a dividend” within the meaning of that phrase in § 302 (b)(1) of the Code because the redemption was the final step in a course of action that had a legitimate business (as opposed to a tax avoidance) purpose. That holding represents only one of a variety of treatments accorded similar transactions under § 302 (b)(1) in the circuit courts of appeals. We granted certiorari, 396 U. S. 815 (1969), in order to resolve this recurring tax question involving stock redemptions by closely held corporations. We reverse.
I
The Internal Revenue Code of 1954 provides generally in §§ 301 and 316 for the tax treatment of distributions by a corporation to its shareholders; under those provisions, a distribution is includable in a taxpayer’s gross income as a dividend out of earnings and profits to the extent such earnings exist. There are exceptions to the application of these general provisions, however, and among them are those found in § 302 involving certain distributions for redeemed stock. The basic question in this case is whether the $25,000 distribution by the corporation to taxpayer falls under that section — more specifically, whether its legitimate business motivation qualifies the distribution under § 302 (b)(1) of the Code. Preliminarily, however, we must consider the relationship between §302 (b)(1) and the rules regarding the attribution of stock ownership found in § 318 (a) of the Code.
Under subsection (a) of § 302, a distribution is treated as “payment in exchange for the stock,” thus qualifying for capital gains rather than ordinary income treatment, if the conditions contained in any one of the four paragraphs of subsection (b) are met. In addition to paragraph (l)’s “not essentially equivalent to a dividend” test, capital gains treatment is available where (2) the taxpayer’s voting strength is substantially diminished, (3) his interest in the company is completely terminated, or (4) certain railroad stock is redeemed. Paragraph (4) is not involved here, and taxpayer admits that paragraphs (2) and (3) do not apply. Moreover, taxpayer agrees that for the purposes of §§ 302 (b)(2) and (3) the attribution rules of § 318 (a) apply and he is considered to own the 750 outstanding shares of common stock held by his wife and children in addition to the 250 shares in his own name.
Taxpayer, however, argues that the attribution rules do not apply in considering whether a distribution is essentially equivalent to a dividend under § 302 (b)(1). According to taxpayer, he should thus be considered to own only 25 percent of the corporation’s common stock, and the distribution would then qualify under § 302 (b)(1) since it was not pro rata or proportionate to his stock interest, the fundamental test of dividend equivalency. See Treas. Reg. 1.302-2 (b). However, the plain language of the statute compels rejection of the argument. In subsection (c) of § 302, the attribution rules are made specifically applicable “in determining the ownership of stock for purposes of this section.” Applying this language, both courts below held that § 318 (a) applies to all of § 302, including § 302 (b)(1)— a view in accord with the decisions of the other courts of appeals, a longstanding treasury regulation, and the opinion of the leading commentators.
Against this weight of authority, taxpayer argues that the result under paragraph (1) should be different because there is no explicit reference to stock ownership as there is in paragraphs (2) and (3). Neither that fact, however, nor the purpose and history of § 302 (b)(1) support taxpayer’s argument. The attribution rules— designed to provide a clear answer to what would otherwise be a difficult tax question — formed part of the tax bill that was subsequently enacted as the 1954 Code. As is discussed further, infra, the bill as passed by the House of Representatives contained no provision comparable to § 302 (b) (1). When that provision was added in the Senate, no purpose was evidenced to restrict the applicability of § 318 (a). Rather, the attribution rules continued to be made specifically applicable to the entire section, and we believe that Congress intended that they be taken into account wherever ownership of stock was relevant.
Indeed, it was necessary that the attribution rules apply to §302 (b)(1) unless they were to be effectively eliminated from consideration with regard to §§ 302 (b)(2) and (3) also. For if a transaction failed to qualify under one of those sections solely because of the attribution rules, it would according to taxpayer’s argument nonetheless qualify under §302 (b)(1). We cannot agree that Congress intended so to nullify its explicit directive. We conclude, therefore, that the attribution rules of § 318 (a) do apply; and, for the purposes of deciding whether a distribution is "not essentially equivalent to a dividend” under § 302 (b)(1), taxpayer must be deemed the owner of all 1,000 shares of the company’s common stock.
II
After application of the stock ownership attribution rules, this case viewed most simply involves a sole stockholder who causes part of his shares to be redeemed by the corporation. We conclude that such a redemption is always “essentially equivalent to a dividend” within the meaning of that phrase in § 302 (b)(1) and therefore do not reach the Government’s alternative argument that in any event the distribution should not on the facts of this case qualify for capital gains treatment.
The predecessor of §302 (b)(1) came into the tax law as § 201 (d) of the Revenue Act of 1921, 42 Stat. 228:
“A stock dividend shall not be subject to tax but if after the distribution of any such dividend the corporation proceeds to cancel or redeem its stock at such time and in such manner as to make the distribution and cancellation or redemption essentially equivalent to the distribution of a taxable dividend, the amount received in redemption or cancellation of the stock shall be treated as a taxable dividend ...
Enacted in response to this Court’s decision that pro rata stock dividends do not constitute taxable income, Eisner v. Macomber, 252 U. S. 189 (1920), the provision had the obvious purpose of preventing a corporation from avoiding dividend tax treatment by distributing earnings to its shareholders in two transactions — a pro rata stock dividend followed by a pro rata redemption — that would have the same economic consequences as a simple dividend. Congress, however, soon recognized that even without a prior stock dividend essentially the same result could be effected whereby any corporation, “especially one which has only a few stockholders, might be able to make a distribution to its stockholders which would have the same effect as a taxable dividend.” H. R. Rep. No. 1, 69th Cong., 1st Sess., 5. In order to cover this situation, the law w:as amended to apply “(whether or not such stock was issued as a stock dividend)” whenever a distribution in redemption of stock was made “at such time and in such manner” that'it was essentially equivalent to a taxable dividend. Revenue Act of 1926, § 201 (g), 44 Stat. 11.
This provision of the 1926 Act was carried forward in each subsequent revenue act and finally became § 115 (g)(1) of the Internal Revenue Code of 1939. Unfortunately, however, the policies encompassed within the general language of §115 (g)(1) and its predecessors were not clear, and there resulted much confusion in the tax law. At first, courts assumed that the provision was aimed at tax avoidance schemes and sought only to determine whether such a scheme existed. See, e. g., Commissioner v. Quackenbos, 78 F. 2d 156 (C. A. 2d Cir. 1935). Although later the emphasis changed and the focus was more on the effect of the distribution, many courts continued to find that distributions otherwise like a dividend were not “essentially equivalent” if, for example, they were motivated by a sufficiently strong nontax business purpose. See cases cited n. 2, supra. There was general disagreement, however, about what would qualify as such a purpose, and the result was a case-by-case determination with each case decided “on the basis of the particular facts of the transaction in question.” Bains v. United States, 153 Ct. Cl. 599, 603, 289 F. 2d 644, 646 (1961).
By the time of the general revision resulting in the Internal Revenue Code of 1954, the draftsmen were faced with what has aptly been described as “the morass created by the decisions.” Ballenger v. United States, 301 F. 2d 192, 196 (C. A. 4th Cir. 1962). In an effort to eliminate “the considerable confusion which exists in this area” and thereby to facilitate tax planning, H. R. Rep. No. 1337, 83d Cong., 2d Sess., 35, the authors of the new Code sought to provide objective tests to govern the tax consequences of stock redemptions. Thus, the tax bill passed by the House of Representatives contained no “essentially equivalent” language. Rather, it provided for “safe harbors” where capital gains treatment would be accorded to corporate redemptions that met the conditions now found in §§ 302 (b) (2) and (3) of the Code.
It was in the Senate Finance Committee’s consideration of the tax bill that §302 (b)(1) was added, and Congress thereby provided that capital gains treatment should be available “if the redemption is not essentially equivalent to a dividend.” Taxpayer argues that the purpose was to continue “existing law,” and there is support in the legislative history that §302 (b)(1) reverted “in part” or “in general” to the “essentially equivalent” provision of § 115 (g)(1) of the 1939 Code. According to the Government, even under the old law it would have been improper for the Court of Appeals to rely on “a business purpose for the redemption” and “an absence of the proscribed tax avoidance purpose to bail out dividends at favorable tax rates.” See Northup v. United States, 240 F. 2d 304, 307 (C. A. 2d Cir. 1957); Smith v. United States, 121 F. 2d 692, 695 (C. A. 3d Cir. 1941); cf. Commissioner v. Estate of Bedford, 325 U. S. 283 (1945). However, we need not decide that question, for we find from the history of the 1954 revisions and the purpose of §302 (b)(1) that Congress intended more than merely to re-enact the prior law.
In explaining the reason for adding the “essentially equivalent” test, the Senate Committee stated that the House provisions “appeared unnecessarily restrictive, particularly, in the case of redemptions of preferred stock which might be called by the corporation without the shareholder having any control over when the redemption may take place.” S. Rep. No. 1622, 83d Cong., 2d Sess., 44. This explanation gives no indication that the purpose behind the redemption should affect the result. Rather, in its more detailed technical evaluation of § 302 (b)(1), the Senate Committee reported as follows:
“The test intended to be incorporated in the interpretation of paragraph (1) is in general that currently employed under section 115 (g)(1) of the 1939 Code. Your committee further intends that in applying this test for the future . . . the inquiry will be devoted solely to the question of whether or not the transaction by its nature may properly be characterized as a sale of stock by the redeeming shareholder to the corporation. For this purpose the presence or absence of earnings and profits of the corporation is not material. Example: X, the sole shareholder of a corporation having no earnings or profits causes the corporation to redeem half of its stock. Paragraph (1) does not apply to such redemption notwithstanding the absence of earnings and profits.” S. Rep. No. 1622, supra, at 234.
The intended scope of § 302 (b)(1) as revealed by this legislative history is certainly not free from doubt. However, we agree with the Government that by making the sole inquiry relevant for the future the narrow one whether the redemption could be characterized as a sale, Congress was apparently rejecting past court decisions that had also considered factors indicating the presence or absence of a tax-avoidance motive. At least that is the implication of the example given. Congress clearly-mandated that pro rata distributions be treated under the general rules laid down in §§301 and 316 rather than under § 302, and nothing suggests that there should be a different result if there were a “business purpose” for the redemption. Indeed, just the opposite inference must be drawn since there would not likely be a tax-avoidance purpose in a situation where there were no earnings or profits. We conclude that the Court of Appeals was therefore wrong in looking for a business purpose and considering it in deciding whether the redemption was equivalent to a dividend. Rather, we agree with the Court of Appeals for the Second Circuit that “the business purpose of a transaction is irrelevant in determining dividend equivalence” under § 302 (b)(1). Hasbrook v. United States, 343 F. 2d 811, 814 (1966).
Taxpayer strongly argues that to treat the redemption involved here as essentially equivalent to a dividend is to elevate form over substance. Thus, taxpayer argues, had he not bought Bradley's shares or had he made a subordinated loan to the company instead of buying preferred stock, he could have gotten back his $25,000 with favorable tax treatment. However, the difference between form and substance in the tax law is largely problematical, and taxpayer’s complaints have little to do with whether a business purpose is relevant under § 302 (b)(1). It was clearly proper for Congress to treat distributions generally as taxable dividends when made out of earnings and profits and then to prevent avoidance of that result without regard to motivation where the distribution is in exchange for redeemed stock.
We conclude that that is what Congress did when enacting § 302 (b)(1). If a corporation distributes property as a simple dividend, the effect is to transfer the property from the company to its shareholders without a change in the relative economic interests or rights of the stockholders. Where a redemption has that same effect, it cannot be said to have satisfied the “not essentially equivalent to a dividend” requirement of § 302 (b)(1). Rather, to qualify for preferred treatment under that section, a redemption must result in a meaningful reduction of the shareholder’s proportionate interest in the corporation. Clearly, taxpayer here, who (after application of the attribution rules) was the sole shareholder of the corporation both before and after the redemption, did not qualify under this test. The decision of the Court of Appeals must therefore be reversed and the case remanded to the District Court for dismissal of the complaint.
It is so ordered.
References in this opinion to “taxpayer” are to Maclín P. Davis. His wife is a party solely because joint returns were filed for the year in question.
Only the Second Circuit has unequivocally adopted the Commissioner’s view and held irrelevant the motivation of the redemption. See Levin v. Commissioner, 385 F. 2d 521 (1967); Hasbrook v. United States, 343 F. 2d 811 (1965). The First Circuit, however, seems almost to have come to that conclusion, too. Compare Wiseman v. United States, 371 F. 2d 816 (1967), with Bradbury v. Commissioner, 298 F. 2d 111 (1962).
The other courts of appeals that, have passed on the question are apparently willing to give at least some weight under §302 (b)(1) to the business motivation of a distribution and redemption. See, e. g., Commissioner v. Berenbaum, 369 F. 2d 337 (C. A. 10th Cir. 1966); Kerr v. Commissioner, 326 F. 2d 225 (C. A. 9th Cir. 1964); Ballenger v. United States, 301 F. 2d 192 (C. A. 4th Cir. 1962); Heman v. Commissioner, 283 F. 2d 227 (C. A. 8th Cir. 1960); United States v. Fewell, 255 F. 2d 496 (C. A. 5th Cir. 1958). See also Neff v. United States, 157 Ct. Cl. 322, 305 F. 2d 455 (1962). Even among those courts that consider business purpose, however, it is generally required that the business purpose be related, not to the issuance of the stock, but to the redemption of it. See Commissioner v. Berenbaum, supra; Ballenger v. United States, supra.
See, e. g., Commissioner v. Gordon, 391 U. S. 83, 88-89 (1968). Taxpayer makes no contention that the corporation did not have $25,000 in accumulated earnings and profits.
Section 318 (a) provides in relevant part as follows:
“General rule. — For purposes of those provisions of this sub-chapter to which the rules contained in this section are expressly made applicable—
“(1) Members of family.—
“(A) In general. — An individual shall be considered as owning the stock owned, directly or indirectly, by or for—
“(i) his spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), and
“ (ii) his children, grandchildren, and parents.”
In § 318 (b) the rales contained in subsection (a) are made specifically applicable to “section 302 (relating to redemption of stock).”
See Levin v. Commissioner, 385 F. 2d 521, 526-527 (C. A. 2d Cir. 1967); Commissioner v. Berenbaum, 369 F. 2d 337, 342 (C. A. 10th Cir. 1966); Ballenger v. United States, 301 F. 2d 192, 199 (C. A. 4th Cir. 1962); Bradbury v. Commissioner, 298 F. 2d 111, 116-117 (C. A. 1st Cir. 1962).
See Treas. Reg. 1.302-2 (b).
See B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders 292 n. 32 (2d ed. 1966).
Of course, this just means that a distribution in redemption to a sole shareholder will be treated under the general provisions of § 301, and it will only be taxed as a dividend under § 316 to the extent that there are earnings and profits.
The Government argues that even if business purpose were relevant under §302 (b)(1), the business purpose present here related only to the original investment and not at all to the necessity for redemption. See cases cited, n. 2, supra. Under either view, taxpayer does not lose his basis in the preferred stock. Under Treas. Reg. 1,302-2 (c) that basis is apphed to taxpayer's common stock.
See Bittker & Eustice, supra, n. 7, at 291: “It is not easy to give § 302 (b) (1) an expansive construction in view of this indication that its major function was the narrow one of immunizing redemp-tions of minority holdings of preferred stock.”
This rejection is confirmed by the Committee’s acceptance of the House treatment of distributions involving corporate contractions — a factor present in many of the earlier “business purpose” redemptions. In describing its action, the Committee stated as follows:
“Your committee, as did the House bill, separates into their significant elements the kind of transactions now incoherently aggregated in the definition of a partial liquidation. Those distributions which may have capital-gain characteristics became they are not made pro rata among the various shareholders would be subjected, at the shareholder level, to the separate tests described in [§§ 301 to 318]. On the other hand, those distributions characterized by what happens solely at the corporate level by reason of the assets distributed would be included as within the concept of a partial liquidation.” S. Rep. No. 1622, supra, at 49. (Emphasis added.)
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | L | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice KAGANdelivered the opinion of the Court.
The Federal Tort Claims Act (FTCA or Act) provides that a tort claim against the United States "shall be forever barred" unless it is presented to the "appropriate Federal agency within two years after such claim accrues" and then brought to federal court "within six months" after the agency acts on the claim. 28 U.S.C. § 2401(b). In each of the two cases we resolve here, the claimant missed one of those deadlines, but requested equitable tolling on the ground that she had a good reason for filing late. The Government responded that § 2401(b)'s time limits are not subject to tolling because they are jurisdictional restrictions. Today, we reject the Government's argument and conclude that courts may toll both of the FTCA's limitations periods.
I
In the first case, respondent Kwai Fun Wong asserts that the Immigration and Naturalization Service (INS) falsely imprisoned her for five days in 1999. As the FTCA requires, Wong first presented that claim to the INS within two years of the alleged unlawful action. See § 2401(b); § 2675(a). The INS denied the administrative complaint on December 3, 2001. Under the Act, that gave Wong six months, until June 3, 2002, to bring her tort claim in federal court. See § 2401(b).
Several months prior to the INS's decision, Wong had filed suit in federal district court asserting various non-FTCA claims against the Government arising out of the same alleged misconduct. Anticipating the INS's ruling, Wong moved in mid-November 2001 to amend the complaint in that suit by adding her tort claim. On April 5, 2002, a Magistrate Judge recommended granting Wong leave to amend. But the District Court did not finally adopt that proposal until June 25-three weeks afterthe FTCA's 6-month deadline.
The Government moved to dismiss the tort claim on the ground that it was filed late. The District Court at first rejected the motion. It recognized that Wong had managed to add her FTCA claim only after § 2401(b)'s 6-month time period had expired. But the court equitably tolled that period for all the time between the Magistrate Judge's recommendation and its own order allowing amendment, thus bringing Wong's FTCA claim within the statutory deadline. Several years later, the Government moved for reconsideration of that ruling based on an intervening Ninth Circuit decision. This time, the District Court dismissed Wong's claim, reasoning that § 2401(b)'s 6-month time bar was jurisdictional and therefore not subject to equitable tolling. On appeal, the Ninth Circuit agreed to hear the case en banc to address an intra-circuit conflict on the issue. The en banc court held that the 6-month limit is not jurisdictional and that equitable tolling is available. Kwai Fun Wong v. Beebe,732 F.3d 1030 (2013). It then confirmed the District Court's prior ruling that the circumstances here justify tolling because Wong "exercis [ed] due diligence" in attempting to amend her complaint before the statutory deadline. Id.,at 1052.
The second case before us arises from a deadly highway accident. Andrew Booth was killed in 2005 when a car in which he was riding crossed through a cable median barrier and crashed into oncoming traffic. The following year, respondent Marlene June, acting on behalf of Booth's young son, filed a wrongful death action alleging that the State of Arizona and its contractor had negligently constructed and maintained the median barrier. Years into that state-court litigation, June contends, she discovered that the Federal Highway Administration (FHWA) had approved installation of the barrier knowing it had not been properly crash tested.
Relying on that new information, June presented a tort claim to the FHWA in 2010, more than five years after the accident. The FHWA denied the claim, and June promptly filed this action in federal district court. The court dismissed the suit because June had failed to submit her claim to the FHWA within two years of the collision. The FTCA's 2-year bar, the court ruled, is jurisdictional and therefore not subject to equitable tolling; accordingly, the court did not consider June's contention that tolling was proper because the Government had concealed its failure to require crash testing. On appeal, the Ninth Circuit reversed in light of its recent decision in Wong,thus holding that § 2401(b)'s 2-year deadline, like its 6-month counterpart, is not jurisdictional and may be tolled. 550 Fed.Appx. 505 (2013).
We granted certiorari in both cases, 573 U.S. ----, 134 S.Ct. 2873, 189 L.Ed.2d 831, 832 (2014), to resolve a circuit split about whether courts may equitably toll § 2401(b)'s two time limits. Compare, e.g., In re FEMA Trailer Formaldehyde Prods. Liability Litigation,646 F.3d 185, 190-191 (C.A.5 2011)(per curiam) (tolling not available), with Arteaga v. United States,711 F.3d 828, 832-833 (C.A.7 2013)(tolling allowed).We now affirm the Court of Appeals' rulings.
II
Irwin v. Department of Veterans Affairs,498 U.S. 89, 95, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990), sets out the framework for deciding "the applicability of equitable tolling in suits against the Government." In Irwin,we recognized that time bars in suits between privateparties are presumptively subject to equitable tolling. See id.,at 95-96, 111 S.Ct. 453.That means a court usually may pause the running of a limitations statute in private litigation when a party "has pursued his rights diligently but some extraordinary circumstance" prevents him from meeting a deadline. Lozano v. Montoya Alvarez,572 U.S. 1, ----, 134 S.Ct. 1224, 1231-1232, 188 L.Ed.2d 200 (2014). We held in Irwinthat "the same rebuttable presumption of equitable tolling" should also apply to suits brought against the United States under a statute waiving sovereign immunity. 498 U.S., at 95-96, 111 S.Ct. 453. Our old "ad hoc," law-by-law approach to determining the availability of tolling in those suits, we reasoned, had produced inconsistency and "unpredictability" without the offsetting virtue of enhanced "fidelity to the intent of Congress." Id.,at 95, 111 S.Ct. 453. Adopting the "general rule" used in private litigation, we stated, would "amount[ ] to little, if any, broadening" of a statutory waiver of immunity. Ibid.Accordingly, we thought such a presumption "likely to be a realistic assessment of legislative intent as well as a practically useful" rule of interpretation. Ibid.
A rebuttable presumption, of course, may be rebutted, so Irwindoes not end the matter. When enacting a time bar for a suit against the Government (as for one against a private party), Congress may reverse the usual rule if it chooses. See id.,at 96, 111 S.Ct. 453. The Government may therefore attempt to establish, through evidence relating to a particular statute of limitations, that Congress opted to forbid equitable tolling.
One way to meet that burden-and the way the Government pursues here-is to show that Congress made the time bar at issue jurisdictional.When that is so, a litigant's failure to comply with the bar deprives a court of all authority to hear a case. Hence, a court must enforce the limitation even if the other party has waived any timeliness objection. See Gonzalez v. Thaler,565 U.S. ----, ---- - ----, 132 S.Ct. 641, 648, 181 L.Ed.2d 619 (2012). And, more crucially here, a court must do so even if equitable considerations would support extending the prescribed time period. See John R. Sand & Gravel Co. v. United States,552 U.S. 130, 133-134, 128 S.Ct. 750, 169 L.Ed.2d 591 (2008).
Given those harsh consequences, the Government must clear a high bar to establish that a statute of limitations is jurisdictional. In recent years, we have repeatedly held that procedural rules, including time bars, cabin a court's power only if Congress has "clearly state[d]" as much. Sebelius v. Auburn Regional Medical Center,568 U.S. ----, ----, 133 S.Ct. 817, 824, 184 L.Ed.2d 627 (2013)(quoting Arbaugh v. Y & H Corp.,546 U.S. 500, 515, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006)); see Gonzalez,565 U.S., at ---- - ----, 132 S.Ct., at 648-649. "[A]bsent such a clear statement,... 'courts should treat the restriction as nonjurisdictional.' " Auburn Regional,568 U.S., at ---- - ----, 133 S.Ct., at 824(quoting Arbaugh,546 U.S., at 516, 126 S.Ct. 1235). That does not mean "Congress must incant magic words." Auburn Regional,568 U.S., at ----, 133 S.Ct., at 824. But traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences.
And in applying that clear statement rule, we have made plain that most time bars are nonjurisdictional. See, e.g.,id.,at ----, 133 S.Ct., at 825(noting the rarity of jurisdictional time limits). Time and again, we have described filing deadlines as "quintessential claim-processing rules," which "seek to promote the orderly progress of litigation," but do not deprive a court of authority to hear a case. Henderson v. Shinseki,562 U.S. 428, 435, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011); see Auburn Regional,568 U.S., at ----, 133 S.Ct., at 825; Scarborough v. Principi,541 U.S. 401, 413, 124 S.Ct. 1856, 158 L.Ed.2d 674 (2004). That is so, contrary to the dissent's suggestion, see post, at 1640, 1643 - 1644, even when the time limit is important (most are) and even when it is framed in mandatory terms (again, most are); indeed, that is so "however emphatic[ally]" expressed those terms may be, Henderson,562 U.S., at 439, 131 S.Ct. 1197(quoting Union Pacific R. Co. v. Locomotive Engineers,558 U.S. 67, 81, 130 S.Ct. 584, 175 L.Ed.2d 428 (2009)). Congress must do something special, beyond setting an exception-free deadline, to tag a statute of limitations as jurisdictional and so prohibit a court from tolling it.
In enacting the FTCA, Congress did nothing of that kind. It provided no clear statement indicating that § 2401(b)is the rare statute of limitations that can deprive a court of jurisdiction. Neither the text nor the context nor the legislative history indicates (much less does so plainly) that Congress meant to enact something other than a standard time bar.
Most important, § 2401(b)'s text speaks only to a claim's timeliness, not to a court's power. It states that "[a] tort claim against the United States shall be forever barred unless it is presented [to the agency] within two years... or unless action is begun within six months" of the agency's denial of the claim. That is mundane statute-of-limitations language, saying only what every time bar, by definition, must: that after a certain time a claim is barred. See infra,at 1634, n. 7 (citing many similarly worded limitations statutes). The language is mandatory-"shall" be barred-but (as just noted) that is true of most such statutes, and we have consistently found it of no consequence. See, e.g.,Gonzalez,565 U.S., at ---- - ----, 132 S.Ct., at 650-652. Too, the language might be viewed as emphatic-"forever" barred-but (again) we have often held that not to matter. See, e.g., Henderson,562 U.S., at 439, 131 S.Ct. 1197; Union Pacific,558 U.S., at 81, 130 S.Ct. 584. What matters instead is that § 2401(b)"does not speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts." Arbaugh,546 U.S., at 515, 126 S.Ct. 1235(quoting Zipes v. Trans World Airlines, Inc.,455 U.S. 385, 394, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982)). It does not define a federal court's jurisdiction over tort claims generally, address its authority to hear untimely suits, or in any way cabin its usual equitable powers. Section 2401(b), in short, "reads like an ordinary, run-of-the-mill statute of limitations," spelling out a litigant's filing obligations without restricting a court's authority. Holland v. Florida,560 U.S. 631, 647, 130 S.Ct. 2549, 177 L.Ed.2d 130 (2010).
Statutory context confirms that reading. This Court has often explained that Congress's separation of a filing deadline from a jurisdictional grant indicates that the time bar is not jurisdictional. See Henderson,562 U.S., at 439-440, 131 S.Ct. 1197; Reed Elsevier, Inc. v. Muchnick,559 U.S. 154, 164-165, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010); Arbaugh,546 U.S., at 515, 126 S.Ct. 1235; Zipes,455 U.S., at 393-394, 102 S.Ct. 1127. So too here. Whereas § 2401(b)houses the FTCA's time limitations, a different section of Title 28 confers power on federal district courts to hear FTCA claims. See § 1346(b)(1)("district courts... shall have exclusive jurisdiction" over tort claims against the United States). Nothing conditions the jurisdictional grant on the limitations periods, or otherwise links those separate provisions. Treating § 2401(b)'s time bars as jurisdictional would thus disregard the structural divide built into the statute.
Finally, even assuming legislative history alone could provide a clear statement (which we doubt), none does so here. The report accompanying the FTCA did not discuss whether § 2401(b)'s time limits are jurisdictional. See S.Rep. No. 1400, 79th Cong., 2d Sess., 33 (1946). And in amending § 2401(b)four times after its enactment, Congress declined again (four times over) to say anything specific about whether the statute of limitations imposes a jurisdictional bar. Congress thus failed to provide anything like the clear statement this Court has demanded before deeming a statute of limitations to curtail a court's power.
And so we wind up back where we started, with Irwin's "general rule" that equitable tolling is available in suits against the Government. 498 U.S., at 95, 111 S.Ct. 453. The justification the Government offers for departing from that principle fails: Section 2401(b)is not a jurisdictional requirement. The time limits in the FTCA are just time limits, nothing more. Even though they govern litigation against the Government, a court can toll them on equitable grounds.
III
The Government balks at that straightforward analysis, claiming that it overlooks two reasons for thinking § 2401(b)jurisdictional. But neither of those reasons is persuasive. Indeed, our precedents in this area foreclose them both.
A
The Government principally contends that § 2401(b)is jurisdictional because it includes the same language as the statute of limitations governing contract (and some other non-tort) suits brought against the United States under the Tucker Act. See § 2501.That statute long provided that such suits "shall be forever barred" if not filed within six years. Act of Mar. 3, 1863, § 10, 12 Stat. 767; see Act of Mar. 3, 1911, § 156, 36 Stat. 1139.And this Court repeatedly held that 6-year limit to be jurisdictional and thus not subject to equitable tolling. See Kendall v. United States,107 U.S. 123, 125-126, 2 S.Ct. 277, 27 L.Ed. 437 (1883); Finn v. United States,123 U.S. 227, 232, 8 S.Ct. 82, 31 L.Ed. 128 (1887); Soriano v. United States,352 U.S. 270, 273-274, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957). When Congress drafted the FTCA's time bar, it used the same "shall be forever barred" language (though selecting a shorter limitations period). "In these circumstances," the Government maintains, "the only reasonable conclusion is that Congress intended the FTCA's identically worded time limit to be a jurisdictional bar." Brief for United States in Wong 21-22. According to the Government, Congress wanted the FTCA to serve as "a tort-law analogue to the Tucker Act" and incorporated the words "shall be forever barred" to similarly preclude equitable tolling. Reply Brief in Wong 4. (The dissent relies heavily on the same argument. See post,at 1640 - 1642.)
But the Government takes too much from Congress's use in § 2401(b)of an utterly unremarkable phrase. The "shall be forever barred" formulation was a commonplace in federal limitations statutes for many decades surrounding Congress's enactment of the FTCA.And neither this Court nor any other has accorded those words talismanic power to render time bars jurisdictional. To the contrary, we have construed the very same "shall be forever barred" language in 15 U.S.C. § 15b, the Clayton Act's statute of limitations, to be subject to tolling; nothing in that provision, we found, "restrict[s] the power of the federal courts" to extend a limitations period when circumstances warrant. American Pipe & Constr. Co. v. Utah,414 U.S. 538, 559, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974); see Hardin v. City Title & Escrow Co.,797 F.2d 1037, 1040 (C.A.D.C.1986)(calling § 15(b) "a good example of a non-jurisdictional time limitation"
based on its text and separation from the Clayton Act's jurisdictional provisions).As the Government itself has previously acknowledged, referring to the "shall be forever barred" locution: "[T]hat type of language has more to do with the legal rhetoric at the time the statute was passed" than with anything else, and should not "make [ ] a difference" to the jurisdictional analysis. Tr. of Oral Arg. in Irwin,O.T. 1990, No. 89-5867, p. 30. Or, put just a bit differently: Congress's inclusion of a phrase endemic to limitations statutes of that era, at least some of which allow tolling, cannot provide the requisite clear statement that a time bar curtails a court's authority.
Indeed, in two decisions directly addressing the Tucker Act's statute of limitations, this Court dismissed the idea that the language the Government relies on here has jurisdictional significance. Twice we described the words in that provision as not meaningfully different from those in a nonjurisdictional statute of limitations. And twice we made clear that the jurisdictional status of the Tucker Act's time bar has precious little to do with its phrasing.
We first did so in Irwin. Using our newly minted presumption, see supra,at 1631, we decided there that the limitations period governing Title VII suits against the Government, 42 U.S.C. § 2000e-16(c) (1988 ed.), allowed equitable tolling. In reaching that conclusion, we compared § 2000e-16(c)'s text (then stating that an employee "may file a civil action" within 30 days of an agency's denial of her claim) with the language of the Tucker Act's time bar. We noted that we had formerly held the Tucker Act's limitations statute to "jurisdictionally bar[ ]" late claims, and we acknowledged the possibility of justifying that different treatment by characterizing its "language [as] more stringent than" § 2000e-16(c)'s. Irwin,498 U.S., at 94-95, 111 S.Ct. 453. But we rejected that reasoning, instead finding that the two formulations were materially alike. "[W]e are not persuaded," we stated, "that the difference between them is enough to manifest a different congressional intent with respect to the availability of equitable tolling." Id.,at 95, 111 S.Ct. 453. Leaving for another day the question of what did account for the jurisdictional status of the Tucker Act's time bar, the Court thus ruled out reliance on its language. In other words, on the core question the Government raises here-whether the phrase "shall be forever barred," as used in both the Tucker Act and the FTCA, manifests a congressional decision to preclude tolling-Irwinsaid no.
More recently, John R. Sandreaffirmed that conclusion, even as it refused to overturn our century-old view that the Tucker Act's time bar is jurisdictional. No less than three times, John R. Sandapprovingly repeated Irwin's statement that the textual differences between the Tucker Act's time bar and § 2000e-16(c)were insignificant-i.e.,that the language of the two provisions could not explain why the former was jurisdictional and the latter not. See 552 U.S., at 137, 139, 128 S.Ct. 750(calling the provisions "linguistically similar," "similar... in language," and "similarly worded"). But if that were so, John R. Sandasked, why not hold that the Tucker Act's time limit, like § 2000e-16(c), is nonjurisdictional? The answer came down to two words: stare decisis. The Tucker Act's bar was different because it had been the subject of "a definitive earlier interpretation." Id.,at 138, 128 S.Ct. 750; see id.,at 137, 128 S.Ct. 750; supra,at 1634. And for that reason alone, John R. Sandleft in place our prior construction of the Tucker Act's time limit. See 552 U.S., at 139, 128 S.Ct. 750(observing, in Justice Brandeis's words, that "it is more important that" the rule "be settled than that it be settled right" (quoting Burnet v. Coronado Oil & Gas Co.,285 U.S. 393, 406, 52 S.Ct. 443, 76 L.Ed. 815 (1932)(dissenting opinion))). What is special about the Tucker Act's deadline, John R. Sandrecognized, comes merely from this Court's prior rulings, not from Congress's choice of wording.
The Government thus cannot show that the phrase "shall be forever barred" in § 2401(b)plainly signifies a jurisdictional statute, as our decisions require. See supra,at 1632. Unlike in John R. Sand,here stare decisisplays no role: We have not previously considered whether § 2401(b)restricts a court's authority. What we have done is to say, again and again, that the core language in that provision has no jurisdictional significance. It is materially indistinguishable from the language in one nonjurisdictional time bar (i.e.,§ 2000e-16(c)). See Irwin,498 U.S., at 95, 111 S.Ct. 453; John R. Sand,552 U.S., at 137, 139, 128 S.Ct. 750. And it is identical to the language in another (i.e., 15 U.S.C. § 15b). See American Pipe,414 U.S., at 559, 94 S.Ct. 756. Yes, we have held that the Tucker Act's time bar, which includes those same words, constrains a court's power to hear late claims. But as we explained in Irwin,that is not because the phrase itself "manifest[s] a... congressional intent with respect to the availability of equitable tolling." 498 U.S., at 95, 111 S.Ct. 453. The words on which the Government pins its hopes are just the words of a limitations statute of a particular era. And nothing else supports the Government's claim that Congress, when enacting the FTCA, wanted to incorporate this Court's view of the Tucker Act's time bar-much less that Congress expressed that purported intent with the needed clear statement.
B
The Government next contends that at the time of the FTCA's enactment, Congress thought that everylimitations statute applying to suits against the United States, however framed or worded, cut off a court's jurisdiction over untimely claims. On that view, the particular language of those statutes makes no difference. All that matters is that such time limits function as conditions on the Government's waiver of sovereign immunity. In that era-indeed, up until Irwinwas decided-those conditions were generally supposed to be "strictly observed." Soriano,352 U.S., at 276, 77 S.Ct. 269. That meant, the Government urges, that all time limits on actions against the United States "carr[ied] jurisdictional consequences." Brief for United States in Wong 34. Accordingly, the Government concludes, Congress "would have expected courts to apply [§ 2401(b)] as a jurisdictional requirement-just as conditions on waivers of sovereign immunity had always been applied." Id.,at 32.
Irwin,however, forecloses that argument. After all, Irwinalso considered a pre-Irwintime bar attached to a waiver of sovereign immunity. The Government argued there-anticipating its claim here-that because § 2000e-16(c)'s statute of limitations conditioned such a waiver, it must be jurisdictional and not subject to equitable tolling. See Brief for Respondents 6, 10, 14, 19, and Tr. of Oral Arg. 31-37, inIrwin,O.T. 1990, No. 89-5867. But Irwindisagreed, applying the opposite presumption to a time limit passed two decades earlier. See 498 U.S., at 94-96, 111 S.Ct. 453; supra,at 1631. Justice White protested, much as the Government does now, that at the time of § 2000e-16(c)'s enactment, limitations statutes for suits against the Government were "strictly observed" and not amenable to tolling. 498 U.S., at 97, 111 S.Ct. 453(opinion concurring in part and concurring in judgment) (quoting Soriano,352 U.S., at 276, 77 S.Ct. 269); see 498 U.S., at 99, n. 2, 111 S.Ct. 453. How could an earlier Congress, Justice White asked, have "had in mind the Court's present departure from that longstanding rule"? Ibid.; see post,at 1643 (asking a variant of the same question). But the IrwinCourt was undeterred. The Court noted that it had not applied the former rule so consistently as Justice White suggested. See 498 U.S., at 94, 111 S.Ct. 453. And the Court doubted that the former approach so well reflected congressional intent: On the contrary, because equitable tolling "amounts to little, if any, broadening of the congressional waiver," we thought that a rule generally allowing tolling is the more "realistic assessment of legislative intent." Id.,at 95, 111 S.Ct. 453; see supra,at 1631. For those reasons, the Court declined to count time bars as jurisdictional merely because they condition waivers of immunity-even if Congress enacted the deadline when the Court interpreted limitations statutes differently.
In the years since, this Court has repeatedly followed Irwin's lead. We have applied Irwinto pre-Irwinstatutes, just as we have to statutes that followed in that decision's wake. See Scarborough,541 U.S., at 420-422, 124 S.Ct. 1856; Franconia Associates v. United States,536 U.S. 129, 145, 122 S.Ct. 1993, 153 L.Ed.2d 132 (2002). To be sure, Irwin's presumption is rebuttable. But the rebuttal cannot rely on what Irwinitself deemed irrelevant-that Congress passed the statute in an earlier era, when this Court often attached jurisdictional consequence to conditions on waivers of sovereign immunity. Rather, the rebuttal must identify something distinctive about the time limit at issue, whether enacted then or later-a reason for thinking Congress wanted that limitations statute (not all statutes passed in an earlier day) to curtail a court's jurisdiction. On the Government's contrary view, Irwinwould effectively become only a prospective decision. Nothing could be less consonant with Irwin's ambition to adopt a "general rule to govern the applicability of equitable tolling in suits against the Government." 498 U.S., at 95, 111 S.Ct. 453.
And the Government's claim is peculiarly inapt as applied to § 2401(b)because all that is special about the FTCA cuts in favor ofallowing equitable tolling. As compared to other waivers of immunity (prominently including the Tucker Act), the FTCA treats the United States more like a commoner than like the Crown. The FTCA's jurisdictional provision states that courts may hear suits "under circumstances where the United States, if a private person, would be liable to the claimant." 28 U.S.C. § 1346(b). And when defining substantive liability for torts, the Act reiterates that the United States is accountable "in the same manner and to the same extent as a private individual." § 2674. In keeping with those provisions, this Court has often rejected the Government's calls to cabin the FTCA on the ground that it waives sovereign immunity-and indeed, the Court did so in the years immediately after the Act's passage, even as it was construing otherwaivers of immunity narrowly. See, e.g., United States v. Aetna Casualty & Surety Co.,338 U.S. 366, 383, 70 S.Ct. 207, 94 L.Ed. 171 (1949); Indian Towing Co. v. United States,350 U.S. 61, 65, 76 S.Ct. 122, 100 L.Ed. 48 (1955); Rayonier Inc. v. United States,352 U.S. 315, 319-320, 77 S.Ct. 374, 1 L.Ed.2d 354 (1957). There is no reason to do differently here. As Irwinrecognized, treating the Government like a private person means (among other things) permitting equitable tolling. See 498 U.S., at 95-96, 111 S.Ct. 453. So in stressing the Government's equivalence to a private party, the FTCA goes further than the typical statute waiving sovereign immunity to indicate that its time bar allows a court to hear late claims.
IV
Our precedents make this a clear-cut case. Irwinrequires an affirmative indication from Congress that it intends to preclude equitable tolling in a suit against the Government. See 498 U.S., at 95-96, 111 S.Ct. 453. Congress can provide that signal by making a statute of limitations jurisdictional. But that requires its own plain statement; otherwise, we treat a time bar as a mere claims-processing rule. See Auburn Regional,568 U.S., at ----, ----, 133 S.Ct., at 823-824, 825. Congress has supplied no such statement here. As this Court has repeatedly stated, nothing about § 2401(b)'s core language is special; "shall be forever barred" is an ordinary (albeit old-fashioned) way of setting a deadline, which does not preclude tolling when circumstances warrant. See Irwin,498 U.S., at 95-96, 111 S.Ct. 453; John R. Sand,552 U.S., at 137, 139, 128 S.Ct. 750; American Pipe,414 U.S., at 558-559, 94 S.Ct. 756. And it makes no difference that a time bar conditions a waiver of sovereign immunity, even if Congress enacted the measure when different interpretive conventions applied; that is the very point of this Court's decision to treat time bars in suits against the Government, whenever passed, the same as in litigation between private parties. See Irwin,498 U.S., at 95-96, 111 S.Ct. 453; Scarborough,541 U.S., at 420-422, 124 S.Ct. 1856;Franconia,536 U.S., at 145, 122 S.Ct. 1993. Accordingly, we hold that the FTCA's time bars are nonjurisdictional and subject to equitable tolling.
We affirm the judgments of the U.S. Court of Appeals for the Ninth Circuit and remand the cases for further proceedings consistent with this opinion. On remand in June,it is for the District Court to decide whether, on the facts of her case, June is entitled to equitable tolling.
It is so ordered.
Justice ALITO, with whom THE CHIEF JUSTICE, Justice SCALIA, and Justice THOMAS join, dissenting.
Our task in these cases is to interpret and enforce a federal statute that specifies the limits of the waiver of sovereign immunity in the Federal Tort Claims Act (FTCA). The FTCA waives the immunity of the United States for certain tort claims but provides that any "tort claim against the United States shall be forever barred unless" it is filed with the appropriate agency "within two years after such claim accrues" and in federal court "within six months after" the agency's final decision.
28 U.S.C. § 2401(b). The statutory text, its historical roots, and more than a century of precedents show that this absolute bar is not subject to equitable tolling. I would enforce the statute as Congress intended and reverse.
I
The FTCA is a waiver of sovereign immunity and must be understood in that context. In the 19th and early 20th centuries, Congress was reluctant to allow individual tort claims against the United States. Instead, it granted relief to individuals through private laws enacted
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
We granted certiorari in this case, 404 U. S. 821, to consider questions seemingly presented under the constitutional guarantee against double jeopardy. After briefing and oral argument, it now appears that those questions are so interrelated with rules of criminal pleading peculiar to the State of Tennessee, the constitutionality of which is not at issue, as not to warrant the exercise of the certiorari jurisdiction of this Court. See, e. g., Wilson v. State, 200 Tenn. 309, 292 S. W. 2d 188 (1956); Young v. State, 185 Tenn. 596, 206 S. W. 2d 805 (1947). See U. S. Sup. Ct. Rule 19 (1)(a). The writ is, therefore, dismissed as having been improvidently granted.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
II
Together with the right to vote, those who wrote our Constitution considered the right to trial by jury "the heart and lungs, the mainspring and the center wheel" of our liberties, without which "the body must die; the watch must run down; the government must become arbitrary." Letter from Clarendon to W. Pym (Jan. 27, 1766), in 1 Papers of John Adams 169 (R. Taylor ed. 1977). Just as the right to vote sought to preserve the people's authority over their government's executive and legislative functions, the right to a jury trial sought to preserve the people's authority over its judicial functions. J. Adams, Diary Entry (Feb. 12, 1771), in 2 Diary and Autobiography of John Adams 3 (L. Butterfield ed. 1961); see also 2 J. Story, Commentaries on the Constitution § 1779, pp. 540-541 (4th ed. 1873).
Toward that end, the Framers adopted the Sixth Amendment's promise that "[i]n all criminal prosecutions the accused shall enjoy the right to a speedy and public trial, by an impartial jury." In the Fifth Amendment, they added that no one may be deprived of liberty without "due process of law." Together, these pillars of the Bill of Rights ensure that the government must prove to a jury every criminal charge beyond a reasonable doubt, an ancient rule that has "extend[ed] down centuries." Apprendi v. New Jersey, 530 U.S. 466, 477, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000).
But when does a "criminal prosecution" arise implicating the right to trial by jury beyond a reasonable doubt? At the founding, a "prosecution" of an individual simply referred to "the manner of [his] formal accusation." 4 W. Blackstone, Commentaries on the Laws of England 298 (1769) (Blackstone); see also N. Webster, An American Dictionary of the English Language (1st ed. 1828) (defining "prosecution" as "the process of exhibiting formal charges against an offender before a legal tribunal"). And the concept of a "crime" was a broad one linked to punishment, amounting to those "acts to which the law affixes... punishment," or, stated differently, those "element[s] in the wrong upon which the punishment is based." 1 J. Bishop, Criminal Procedure §§ 80, 84, pp. 51-53 (2d ed. 1872) (Bishop); see also J. Archbold, Pleading and Evidence in Criminal Cases *106 (5th Am. ed. 1846) (Archbold) (discussing a crime as including any fact that "annexes a higher degree of punishment"); Blakely v. Washington, 542 U.S. 296, 309, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004) ; Apprendi, 530 U.S. at 481, 120 S.Ct. 2348.
Consistent with these understandings, juries in our constitutional order exercise supervisory authority over the judicial function by limiting the judge's power to punish. A judge's authority to issue a sentence derives from, and is limited by, the jury's factual findings of criminal conduct. In the early Republic, if an indictment or "accusation... lack[ed] any particular fact which the laws ma[d]e essential to the punishment," it was treated as "no accusation" at all. 1 Bishop § 87, at 55; see also 2 M. Hale, Pleas of the Crown *170 (1736); Archbold *106. And the "truth of every accusation" that was brought against a person had to "be confirmed by the unanimous suffrage of twelve of his equals and neighbours." 4 Blackstone 343. Because the Constitution's guarantees cannot mean less today than they did the day they were adopted, it remains the case today that a jury must find beyond a reasonable doubt every fact " 'which the law makes essential to [a] punishment' " that a judge might later seek to impose. Blakely, 542 U.S. at 304, 124 S.Ct. 2531 (quoting 1 Bishop § 87, at 55).
For much of our history, the application of this rule of jury supervision proved pretty straightforward. At common law, crimes tended to carry with them specific sanctions, and "once the facts of the offense were determined by the jury, the judge was meant simply to impose the prescribed sentence." Alleyne v. United States, 570 U.S. 99, 108, 133 S.Ct. 2151, 186 L.Ed.2d 314 (2013) (plurality opinion) (internal quotation marks and brackets omitted). Even when judges did enjoy discretion to adjust a sentence based on judge-found aggravating or mitigating facts, they could not "'swell the penalty above what the law ha[d] provided for the acts charged' " and found by the jury. Apprendi, 530 U.S. at 519, 120 S.Ct. 2348 (THOMAS, J., concurring) (quoting 1 Bishop § 85, at 54); see also 1 J. Bishop, Criminal Law §§ 933-934(1), p. 690 (9th ed. 1923) ("[T]he court determines in each case what within the limits of the law shall be the punishment" (emphasis added)). In time, of course, legislatures adopted new laws allowing judges or parole boards to suspend part (parole) or all (probation) of a defendant's prescribed prison term and afford him a period of conditional liberty as an "act of grace," subject to revocation. Escoe v. Zerbst, 295 U.S. 490, 492, 55 S.Ct. 818, 79 L.Ed. 1566 (1935) ; see Anderson v. Corall, 263 U.S. 193, 196-197, 44 S.Ct. 43, 68 L.Ed. 247 (1923). But here, too, the prison sentence a judge or parole board could impose for a parole or probation violation normally could not exceed the remaining balance of the term of imprisonment already authorized by the jury's verdict. So even these developments did not usually implicate the historic concerns of the Fifth and Sixth Amendments. See Blakely, 542 U.S. at 309, 124 S.Ct. 2531 ; Apprendi, 530 U.S. at 498, 120 S.Ct. 2348 (Scalia, J., concurring); 4 Atty. Gen.'s Survey of Release Proc. 22 (1939); 2 id., at 333.
More recent legislative innovations have raised harder questions. In Apprendi, for example, a jury convicted the defendant of a gun crime that carried a maximum prison sentence of 10 years. But then a judge sought to impose a longer sentence pursuant to a statute that authorized him to do so if he found, by a preponderance of the evidence, that the defendant had committed the crime with racial bias. Apprendi held this scheme unconstitutional. "[A]ny fact that increases the penalty for a crime beyond the prescribed statutory maximum," this Court explained, "must be submitted to a jury, and proved beyond a reasonable doubt" or admitted by the defendant. 530 U.S. at 490, 120 S.Ct. 2348. Nor may a State evade this traditional restraint on the judicial power by simply calling the process of finding new facts and imposing a new punishment a judicial "sentencing enhancement." Id., at 495, 120 S.Ct. 2348. "[T]he relevant inquiry is one not of form, but of effect-does the required [judicial] finding expose the defendant to a greater punishment than that authorized by the jury's guilty verdict?" Id., at 494, 120 S.Ct. 2348.
While "trial practices ca[n] change in the course of centuries and still remain true to the principles that emerged from the Framers' " design, id., at 483, 120 S.Ct. 2348, in the years since Apprendi this Court has not hesitated to strike down other innovations that fail to respect the jury's supervisory function. See, e.g., Ring v. Arizona, 536 U.S. 584, 122 S.Ct. 2428, 153 L.Ed.2d 556 (2002) (imposition of death penalty based on judicial factfinding); Blakely, 542 U.S. at 303, 124 S.Ct. 2531 (mandatory state sentencing guidelines); Cunningham v. California, 549 U.S. 270, 127 S.Ct. 856, 166 L.Ed.2d 856 (2007) (same); United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005) (mandatory federal sentencing guidelines); Southern Union Co. v. United States, 567 U.S. 343, 132 S.Ct. 2344, 183 L.Ed.2d 318 (2012) (imposition of criminal fines based on judicial factfinding).
Still, these decisions left an important gap. In Apprendi, this Court recognized that " '[i]t is unconstitutional for a legislature to remove from the jury the assessment of facts that increase the prescribed range of penalties.' "
530 U.S. at 490, 120 S.Ct. 2348. But by definition, a range of punishments includes not only a maximum but a minimum. And logically it would seem to follow that any facts necessary to increase a person's minimum punishment (the "floor") should be found by the jury no less than facts necessary to increase his maximum punishment (the "ceiling"). Before Apprendi, however, this Court had held that facts elevating the minimum punishment need not be proven to a jury beyond a reasonable doubt. McMillan v. Pennsylvania, 477 U.S. 79, 106 S.Ct. 2411, 91 L.Ed.2d 67 (1986) ; see also Harris v. United States, 536 U.S. 545, 122 S.Ct. 2406, 153 L.Ed.2d 524 (2002) (adhering to McMillan ).
Eventually, the Court confronted this anomaly in Alleyne. There, a jury convicted the defendant of a crime that ordinarily carried a sentence of five years to life in prison. But a separate statutory "sentencing enhancement" increased the mandatory minimum to seven years if the defendant "brandished" the gun. At sentencing, a judge found by a preponderance of the evidence that the defendant had indeed brandished a gun and imposed the mandatory minimum 7-year prison term.
This Court reversed. Finding no basis in the original understanding of the Fifth and Sixth Amendments for McMillan and Harris, the Court expressly overruled those decisions and held that "the principle applied in Apprendi applies with equal force to facts increasing the mandatory minimum" as it does to facts increasing the statutory maximum penalty. Alleyne, 570 U.S. at 112, 133 S.Ct. 2151. Nor did it matter to Alleyne's analysis that, even without the mandatory minimum, the trial judge would have been free to impose a 7-year sentence because it fell within the statutory sentencing range authorized by the jury's findings. Both the "floor" and "ceiling" of a sentencing range "define the legally prescribed penalty." Ibid. And under our Constitution, when "a finding of fact alters the legally prescribed punishment so as to aggravate it" that finding must be made by a jury of the defendant's peers beyond a reasonable doubt. Id., at 114, 133 S.Ct. 2151. Along the way, the Court observed that there can be little doubt that "[e]levating the low end of a sentencing range heightens the loss of liberty associated with the crime: The defendant's expected punishment has increased as a result of the narrowed range and the prosecution is empowered, by invoking the mandatory minimum, to require the judge to impose a higher punishment than he might wish." Id., at 113, 133 S.Ct. 2151 (internal quotation marks omitted).
By now, the lesson for our case is clear. Based on the facts reflected in the jury's verdict, Mr. Haymond faced a lawful prison term of between zero and 10 years under § 2252(b)(2). But then a judge-acting without a jury and based only on a preponderance of the evidence-found that Mr. Haymond had engaged in additional conduct in violation of the terms of his supervised release. Under § 3583(k), that judicial factfinding triggered a new punishment in the form of a prison term of at least five years and up to life. So just like the facts the judge found at the defendant's sentencing hearing in Alleyne, the facts the judge found here increased "the legally prescribed range of allowable sentences" in violation of the Fifth and Sixth Amendments. Id., at 115, 133 S.Ct. 2151. In this case, that meant Mr. Haymond faced a minimum of five years in prison instead of as little as none. Nor did the absence of a jury's finding beyond a reasonable doubt only infringe the rights of the accused; it also divested the " 'people at large' "-the men and women who make up a jury of a defendant's peers-of their constitutional authority to set the metes and bounds of judicially administered criminal punishments. Blakely, 542 U.S. at 306, 124 S.Ct. 2531 (quoting Letter XV by the Federal Farmer (Jan. 18, 1788), in 2 The Complete Anti-Federalist 315, 320 (H. Storing ed. 1981)).
III
In reply, the government and the dissent offer many and sometimes competing arguments, but we find none persuasive.
A
The government begins by pointing out that Alleyne arose in a different procedural posture. There, the trial judge applied a "sentencing enhancement" based on his own factual findings at the defendant's initial sentencing hearing; meanwhile, Mr. Haymond received his new punishment from a judge at a hearing to consider the revocation of his term of supervised release. This procedural distinction makes all the difference, we are told, because the Sixth Amendment's jury trial promise applies only to "criminal prosecutions," which end with the issuance of a sentence and do not extend to "postjudgment sentence-administration proceedings." Brief for United States 24; see also post, at 2393 - 2395 (ALITO, J., dissenting) (echoing this argument).
But we have been down this road before. Our precedents, Apprendi, Blakely, and Alleyne included, have repeatedly rejected efforts to dodge the demands of the Fifth and Sixth Amendments by the simple expedient of relabeling a criminal prosecution a "sentencing enhancement." Calling part of a criminal prosecution a "sentence modification" imposed at a "postjudgment sentence-administration proceeding" can fare no better. As this Court has repeatedly explained, any "increase in a defendant's authorized punishment contingent on the finding of a fact" requires a jury and proof beyond a reasonable doubt "no matter" what the government chooses to call the exercise. Ring, 536 U.S. at 602, 122 S.Ct. 2428.
To be sure, and as the government and dissent emphasize, founding-era prosecutions traditionally ended at final judgment. But at that time, generally, "questions of guilt and punishment both were resolved in a single proceeding" subject to the Fifth and Sixth Amendment's demands. Douglass, Confronting Death: Sixth Amendment Rights at Capital Sentencing, 105 Colum. L. Rev. 1967, 2011 (2005) ; see also supra, at 7. Over time, procedures changed as legislatures sometimes bifurcated criminal prosecutions into separate trial and penalty phases. But none of these developments licensed judges to sentence individuals to punishments beyond the legal limits fixed by the facts found in the jury's verdict. See ibid. To the contrary, we recognized in Apprendi and Alleyne, a "criminal prosecution" continues and the defendant remains an "accused" with all the rights provided by the Sixth Amendment, until a final sentence is imposed. See Apprendi, 530 U.S. at 481-482, 120 S.Ct. 2348.
Today, we merely acknowledge that an accused's final sentence includes any supervised release sentence he may receive. Nor in saying that do we say anything new: This Court has already recognized that supervised release punishments arise from and are "treat[ed]... as part of the penalty for the initial offense." Johnson v. United States, 529 U.S. 694, 700, 120 S.Ct. 1795, 146 L.Ed.2d 727 (2000). The defendant receives a term of supervised release thanks to his initial offense, and whether that release is later revoked or sustained, it constitutes a part of the final sentence for his crime. As at the initial sentencing hearing, that does not mean a jury must find every fact in a revocation hearing that may affect the judge's exercise of discretion within the range of punishments authorized by the jury's verdict. But it does mean that a jury must find any facts that trigger a new mandatory minimum prison term.
This logic respects not only our precedents, but the original meaning of the jury trial right they seek to protect. The Constitution seeks to safeguard the people's control over the business of judicial punishments by ensuring that any accusation triggering a new and additional punishment is proven to the satisfaction of a jury beyond a reasonable doubt. By contrast, the view the government and dissent espouse would demote the jury from its historic role as "circuitbreaker in the State's machinery of justice," Blakely, 542 U.S. at 306, 124 S.Ct. 2531, to " 'low-level gatekeeping,' " Booker, 543 U.S. at 230, 125 S.Ct. 738. If the government and dissent were correct, Congress could require anyone convicted of even a modest crime to serve a sentence of supervised release for the rest of his life. At that point, a judge could try and convict him of any violation of the terms of his release under a preponderance of the evidence standard, and then sentence him to pretty much anything. At oral argument, the government even conceded that, under its theory, a defendant on supervised release would have no Sixth Amendment right to a jury trial when charged with an infraction carrying the death penalty. We continue to doubt whether even Apprendi's fiercest critics "would advocate" such an "absurd result." Blakely, 542 U.S. at 306, 124 S.Ct. 2531.
B
Where it previously suggested that Mr. Haymond's supervised release revocation proceeding was entirely divorced from his criminal prosecution, the government next turns around and suggests that Mr. Haymond's sentence for violating the terms of his supervised release was actually fully authorized by the jury's verdict. See also post, at 2389 - 2390 (ALITO, J., dissenting) (proposing a similar theory). After all, the government observes, on the strength of the jury's findings the judge was entitled to impose as punishment a term of supervised release; and, in turn, that term of supervised release was from the outset always subject to the possibility of judicial revocation and § 3583(k)'s mandatory prison sentence. Presto: Sixth Amendment problem solved.
But we have been down this road too. In Apprendi and Alleyne, the jury's verdict triggered a statute that authorized a judge at sentencing to increase the defendant's term of imprisonment based on judge-found facts. This Court had no difficulty rejecting that scheme as an impermissible evasion of the historic rule that a jury must find all of the facts necessary to authorize a judicial punishment. See Alleyne, 570 U.S. at 117, 133 S.Ct. 2151 ; Apprendi, 530 U.S. at 483, 120 S.Ct. 2348. And what was true there can be no less true here: A mandatory minimum 5-year sentence that comes into play only as a result of additional judicial factual findings by a preponderance of the evidence cannot stand. This Court's observation that "postrevocation sanctions" are "treat[ed]... as part of the penalty for the initial offense," Johnson, 529 U.S. at 700, 120 S.Ct. 1795, only highlights the constitutional infirmity of § 3583(k) : Treating Mr. Haymond's 5-year mandatory minimum prison term as part of his sentence for his original offense makes clear that it mirrors the unconstitutional sentencing enhancement in Alleyne. See supra, at 2379 - 2380.
Notice, too, that following the government down this road would lead to the same destination as the last: If the government were right, a jury's conviction on one crime would (again) permit perpetual supervised release and allow the government to evade the need for another jury trial on any other offense the defendant might commit, no matter how grave the punishment. And if there's any doubt about the incentives such a rule would create, consider this case. Instead of seeking a revocation of supervised release, the government could have chosen to prosecute Mr. Haymond under a statute mandating a term of imprisonment of 10 to 20 years for repeat child-pornography offenders. 18 U.S.C. § 2252(b)(2). But why bother with an old-fashioned jury trial for a new crime when a quick-and-easy "supervised release revocation hearing" before a judge carries a penalty of five years to life? This displacement of the jury's traditional supervisory role, under cover of a welter of new labels, exemplifies the "Framers' fears that the jury right could be lost not only by gross denial, but by erosion." Apprendi, 530 U.S. at 483, 120 S.Ct. 2348 (internal quotation marks omitted).
C
Pivoting once more, the government and the dissent seem to accept for argument's sake that "postjudgment sentence-administration proceedings" can implicate the Fifth and Sixth Amendments. See post, at 2376 - 2379. But, they contend, § 3583(k)'s supervised release revocation procedures are practically identical to historic parole and probation revocation procedures. See, e.g., Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973) ; Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). And, because those other procedures have usually been understood to comport with the Fifth and Sixth Amendments, they submit, § 3583(k)'s procedures must do so as well.
But this argument, too, rests on a faulty premise, overlooking a critical difference between § 3583(k) and traditional parole and probation practices. Before the Sentencing Reform Act of 1984, a federal criminal defendant could serve as little as a third of his assigned prison term before becoming eligible for release on parole. See 18 U.S.C. § 4205(a) (1982 ed.). Or he might avoid prison altogether in favor of probation. See § 3561 (1982 ed.). If the defendant violated the terms of his parole or probation, a judge could send him to prison. But either way and as we've seen, a judge generally could sentence the defendant to serve only the remaining prison term authorized by statute for his original crime of conviction. See supra, at 2376 - 2377; Morrissey, 408 U.S. at 477, 92 S.Ct. 2593 ("The essence of parole is release from prison, before the completion of sentence" (emphasis added)). Thus, a judge could not imprison a defendant for any longer than the jury's factual findings allowed-a result entirely harmonious with the Fifth and Sixth Amendments. See Apprendi, 530 U.S. at 498, 120 S.Ct. 2348 (Scalia, J., concurring); Blakely, 542 U.S. at 309, 124 S.Ct. 2531.
All that changed beginning in 1984. That year, Congress overhauled federal sentencing procedures to make prison terms more determinate and abolish the practice of parole. Now, when a defendant is sentenced to prison he generally must serve the great bulk of his assigned term. In parole's place, Congress established the system of supervised release. But "[u]nlike parole," supervised release wasn't introduced to replace a portion of the defendant's prison term, only to encourage rehabilitation after the completion of his prison term. United States Sentencing Commission, Guidelines Manual ch. 7, pt. A(2)(b) (Nov. 2012); see Doherty, Indeterminate Sentencing Returns: The Invention of Supervised Release, 88 N. Y. U. L. Rev. 958, 1024 (2013).
In this case, that structural difference bears constitutional consequences. Where parole and probation violations generally exposed a defendant only to the remaining prison term authorized for his crime of conviction, as found by a unanimous jury under the reasonable doubt standard, supervised release violations subject to § 3583(k) can, at least as applied in cases like ours, expose a defendant to an additional mandatory minimum prison term well beyond that authorized by the jury's verdict-all based on facts found by a judge by a mere preponderance of the evidence. In fact, § 3583(k) differs in this critical respect not only from parole and probation; it also represents a break from the supervised release practices that Congress authorized in § 3583(e)(3) and that govern most federal criminal proceedings today. Unlike all those procedures, § 3583(k) alone requires a substantial increase in the minimum sentence to which a defendant may be exposed based only on judge-found facts under a preponderance standard. And, as we explained in Alleyne and reaffirm today, that offends the Fifth and Sixth Amendments' ancient protections.
D
The dissent suggests an analogy between revocation under § 3583(k) and prison disciplinary procedures that do not normally require the involvement of a jury. Post, at 2396 - 2397. But the analogy is a strained one: While the Sixth Amendment surely does not require a jury to find every fact that the government relies on to adjust the terms of a prisoner's confinement (say, by reducing some of his privileges as a sanction for violating the prison rules), that does not mean the government can send a free man back to prison for years based on judge-found facts.
Again, practice in the early Republic confirms this. At that time, a term of imprisonment may have been understood as encompassing a degree of summary discipline for alleged infractions of prison regulations without the involvement of a jury. See F. Gray, Prison Discipline in America 22-23, 48-49 (1848). But that does not mean any sanction, no matter how serious, would have been considered part and parcel of the original punishment. On the contrary, the few courts that grappled with this issue seem to have recognized that "infamous" punishments, such as a substantial additional term in prison, might implicate the right to trial by jury. See, e.g., Gross v. Rice, 71 Me. 241, 246-252 (1880) ; In re Edwards, 43 N.J.L. 555, 557-558 (1881).
What's more, a tradition of summary process in prison, where administrators face the "formidable task" of controlling a large group of potentially unruly prisoners, does not necessarily support the use of such summary process outside the prison walls. O'Lone v. Estate of Shabazz, 482 U.S. 342, 353, 107 S.Ct. 2400, 96 L.Ed.2d 282 (1987) ; cf. Morrissey, 408 U.S. at 482, 92 S.Ct. 2593. We have long held that prison regulations that impinge on the constitutional rights inmates would enjoy outside of prison must be "reasonably related to legitimate penological interests" in managing the prison. Turner v. Safley, 482 U.S. 78, 89, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1987). That approach, we have said, ensures that corrections officials can " 'anticipate security problems' " and address " 'the intractable problems of prison administration.' " O'Lone, 482 U.S. at 349, 107 S.Ct. 2400 ; see also Dahne v. Richey, 587 U. S. ----, ----, 139 S.Ct. 1531, 1532, --- L.Ed.2d ---- (2019) (ALITO, J., dissenting from denial of certiorari) ("To maintain order, prison authorities may insist on compliance with rules that would not be permitted in the outside world"). Whether or not the Turner test applies to prisoners' jury trial rights, we certainly have never extended it to the jury rights of persons out in the world who retain the core attributes of liberty. Cf. Griffin v. Wisconsin, 483 U.S. 868, 874, n. 2, 107 S.Ct. 3164, 97 L.Ed.2d 709 (1987) (reserving question whether Turner applies to probation). Even the government has not asked us to do so today.
E
Finally, much of the dissent is consumed by what it calls the "potentially revolutionary" consequences of our opinion. Post, at 2396 - 2397; see also post, at 2394, 2399 (calling our opinion "inexcusable," "unpardonabl[e]," and "dangerous"); post, at 2388 (our opinion threatens to bring "the whole concept of supervised release... crashing down"); post, at 2391 (under our opinion, "the whole system of supervised release would be like a 40-ton truck speeding down a steep mountain road with no brakes"). But what agitates the dissent so much is an issue not presented here: whether all supervised release proceedings comport with Apprendi. As we have emphasized, our decision is limited to § 3583(k) -an unusual provision enacted little more than a decade ago-and the Alleyne problem raised by its 5-year mandatory minimum term of imprisonment. See n. 7, supra. Section § 3583(e), which governs supervised release revocation proceedings generally, does not contain any similar mandatory minimum triggered by judge-found facts.
Besides, even if our opinion could be read to cast doubts on § 3583(e) and its consistency with Apprendi, the practical consequences of a holding to that effect would not come close to fulfilling the dissent's apocalyptic prophecy. In most cases (including this one), combining a defendant's initial and post-revocation sentences issued under § 3583(e) will not yield a term of imprisonment that exceeds the statutory maximum term of imprisonment the jury has authorized for the original crime of conviction. That's because "courts rarely sentence defendants to the statutory maxima," United States v. Caso, 723 F.3d 215, 224-225 (C.A.D.C. 2013) (citing Sentencing Commission data indicating that only about 1% of defendants receive the maximum), and revocation penalties under § 3583(e)(3) are only a small fraction of those available under § 3583(k). So even if § 3583(e)(3) turns out to raise Sixth Amendment issues in a small set of cases, it hardly follows that "as a practical matter supervised-release revocation proceedings cannot be held" or that "the whole idea of supervised release must fall." Post, at 238. Indeed, the vast majority of supervised release revocation proceedings under subsection (e)(3) would likely be unaffected.
In the end, the dissent is left only to echo an age-old criticism: Jury trials are inconvenient for the government. Yet like much else in our Constitution, the jury system isn't designed to promote efficiency but to protect liberty. In what now seems a prescient passage, Blackstone warned that the true threat to trial by jury would come less from "open attacks," which "none will be so hardy as to make," as from subtle "machinations, which may sap and undermine i[t] by introducing new and arbitrary methods." 4 Blackstone 343. This Court has repeatedly sought to guard the historic role of the jury against such incursions. For "however convenient these may appear at first, (as doubtless all arbitrary powers, well executed, are the most convenient ) yet let it be again remembered, that delays, and little inconveniences in the forms of justice, are the price that all free nations must pay for their liberty in more substantial matters." Id., at 344.
IV
Having concluded that the application of § 3583(k)'s mandatory minimum in this case violated Mr. Haymond's right to trial by jury, we face the question of remedy. Recall that the Tenth Circuit declared the last two sentences of § 3583(k) "unconstitutional and unenforceable." Those two sentences provide in relevant part that "[i]f a defendant required to register under [SORNA]" commits certain specified offenses, "the court shall revoke the term of supervised release and require the defendant to serve a term of imprisonment [of] not... less than 5 years."
Before us, the government suggests that the Tenth Circuit erred in declaring those two sentences "unenforceable." That remedy, the government says, sweeps too broadly. In the government's view, any constitutional infirmity can be cured simply by requiring juries acting under the reasonable doubt standard, rather than judges proceeding under the preponderance of the evidence standard, to find the facts necessary to trigger § 3583(k)'s mandatory minimum. This remedy would be consistent with the statute's terms, the government assures us, because "the court" authorized to revoke a term of supervised release in § 3583(k) can and should be construed as embracing not only judges but also juries. And, the government insists, that means we should direct the court of appeals to send this case back to the district court so a jury may be empaneled to decide whether Mr. Haymond violated § 3583(k). Unsurprisingly, Mr. Haymond contests all of this vigorously.
We decline to tangle with the parties' competing remedial arguments today. The Tenth Circuit did not address these arguments; it appears the government did not even discuss the possibility of empaneling a jury in its brief to that court; and this Court normally proceeds as a "court of review, not of first view," Cutter v. Wilkinson, 544 U.S. 709, 718, n. 7, 125 S.Ct. 2113, 161 L.Ed.2d 1020 (2005). Given all this, we believe the wiser course lies in returning the case to the court of appeals for it to have the opportunity to address the government's remedial argument in the first instance, including any question concerning whether that argument was adequately preserved in this case.
*
The judgment of the court of appeals is vacated, and the case is remanded for further proceedings.
It is so ordered.
Justice BREYER, concurring in the judgment.
I agree with much of the dissent, in particular that the
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The petition for certiorari questions the validity of a notice of appeal filed after the entry of the District Court’s judgment but while the appellant’s motion to alter or amend that judgment remained pending in the District Court.
The petitioners brought this civil action in the United States District Court for the Eastern District of Pennsylvania, seeking statutory damages for an alleged violation of the Truth in Lending Act, 82 Stat. 146, as amended, 15 U. S. C. § 1601 et seq., and Regulation Z of the Federal Reserve Board, 12 CFR §226.1 et seq. (1982). On December 24, 1980, the District Court granted the petitioners’ motion for summary judgment, finding that the respondent’s disclosure of its security interests in after-acquired property had been inaccurate and misleading. 503 F. Supp. 246. On November 5, 1981, the District Court entered an order pursuant to Federal Rule of Civil Procedure 54(b) directing that a final judgment be entered. On November 12, the respondent filed a timely motion to alter or amend the judgment, pursuant to Federal Rule of Civil Procedure 59. On November 19, while that motion was still pending, the respondent filed a notice of appeal. On November 23, the District Court denied the motion to alter or amend the judgment. Neither the opinion below nor the response to the petition for a writ of certiorari indicates that any further notice of appeal was filed.
The United States Court of Appeals for the Third Circuit accepted jurisdiction of the appeal and reversed the District Court’s judgment. 680 F. 2d 927 (1982). The Court of Appeals explained its decision to take jurisdiction as follows:
“The Griggses urge that this matter is not appealable because Rule 4(a)(4) of the Federal Rules of Appellate Procedure provides that ‘[a] notice of appeal filed before the disposition of any of the above motions shall have no effect.’ Appellant did fail to satisfy Rule 4(a)(4) but though a premature notice of appeal is subject to dismissal, we have generally allowed appellant to proceed unless the appellee can show prejudice resulting from the premature filing of the notice. Tose v. First Pennsylvania Bank, N.A., 648 F. 2d 879, 882 n. 2 (3d Cir.), cert. denied, [454] U. S. [893] . . . (1981); Hodge v. Hodge, 507 F. 2d 87, 89 (3d Cir. 1975); accord Williams v. Town of Okoboji, 599 F. 2d 238 (8th Cir. 1979). See also 9 Moore’s Federal Practice ¶ 204.14 (2d ed. 1982). In our case, the Griggses have shown no prejudice by the premature filing of a notice of appeal.” Id., at 929, n. 2.
Because this analysis of Rule 4(a)(4) conflicts with the decisions of other Courts of Appeals and is contrary to the language and purposes of the 1979 amendments to the Federal Rules of Appellate Procedure, we grant the petitioners’ request for leave to proceed informa pauperis and their petition for a writ of certiorari, and we reverse.
Even before 1979, it was generally understood that a federal district court and a federal court of appeals should not attempt to assert jurisdiction over a case simultaneously. The filing of a notice of appeal is an event of jurisdictional significance — it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal. See, e. g., United States v. Hitchmon, 587 F. 2d 1357 (CA5 1979). Cf. Ruby v. Secretary of United States Navy, 365 F. 2d 385, 389 (CA9 1966) (en banc) (notice of appeal from unappealable order does not divest district court of jurisdiction), cert. denied, 386 U. S. 1011 (1967). Under pre-1979 procedures, a district court lacked jurisdiction to entertain a motion to vacate, alter, or amend a judgment after a notice of appeal was filed. See Hattersley v. Bollt, 512 F. 2d 209 (CA3 1975); Edmond v. Moore-McCormack Lines, 253 F. 2d 143 (CA2 1958). However, if the timing was reversed — if the notice of appeal was filed after the motion to vacate, alter, or amend the judgment — two seemingly inconsistent conclusions were generally held to follow: the district court retained jurisdiction to decide the motion, but the notice of appeal was nonetheless considered adequate for purposes of beginning the appeals process. E. g., Yaretsky v. Blum, 592 F. 2d 65, 66 (CA2 1979), cert. denied, 450 U. S. 925 (1981); Williams v. Town of Okoboji, 599 F. 2d 238 (CA8 1979); Alexander v. Aero Lodge No. 735, 565 F. 2d 1364, 1371 (CA6 1977), cert. denied, 436 U. S. 946 (1978); Dougherty v. Harper’s Magazine Co., 537 F. 2d 758, 762 (CA3 1976); Stokes v. Peyton’s Inc., 508 F. 2d 1287 (CA5 1975); Song Jook Suh v. Rosenberg, 437 F. 2d 1098 (CA9 1971). Cf. Foman v. Davis, 371 U. S. 178 (1962). But see Century Laminating, Ltd. v. Montgomery, 595 F. 2d 563 (CA10), cert. dism’d, 444 U. S. 987 (1979). The reason this theoretical inconsistency was tolerable in practice was that the district courts did not automatically inform the courts of appeals when a notice of appeal had been filed, and there was therefore little danger a district court and a court of appeals would be simultaneously analyzing the same judgment.
In 1979, the Rules were amended to clarify both the litigants’ timetable and the courts’ respective jurisdictions. The new requirement that a district court “transmit forthwith” any valid notice of appeal to the court of appeals advanced the time when that court could begin processing an appeal. Fed. Rule App. Proc. 3(d). At the same time, in order to prevent unnecessary appellate review, the district court was given express authority to entertain a timely motion to alter or amend the judgment under Rule 59, even after a notice of appeal had been filed. Fed. Rule App. Proc. 4(a)(4). If these had been the only changes, the theoretical inconsistency noted above would have suddenly taken on practical significance. A broad class of situations would have been created in which district courts and courts of appeals would both have had the power to modify the same judgment. The 1979 amendments avoided that potential conflict by depriving the courts of appeals of jurisdiction in such situations.
New Rule 4(a)(4) states: Professor Moore has aptly described the post-1979 effect of a Rule 59 motion on a previously filed notice of appeal: “The appeal simply self-destructs.” 9 J. Moore, B. Ward, & J. Lucas, Moore’s Federal Practice ¶204.12[1], p. 4-65, n. 17 (1982). Moreover, a subsequent notice of appeal is also ineffective if it is filed while a timely Rule 59 motion is still pending. See 16 C. Wright, A. Miller, E. Cooper, & E. Gressman, Federal Practice and Procedure §3950 (1982 Supp.).
“If a timely motion under the Federal Rules of Civil Procedure is filed in the district court by any party . . . under Rule 59 ... , the time for appeal for all parties shall run from the entry of the order denying . . . such motion. A notice of appeal filed before the disposition of [such motion] shall have no effect. A new notice of appeal must be filed within the prescribed time measured from the entry of the order disposing of the motion as provided above. No additional fees shall be required for such filing.”
The United States Court of Appeals for the Third Circuit has taken the position that, notwithstanding the 1979 amendments, it retains discretion under Federal Rule of Appellate Procedure 2 to waive the conceded defects in a premature notice of appeal. Tose v. First Pennsylvania Bank, N.A., 648 F. 2d 879, 882, n. 2, cert. denied, 454 U. S. 893 (1981). We disagree. The notice of appeal filed in this case on November 19, 1980, was not merely defective; it was a nullity. Under the plain language of the current Rule, a premature notice of appeal “shall have no effect”; a new notice of appeal “must be filed.” In short, it is as if no notice of appeal were filed at all. And if no notice of appeal is filed at all, the Court of Appeals lacks jurisdiction to act. It is well settled that the requirement of a timely notice of appeal is “ ‘mandatory and jurisdictional.’” Browder v. Director, Illinois Dept. of Corrections, 434 U. S. 257, 264 (1978).
The motion of petitioners for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment is vacated, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
See United States v. Valdosta-Lowndes County Hospital Authority, 668 F. 2d 1177, 1178, n. 2 (CA11 1982); Beam v. Youens, 664 F. 2d 1275 (CA5 1982); Williams v. Bolger, 633 F. 2d 410 (CA5 1980); Century Laminating, Ltd. v. Montgomery, 595 F. 2d 563 (CA10), cert. dism’d, 444 U. S. 987 (1979). Cf. United States v. Jones, 669 F. 2d 559, 561 (CA8 1982) (dictum); Calhoun v. United States, 647 F. 2d 6, 10 (CA9 1981); United States v. Moore, 616 F. 2d 1030, 1032, n. 2 (CA7) (dictum), cert. denied, 446 U. S. 987 (1980). But cf. Laser Alignment, Inc. v. Warlick, 32 Fed. Rules Serv. 2d 776 (CA4 1981).
The Advisory Committee on Appellate Rules explained the modification as follows:
“The proposed amendment would make it clear that after the filing of the specified post trial motions, a notice of appeal should await disposition of the motion. . . . [I]t would be undesirable to proceed with the appeal while the district court has before it a motion the granting of which would vacate or alter the judgment appealed from. . . . Under the present rule, since docketing may not take place until the record is transmitted, premature filing is much less likely to involve waste effort. See, e. g., Stokes v. Peyton’s Inc., 508 F. 2d 1287 (5th Cir. 1975). Further, since a notice of appeal filed before the disposition of a post trial motion, even if it were treated as valid for purposes of jurisdiction, would not embrace objections to the denial of the motion, it is obviously preferable to postpone the notice of appeal until after the motion is disposed of.
“The present rule [pre-1979], since it provides for the ‘termination’ of the ‘running’ of the appeal time, is ambiguous in its application to a notice of appeal filed prior to a post trial motion filed within the 10 day limit. The amendment would make it clear that in such circumstances the appellant should not proceed with the appeal during pendency of the motion but should file a new notice of appeal after the motion is disposed of.” Notes of Advisory Committee on Appellate Rules, 28 U. S. C. App., p. 146 (1976 ed., Supp V).
Rule 2 does not purport to vest unlimited discretion in the court of appeals. That Rule explicitly states that the discretion it authorizes is limited by Rule 26(b), which prohibits courts of appeals from enlarging the time for filing a notice of appeal.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The judgment below is affirmed by an equally divided Court.
Justice Blackmun took no part in the decision of this case. Justice Scalia took no part in the consideration or decision of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Powell
delivered the opinion of the Court.
On June 28, 1971, this Court handed down Lemon v. Kurtzman, 403 U. S. 602, in which Pennsylvania’s “Nonpublic Elementary and Secondary Education Act” was held unconstitutional as violative of the Establishment Clause of the First Amendment. That law authorized the State to reimburse nonpublic, sectarian schools for their expenditures on teachers’ salaries, textbooks, and instructional materials used in specified “secular” courses. The Court’s ruling was premised on its determination that the restrictions and state supervision required to guarantee that the specified aid would benefit only the nonreligious activities of the schools would foster “excessive entanglement” between government and religion. Id., at 620-622.
On August 27, 1971, the Pennsylvania General Assembly promulgated a new aid law, entitled the “Parent Reimbursement Act for Nonpublic Education,” providing funds to reimburse parents for a portion of tuition expenses incurred in sending their children to nonpublic schools. Shortly thereafter, this suit, challenging the enactment and seeking declaratory and injunctive relief, was filed in the United States District Court for the Eastern District of Pennsylvania. The plaintiffs were Pennsylvania residents and taxpayers who had paid the state tax used to finance the aid program, and at least one plaintiff was also the parent of a child attending a public school within the State. The State Treasurer was named as the defendant and was sued in that capacity. Motions to intervene on the side of the State were granted to a number of parents whose children were enrolled in nonpublic schools and who were therefore entitled to payments under the challenged law.
The defendant and intervenors filed a motion to dismiss the complaint for failure to state a claim upon which relief might be granted. The motion was considered by a properly constituted three-judge District Court. On April 6, 1972, the panel denied the motion in a full opinion explicating its views and holding that the law violated the Establishment Clause. 340 F. Supp. 1356. On the basis of that opinion, the District Court subsequently issued an order granting plaintiffs’ motion for summary judgment and permanently enjoining the disbursement of any funds under the Act. Its order also ruled that the Act could not properly be viewed as containing a separable provision for aid to parents whose children attended nonsectarian, nonpublic schools.
Direct appeals were docketed in this Court by the State Treasurer and by the several intervenors. We noted probable jurisdiction, consolidated the appeals for oral argument, and scheduled the cases to be argued with the several appeals in a case from New York involving an issue in common with this case. 410 U. S. 907 (1973). We have today held in Committee for Public Education & Religious Liberty v. Nyquist, ante, p. 756, that New York's tuition reimbursement legislation has the impermissible effect of advancing religious institutions and is therefore unconstitutional under the Establishment Clause. Because we find no constitutionally significant difference between New York’s and Pennsylvania’s programs, that decision compels our affirmance of the District Court’s decision here.
I
Pennsylvania’s “Parent Reimbursement Act for Nonpublic Education” provides for reimbursement to parents who pay tuition for their children to attend the State’s nonpublic elementary and secondary schools. Qualifying parents are entitled to receive $75 for each dependent enrolled in an elementary school, and $150 for each dependent in a secondary school, unless that amount exceeds the amount of tuition actually paid. The money to fund this program is to be derived from a portion of the revenues from the State’s tax on cigarette sales, and is to be administered by a five-member committee appointed by the Governor, known as the “Pennsylvania Parent Assistance Authority.” In an effort to avoid the “entanglement” problem that flawed its prior aid statute, Lemon v. Kurtzman, supra, the new legislation specifically precludes the administering authority from having any “direction, supervision or control over the policy determinations, personnel, curriculum, program of instruction or any other aspect of the administration or operation of any nonpublic school or schools.” Similarly, the statute imposes no restrictions or limitations on the uses to which the reimbursement allotments can be put by the qualifying parents.
Like the New York tuition program, the Pennsylvania law is prefaced by “legislative findings,” which emphasize its underlying secular purposes: parents who send their children to nonpublic schools reduce the total cost of public education; “inflation, plus sharply rising costs of education, now combine to place in jeopardy the ability of such parents fully to carry this burden”; if the State’s 500,000 nonpublic school children were to transfer to the public schools, the annual operating costs to the State would be $400 million, and the added capital costs would exceed $1 billion; therefore, “parents who maintain students in nonpublic schools provide a vital service” and deserve at least partial reimbursement for alleviating an otherwise “intolerable public burden.” We certainly do not question now, any more than we did two Terms ago in Lemon v. Kurtzman, the reality and legitimacy of Pennsylvania's secular purposes. See Committee for Public Education & Religious Liberty v. Ny-guist, ante, at 773.
We turn, then, to consider the new law's effect. As the case was decided in the District Court initially on defendant's and intervenors’ motions to dismiss, the court accepted as true plaintiffs’ allegation with respect to the identifying characteristics of the schools qualifying under the Act. 340 F. Supp., at 1359. Those characteristics are largely the same as the ones used by the District Court to describe typical sectarian schools in New York. Ante, at 767-768. In its subsequent order granting summary judgment in plaintiffs’ favor, the District Court indicated that “more than 90% of the children attending nonpublic schools in the Commonwealth of Pennsylvania are enrolled in schools that are controlled by religious organizations or that have the purpose of propagating and promoting religious faith.” App. 87a. This finding is consistent with the evidence in Lemon v. Kurtzman, in which the Court noted that more than 96% of the children attending nonpublic schools in Pennsylvania in 1969 “attend [ed] church-related schools, and most of these schools are affiliated with the Roman Catholic church.” 403 U. S., at 610.
For purposes of determining whether the Pennsylvania tuition reimbursement program has the impermissible effect of advancing religion, we find no constitutionally significant distinctions between this law and the one declared invalid today in Nyquist. Each authorizes the States to use tax-raised funds for tuition reimbursements payable to parents who send their children to nonpublic schools. Neither tells parents how they must spend the amount received. While the Pennsylvania grants are more generous ($75 to $150 as opposed to $50 to $100), and while Pennsylvania imposes no ceiling on the number of children for whom parents may claim tuition reimbursement or on the percentage of the tuition bill for which parents may be reimbursed, these considerations are irrelevant to the First Amendment question.
Neither the State Treasurer nor appellant-intervenor in No. 72-620 has suggested any way in which the present law might be distinguished from the one in question in Nyquist. The intervenors in No. 72-459 have, however, proffered a distinction which deserves discussion because* it serves to underline the basis for our ruling in these cases. Intervenors suggest that New York’s law might be differentiated on the ground that, because tuition grants there were available only to parents in an extremely low income bracket (less than $5,000 of taxable income), it would be reasonable to predict that the grant would, in fact, be used to pay tuition, rendering the parent a mere "conduit” for public aid to religious schools. Since Pennsylvania authorizes grants to. all parents of children in nonpublic schools — regardless of income level — it is argued that no such assumption can be made as to how individual parents will spend their reimbursed amounts.
Our decision, however, is not dependent upon any such speculation. Instead we look to the substance of the program, and no matter how it is characterized its effect remains the same. The State has singled out a class of its citizens for a special economic benefit. Whether that benefit be viewed as a simple tuition subsidy, as an incentive to parents to send their children to sectarian schools, or as a reward for having done so, at bottom its intended consequence is to preserve and support religion-oriented institutions. We think it plain that this is quite unlike the sort of “indirect” and “incidental” benefits that flowed to sectarian schools from programs aiding all parents by supplying bus transportation and secular textbooks for their children. Such benefits were carefully restricted to the purely secular side of church-affiliated institutions and provided no special aid for those who had chosen to support religious schools. Yet such aid approached the “verge” of the constitutionally impermissible. Everson v. Board of Education, 330 U. S. 1, 16 (1947). In Lemon v. Kurtzman, we declined to allow Everson to be used as the “platform for yet further steps” in granting assistance to “institutions whose legitimate needs are growing and whose interests have substantial political support.” 403 U. S., at 624. Again today we decline to approach or overstep the “precipice” against which the Establishment Clause protects. We hold that Pennsylvania's tuition grant scheme violates the constitutional mandate against the “sponsorship” or “financial support” of religion or religious institutions. Walz v. Tax Comm’n, 397 U. S. 664, 668 (1970).
II
Apart from the Establishment Clause issues central to this case, appellant-intervenors in No. 72-459 make an equal protection claim that was not directly ruled on by the District Court. These intervenors are 12 parents whose children attend nonpublic schools. Two parents, the Watsons, send their child to a nonsectarian school while the remainder send their children to sectarian schools. The District Court’s final order enjoined the State Treasurer from disbursing funds to any parents, irrespective of whether their children attended sectarian or nonsectarian schools. The court considered and rejected the argument that the state law should be treated “as containing a separable provision for aid to parents of children attending nonpublic schools that are not church related.” Although the Act contained a severability clause, the court reasoned that, in view of the fact that so substantial a majority of the law’s designated beneficiaries were affiliated with religious organizations, it could not be assumed that the state legislature would have passed the law to aid only those attending the relatively few nonsectarian schools.
Appellants ask this Court to declare the provisions severable and thereby to allow tuition reimbursement for parents of children attending schools that are not church related. If the parents of children who attend nonsectarian schools receive assistance, their argument continues, parents of children who attend sectarian schools are entitled to the same aid as a matter of equal protection. The argument is thoroughly spurious. In the first place, we have been shown no reason to upset the District Court’s conclusion that aid to the nonsectarian school could not be severed from aid to the sectarian. The statute nowhere sets up this suggested dichotomy between sectarian and nonsectarian schools, and to approve such a distinction here would be to create a program quite different from the one the legislature actually adopted. See Champlin Refining Co. v. Corporation Commission of Oklahoma, 286 U. S. 210, 234 (1932); cf. Tilton v. Richardson, 403 U. S. 672, 683-684 (1971) (plurality opinion). Even if the Act were clearly sever-able, valid aid to nonpublic, nonsectarian schools would provide no lever for aid to their sectarian counterparts. The Equal Protection Clause has never been regarded as a bludgeon with which to compel a State to violate other provisions of the Constitution. Having held that tuition reimbursements for the benefit of sectarian schools violate the Establishment Clause, nothing in the Equal Protection Clause will suffice to revive that program. Cf. Brusca v. State Board of Education, 405 U. S. 1050 (1972), aff’g 332 F. Supp. 275 (ED Mo. 1971).
Ill
In holding today that Pennsylvania’s post-Lemon, v. Kurtzman attempt to avoid the Establishment Clause’s prohibition against government entanglements with religion has failed to satisfy the parallel bar against laws having a primary effect that advances religion, we are not unaware that appellants and those who have endeavored to formulate systems of state aid to nonpublic education may feel that the decisions of this Court have, indeed, presented them with the “insoluble paradox” to which Mr. Justice White referred in his separate opinion in Lemon v. Kurtzman. 403 U. S., at 668. But if novel forms of aid have not readily been sustained by this Court, the “fault” lies not with the doctrines which are said to create a paradox but rather with the Establishment Clause itself: “Congress” and the States by virtue of the Fourteenth Amendment “shall make no law respecting an establishment of religion.” With that judgment we are not free to tamper, and while there is “room for play in the joints,” Walz v. Tax Comm’n, supra, at 669, the Amendment’s proscription clearly forecloses Pennsylvania’s tuition reimbursement program.
Affirmed.
[For dissenting opinion of The Chief Justice, see ante, p. 798.]
[For dissenting opinion of Mr. Justice White, see ante, p. 813.]
No. 72-459, Sloan v. Lemon, is an appeal filed by the State Treasurer and by 12 intervening parents, two of whom are the Watsons — the parents of a child registered in a nonreligious, private school. No. 72-620, Crouter v. Lemon, is a separately docketed appeal initiated by another one of the intervenors.
Pa. Laws 1971, Act 92, Pa. Stat. Ann., Tit. 24, §§ 5701-5709 (Supp. 1973-1974) (the entire enactment is printed in an appendix to the District Court’s opinion, 340 F. Supp. 1356, 1365-1368).
Act 92, supra, § 5704.
Id., §5702.
These findings are similar to the ones which supported the Pennsylvania teacher-salary reimbursement law involved in Lemon v. Kurtzman. There the Court noted that the Act was passed “in response to a crisis that the Pennsylvania Legislature found existed in the State's nonpublic schools due to rapidly rising costs.” 403 U. S., at 609. The Court held that the State’s interest in enhancing “the quality of the secular education in all schools covered by the compulsory attendance laws” was clearly legitimate and “must therefore be accorded appropriate deference.” Id., at 613.
Since the grants in this case are not limited to reimbursing only a percentage of the tuition bill, the argument could not be made here that the law contains any “statistical guarantee of neutrality,” Nyquist, ante, at 787.
Brief for Appellants Diaz et al. 23-24. It was also alleged, as a ground of distinction between the Pennsylvania and New York tuition reimbursement grants, that there was less likelihood of political divisiveness under the Pennsylvania scheme because it is financed out of a self-perpetuating fund derived from the state cigarette tax. Thus, it is contended that no annual appropriations are required and there will be less likelihood of divisive political pressure for increased grants and expanded aid. We addressed the problem of potential political divisiveness in Part III of our opinion in Nyquist, ante, at 794 — 798. At most, the difference here is one in degree and one not likely to diminish perceptibly over the long term the inevitable demands for increased and expanded aid.
Appellants have also sought to distinguish Nyquist on the ground that Pennsylvania’s legislation is more carefully drafted to avoid excessive administrative entanglements; the program is administered by an independent authority rather than by the Commissioner of Education, and its funds are not derived from the general revenues available for education but from a separate fund. Brief for Appellant Diaz et al. 24. Since Pennsylvania’s law falls under the second aspect of our test because its effect, inevitably, is to advance religion, we need not address this claimed distinction.
Order of District Court, dated June 20, 1972, scheduling oral arguments on plaintiffs’ summary judgment motion and outlining the questions to be argued at that time, reprinted in App. 84a-85a.
“Section 10. Severability. — If a part of this act is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of this act is invalid, in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.” Pa. Laws 1971, Act 92. (Emphasis supplied.)
Final Order of District Court, dated July 21,1972, permanently enjoining enforcement of the Act, reprinted in App. 87a.
See also Lemon v. Kurtzman, 403 U. S., at 640 (Douglas, J., concurring); Lemon v. Kurtzman, 411 U. S. 192, 203 n. 3 (1973).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | C | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Clark
delivered the opinion of the Court.
The question here involves the right to trial by jury under principles of maritime liability enunciated in Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350 U. S. 124 (1956). Respondent, a stevedoring company, contracted to furnish petitioner, a shipowner, with stevedoring services, and a longshoreman employed by respondent was injured while unloading petitioner’s vessel. When the longshoreman sued petitioner on claims of negligence and unseaworthiness, petitioner impleaded respondent, claiming a right to indemnity for any damages the longshoreman might recover. The main case, involving the longshoreman’s claims, was submitted to the jury, which found for the longshoreman on the issue of negligence and for petitioner on the issue of seaworthiness. That judgment has since been satisfied and is not before us. After receiving the verdict, the judge decided that it also was dispositive of the third-party action, and directed a verdict for respondent. A divided Court of Appeals affirmed, 236 F. 2d 848, and we granted certiorari. 352 U. S. 1030 (1957). Petitioner contends, inter alia, that certain issues of fact should have been submitted to the jury. We agree with petitioner on this point.
Petitioner’s claim for indemnity primarily rests on the contractual relationship between it and respondent. While the stevedoring contract contained no express indemnity clause, it obligated respondent “to faithfully furnish such stevedoring services as may be required,” and to provide all necessary labor and supervision for “the proper and efficient conduct of the work.” As this Court said in Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., supra, such language constitutes “a contractual undertaking to [perform] ‘with reasonable safety,’ ” 350 U. S., at 130, and to discharge “foreseeable damages resulting to the shipowner from the contractor’s improper performance.” 350 U. S., at 129, footnote 3. Petitioner contends that a breach of this undertaking by respondent caused the injury to the longshoreman, and that petitioner’s liability resulting from the breach was “foreseeable.”
The F. E. Weyerhaeuser, the vessel upon which the accident occurred, had sailed from the West Coast with a cargo of lumber for New York and Boston, the ports where respondent was to perform the stevedoring operations. The vessel arrived in New York on January 25, 1952, and in the ensuing five days the deck load and part of the underdeck cargo was discharged. On January 30 the ship left New York, arriving in Boston the next day. Respondent’s crews boarded the vessel and the unloading continued. On the fifth day of the Boston operations one Connolly, a longshoreman employed by respondent, was injured when struck on the head by a piece of wood while working in a lower hold. The parties agree that the wood must have fallen into the hold from the top of a temporary winch shelter which protected the winch drivers from the elements.
The evidence indicated that winch shelters are customarily erected by longshoremen at the beginning of their unloading operations. They consist of a scrap lumber framework with a tarpaulin stretched across the top. Because of their flimsy construction they are considered a hazard in the winds at sea, and “automatically” are torn down by the ship’s crew when the vessel leaves port. Both the captain and the second officer of the F. E. Weyerhaeuser testified that it would be carelessness on their part to allow winch shelters to remain in place when the vessel goes to sea. We need not discuss the details which may have led the jury to find for Connolly in the main case, but implicit in the jury verdict was a finding that the structure was on the ship when it arrived in Boston. Respondent, through its employees stationed in New York, must have built the shelter while the ship was in New York harbor, and we may assume that petitioner failed to remove it upon leaving for Boston. The record is silent as to the exact circumstances under which it was made available to respondent in Boston. It does appear, however, that the shelter was used in the stevedoring operations by respondent’s Boston employees, in spite of the fact that respondent as well as petitioner must have known of its journey from New York and the possible effect of such a journey on an already flimsy structure. There was evidence that the shelter was not inspected by either party until the injury to Connolly five days after the arrival in Boston.
We believe that respondent’s contractual obligation to perform its duties with reasonable safety'related not only to the handling of cargo, as in Ryan, but also to the use of equipment incidental thereto, such as the winch shelter involved here. American President Lines v. Marine Terminals Corp., 234 F. 2d 753, 758; United States v. Arrow Stevedoring Co., 175 F. 2d 329, 331. If in that regard respondent rendered a substandard performance which led to foreseeable liability of petitioner, the latter was entitled to indemnity absent conduct on its part sufficient to preclude recovery. The evidence bearing on these issues — petitioner’s action in making the shelter on its ship available to respondent’s employees in Boston although it apparently was unsafe, as well as respondent’s continued use of the shelter for five days thereafter without inspection — was for jury consideration under appropriate instructions. These issues were not encompassed by the instructions in the main case, where the test- of petitioner’s liability was based on failure to perform a nondelegable duty to Connolly. Since the liability of respondent depended on different principles, Crawford v. Pope & Talbot, Inc., 206 F. 2d 784, 792, all fact issues involved in the third-party action should have been submitted to the jury after the verdict in the main case. Further, the verdict for Connolly did not ipso facto preclude recovery of indemnity by petitioner, for as we have indicated, the duties owing from petitioner to Connolly were not identical with those from petitioner to respondent. While the jury found petitioner “guilty of some act of negligence,” that ultimate finding might have been predicated, inter alia, on a failure of petitioner to remove the shelter when the ship left New York, or a failure to correct or warn respondent of a latent dangerous condition known to petitioner when respondent began the Boston unloading. Likewise, the finding might have been predicated on a failure of petitioner during the five days in Boston to inspect the shelter, detect and correct the unsafe condition. Although any of these possibilities could provide Connolly a basis of recovery, at least the latter would not, under Ryan, prevent recovery by petitioner in the third-party action. 350 U. S., at 134-135. See Cornec v. Baltimore & O. R. Co., 48 F. 2d 497, 502; Boston Woven Hose & Rubber Co. v. Kendall, 178 Mass. 232, 59 N. E. 657 (opinion of Chief Justice Holmes). It was improper, therefore, for the court to direct a verdict for respondent based on the finding for Connolly.
In view of the new trial to which petitioner is entitled, we believe sound judicial administration requires us to point out that in the area of contractual indemnity an application of the theories of “active” or “passive” as well as “primary” or “secondary” negligence is inappropriate. Ryan Stevedoring Go. v. Pan-Atlantic S. S. Co., supra, at 132-133.
The judgment of the Court of Appeals is reversed and the case is remanded for proceedings in conformity with this opinion.
It is so ordered.
See, generally, Weinstock, The Employer’s Duty to Indemnify Shipowners for Damages Recovered by Harbor Workers, 103 U. of Pa. L. Rev. 321, 332-346 (1954).
The jury found for Connolly on the issue of negligence after being instructed as follows:
“Now, if you find from the evidence that the structure, that is, this shelter, was on the ship when it came into Boston Harbor and that the ship offered it to the stevedores to use and work with, and if you find that in permitting that to be there the ship was guilty of some act of negligence as T have defined it to you, then you could find a verdict for Mr. Connolly.”
There was undisputed evidence that the shelter could not have been assembled prior to the removal of the deck cargo in New York.
A witness testified that after the accident he stood on one of the winches to permit a view of the shelter top, which was approximately seven feet above the deck, and discovered a second piece of tarpaulin secured only by two loose pieces of wood similar to that which struck Connolly.
It should be noted that “[t]he shipowner’s action is not changed from one for a breach of contract to one for a tort simply because recovery may turn upon the standard of the performance of petitioner’s stevedoring service.” Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., supra, at 134.
See Corbin, Contracts, §§571, 947, 1264; cf. Restatement, Contracts, §§ 295, 315.
The following explanation in the charge to the jury suggests that the trial judge intended to submit the third-party action upon return of the verdict in the main case:
“I shall ask you to go out and consider the claims of Mr. Connolly against the Weyerhaeuser Steamship Company first and then when you come back with your verdict on that I shall ask you to retire again and consider the issues in the second suit, namely Weyerhaeuser Steamship Company against the Nacirema Operating Company, and before I submit that second one to you I shall give you some instructions which apply peculiarly to that.”
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Chief Justice Vinson
delivered the opinion of the Court.
These are companion cases to Shelley v. Kraemer and McGhee v. Sipes, ante, p. 1, and come to this Court on certiorari to the United States Court of Appeals for the District of Columbia.
In 1906, twenty of thirty-one lots in the 100 block of Bryant Street, Northwest, in the City of Washington, were sold subject to the following covenant:
. . that said lot shall never be rented, leased, sold, transferred or conveyed unto any Negro or colored person, under a penalty of Two Thousand Dollars ($2,000), which shall be a lien against said property.”
The covenant imposes no time limitation on the restriction.
Prior to the sales which gave rise to these cases, the twenty lots which are subject to the covenants were at all times owned and occupied by white persons, except for a brief period when three of the houses were occupied by Negroes who were eventually induced to move without legal action. The remaining eleven lots in the same block, however, are not subject to a restrictive agreement and, as found by the District Court, were occupied by Negroes for the twenty years prior to the institution of this litigation.
These cases involve seven of the twenty lots which are subject to the terms of the restrictive covenants. In No. 290, petitioners Hurd, found by the trial court to be Negroes, purchased one of the restricted properties from the white owners. In No. 291, petitioner Urciolo, a white real estate dealer, sold and conveyed three of the restricted properties to the Negro petitioners Rowe, Savage, and Stewart. Petitioner Urciolo also owns three other lots in the block subject to the covenants. In both cases, the Negro petitioners are presently occupying as homes the respective properties which have been conveyed to them.
Suits were instituted in the District Court by respondents, who own other property in the block subject to the terms of the covenants, praying for injunctive relief to enforce the terms of the restrictive agreement. The cases were consolidated for trial, and after a hearing, the court entered a judgment declaring null and void the deeds of the Negro petitioners; enjoining petitioner Urci-olo and one Ryan, the white property owners who had sold the houses to the Negro petitioners, from leasing, selling or conveying the properties to any Negro or colored person; enjoining the Negro petitioners from leasing or conveying the properties and directing those petitioners “to remove themselves and all of their personal belongings” from the premises within sixty days.
The United States Court of Appeals for the District of Columbia, with one justice dissenting, affirmed the judgment of the District Court. The majority of the court was of the opinion that the action of the District Court was consistent with earlier decisions of the Court of Appeals and that those decisions should be held determinative in these cases.
Petitioners have attacked the judicial enforcement of the restrictive covenants in these cases on a wide variety of grounds. Primary reliance, however, is placed on the contention that such governmental action on the part of the courts of the District of Columbia is forbidden by the due process clause of the Fifth Amendment of the Federal Constitution.
Whether judicial enforcement of racial restrictive agreements by the federal courts of the District of Columbia violates the Fifth Amendment has never been adjudicated by this Court. In Corrigan v. Buckley, 271 U. S. 323 (1926), an appeal was taken to this Court from a judgment of the United States Court of Appeals for the District of Columbia which had affirmed an order of the lower court granting enforcement to a restrictive covenant. But as was pointed out in our opinion in Shelley v. Kraemer, supra, the only constitutional issue which had been raised in the lower courts in the Corrigan case, and, consequently, the only constitutional question before this Court on appeal, related to the validity of the private agreements as such. Nothing in the opinion of this Court in that case, therefore, may properly be regarded as an adjudication of the issue presented by petitioners in this case which concerns, not the validity of the restrictive agreements standing alone, but the validity of court enforcement of the restrictive covenants under the due process clause of the Fifth Amendment. See Shelley v. Kraemer, supra at p. 8.
This Court has declared invalid municipal ordinances restricting occupancy in designated areas to persons of specified race and color as denying rights of white sellers and Negro purchasers of property, guaranteed by the due process clause of the Fourteenth Amendment. Buchanan v. Warley, 245 U. S. 60 (1917); Harmon v. Tyler, 273 U. S. 668 (1927); Richmond v. Deans, 281 U. S. 704 (1930). Petitioners urge that judicial enforcement of the restrictive covenants by courts of the District of Columbia should likewise be held to deny rights of white sellers and Negro purchasers of property, guaranteed by the due process clause of the Fifth Amendment. Petitioners point out that this Court in Hirabayashi v. United States, 320 U. S. 81, 100 (1943), reached its decision in a case in which issues under the Fifth Amendment were presented, on the assumption that “racial discrimi-nations are in most circumstances irrelevant and therefore prohibited . . . And see Korematsu v. United States, 323 U. S. 214, 216 (1944).
Upon full consideration, however, we have found it unnecessary to resolve the constitutional issue which petitioners advance; for we have concluded that judicial enforcement of restrictive covenants by the courts of the District of Columbia is improper for other reasons hereinafter stated.
Section 1978 of the Revised Statutes, derived from § 1 of the Civil Rights Act of 1866, provides:
“All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.”
All the petitioners in these cases, as found by the District Court, are citizens of the United States. We have no doubt that, for the purposes of this section, the District of Columbia is included within the phrase “every State and Territory.” Nor can there be doubt of the constitutional power of Congress to enact such legislation with reference to the District of Columbia.
We may start with the proposition that the statute does not invalidate private restrictive agreements so long as the purposes of those agreements are achieved by the parties through voluntary adherence to the terms. The action toward which the provisions of the statute under consideration is directed is governmental action. Such was the holding of Corrigan v. Buckley, supra.
In considering whether judicial enforcement of restrictive covenants is the kind of governmental action which the first section of the Civil Rights Act of 1866 was intended to prohibit, reference must be made to the scope and purposes of the Fourteenth Amendment; for that statute and the Amendment were closely related both in inception and in the objectives which Congress sought to achieve.
Both the Civil Rights Act of 1866 and the joint resolution which was later adopted as the Fourteenth Amendment were passed in the first session of the Thirty-Ninth Congress. Frequent references to the Civil Rights Act are to be found in the record of the legislative debates on the adoption of the Amendment. It is clear that in many significant respects the statute and the Amendment were expressions of the same general congressional policy. Indeed, as the legislative debates reveal, one of the primary purposes of many members of Congress in supporting the adoption of the Fourteenth Amendment was to incorporate the guaranties of the Civil Rights Act of 1866 in the organic law of the land. Others supported the adoption of the Amendment in order to eliminate doubt as to the constitutional validity of the Civil Rights Act as applied to the States.
The close relationship between § 1 of the Civil Rights Act and the Fourteenth Amendment was given specific recognition by this Court in Buchanan v. Warley, supra at 79. There, the Court observed that, not only through the operation of the Fourteenth Amendment, but also by virtue of the “statutes enacted in furtherance of its purpose,” including the provisions here considered, a colored man is granted the right to acquire property free from interference by discriminatory state legislation. In Shelley v. Kraemer, supra, we have held that the Fourteenth Amendment also forbids such discrimination where imposed by state courts in the enforcement of restrictive covenants. That holding is clearly indicative of the construction to be given to the relevant provisions of the Civil Rights Act in their application to the Courts of the District of Columbia.
Moreover, the explicit language employed by Congress to effectuate its purposes leaves no doubt that judicial enforcement of the restrictive covenants by the courts of the District of Columbia is prohibited by the Civil Rights Act. That statute, by its terms, requires that all citizens of the United States shall have the same right “as is enjoyed by white citizens ... to inherit, purchase, lease, sell, hold, and convey real and personal property.” That the Negro petitioners have been denied that right by virtue of the action of the federal courts of the District is clear. The Negro petitioners entered into contracts of sale with willing sellers for the purchase of properties upon which they desired to establish homes. Solely because of their race and color they are confronted with orders of court divesting their titles in the properties and ordering that the premises be vacated. White sellers, one of whom is a petitioner here, have been enjoined from selling the properties to any Negro or colored person. Under such circumstances, to suggest that the Negro petitioners have been accorded the same rights as white citizens to purchase, hold, and convey real property is to reject the plain meaning of language. We hold that the action of the District Court directed against the Negro purchasers and the white sellers denies rights intended by Congress to be protected by the Civil Rights Act and that, consequently, the action cannot stand.
But even in the absence of the statute, there are other considerations which would indicate that enforcement of restrictive covenants in these cases is judicial action contrary to the public policy of the United States, and as such should be corrected by this Court in the exercise of its supervisory powers over the courts of the District of Columbia. The power of the federal courts to enforce the terms of private agreements is at all times exercised subject to the restrictions and limitations of the public policy of the United States as manifested in the Constitution, treaties, federal statutes, and applicable legal precedents. Where the enforcement of private agreements would be violative of that policy, it is the obligation of courts to refrain from such exertions of judicial power.
We are here concerned with action of federal courts of such a nature that if taken by the courts of a State would violate the prohibitory provisions of the Fourteenth Amendment. Shelley v. Kraemer, supra. It is not consistent with the public policy of the United States to permit federal courts in the Nation’s capital to exercise general equitable powers to compel action denied the state courts where such state action has been held to be violative of the guaranty of the equal protection of the laws. We cannot presume that the public policy of the United States manifests a lesser concern for the protection of such basic rights against discriminatory action of federal courts than against such action taken by the courts of the States.
Reversed.
Mr. Justice Reed, Mr. Justice Jackson, and Mr. Justice Rutledge took no part in the consideration or decision of these cases. ' < j-
All of the residential property in the block is on the south side of the street, the northern side of the street providing a boundary for a public park.
Petitioner James M. Hurd maintained that he is not a Negro but a Mohawk Indian.
82 U. S. App. D. C. 180, 162 F. 2d 233 (1947).
Other contentions made by petitioners include the following: judicial enforcement of the covenants is contrary to § 1978 of the Revised Statutes, derived from the Civil Rights Act of 1866, and to treaty obligations of the United States contained in the United Nations’ charter; enforcement of the covenants is contrary to the public policy; enforcement of the covenants is inequitable.
Prior to the present litigation, the United States Court of Appeals for the District of Columbia had considered cases involving enforcement of racial restrictive agreements on at least eight occasions. Corrigan v. Buckley, 55 App. D. C. 30, 299 F. 899 (1924); Torrey v. Wolfes, 56 App. D. C. 4, 6 F. 2d 702 (1925); Russell v. Wallace, 58 App. D. C. 357, 30 F. 2d 981 (1929); Cornish v. O’Donoghue, 58 App. D. C. 359, 30 F. 2d 983 (1929); Grady v. Garland, 67 App. D. C. 73, 89 F. 2d 817 (1937); Hundley v. Gorewitz, 77 U. S. App. D. C. 48, 132 F. 2d 23 (1942); Mays v. Burgess, 79 U. S. App. D. C. 343, 147 F. 2d 869 (1945); Mays v. Burgess, 80 U. S. App. D. C. 236, 152 F. 2d 123 (1945).
In Corrigan v. Buckley, supra, the first of the cases decided by the United States Court of Appeals and relied on in most of the subsequent decisions, the opinion of the court contains no consideration of the specific issues presented to this Court in these cases. An appeal from the decision in Corrigan v. Buckley was dismissed by this Court. 271 U. S. 323 (1926). See discussion supra. In Hundley v. Gorewitz, supra, the United States Court of Appeals refused enforcement of a restrictive agreement where changes in the character of the neighborhood would have rendered enforcement inequitable.
It is a well-established principle that this Court will not decide constitutional questions where other grounds are available and dis-positive of the issues of the case. Recent expressions of that policy are to be found in Alma Motor Co. v. Timken-Detroit Axle Co., 329 U. S. 129 (1946); Rescue Army v. Municipal Court, 331 U. S. 549 (1947).
14 Stat. 27. Section 1 of the Act provided: “. . . That all persons born in the United States and not subject to any foreign power, excluding Indians not taxed, are hereby declared to be citizens of the United States; and such citizens, of every race and color, without regard to any previous condition of slavery or involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall have the same right, in every State and Territory in the United States, to make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws and proceedings for the security of person and property, as is enjoyed by white citizens, and shall be subject to like punishment, pains, and penalties, and to none other, any law, statute, ordinance, regulation, or custom, to the contrary notwithstanding.”
The Civil Rights Act of 1866 was reenacted in § 18 of the Act of May 31, 1870, 16 Stat. 144, passed subsequent to the adoption of the Fourteenth Amendment. Section 1977 of the Revised Statutes (8 U. S. C. § 41), derived from § 16 of the Act of 1870, which in turn was patterned after § 1 of the Civil Rights Act of 1866, provides: “All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.”
8 U.S. C. § 42.
Cf. Talbott v. Silver Bow County, 139 U. S. 438, 444 (1891).
See Keller v. Potomac Electric Power Co., 261 U. S. 428, 442-443 (1923).
The Civil Rights Act of 1866 became law on April 9, 1866. The Joint Resolution submitting the Fourteenth Amendment to the States passed the House of Representatives on June 13, 1866, having previously passed the Senate on June 8. Cong. Globe, 39th Cong., 1st Sess. 3148-3149, 3042.
See, e. g., Cong. Globe, 39th Cong., 1st Sess. 2459, 2461, 2462, 2465, 2467, 2498, 2506, 2511, 2538, 2896, 2961, 3035.
Thus, Mr. Thayer of Pennsylvania, speaking in the House of Representatives, stated: “As I understand it, it is but incorporating in the Constitution of the United States the principle of the civil rights bill which has lately become a law, ... in order . . . that that provision so necessary for the equal administration of the law, so just in its operation, so necessary for the protection of the fundamental rights of citizenship, shall be forever incorporated in the Constitution of the United States.” Cong. Globe, 39th Cong., 1st Sess. 2465. And note the remarks of Mr. Stevens of Pennsylvania in reporting to the House the joint resolution which was subsequently adopted as the Fourteenth Amendment. Id. at 2459. See also id. at 2462, 2896, 2961. That such was understood to be a primary purpose of the Amendment is made clear not only from statements of the proponents of the Amendment but of its opponents. Id. at 2467, 2538. See Flack, The Adoption of the Fourteenth Amendment 94^96.
No doubts were expressed as to the constitutionality of the Civil Rights Act in its application to the District of Columbia. Senator Poland of Vermont stated: “It certainly seems desirable that no doubt should be left existing as to the power of Congress to enforce principles lying at the very foundation of all republican government if they be denied or violated by the States, and I cannot doubt but that every Senator will rejoice in aiding to remove all doubt upon this power of Congress.” Cong. Globe, 39th Cong., 1st Sess. 2961. See also id. at 2461, 2498, 2506, 2511, 2896, 3035.
See United States v. Hutcheson, 312 U. S. 219, 235 (1941); Johnson v. United States, 163 F. 30, 32 (1908).
Section 240 (a) of the Judicial Code, 43 Stat. 938, 28 U. S. C. §347 (a), provides: “In any case, civil or criminal, in a circuit court of appeals, or in the Court of Appeals of the District of Columbia, it shall be competent for the Supreme Court of the United States, upon the petition of any party thereto, whether Government or other litigant, to require by certiorari, either before or after a judgment or decree by such lower court, that the cause be certified to the Supreme Court for determination by it with the same power and authority, and with like effect, as if the cause had been brought there by unrestricted writ of error or appeal.”
Muschany v. United, States, 324 U. S. 49, 66 (1945). And see License Tax Cases, 5 Wall. 462,469 (1867).
Cf. Kennett v. Chambers, 14 How. 38 (1852); Tool Co. v. Norris, 2 Wall. 45 (1865); Sprott v. United States, 20 Wall. 459 (1874); Trist v. Child, 21 Wall. 441 (1875); Oscanyan v. Arms Co., 103 U. S. 261 (1881); Burt v. Union Central Life Insurance Co., 187 U. S. 362 (1902); Sage v. Hampe, 235 U. S. 99 (1914). And see Beasley v. Texas & Pacific R. Co., 191 U. S. 492 (1903).
Cf. Gandolfo v. Hartman, 49 F. 181, 183 (1892).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The appeal is dismissed for want of a substantial federal question. Upon plenary consideration, we are satisfied that, both on their face and as applied to appellant, Kan. Gen. Stat., 1949, § 7-104, and amended Kan. Sup. Ct. Rules 41 and 54 promulgated by the Supreme Court of Kansas, acting within its competence under state law, are not beyond the allowable range of state action under the Fourteenth Amendment. See, e. g., Dent v. West Virginia, 129 U. S. 114; Graves v. Minnesota, 272 U. S. 425; Schware v. Board of Bar Examiners, 353 U. S. 232, 239; Hitchcock v. Collenberg, 353 U. S. 919; Kovrak v. Ginsburg, 358 U. S. 52. We cannot disregard the reasons given by the Kansas Supreme Court for the Rules in question. 187 Kan. 473, 357 P. 2d 782. Nor does the fact that the Rules may result in “incidental individual inequality” make them offensive to the Fourteenth Amendment. Phelps v. Board of Education, 300 U. S. 319, 324.
The Chief Justice concurs in the result.
Mb. Justice Whittaker took no part in the disposition of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
The petition for rehearing is denied. However, we think we should make clear the basis upon which our per curiam order affirmed the judgment of the District Court. 371 U. S. 223. The District Court dismissed appellants’ action to set aside an order of the Interstate Commerce Commission on two grounds: (1) that the appellants lacked standing to challenge the Commission’s order in the District Court; (2) that the appellants’ challenge to the Commission’s order was without merit. Our per curiam order affirmed the District Court’s judgment insofar as it upheld the validity of the Commission’s order on the merits. We disagreed that appellants lacked standing to challenge the Commission’s order in the District Court. The appellants are associations of motor carriers, authorized under 49 U. S. C. § 5b, and perform significant functions in the administration of the Interstate Commerce Act, including the representation of member carriers in proceedings before the Commission. Since individual member carriers of appellants will be aggrieved by the Commission’s order, and since appellants are proper representatives of the interests of their members, appellants have standing to challenge the validity of the Commission’s order in the District Court. See Administrative Procedure Act, 5 U. S. C. § 1009 (a); FCC v. Sanders Bros. Radio Station, 309 U. S. 470; NAACP v. Alabama ex rel. Patterson, 357 U. S. 449, 459.
Mr. Justice Harlan concurs in the denial of the petition for rehearing and in the affirmance of the judgment of the District Court insofar as that judgment refused to set aside the order of the Interstate Commerce Commission. He believes, however, that the question of “standing” should not be decided without plenary consideration.
Mr. Justice Stewart would grant the petition for rehearing.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Scalia
delivered the opinion of the Court.
Under the Mobile-Sierra doctrine, the Federal Energy Regulatory Commission (FERC or Commission) must presume that the rate set out in a freely negotiated wholesale-energy contract meets the “just and reasonable” requirement imposed by law. The presumption may be overcome only if FERC concludes that the contract seriously harms the public interest. These cases present two questions about the scope of the Mobile-Sierra doctrine: First, does the presumption apply only when FERC has had an initial opportunity to review a contract rate without the presumption? Second, does the presumption impose as high a bar to challenges by purchasers of wholesale electricity as it does to challenges by sellers?
I
A
Statutory Background
The Federal Power Act (FPA), 41 Stat. 1063, as amended, gives the Commission the authority to regulate the sale of electricity in interstate commerce—a market historically characterized by natural monopoly and therefore subject to abuses of market power. See 16 U. S. C. § 824 et seq. (2000 ed. and Supp. V). Modeled on the Interstate Commerce Act, the FPA requires regulated utilities to file compilations of their rate schedules, or “tariffs,” with the Commission, and to provide service to electricity purchasers on the terms and prices there set forth. §824d(e). Utilities wishing to change their tariffs must notify the Commission 60 days before the change is to go into effect. §824d(d). Unlike the Interstate Commerce Act, however, the FPA also permits utilities to set rates with individual electricity purchasers through bilateral contracts. § 824d(e), (d). As we have explained elsewhere, the FPA “departed from the scheme of purely tariff-based regulation and acknowledged that contracts between commercial buyers and sellers could be used in ratesetting.” Verizon Communications Inc. v. FCC, 535 U. S. 467, 479 (2002). Like tariffs, contracts must be filed with the Commission before they go into effect. 16 U. S. C. § 824d(c), (d).
The FPA requires all wholesale-electricity rates to be “just and reasonable.” § 824d(a). When a utility files a new rate with the Commission, through a change to its tariff or a new contract, the Commission may suspend the rate for up to five months while it investigates whether the rate is just and reasonable. § 824d(e). The Commission may, however, decline to investigate and permit the rate to go into effect— which does not amount to a determination that the rate is “just and reasonable.” See 18 CFR §35.4 (2007). After a rate goes into effect, whether or not the Commission deemed it just and reasonable when filed, the Commission may conclude, in response to a complaint or on its own motion, that the rate is not just and reasonable and replace it with a lawful rate. 16 U. S. C. § 824e(a) (2000 ed., Supp. V).
The statutory requirement that rates be “just and reasonable” is obviously incapable of precise judicial definition, and we afford great deference to the Commission in its rate decisions. See FPC v. Texaco Inc., 417 U. S. 380, 389 (1974); Permian Basin Area Rate Cases, 390 U. S. 747, 767 (1968). We have repeatedly emphasized that the Commission is not bound to any one ratemaking formula. See Mobil Oil Exploration & Producing Southeast, Inc. v. United Distribution Cos., 498 U. S. 211, 224 (1991); Permian Basin, supra, at 776-777. But FERC must choose a method that entails an appropriate “balancing of the investor and the consumer interests.” FPC v. Hope Natural Gas Co., 320 U. S. 591, 603 (1944). In exercising its broad discretion, the Commission traditionally reviewed and set tariff rates under the “cost-of-service” method, which ensures that a seller of electricity recovers its' costs plus a rate of return sufficient to attract necessary capital. See J. McGrew, Federal Energy Regulatory Commission 152, 160-161 (2003) (hereinafter McGrew).
In two cases decided on the same day in 1956, we addressed the authority of the Commission to modify rates set bilaterally by contract rather than unilaterally by tariff. In United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U. S. 332, we rejected a natural-gas utility’s argument that the Natural Gas Act’s requirement that it file all new rates with the Commission authorized it to abrogate a lawful contract with a purchaser simply by filing a new tariff, see id., at 336-337. The filing requirement, we explained, is merely a precondition to changing a rate, not an authorization to change rates in violation of a lawful contract (i. e., a contract that sets a just and reasonable rate). See id., at 339-344.
In FPC v. Sierra Pacific Power Co., 350 U. S. 348, 352-353 (1956), we applied the holding of Mobile to the analogous provisions of the FPA, concluding that the complaining utility could not supersede a contract rate simply by filing a new tariff. In Sierra, however, the Commission had concluded not only (contrary to our holding) that the newly filed tariff superseded the contract, but also that the contract rate itself was not just and reasonable, “solely because it yield[ed] less than a fair return on the net invested capital” of the utility. 350 U. S., at 355. Thus, we were confronted with the question of how the Commission may evaluate whether a contract rate is just and reasonable.
We answered that question in the following way:
“[T]he Commission’s conclusion appears on its face to be based on an erroneous standard.... [W]hile it may be that the Commission may not normally impose upon a public utility a rate which would produce less than a fair return, it does not follow that the public utility may not itself agree by contract to a rate affording less than a fair return or that, if it does so, it is entitled to be relieved of its improvident bargain.... In such circumstances the sole concern of the Commission would seem to be whether the rate is so low as to adversely affect the public interest — as where it might impair the financial ability of the public utility to continue its service, cast upon other consumers an excessive burden, or be unduly discriminatory.” Id., at 354-355 (emphasis deleted).
As we said in a later case, “[t]he regulatory system created by the [FPA] is premised on contractual agreements voluntarily devised by the regulated companies; it contemplates abrogation of these agreements only in circumstances of unequivocal public necessity.” Permian Basin, supra, at 822.
Over the past 50 years, decisions of this Court and the Courts of Appeals have refined the Mobile-Sierra presumption to allow greater freedom of contract. In United Gas Pipe Line Co. v. Memphis Light, Gas and Water Div., 358 U. S. 103, 110-113 (1958), we held that parties could contract out of the Mobile-Sierra presumption by specifying in their contracts that a new rate filed with the Commission would supersede the contract rate. Courts of Appeals have held that contracting parties may also agree to a middle option between Mobile-Sierra and Memphis Light: A contract that does not allow the seller to supersede the contract rate by filing a new rate may nonetheless permit the Commission to set aside the contract rate if it results in an unfair rate of return, not just if it violates the public interest. See, e. g., Papago Tribal Util. Auth. v. FERC, 723 F. 2d 950, 953 (CADC 1983); Louisiana Power & Light Co. v. FERC, 587 F. 2d 671, 675-676 (CA5 1979). Thus, as the Mobile-Sierra doctrine has developed, regulated parties have retained broad authority to specify whether FERC can review a contract rate solely for whether it violates the public interest or also for whether it results in an unfair rate of return. But the Mobile-Sierra presumption remains the default rule.
Moreover, even though the challenges in Mobile and Sierra were brought by sellers, lower courts have concluded that the Mobile-Sierra presumption also applies where a purchaser, rather than a seller, asks FERC to modify a contract. See Potomac Elec. Power Co. v. FERC, 210 F. 3d 403, 404-405, 409-410 (CADC 2000); Boston Edison Co. v. FERC, 856 F. 2d 361, 372 (CA1 1988). This Court has seemingly blessed that conclusion, explaining that under the FPA, “[w]hen commercial parties... avail themselves of rate agreements, the principal regulatory responsibility [is] not to relieve a contracting party of an unreasonable rate.” Verizon, 535 U. S., at 479 (citing Sierra, supra, at 355).
Over the years, the Commission began to refer to the two modes of review—one with the Mobile-Sierra presumption and the other without—as the “public interest standard” and the “just and reasonable standard.” See, e. g., In re Southern Company Servs., Inc., 39 FERC ¶ 63,026, pp. 65,134, 65,141 (1987). Decisions from the Courts of Appeals did likewise. See, e. g., Kansas Cities v. FERC, 723 F. 2d 82, 87-88 (CADC 1983); Northeast Utils. Serv. Co. v. FERC, 993 F. 2d 937, 961 (CA1 1993). We do not take this nomenclature to stand for the obviously indefensible proposition that a standard different from the statutory just-and-reasonable standard applies to contract rates. Rather, the term “public interest standard” refers to the differing application of that just-and-reasonable standard to contract rates. See Philadelphia Elec. Co., 58 F. R C. 88, 90 (1977). (It would be less confusing to adopt the Solicitor General’s terminology, referring to the two differing applications of the just-and-reasonable standard as the “ordinary” “just and reasonable standard” and the “public interest standard.” See Reply Brief for Respondent FERC 6.)
B
Recent FERC Innovations; Market-Based Tariffs
In recent decades, the Commission has undertaken an ambitious program of market-based reforms. Part of the impetus for those changes was technological evolution. Historically, electric utilities had been vertically integrated monopolies. For a particular geographic area, a single utility would control the generation of electricity, its transmission, and its distribution to consumers. See Midwest ISO Transmission Owners v. FERC, 373 F. 3d 1361, 1363 (CADC 2004). Since the 1970’s, however, engineering innovations have lowered the cost of generating electricity and transmitting it over long distances, enabling new entrants to challenge the regional generating monopolies of traditional utilities. See generally New York v. FERC, 535 U. S. 1, 7-8 (2002); Public Util. Disk No. 1 of Snohomish Cty. v. FERC, 272 F. 3d 607, 610 (CADC 2001) (per curiam).
To take advantage of these changes, the Commission has attempted to break down regulatory and economic barriers that hinder a free market in wholesale electricity. It has sought to promote competition in those areas of the industry amenable to competition, such as the segment that generates electric power, while ensuring that the segment of the industry characterized by natural monopoly — namely, the transmission grid that conveys the generated electricity — cannot exert monopolistic influence over other areas. See New York, supra, at 9-10; Snohomish, supra. To that end, FERC required in Order No. 888 that each transmission provider offer transmission service to all customers on an equal basis by filing an “open access transmission tariff.” Promoting Wholesale Competition Through Open Access NonDiscriminatory Transmission Services by Public Utilities, 61 Fed. Reg. 21540 (1996); see New York, supra, at 10-12. That requirement prevents the utilities that own the grid from offering more favorable transmission terms to their own affiliates and thereby extending their monopoly power to other areas of the industry.
To further pry open the wholesale-electricity market and to reduce technical inefficiencies caused when different utilities operate different portions of the grid independently, the Commission has encouraged transmission providers to establish “Regional Transmission Organizations” — entities to which transmission providers would transfer operational control of their facilities for the purpose of efficient coordination. Order No. 2000, 65 Fed. Reg. 810, 811-812 (2000); see Midwest ISO, supra, at 1364. It has encouraged the management of those entities by “Independent System Operators,” not-for-profit entities that operate transmission facilities in a nondiseriminatory manner. See Midwest ISO, supra. In addition to coordinating transmission service, Regional Transmission Organizations perform other functions, such as running auction markets for electricity sales and offering contracts for hedging against potential grid congestion. See Blumsack, Measuring the Benefits and Costs of Regional Electric Grid Integration, 28 Energy L. J. 147 (2007).
Against this backdrop of technological change and market-based reforms, the Commission over the past two decades has begun to permit sellers of wholesale electricity to file “market-based” tariffs. These tariffs, instead of setting forth rate schedules or rate-fixing contracts, simply state that the seller will enter into freely negotiated contracts with purchasers. See generally Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities, Order No. 697, 72 Fed. Reg. 39904 (2007) (hereinafter Market-Based Rates); McGrew 160-167. FERC does not subject the contracts entered into under these tariffs (as it subjected traditional wholesale-power contracts) to § 824d’s requirement of immediate filing, apparently on the theory that the requirement has been satisfied by the initial filing of the market-based tariffs themselves. See Brief for Respondent FERC 28-29 (hereinafter Brief for FERC).
FERC will grant approval of a market-based tariff only if a utility demonstrates that it lacks or has adequately mitigated market power, lacks the capacity to erect other barriers to entry, and has avoided giving preferences to its affiliates. See Market-Based Rates ¶ 7, 72 Fed. Reg. 39907. In addition to the initial authorization of a market-based tariff, FERC imposes ongoing reporting requirements. A seller must file quarterly reports summarizing the contracts that it has entered into, even extremely short-term contracts. See California ex rel. Lockyer v. FERC, 383 F. 3d 1006, 1013 (CA9 2004). It must also demonstrate every four months that it still lacks or has adequately mitigated market power. See ibid. If FERC determines from these filings that a seller has reattained market power, it may revoke the authority prospectively. See Market-Based Rates ¶ 5, 72 Fed. Reg. 39906. And if the Commission finds that a seller has violated its Regional Transmission Organization’s market rules, its tariff, or Commission orders, the Commission may take appropriate remedial action, such as ordering refunds, requiring disgorgement of profits, and imposing civil penalties. See ibid.
Both the Ninth Circuit and the D. C. Circuit have generally approved FERC’s scheme of market-based tariffs. See Lockyer, supra, at 1011-1013; Louisiana Energy & Power Auth. v. FERC, 141 F. 3d 364, 365 (CADC 1998). We have not hitherto approved, and express no opinion today, on the lawfulness of the market-based-tariff system, which is not one of the issues before us. It suffices for the present cases to recognize that when a seller files a market-based tariff, purchasers no longer have the option of buying electricity at a rate set by tariff and contracts no longer need to be filed with FERC (and subjected to its investigatory power) before going into effect.
C
California’s Electricity Regulation and Its Consequences
In 1996, California enacted Assembly Bill 1890 (AB 1890), which massively restructured the California electricity market. See 1996 Cal. Stat. ch. 854 (codified at Cal. Pub. Util. Code Ann. §§ 330-398.5 (West 2004 and Supp. 2008)); see generally Cudahy, Whither Deregulation: A Look at the Portents, 58 N. Y. U. Annual Survey of Am. Law 155, 172-185 (2001) (hereinafter Cudahy). The bill transferred operational control of the transmission facilities of California’s three largest investor-owned utilities to an Independent Service Operator (Cal-ISO). See Pacific Gas & Elec. Co. v. FERC, 464 F. 3d 861, 864 (CA9 2006). It also established the California Power Exchange (CalPX), a nonprofit entity that operated a short-term market — or “spot market” — for electricity. The bill required California’s three largest investor-owned utilities to divest most of their electricity-generation facilities. It then required those utilities to purchase and sell the bulk of their electricity from and to the CalPX’s spot market, permitting only limited leeway for them to enter into long-term contracts. See Public Util. Dist. No. 1 of Snohomish Cty. v. FERC, 471 F. 3d 1053, 1068 (CA9 2006) (case below).
In 1997, FERC approved the Cal-ISO as consistent with the requirements for an Independent Service Operator established in Order No. 888. FERC also approved the CalPX and the investor-owned utilities’ authority to make sales at market-based rates in the CalPX, finding that, in light of the divesture of their generation units and other conditions imposed under the restructuring plan, those utilities had adequately mitigated their market power. See Pacific Gas & Elec. Co., 81 FERC ¶ 61,122, pp. 61,435, 61,435-61,436, 61,537-61,548 (1997).
The CalPX opened for business in March 1998. In the summer of 1999, it expanded to include an auction for sales of electricity under “forward contracts”—contracts in which sellers promise to deliver electricity more than one day in the future (sometimes many years). But the participation of California’s large investor-owned utilities in that forward market was limited because, as we have said, AB 1890 strictly capped the amount of power that they could purchase outside of the spot market. See 471 F. 3d, at 1068.
That diminishment of the role of long-term contracts in the California electricity market turned out to be one of the seeds of an energy crisis. In the summer of 2000, the price of electricity in the CalPX’s spot market jumped dramatically — more than fifteenfold. See ibid. The increase was the result of a combination of natural, economic, and regulatory factors: “flawed market rules; inadequate addition of generating facilities in the preceding years; a drop in available hydropower due to drought conditions; a rupture of a major pipeline supplying natural gas into California; strong growth in the economy and in electricity demand; unusually high temperatures; an increase in unplanned outages of extremely old generating facilities; and market manipulation.” CAlifornians for Renewable Energy, Inc. v. Sellers of Energy and Ancillary Servs., 119 FERC ¶ 61,058, pp. 61,243, 61,247 (2007). Because California’s investor-owned utilities had for the most part been forbidden to obtain their power through long-term contracts, the turmoil in the spot market hit them hard. See Cudahy 174. The high prices led to rolling blackouts and saddled utilities with mounting debt.
In late 2000, the Commission took action. A central plank of its emergency effort was to eliminate the utilities’ reliance on the CalPX’s spot market and to shift their purchases to the forward market. To that end, FERC abolished the requirement that investor-owned utilities purchase and sell all power through the CalPX and encouraged them to enter into long-term contracts. See San Diego Gas & Electric Co. v. Sellers of Energy and Ancillary Servs., 93 FERC ¶ 61,294, pp. 61,980, 61,982 (2000); see also 471 F. 3d, at 1069. The Commission also put price caps on wholesale electricity. See San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Servs., 95 FERC ¶ 61,418, p. 62,545 (2001). By June 2001, electricity prices began to decline to normal levels. Id., at 62,546.
D
Genesis of These Cases
The principal respondents in these cases are western utilities that purchased power under long-term contracts during that tumultuous period in 2000 and 2001. Although they are not located in California, the high prices in California spilled over into other Western States. See 471 F. 3d, at 1069. Petitioners are the sellers that entered into the contracts with respondents.
The contracts between the parties included rates that were very high by historical standards. For example, respondent Snohomish signed a 9-year contract to purchase electricity from petitioner Morgan Stanley at a rate of $105/ megawatt hour (MWh), whereas prices in the Pacific Northwest have historically averaged $24/MWh. The contract prices were substantially lower, however, than the prices that Snohomish would have paid in the spot market during the energy crisis, when prices peaked at $3,300/MWh. See id., at 1069-1070.
After the crisis had passed, buyer’s remorse set in and respondents asked FERC to modify the contracts. They contended that the rates in the contracts should not be presumed to be just and reasonable under Mobile-Sierra because, given the sellers’ market-based tariffs, the contracts had never been initially approved by the Commission without the presumption. See Nevada Power Co. v. Enron Power Marketing, Inc., 103 FERC ¶ 61,353, pp. 62,382, 62,387 (2003). Respondents also argued that contract modification was warranted even under the Mobile-Sierra presumption because the contract rates were so high that they violated the public interest. See 103 FERC, at 62,383, 62,387-62,395.
In a preliminary order, the Commission instructed the Administrative Law Judge (ALJ) to consider 12 different factors in deciding whether the presumption could be overcome for the contracts, such as the terms of the contracts, the available alternatives at the time of sale, the relationship of the rates to Commission benchmarks, the effect of the contracts on the financial health of the purchasers, and the impact of contract modification on national energy markets. After a hearing, the ALJ concluded that the Mobile-Sierra presumption should apply to the contracts and that the contracts did not seriously harm the public interest. In fact, according to the ALJ, even if the Mobile-Sierra presumption did not apply, respondents would not be entitled to have the contracts modified. 103 FERC, at 62,390-62,394.
Between the ALJ’s decision and the Commission’s ruling, the Commission’s staff issued a report (Staff Report) concluding that unlawful activities of various sellers in the spot market had affected prices in the forward market. See id., at 62,396. Respondents raised the report at oral argument before the Commission, and some of them argued that petitioners “were unlawfully manipulating market prices, thereby engaging in fraud and deception in violation of their market-based rate tariffs.” Ibid. Petitioners contended, however, that the Staff Report demonstrated only a correlation between rates in the spot and forward markets, not a causal connection. See ibid.
FERC affirmed the ALJ. The Commission first held that the Mobile-Sierra presumption did apply to the contracts at issue. Although agreeing with respondents that the presumption applies only where FERC has had an initial opportunity to review a contract rate, the Commission relied on the somewhat metaphysical ground that the grant of market-based authority to petitioners qualified as that initial opportunity. See 103 FERC, at 62,388-62,389. The Commission then held that respondents could not overcome the Mobile-Sierra presumption. It recognized that the Staff Report had “found that spot market distortions flowed through to forward power prices,” 103 FERC, at 62,396-62,397, but concluded that this finding, even if true, was not “determinative” because:
“a finding that the unjust and unreasonable spot market caused forward bilateral prices to be unjust and unreasonable would be relevant to contract modification only where there is a ‘just and reasonable’ standard of review.... Under the ‘public interest’ standard, to justify contract modification it is not enough to show that forward prices became unjust and unreasonable due to the impact of spot market dysfunctions; it must be shown that the rates, terms and conditions are contrary to the public interest.” Id., at 62,397.
The Commission determined that under the factors identified in Sierra, as well as under a totality-of-the-circumstances test, respondents had not demonstrated that the contracts threatened the public interest. See 103 FERC, at 62,397-62,399. On rehearing, respondents reiterated their complaints, including their charge that “their contracts were the product of market manipulation by Enron, Morgan Stanley and other [sellers].” 105 FERC ¶ 61,185, pp. 61,979, 61,989 (2003). The Commission answered that there was “no evidence to support a finding of market manipulation that specifically affected the contracts at issue.” Id., at 61,989.
Respondents filed petitions for review in the Ninth Circuit, which granted the petitions and remanded to the Commission, finding two flaws in the Commission’s analysis. First, the court agreed with respondents that rates set by contract (whether pursuant to a market-based tariff or not) are presumptively reasonable only where FERC has had an initial opportunity to review the contracts without applying the Mobile-Sierra presumption. To satisfy that prerequisite under the market-based tariff regime, the court said, the Commission must promptly review the terms of contracts after their formation and must modify those that do not appear to be just and reasonable when evaluated without the Mobile-Sierra presumption (rather than merely revoking market-based authority prospectively but leaving preexisting contracts intact). See 471 F. 3d, at 1075-1077, 1079-1085. This initial review must include an inquiry into “the market conditions in which the contracts at issue were formed,” and market “dysfunction” is a ground for finding a contract not to be just and reasonable. Id., at 1085-1087. Second, the Ninth Circuit held that even assuming that the Mobile-Sierra presumption applied, the standard for overcoming that presumption is different for a purchaser’s challenge to a contract, namely, whether the contract rate exceeds a “zone of reasonableness.” 471 F. 3d, at 1088-1090.
We granted certiorari. See 551 U. S. 1189 (2007).
II
A
Application of Mobile-Sierra Presumption to Contracts Concluded Under Market-Based Rate Authority
As noted earlier, the FERC order under review here agreed with the Ninth Circuit’s premise that the Commission must have an initial opportunity to review a contract without the Mobile-Sierra presumption, but maintained that the authorization for market-based rate authority qualified as that initial review. Before this Court, however, FERC changes its tune, arguing that there is no such prerequisite — or at least that FERC could reasonably conclude so and therefore that Chevron deference is in order. See Brief for FERC 20-21, 33-34; Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). We will not uphold a discretionary agency decision where the agency has offered a justification in court different from what it provided in its opinion. See SEC v. Chenery Corp., 318 U. S. 80, 94-95 (1943). But FERC has lucked out: The Chenery doctrine has no application to these cases, because we conclude that the Commission was required, under our decision in Sierra, to apply the Mobile-Sierra presumption in its evaluation of the contracts here. That it provided a different rationale for the necessary result is no cause for upsetting its ruling. “To remand would be an idle and useless formality. Chenery does not require that we convert judicial review of agency action into a ping-pong game.” NLRB v. Wyman-Gordon Co., 394 U. S. 759, 766-767, n. 6 (1969) (plurality opinion).
We are in broad agreement with the Ninth Circuit on a central premise: There is only one statutory standard for assessing wholesale-electricity rates, whether set by contract or tariff — the just-and-reasonable standard. The plain text of the FPA states that “[a]ll rates... shall be just and reasonable.” 16 U. S. C. § 824d(a); see also § 824e(a) (2000 ed., Supp. V). But we disagree with the Ninth Circuit’s interpretation of Sierra as requiring (contrary to the statute) that the Commission apply the standard differently, depending on when a contract rate is challenged. In the Ninth Circuit’s view, Sierra was premised on the idea that “as long as the rate was just and reasonable when the contract was formed, there would be a presumption... that the reasonableness continued throughout the term of the contract.” 471 F. 3d, at 1077. In other words, so long as the Commission concludes (either after a hearing or by allowing a rate to go into effect) that a contract rate is just and reasonable when initially filed, the rate will be presumed just and reasonable in future proceedings.
That is a misreading of Sierra. Sierra was grounded in the commonsense notion that “[i]n wholesale markets, the party charging the rate and the party charged [are] often sophisticated businesses enjoying presumptively equal bargaining power, who could be expected to negotiate a ‘just and reasonable’ rate as between the two of them.” Verizon, 535 U. S., at 479. Therefore, only when the mutually agreed-upon contract rate seriously harms the consuming public may the Commission declare it not to be just and reasonable. Sierra thus provided a definition of what it means for a rate to satisfy the just-and-reasonable standard in the contract context — a definition that applies regardless of when the contract is reviewed. The Ninth Circuit, by contrast, essentially read Sierra “as the equivalent of an estoppel doctrine,” whereby an initial Commission opportunity for review prevents the Commission from modifying the rates absent serious future harm to the public interest. Tewksbury & Lim, Applying the Mobile-Sierra Doctrine to Market-Based Rate Contracts, 26 Energy L. J. 437, 457-458 (2005). But Sierra said nothing of the sort. And given that the Commission’s passive permission for a rate to go into effect does not constitute a finding that the rate is just and reasonable, it would be odd to treat that initial “opportunity for review” as curtailing later challenges.
The Ninth Circuit found support for its prerequisite in our decision in FPC v. Texaco Inc., 417 U. S. 380 (1974). In that case, we warned that the Commission’s attempt to rely solely on market forces to evaluate rates charged by small natural-gas producers was inconsistent with the Natural Gas Act’s insistence that rates be just and reasonable. See id., at 397. The Ninth Circuit apparently took this to mean that all initially filed contracts must be subject to review without the Mobile-Sierra presumption. But Texaco had nothing to do with that doctrine. It held that the Commission had improperly implemented a scheme of total deregulation by applying no standard of review at all to small-producer rates. See 417 U. S., at 395-397. It did not cast doubt on the proposition that in a proper regulatory scheme, the ordinary mode for evaluating contractually set rates is to look to whether the rates seriously harm the public interest, not to whether they are unfair to one of the parties that voluntarily assented to the contract. Cf. id., at 391, n. 4.
Nor do we agree with the Ninth Circuit that FERC must inquire into whether a contract was formed in an environment of market “dysfunction” before applying the Mobile-Sierra presumption. Markets are not perfect, and one of the reasons that parties enter into wholesale-power contracts is precisely to hedge against the volatility that market imperfections produce. That is why one of the Commission’s responses to the energy crisis was to remove regulatory barriers to long-term contracts. It would be a perverse rule that rendered contracts less likely to be enforced when there is volatility in the market. (Such a rule would come into play, after all, only when a contract formed in a period of “dysfunction” did not significantly harm the consuming public, since contracts that seriously harm the public should be set aside even under the Mobile-Sierra presumption.) By enabling sophisticated parties who weathered market turmoil by entering long-term contracts to renounce those contracts once the storm has passed, the Ninth Circuit’s holding would reduce the incentive to conclude such contracts in the future. Such a rule has no support in our case law and plainly undermines the role of contracts in the FPA’s statutory scheme.
To be sure, FERC has ample authority to set aside a contract where there is unfair dealing at the contract formation stage — for instance, if it finds traditional grounds for the abrogation of the contract such as fraud or duress. See 103 FERC, at 62,399-62,400 (“[T]here is no evidence of unfairness, bad faith, or duress in the original negotiations”). In addition, if the “dysfunctional” market conditions under which the contract was formed were caused by illegal action of one of the parties, FERC should not apply the Mobile-Sierra presumption. See Part III, infra. But the mere fact that the market is imperfect, or even chaotic, is no reason to undermine the stabilizing force of contracts that the FPA embraced as an alternative to “purely tariff-based regulation.” Verizon, 535 U. S., at 479. We may add that evaluating market “dysfunction” is a very difficult and highly speculative task — not one that the FPA would likely require the agency to engage in before holding sophisticated parties to their bargains.
We reiterate that we do not address the lawfulness of FERC’s market-based-rates scheme, which assuredly has its critics. But any needed revision in that scheme is properly addressed in a challenge to the scheme itself, not through a disfigurement of the venerable Mobile-Sierra doctrine. We hold only that FERC may abrogate a valid contract only if it harms the public interest.
B
Application of “Excessive Burden” Exception to High-Rate Challenges
We turn now to the Ninth Circuit’s second holding: that a “zone of reasonableness” test should be used to evaluate a buyer’s challenge that a rate is too high. In our view that fails to accord an adequate level of protection to contracts. The standard for a buyer’s challenge must be the same, generally speaking, as the standard for
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Brennan
delivered the opinion of the Court.
The Judicial Officer of the Department of Agriculture, acting for the Secretary of Agriculture, found that respondent, a registrant under the Packers and Stockyards Act, 1921, 42 Stat. 159, 7 U. S. C. § 181 et seq., wilfully violated §§ 307 (a) and 312 (a) of the Act, 7 U. S. C. §§ 208 (a) and 213 (a), by incorrect weighing of livestock, and also breached § 401, 7 U. S. C. § 221, by entries of false weights. An order was entered directing that respondent cease and desist from the violations and keep correct accounts, and also suspending respondent as a registrant under the Act for 20 days. Upon review of the decision and order, the Court of Appeals for the Eighth Circuit upheld, as supported by substantial evidence, the findings that respondent violated the Act by short-weighting cattle, and also sustained the cease-and-desist order and the order to keep correct accounts. The Court of Appeals, however, set aside the 20-day suspension. 454 F. 2d 109 (1972). We granted certiorari to consider whether, in doing so, the Court of Appeals exceeded the scope of proper judicial review of administrative sanctions. 409 U. S. 947 (1972). We conclude that the setting aside of the suspension was an impermissible judicial intrusion into the administrative domain under the circumstances of this case, and reverse.
Respondent operates a stockyard in Pine Bluff, Arkansas. As a registered “market agency” under § 303 of the Act, 7 U. S. C. § 203, respondent is authorized to sell consigned livestock on commission, subject to the regulatory provisions of the Act and the Secretary’s implementing regulations. Investigations of respondent’s operations in 1964, 1966, and 1967 uncovered instances of underweighing of consigned livestock. Respondent was informally warned to correct the situation, but when a 1969 investigation revealed more underweighing, the present proceeding was instituted by the Administrator of the Packers and Stockyards Administration.
Following a hearing and the submission of briefs, the Department of Agriculture hearing examiner found that respondent had “intentionally weighed the livestock at less than their true weights, issued scale tickets and accountings to the consignors on the basis of the false weights, and paid the consignors on the basis of the false weights.” The hearing examiner recommended, in addition to a cease-and-desist order and an order to keep correct records, a 30-day suspension of respondent’s registration under the Act.
The matter was then referred to the Judicial Officer.After hearing oral argument, the Judicial Officer filed a decision and order accepting the hearing examiner’s findings and adopting his recommendations of a cease-and-desist order and an order to keep correct records. The recommended suspension was also imposed but was reduced to 20 days. The Judicial Officer stated:
“It is not a pleasant task to impose sanctions but in view of the previous warnings given respondent we conclude that we should not only issue a cease and desist order but also a suspension of respondent as a registrant under the act but for a lesser period than recommended by complainant and the hearing examiner.” 30 Agri. Dec. 179, 186 (1971).
The Court of Appeals agreed that 7 U. S. C. § 204 authorized the Secretary to suspend “any registrant found in violation of the Act,” 454 F. 2d, at 113, that the suspension procedure here satisfied the relevant requirements of the Administrative Procedure Act, 5 U. S. C. § 558, and that “the evidence indicates that [respondent] acted with careless disregard of the statutory requirements and thus meets the test of wilfulness.’ ” 454 F. 2d, at 115. The court nevertheless concluded that the suspension order was “unconscionable” under the circumstances of this case. The court gave two reasons. The first, relying on four previous suspension decisions, was that the Secretary’s practice was not to impose suspensions for negligent or careless violations but only for violations found to be “intentional and flagrant,” and therefore that the suspension in respondent’s case was contrary to a policy of “ ‘achieving] . . . uniformity of sanctions for similar violations.’ ” The second reason given was that “[t]he cease and desist order coupled with the damaging publicity surrounding these proceedings would certainly seem appropriate and reasonable with respect to the practice the Department seeks to eliminate.” Id., at 114, 115.
The applicable standard of judicial review in such cases required review of the Secretary’s order according to the “fundamental principle . . . that where Congress has entrusted an administrative agency with the responsibility of selecting the means of achieving the statutory policy 'the relation of remedy to policy is peculiarly a matter for administrative competence.’ ” American Power Co. v. SEC, 329 U. S. 90, 112 (1946). Thus, the Secretary’s choice of sanction was not to be overturned unless the Court of Appeals might find it “unwarranted in law or . . . without justification in fact . . . Id., at 112-113; Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 194 (1941); Moog Industries, Inc. v. FTC, 355 U. S. 411, 413-414 (1958); FTC v. Universal-Rundle Corp., 387 U. S. 244, 250 (1967); 4 K. Davis, Administrative Law §30.10, pp. 250-251 (1958). The Court of Appeals acknowledged this definition of the permissible scope of judicial review but apparently regarded respondent’s suspension as “unwarranted in law” or “without justification in fact.” We cannot agree that the Secretary’s action can be faulted in either respect on this record.
We read the Court of Appeals’ opinion to suggest that the sanction was “unwarranted in law” because “uniformity of sanctions for similar violations” is somehow mandated by the Act. We search in vain for that requirement in the statute. The Secretary may suspend “for a reasonable specified period” any registrant who has violated any provision of the Act. 7 U. S. C. § 204. Nothing whatever in that provision confines its application to cases of “intentional and flagrant conduct” or denies its application in cases of negligent or careless violations. Rather, the breadth of the grant of authority to impose the sanction strongly implies a congressional purpose to permit the Secretary to impose it to deter repeated violations of the Act, whether intentional or negligent. Hyatt v. United States, 276 F. 2d 308, 313 (CA10 1960) ; G. H. Miller & Co. v. United States, 260 F. 2d 286 (CA7 1958); In re Silver, 21 Agri. Dec. 1438, 1452 (1962). The employment of a sanction within the authority of an administrative agency is thus not rendered invalid in a particular case because it is more severe than sanctions imposed in other cases. FCC v. WOKO, 329 U. S. 223, 227-228 (1946); FTC v. Universal-Rundle Corp., 387 U. S., at 250, 251; G. H. Miller & Co. v. United States, supra, at 296; Hiller v. SEC, 429 F. 2d 856, 858-859 (CA2 1970); Dlugash v. SEC, 373 F. 2d 107, 110 (CA2 1967) ; Kent v. Hardin, 425 F. 2d 1346, 1349 (CA5 1970).
Moreover, the Court of Appeals may have been in error in acting on the premise that the Secretary’s practice was to impose suspensions only in cases of “intentional and flagrant conduct.” The Secretary’s practice, rather, apparently is to employ that sanction as in his judgment best serves to deter violations and achieve the objectives of that statute. Congress plainly intended in its broad grant to give the Secretary that breadth of discretion. Therefore, mere unevenness in the application of the sanction does not render its application in a particular case “unwarranted in law.”
Nor can we perceive any basis on this record for a conclusion that the suspension of respondent was so “without justification in fact” “as to constitute an abuse of [the Secretary’s] discretion.” American Power Co. v. SEC, 329 U. S., at 115; Moog Industries, Inc. v. FTC, 355 U. S., at 414; Barsky v. Board of Regents, 347 U. S. 442, 455 (1954). The Judicial Officer rested the suspension on his view of its necessity in light of respondent’s disregard of previous warnings. The facts found concerning the previous warnings and respondent’s disregard of these warnings were sustained by the Court of Appeals as based on ample evidence. In that circumstance, the overturning of the suspension authorized by the statute was an impermissible intrusion into the administrative domain.
Similarly, insofar as the Court of Appeals rested its action on its view that, in light of damaging publicity about the charges, the cease-and-desist order sufficiently redressed respondent’s violations, the court clearly exceeded its function of judicial review. The fashioning of an appropriate and reasonable remedy is for the Secretary, not the court. The court may decide only whether, under the pertinent statute and relevant facts, the Secretary made “an allowable judgment in [his] choice of the remedy.” Jacob Siegel Co. v. FTC, 327 U. S. 608, 612 (1946).
Reversed.
7 U. S. C. §§ 201-217a. Specifically, registrants are prohibited from engaging in or using “any unfair, unjustly discriminatory, or deceptive practice or device in connection with . . . receiving, marketing, buying, or selling on a commission basis or otherwise, feeding, watering, holding, delivery, shipment, weighing, or handling ... of livestock,” 7 U. S. C. §213 (a), and are required to “keep such accounts, records, and memoranda as fully and correctly disclose all transactions involved in his business 7 U. S. C. §221.
The Secretary’s regulations may be found in 9 CFR pt. 201.
App. 35.
The Court of Appeals stated:
“Ordinarily it is not for the courts to modify ancillary features of agency orders which are supported by substantial evidence. The shaping of remedies is peculiarly within the special competence of the regulatory agency vested by Congress with authority to deal with these matters, and so long as the remedy selected does not exceed the agency’s statutory power to impose and it bears a reasonable relation to the practice sought to be eliminated, a reviewing court may not interfere. . . . [A]ppellate courts [may not] enter the more spacious domain of public policy which Congress has entrusted in the various regulatory agencies.” 454 F. 2d 109, 114.
The Court of Appeals cited a 1962 decision by the Secretary in which appears a reference to “uniformity of sanctions for similar violations.” In re Silver, 21 Agri. Dec. 1438 (1962). That reference is no support for the Court of Appeals’ decision, however, for the Secretary said expressly in that decision:
“False and incorrect weighing of livestock by registrants under the act is a flagrant and serious violation thereof ...” and “even if respondent did not give instructions for the false weighings, his negligence in allowing the false weighings over an extended period brings such situation unthin the reach of the cited cases [sustaining sanctions] and we would still order the sanctions below.” Id., at 1452 (emphasis added).
It is by no means clear that respondent’s violations were merely negligent. The hearing examiner found that respondent had “intentionally” underweighed livestock, and the Judicial Officer stated: “We conclude then, as did the hearing examiner, that respondent wilfully violated . . . the act.” (Emphasis added.) “Wilfully” could refer to either intentional conduct or conduct that was merely careless or negligent. It seems clear, however, that the Judicial Officer sustained the hearing examiner’s finding that the violations were “intentional.”
See, e. g., In re Martella, 30 Agri. Dec. 1479 (1971); In re Meggs, 30 Agri. Dec. 1314 (1971); In re Producers Livestock Mar keting Assn., 30 Agri. Dec. 796 (1971); In re Trimble, 29 Agri. Dec. 936 (1970); In re Anson, 28 Agri. Dec. 1127 (1969); In re Williamstown Stockyards, 27 Agri. Dec. 252 (1968); In re Middle Georgia Livestock Sales Co., 23 Agri. Dec. 1361 (1964). These cases involve suspension of registrants under the Packers and Stockyards Act for false weighing of producers’ livestock and in none was there a finding that the violation was intentional or flagrant. There are also many cases of suspension for diverse other violations without a finding that the conduct was intentional or flagrant. See, e. g., In re Wallis, 29 Agri. Dec. 37 (1970).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice White
delivered the opinion of the Court.
This case concerns the application of state-law rules affecting the measure of damages in an action brought in state court under the Federal Employers’ Liability Act (FELA), 35 Stat. 65, as amended, 45 U. S. C. § 51 et seq.
H
Appellee was employed by appellant as a railroad brakeman and conductor. In August 1977, appellee fell while alighting from a railroad car and suffered a permanent injury to his back. He returned to work in February 1979 in the less physically demanding position of radio and supply clerk.
Appellee brought an FELA action in the Court of Common Pleas of Allegheny County, Pennsylvania, alleging that his fall was attributable to appellant’s negligence. He claimed that his future earning power had been impaired as a result of his injury because he could not obtain certain incentive and shift differential payments in his new position.
The trial judge refused to instruct the jury that any damages award for loss of future earnings would have to be reduced to present value. Instead, she informed the jury that “[t]he law now provides that there need not be such a reduction.” App. 61. The judge apparently was referring to the Pennsylvania Supreme Court’s decision in Kaczkowski v. Bolubasz, 491 Pa. 561, 583, 421 A. 2d 1027, 1038-1039 (1980), which had instructed state courts to cease discounting future lost earnings to present value because “as a matter of law. . . future inflation shall be presumed equal to future interest rates with these factors offsetting.”
The jury found in favor of appellee and awarded damages of $125,000. The trial judge assessed an additional $26,712.50 as prejudgment interest pursuant to Rule 238 of the Pennsylvania Rules of Civil Procedure. Rule 238 requires state courts in personal injury actions to “add to the amount of compensatory damages . . . , damages for delay at ten (10) percent per annum, not compounded,” from “the date the plaintiff filed the initial complaint in the action or from a date one year after the accrual of the cause of action, whichever is later,” to the date of the verdict. The judge rejected appellant’s contention that Rule 238 could not be applied to FELA actions.
A three-judge panel of the Pennsylvania Superior Court affirmed. 339 Pa. Super. 465, 489 A. 2d 254 (1985).
The Pennsylvania Supreme Court granted appellant’s petition for allowance of appeal and subsequently affirmed by a narrow margin. 513 Pa. 86, 518 A. 2d 1171 (1986).
The court characterized Rule 238 as a mere “rule of procedure” designed to encourage meaningful settlement negotiations and thereby alleviate congestion in the trial courts. Id., at 98-99, 518 A. 2d, at 1177. The court concluded that, as neither the “worthy goal” nor the specific provisions of Rule 238 contravened the purposes and provisions of the FELA, the Pennsylvania courts could apply Rule 238 to award prejudgment interest in FELA cases as well as in cases involving only state law. Ibid.
The court recognized that whether the trial judge had properly refused to instruct the jury to discount future damages to present value, and instead applied the so-called “total offset” method, was a question of federal law. See St. Louis Southwestern R. Co. v. Dickerson, 470 U. S. 409, 411 (1985) (per curiam). The court noted our discussion of a Federal District Court’s use of Pennsylvania’s total offset rule in Jones & Laughlin Steel Corp. v. Pfeifer, 462 U. S. 523 (1983), a case brought under the Longshoremen’s and Harbor Workers’ Compensation Act (LHWCA), 33 U. S. C. §904. We held in Pfeifer that “whatever rate the District Court may choose to discount the estimated stream of future earnings, it must make a deliberate choice, rather than assuming that it is bound by a rule of state law.” 462 U. S., at 552-553. Here, the trial judge’s use of the total offset rule was held to have been permissible under Pfeifer because the reviewing court had itself “deliberately selected” that rule in Kaczkowski v. Bolubasz “after a thorough consideration of various present worth theories and rules. ” 513 Pa., at 92-93, 518 A. 2d, at 1174. Nor did the court find any inconsistency between the trial judge’s use of the total offset rule and our holding in Dickerson that “an utter failure to instruct the jury that present value is the proper measure of [an FELA] damages award is error.” 470 U. S., at 412. Here, reasoned the court, “the trial judge did instruct the jury on present value by charging on the total offset method.” 513 Pa., at 94-95, 518 A. 2d, at 1175.
We noted probable jurisdiction, 484 U. S. 813 (1987), and now reverse.
II
We first consider whether state courts may award prejudgment interest pursuant to local practice in actions brought under the FELA.
A
State courts are required to apply federal substantive law in adjudicating FELA claims. Dickerson, supra, at 411; Chesapeake & Ohio R. Co. v. Kuhn, 284 U. S. 44, 46-47 (1931). It has long been settled that “the proper measure of damages [under the FELA] is inseparably connected with the right of action,” and therefore is an issue of substance that “must be settled according to general principles óf law as administered in the Federal courts.” Chesapeake & Ohio R. Co. v. Kelly, 241 U. S. 485, 491 (1916); see also Dickerson, supra, at 411; Norfolk & Western R. Co. v. Liepelt, 444 U. S. 490, 493 (1980).
The question of what constitutes “the proper measure of damages” under the FELA necessarily includes the question whether prejudgment interest may be awarded to a prevailing FELA plaintiff. Prejudgment interest is normally designed to make, the plaintiff whole and is part of the actual damages sought to be recovered. West Virginia v. United States, 479 U. S. 305, 310, and 310-311, n. 2 (1987); General Motors Corp. v. Devex Corp., 461 U. S. 648, 655-656 (1983); Poleto v. Consolidated Rail Corporation, 826 F. 2d 1270, 1278 (CA3 1987); Wilson v. Burlington Northern R. Co., 803 F. 2d 563, 566 (CA10 1986) (McKay, J., concurring), cert. denied, 480 U. S. 946 (1987). Moreover, prejudgment interest may constitute a significant portion of an FELA plaintiff’s total recovery. Here, for example, the trial court’s award of $26,712.50 in prejudgment interest under Rule 238 increased appellee’s total recovery by more than 20 percent. Accordingly, the Pennsylvania courts erred in treating the availability of prejudgment interest in FELA actions as a matter of state law rather than federal law.
The Pennsylvania courts cannot avoid the application of federal law to determine the availability of prejudgment interest under the FELA by characterizing Rule 238 as nothing more than a procedural device to relieve court congestion. In Dice v. Akron, C. & Y. R. Co., 342 U. S. 359 (1952), the Ohio courts had applied a state procedural rule in an FELA action that permitted the judge rather than the jury to resolve factual questions as to whether a release had been fraudulently obtained. We reversed on the ground that “the right to trial by jury is too substantial a part of the rights accorded by the Act to permit it to be classified as a mere ‘local rule of procedure’ for denial in the manner that Ohio has here used.” Id., at 363. See also Brown v. Western R. Co. of Alabama, 338 U. S. 294, 298-299 (1949). Similarly, prejudgment interest constitutes too substantial a part of a defendant’s potential liability under the FELA for this Court to accept a State’s classification of a provision such as Rule 238 as a mere “local rule of procedure.” We therefore turn to the issue whether federal law authorizes awards of prejudgment interest in FELA actions.
B
Neither the FELA itself nor the general federal interest statute, 28 U. S. C. § 1961, makes any mention of prejudgment interest. It is true that Congress’ silence as to the availability of interest on an obligation created by federal law does not, without more, “manifes[t] an unequivocal congressional purpose that the obligation shall not bear interest.” Rodgers v. United States, 332 U. S. 371, 373 (1947).
We can discern a sufficiently clear indication of legislative intent with regard to prejudgment interest under the FELA, however, when we consider Congress’ silence on this matter in the appropriate historical context. In 1908, when Congress enacted the FELA, the common law did not allow prejudgment interest in suits for personal injury or wrongful death. See C. McCormick, Law of Damages § 56 (1935); 1 T. Sedgwick, Measure of Damages §316 (9th ed. 1912). This was the rule in the federal courts. Pierce v. United States, 255 U. S. 398, 406 (1921); Mowry v. Whitney, 14 Wall. 620, 653 (1872); see also Poleto, supra, at 1276, 1278; Wilson, supra, at 565; Louisiana & Arkansas R. Co. v. Pratt, 142 F. 2d 847, 848 (CA5 1944). Congress expressly dispensed with other common-law doctrines of that era, such as the defense of contributory negligence, see 45 U. S. C. § 53, in order “to provide liberal recovery for injured workers” under the FELA. Kernan v. American Dredging Co., 355 U. S. 426, 432 (1958). But Congress did not deal at all with the equally well-established doctrine barring the recovery of prejudgment interest, and we are unpersuaded that Congress intended to abrogate that doctrine sub silentio.
Moreover, we have recognized that Congress’ failure to disturb a consistent judicial interpretation of a statute may provide some indication that “Congress at least acquiesces in, and apparently affirms, that [interpretation].” Cannon v. University of Chicago, 441 U. S. 677, 703. (1979); see also Gulf Oil Corp. v. Copp Paving Co., 419 U. S. 186, 200-201 (1974); Flood v. Kuhn, 407 U. S. 258, 283-284 (1972). The federal and state courts have held with virtual unanimity over more than seven decades that prejudgment interest is not available under the FELA. See, e. g., Poleto, 826 F. 2d, at 1279; Wilson, 803 F. 2d, at 566; Kozar v. Chesapeake & Ohio R. Co., 449 F. 2d 1238, 1244 (CA6 1971); Pratt, supra, at 848-849; Chicago, M., St. P. & P. R. Co. v. Busby, 41 F. 2d 617, 619 (CA9 1930); Carmouche v. Southern Pacific Transportation Co., 734 S. W. 2d 46, 47 (Tex. App. 1987); Melin v. Burlington Northern R. Co., 401 N. W. 2d 418, 420 (Minn. App. 1987); Wicks v. Central R. Co., 129 N. J. Super. 145, 147, 322 A. 2d 488, 489, cert. denied, 66 N. J. 317, 331 A. 2d 17 (1974); Murmann v. New York, N. H. & H. R. Co., 258 N. Y. 447, 450, 180 N. E. 114, 115 (1932) (per curiam); Mobile & O. R. Co. v. Williams, 219 Ala. 238, 249, 121 So. 722, 731 (1929); Bennett v. Atchison, T. & S. F. R. Co., 187 Iowa 897, 903-904, 174 N. W. 805, 807 (1919); Grow v. Oregon Short Line R. Co., 47 Utah 26, 29, 150 P. 970, 971 (1915). Congress has amended the FELA on several occasions since 1908. See 36 Stat. 291 (1910); 53 Stat. 1404 (1939); 62 Stat. 989 (1948). Yet, Congress has never attempted to amend the FELA to provide for prejudgment interest. We are unwilling in the face of such congressional inaction to alter the longstanding apportionment between carrier and worker of the costs of railroading injuries. If prejudgment interest is to be available under the FELA, then Congress must expressly so provide.
Ill
We turn now to the question whether the trial court acted consistently with federal law in instructing the jury not to discount appellee’s future lost earnings to present value.
We have consistently recognized that “damages awards in suits governed by federal law should be based on present value.” Dickerson, 470 U. S., at 412. The “self-evident” reason is that “a given sum of money in hand is worth more than the like sum of money payable in the future.” Kelly, 241 U. S., at 489; see also Dickerson, supra, at 412. And, as Kelly and Dickerson demonstrate, the rule governs in FELA cases. Hence, a “failure to instruct the jury that present value is the proper measure of a damages award is error.” 470 U. S., at 412.
Here, the trial court instructed the jury that although it “used to be” that juries were to reduce an award to “something called present worth,” the law now provided that there need not be such a reduction. Tr. 701-702. The “law” referred to was the Pennsylvania Supreme Court’s decision in Kaczkowski v. Bolubasz, 491 Pa. 561, 421 A. 2d 1027 (1980), which held that future inflation would be conclusively presumed to equal future interest rates and that state courts in Pennsylvania therefore were not to reduce damages to present worth. It was error for the court to have refused on the basis of this state rule to allow an FELA award to be reduced to present value, just as it was error for the court in Pfeifer to have failed to make “a deliberate choice”- as to how an LHWCA award was to be reduced to present value and to have “assum[ed] that it [was] bound by a rule of state law.” 462 U. S., at 553.
Under the Court’s FELA cases, the jury has the task of making the present value determination. It was observed in Kelly, for example, that “it may be a difficult mathematical computation for the ordinary juryman to calculate interest on deferred payments, with annual rests, and reach a present cash value.” 241 U. S., at 491. We declined to decide in that case “[w]hether the difficulty should be met by admitting the testimony of expert witnesses, or by receiving in evidence the standard interest and annuity tables in which present values are worked out at various rates of interest and for various periods covering the ordinary expectancies of life.” Ibid. We did not suggest that the difficulty could also be met by permitting the present value calculation to be made by the judge rather than the jury.
The question was addressed more directly two years later in Louisville & Nashville R. Co. v. Holloway, 246 U. S. 525 (1918), which held that an FELA defendant was not entitled to a jury instruction that the present value of future losses must as a matter of law be computed at the State’s 6 percent legal interest rate. The state trial court had properly refused to give an instruction that “sought to subject the jury’s estimate to [such a] rigid mathematical limitatio[n].” Id., at 528.
There is nothing in Pfeifer to suggest that the judge rather than the jury is to determine the discount rate in FELA actions. There, we repeatedly indicated that the present value calculation is to be made by the “trier of fact.” See 462 U. S., at 534, 536, 538, 547-548, 550-551, n. 32. Of course, because Pfeifer was tried to the bench, the “trier of fact” in that case was a judge rather than a jury.
We do not mean to suggest that the judge in an FELA action is foreclosed from assisting the jury in its present value calculations. Indeed, because “ ‘[t]he average accident trial should not be converted into a graduate seminar on economic forecasting,’” id., at 548 (quoting Doca v. Marina Mercante Nicaraguense, S. A., 634 F. 2d 30, 39 (CA2 1980)), the judge has an obligation to prevent the trial proceedings on the present value issue from becoming unnecessarily prolonged and the jury from becoming hopelessly mired in “difficult mathematical computation.” It is therefore permissible for the judge to recommend to the jury one or more methods of calculating present value so long as the judge does not in effect pre-empt the jury’s function. A trial judge’s instructions to the jury with regard to discount methods — provided that they do not “subject the jury’s estimate to . . . rigid mathematical limitatio[n],” Holloway, supra, at 528 — are entitled to substantial deference on appellate review.
In the present case, however, the trial judge instructed the jury that a zero discount rate was to be applied as a matter of law to appellee’s future damages. This instruction improperly took from the jury the essentially factual question of the appropriate rate at which to discount appellee’s FELA award to present value, and therefore requires reversal.
H-i <3
We conclude that Pennsylvania’s prejudgment interest and “total offset” rules were improperly applied to this FELA action. The judgment of the Pennsylvania Supreme Court is therefore reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Rule 238 provides that, if the defendant made a pretrial settlement offer and the plaintiff’s recovery does not exceed 125 percent of that offer, the court cannot award “delay damages” for the period after the offer was made.
The three dissenting justices maintained that the trial court’s award of “delay damages” under Rule 238 contravened federal substantive law and “undermine[d] the national uniformity FELA was designed to achieve.” 513 Pa., at 102, 518 A. 2d, at 1179. They dismissed as “pure sophistry” the majority’s assertion that Rule 238 was a mere procedural device, observing that “[a]ny rule which increases a damage award by twenty-five percent has an undeniably material effect on damages.” Id., at 101-102, 518 A. 2d, at 1179. In addition, said the dissenters, the trial judge’s refusal to instruct the jury to discount any future damages to present value was inconsistent with federal law. The trial judge had “blindly applied” the Pennsylvania total offset rule, they asserted, and had not made the “deliberate choice” among present value theories required by St. Louis Southwestern R. Co. v. Dickerson, 470 U. S. 409 (1985). 513 Pa., at 100, 518 A. 2d, at 1178.
Other courts have uniformly recognized that the availability of prejudgment interest under the FELA is a question of federal law. See, e. g., Poleto v. Consolidated Rail Corporation, 826 F. 2d 1270, 1274 (CA3 1987); Louisiana & Arkansas R. Co. v. Pratt, 142 F. 2d 847, 848 (CA5 1944); Chicago, M., St. P. & P. R. Co. v. Busby, 41 F. 2d 617, 619 (CA9 1930); Carmouche v. Southern Pacific Transportation Co., 734 S. W. 2d 46, 47 (Tex. App. 1987); Wicks v. Central R. Co., 129 N. J. Super. 145, 147, 322 A. 2d 488, 489, cert. denied, 66 N. J. 317, 331 A. 2d 17 (1974); Mobile & O. R. Co. v. Williams, 219 Ala. 238, 249, 121 So. 722, 731 (1929).
The Court of Appeals for the Third Circuit recognized in an FELA action that Rule 238 is substantive in nature. Poleto v. Consolidated Rail Corporation, supra, at 1274. Indeed, even the Pennsylvania Supreme Court has acknowledged that Rule 238 has “both procedural and substantive elements.” Laudenberger v. Port Authority of Allegheny County, 496 Pa. 52, 66, 436 A. 2d 147, 154 (1981).
As Justice Blackmun’s dissent concedes, the authorities recognized even two decades after the enactment of the FELA that “interest usually was not awarded” in personal injury actions involving claims for both economic and noneconomic injury. Post, at 347 (citing McCormick § 56, p. 224).
In Pierce, the Government obtained a criminal judgment against a corporation, and a fine was imposed. The Government then brought a civil action against the corporation’s shareholders to satisfy the judgment. The Court held that the Government was entitled to interest only from the date of the civil judgment and not from the date of the prior criminal judgment. It was observed that “[a]t common law judgments do not bear interest; interest rests solely upon statutory provision.” 255 U. S., at 406. Accordingly, as the only applicable statute provided for postjudgment interest in civil actions, the Government could not obtain interest prior to the date of the civil judgment either as postjudgment interest in the criminal action or as prejudgment interest in the civil action.
Similarly, the Court refused in an early FELA ease to depart from the common-law rule that a right of action for personal injury was extinguished by the death of the injured party. See Michigan Central R. Co. v. Vreeland, 227 U. S. 59, 67-68 (1913). The Court noted that the FELA did not expressly provide for the survival of the injured employee’s right of action, and that state survival statutes were inapplicable because “[t]he question of survival is not one of procedure, ‘but one which depends on the substance of the cause of action.’” Id., at 67 (quoting Schreiber v. Sharpless, 110 U. S. 76, 80 (1884)).
Congress considered a proposal to authorize prejudgment interest under the general federal interest statute, 28 U. S. C. § 1961, during deliberations on the Federal Courts Improvement Act of 1982, Pub. L. 97-164, 96 Stat. 25. The proposal was omitted from the final legislation. S. Rep. No. 97-275, pp. 11-12 (1981).
Justice Blackmun’s dissent does not recognize the obvious difference between the instant case and previous cases in which the Court allowed prejudgment interest on certain pecuniary losses. See, e. g., General Motors Corp. v. Devex Corp., 461 U. S. 648, 654-656 (1983); Jacobs v. United States, 290 U. S. 13, 16-17 (1933); Waite v. United States, 282 U. S. 508, 509 (1931). In none of those cases did the plaintiff seek prejudgment interest on a cause of action arising under a statute that, like the FELA, was enacted at a time when prejudgment interest was generally unavailable on similar causes of action arising under the common law. The Court would have had no occasion in those cases to consider whether the Congress that adopted the statute under which prejudgment interest was sought intended to dispense sub silentio with a well-established common-law rule barring prejudgment interest on similar claims. Hence, we cannot accept the dissent’s characterization of our analysis as a “departure from our normal inquiry into the relation between an allowance of interest and Congress’ purpose in creating [the underlying] obligation.” Post, at 348.
A similar issue was presented in Vicksburg & Meridian R. Co. v. Putnam, 118 U. S. 545 (1886), a tort action brought against a railroad by an injured passenger. The trial judge had instructed the jury to calculate the present value of the plaintiff’s damages at the rate shown in standard annuity tables. This Court held that such an instruction “tended to mislead the jury ... by giving them to understand that the tables were not merely competent evidencé of the average duration of human life, and of the present value of life annuities, but furnished absolute rules which the law required them to apply in estimating the probable duration of the plaintiff’s life, and the extent of the injury which he had suffered. ” Id., at 557. The Court observed that “it has never been held that the rules to be derived from such tables or computations must be the absolute guides of the judgment and the conscience of the jury.” Id., at 554. The Court discussed this aspect of the Putnam decision in Chesapeake & Ohio R. Co. v. Kelly, 241 U. S. 485 (1916), without questioning its continued validity or intimating that a different rule might apply in FELA actions. See id., at 491-492.
Moreover, as we recognized in Pfeifer, “nothing prevents parties interested in keeping litigation costs under control from stipulating to [the ‘total offset’ method’s] use before trial.” 462 U. S., at 550.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice O’Connor
delivered the opinion of the Court.
This case presents the question whether the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. §1001 et seq., pre-empts a state common law claim that an employee was unlawfully discharged to prevent his attainment of benefits under a plan covered by ERISA.
I
Petitioner Ingersoll-Rand Company employed respondent Perry McClendon as a salesman and distributor of construction equipment. In 1981, after McClendon had worked for the company for nine years and eight months, the company fired him citing a companywide reduction in force. McClen-don sued the company in Texas state court, alleging that his pension would have vested in another four months and that a principal reason for his termination was the company’s desire to avoid making contributions to his pension fund. McClen-don did not realize that pursuant to applicable regulations, see 29 CFR §2530.200b-4 (1990) (break-in-service regulation), he had already been credited with sufficient service to vest his pension under the plan’s 10-year requirement. McClendon sought compensatory and punitive damages under various tort and contract theories; he did not assert any cause of action under ERISA. After a period of discovery, the company moved for, and obtained, summary judgment on all claims. The State Court of Appeals affirmed, holding that McClendon’s employment was terminable at will. 757 S. W. 2d 816 (1988).
In a 5-to-4 decision, the Texas Supreme Court reversed and remanded for trial. The majority reasoned that notwithstanding the traditional employment-at-will doctrine, public policy imposes certain limitations upon an employer’s power to discharge at-will employees. Citing Tex. Rev. Civ. Stat. Ann., Art. 110B (Vernon 1988 pamphlet), and §510 of ERISA, the majority concluded that “the state has an interest in protecting employees’ interests in pension plans.” 779 S. W. 2d 69, 71 (1989). As support the court noted that “[t]he very passage of ERISA demonstrates the great significance attached to income security for retirement purposes.” Ibid. Accordingly, the court held that under Texas law a plaintiff could recover in a wrongful discharge action if he established that “the principal reason for his termination was the employer’s desire to avoid contributing to or paying benefits under the employee’s pension fund.” Ibid. The court noted that federal courts had held similar claims pre-empted by ERISA, but distinguished the present case on the basis that McClendon was “not seeking lost pension benefits but [was] instead seeking lost future wages, mental anguish and punitive damages as a result of the wrongful discharge.” Id., at 71, n. 3 (emphasis in original).
Because this issue has divided state and federal courts, we granted certiorari, 494 U. S. 1078 (1990), and now reverse.
II
“ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans.” Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 90 (1983). “The statute imposes participation, funding, and vesting requirements on pension plans. It also sets various uniform standards, including rules concerning reporting, disclosure, and fiduciary responsibility, for both pension and welfare plans.” Id., at 91 (citation omitted). As part of this closely integrated regulatory system Congress included various safeguards to preclude abuse and “to completely secure the rights and expectations brought into being by this landmark reform legislation.” S. Rep. No. 93-127, p. 36 (1973). Prominent among these safeguards are three provisions of particular relevance to this case: § 514(a), 29 U. S. C. § 1144(a), ERISA’s broad pre-emption provision; §510, 29 U. S. C. § 1140, which proscribes interference with rights protected by ERISA; and § 502(a), 29 U. S. C. § 1132(a), a “ ‘carefully integrated’ ” civil enforcement scheme that “is one of the essential tools for accomplishing the stated purposes of ERISA.” Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41, 52, 54 (1987).
We must decide whether these provisions, singly or in combination, pre-empt the cause of action at issue in this case. “[T]he question whether a certain state action is preempted by federal law is one of congressional intent. ‘The purpose of Congress is the ultimate touchstone.’” Allis-Chalmers Corp. v. Lueck, 471 U. S. 202, 208 (1985) (internal quotation marks omitted) (quoting Malone v. White Motor Corp., 435 U. S. 497, 504 (1978)). To discern Congress’ intent we examine the explicit statutory language and the structure and purpose of the statute. See FMC Corp. v. Holliday, ante, at 56 (citing Shaw, supra, at 95). Regardless of the avenue we follow — whether explicit or implied preemption — this state-law cause of action cannot be sustained.
A
Where, as here, Congress has expressly included a broadly worded pre-emption provision in a comprehensive statute such as ERISA, our task of discerning congressional intent is considerably simplified. In § 514(a) of ERISA, as set forth in 29 U. S. C. § 1144(a), Congress provided:
“Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title.”
“The pre-emption clause is conspicuous for its breadth.” FMC Corp., ante, at 58. Its “deliberately expansive” language was “designed to ‘establish pension plan regulation as exclusively a federal concern.’” Pilot Life, supra, at 46 (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 523 (1981)). The key to § 514(a) is found in the words “relate to.” Congress used those words in their broad sense, rejecting more limited pre-emption language that would have made the clause “applicable only to state laws relating to the specific subjects covered by ERISA.” Shaw, supra, at 98. Moreover, to underscore its intent that § 514(a) be expansively applied, Congress used equally broad language in defining the “State law” that would be pre-empted. Such laws include “all laws, decisions, rules, regulations, or other State action having the effect of law.” §514(c)(1), 29 U. S. C. § 1144(c)(1).
“A law ‘relates to’ an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan.” Shaw, supra, at 96-97. Under this “broad common-sense meaning,” a state law may “relate to” a benefit plan, and thereby be pre-empted, even if the law is not specifically designed to affect such plans, or the effect is only indirect. Pilot Life, supra, at 47. See also Alessi v. Raybestos-Manhattan, Inc., supra, at 525. Pre-emption is also not precluded simply because a state law is consistent with ERISA’s substantive requirements. Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724, 739 (1985).
Notwithstanding its breadth, we have recognized limits to ERISA’s pre-emption clause. In Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825 (1988), the Court held that ERISA did not pre-empt a State’s general garnishment statute, even though it was applied to collect judgments against plan participants. Id., at 841. The fact that collection might burden the administration of a plan did not, by itself, compel pre-emption. Moreover, under the plain language of § 514(a) the Court has held that only state laws that relate to benefit plans are pre-empted. Fort Halifax Packing Co. v. Coyne, 482 U. S. 1, 23 (1987). Thus, even though a state law required payment of severance benefits, which would normally fall within the purview of ERISA, it was not pre-empted because the statute did not require the establishment or maintenance of an ongoing plan. Id., at 12.
Neither of these limitations is applicable to this case. We are not dealing here with a generally applicable statute that makes no reference to, or indeed functions irrespective of, the existence of an ERISA plan. Nor is the cost of defending this lawsuit a mere administrative burden. Here, the existence of a pension plan is a critical factor in establishing liability under the State’s wrongful discharge law. As a result, this cause of action relates not merely to pension benefits, but to the essence of the pension plan itself.
We have no difficulty in concluding that the cause of action which the Texas Supreme Court recognized here — a claim that the employer wrongfully terminated plaintiff primarily because of the employer’s desire to avoid contributing to, or paying benefits under, the employee’s pension fund — “relate[s] to” an ERISA-covered plan within the meaning of § 514(a), and is therefore pre-empted.
“[W]e have virtually taken it for granted that state laws which are ‘specifically designed to affect employee benefit plans’ are pre-empted under § 514(a).” Mackey, supra, at 829. In Mackey the statute’s express reference to ERISA plans established that it was so designed; consequently, it was pre-empted. The facts here are slightly different but the principle is the same: The Texas cause of action makes specific reference to, and indeed is premised on, the existence of a pension plan. In the words of the Texas court, the cause of action “allows recovery when the plaintiff proves that the principal reason for his termination was the employer’s desire to avoid contributing to or paying benefits under the employee’s pension fund.” 779 S. W. 2d, at 71. Thus, in order to prevail, a plaintiff must plead, and the court must find, that an ERISA plan exists and the employer had a pension-defeating motive in terminating the employment. Because the court’s inquiry must be directed to the plan, this judicially created cause of action “relate[s] to” an ERISA plan.
McClendon argues that the pension plan is irrelevant to the Texas cause of action because all that is at issue is the employer’s improper motive to avoid its pension obligations. The argument misses the point, which is that under the Texas court’s analysis there simply is no cause of action if there is no plan.
Similarly unavailing is McClendon’s argument that § 514(a) is limited by the narrower language of § 514(c)(2), as set forth in 29 U. S. C. § 1144(c)(2), which provides:
“The term ‘State’ includes a State, any political subdivisions thereof, or any agency or instrumentality of either, which purports to regulate, directly or indirectly, the terms and conditions of employee benefit plans covered by this subchapter.”
McClendon argues that § 514(c)(2)’s limiting language causes § 514(a) to pre-empt only those state laws that affect plan terms, conditions, or administration. Since the cause of action recognized by the Texas court does not focus on those items but rather on the employer’s termination decision, Mc-Clendon claims that there can be no pre-emption here.
The flaw in this argument is that it misreads § 514(c)(2) and consequently misapprehends its purpose. The ERISA definition of “State” is found in § 3(10), which defines the term as “any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, and the Canal Zone.” 29 U. S. C. § 1002(10). Section 514(c)(2) expands, rather than restricts, that definition for pre-emption purposes in order to “include” state agencies and instrumentalities whose actions might not otherwise be considered state law. Had Congress intended to restrict ERISA’s pre-emptive effect to state laws purporting to regulate plan terms and conditions, it surely would not have done so by placing the restriction in an adjunct definition section while using the broad phrase “relate to” in the pre-emption section itself. Moreover, if § 514(a) were construed as McClendon urges, the “relate to” language would be superfluous — Congress need only have said that “all” state laws would be pre-empted. Moreover, our precedents foreclose this argument. In Mackey the Court held that ERISA pre-empted a Georgia garnishment statute that excluded from garnishment ERISA plan benefits. Mackey, supra, at 828, and n. 2, 829. Such a law clearly did not regulate the terms or conditions of ERISA-covered plans, and yet we found pre-emption. Mackey demonstrates that § 514(a) cannot be read so restrictively.
The conclusion that the cause of action in this case is preempted by § 514(a) is supported by our understanding of the purposes of that provision. Section 514(a) was intended to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government. Otherwise, the inefficiencies created could work to the detriment of plan beneficiaries. FMC Corp., ante, at 60 (citing Fort Halifax, 482 U. S., at 10-11); Shaw, 463 U. S., at 105, and n. 25. Allowing state based actions like the one at issue here would subject plans and plan sponsors to burdens not unlike those that Congress sought to foreclose through § 514(a). Particularly disruptive is the potential for conflict in substantive law. It is foreseeable that state courts, exercising their common law powers, might develop different substantive standards applicable to the same employer conduct, requiring the tailoring of plans and employer conduct to the peculiarities of the law of each jurisdiction. Such an outcome is fundamentally at odds with the goal of uniformity that Congress sought to implement.
B
Even if there were no express pre-emption in this case, the Texas cause of action would be pre-empted because it conflicts directly with an ERISA cause of action. McClendon’s claim falls squarely within the ambit of ERISA § 510, which provides:
“It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan . . . or for the purpose of interfering with the attain- merit of any right to which such participant may become entitled under the plan . . . 29 U. S. C. §1140 (emphasis added).
By its terms § 510 protects plan participants from termination motivated by an employer’s desire to prevent a pension from vesting. Congress viewed this section as a crucial part of ERISA because, without it, employers would be able to circumvent the provision of promised benefits. S. Rep. No. 93-127, pp. 35-36 (1973); H. R. Rep. No. 93-533, p. 17 (1973). We have no doubt that this claim is prototypical of the kind Congress intended to cover under § 510.
“[T]he mere existence of a federal regulatory or enforcement scheme,” however, even a considerably detailed one, “does not by itself imply pre-emption of state remedies.” English v. General Electric Co., 496 U. S. 72, 87 (1990). Accordingly, “ ‘we must look for special features warranting pre-emption.’” Ibid, (quoting Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 719 (1985)).
Of particular relevance in this inquiry is § 502(a) — ERISA’s civil enforcement mechanism. That section, as set forth in 29 U. S. C. §§ 1132(a)(3), (e), provides in pertinent part:
“A civil action may be brought —
“(3) by a participant. . . (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan;
“(e) (1) Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States, shall have exclusive jurisdiction of civil actions under this subchapter brought by ... a participant.” (Emphasis added.)
In Pilot Life we examined this section at some length and explained that Congress intended § 502(a) to be the exclusive remedy for rights guaranteed under ERISA, including those provided by § 510:
“[T]he detailed provisions of § 502(a) set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. ‘The six carefully integrated civil enforcement provisions found in § 502(a) of the statute as finally enacted . . . provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.’” 481 U. S., at 54 (quoting Massachusetts Mut. Life Ins. Co. v. Russell, 473 U. S. 134, 146 (1985)).
It is clear to us that the exclusive remedy provided by §502(a) is precisely the kind of “‘special featur[e]’” that “ ‘warrants] pre-emption’ ” in this case. English, supra, at 87; see also Automated Medical, supra, at 719. As we explained in Pilot Life, ERISA’s legislative history makes clear that “the pre-emptive force of § 502(a) was modeled on the exclusive remedy provided by §301 of the Labor Management Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U. S. C. §185.” 481 U. S., at 52; id., at 54-55 (citing H. R. Conf. Rep. No. 93-1280, p. 327 (1974)). “Congress was well aware that the powerful pre-emptive force of §301 of the LMRA displaced” all state-law claims, “even when the state action purported to authorize a remedy unavailable under the federal provision.” Pilot Life, supra, at 55. In Metropolitan Life Ins. Co. v. Taylor, 481 U. S. 58 (1987), we again drew upon the parallel between § 502(a) and §301 of the LMRA to support our conclusion that the pre-emptive effect of § 502(a) was so complete that an ERISA pre-emption defense provides a sufficient basis for removal of a cause of action to the federal forum notwithstanding the traditional limitation imposed by the “well-pleaded complaint” rule. Id., at 64-67.
We rely on this same evidence in concluding that the requirements of conflict pre-emption are satisfied in this case. Unquestionably, the Texas cause of action purports to provide a remedy for the violation of a right expressly guaranteed by § 510 and exclusively enforced by § 502(a). Accordingly we hold that “‘[w]hen it is clear or may fairly be assumed that the activities which a State purports to regulate are protected” by § 510 of ERISA, “due regard for the federal enactment requires that state jurisdiction must yield.’” Cf. Lingle v. Norge Division of Magic Chef, Inc., 486 U. S. 399, 409, n. 8 (1988).
The preceding discussion also responds to the Texas court’s attempt to distinguish this case as not one within ERISA’s purview. Not only is § 502(a) the exclusive remedy for vindicating § 510-protected rights, but there is no basis in § 502(a)’s language for limiting ERISA actions to only those which seek “pension benefits.” It is clear that the relief requested here is well within the power of federal courts to provide. Consequently, it is no answer to a pre-emption argument that a particular plaintiff is not seeking recovery of pension benefits.
The judgment of the Texas Supreme Court is reversed.
It is so ordered.
JusTiCE Marshall, Justice Blackmun, and Justice Stevens join Parts I and II-B of this opinion.
See, e. g., Fitzgerald v. Codex Corp., 882 F. 2d 586 (CA1 1989) (ERISA pre-empts state wrongful discharge actions premised on employer interference with the attainment of rights under employee benefit plans); Pane v. RCA Corp., 868 F. 2d 631 (CA3 1989) (same); Sorosky v. Burroughs Corp., 826 F. 2d 794 (CA9 1987) (same). Accord, Conaway v. Eastern Associated Coal Corp., 178 W. Va. 164, 358 S. E. 2d 423 (1986). Contra, K-Mart Corp. v. Ponsock, 103 Nev. 39, 732 P. 2d 1364 (1987); Hovey v. Lutheran Medical Center, 516 F. Supp. 554 (EDNY 1981); Savodnik v. Korvettes, Inc., 488 F. Supp. 822 (EDNY 1980).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | J | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
Petitioners seek review of a decision of the United States Court of Appeals for the Tenth Circuit, holding that a Federal District Court lacked jurisdiction to entertain their diversity action because they added a nondiverse party after filing their complaint. We grant certiorari and reverse the decision of the Court of Appeals.
Petitioners, McMoRan Oil and Gas Company (McMoRan) and its parent company, Freeport-McMoRan Inc. (Freeport), sued respondent K N Energy, Inc. (K N) for breach of contract in the United States District Court for the District of Colorado. Petitioners claimed that respondent had failed to pay the price for natural gas agreed upon in their contract, and sought both declaratory relief to establish the contract price and damages for past underpayments. Petitioners based federal jurisdiction upon diversity of citizenship. At all times up to and including the filing of the complaint, Free-port and McMoRan were Delaware corporations with their principal places of business in Louisiana. K N was and is a Kansas corporation with its principal place of business in Colorado.
After suit was filed, petitioner McMoRan transferred its interest in the contract with respondent to a limited partnership, FMP Operating Company (FMPO), for business reasons unrelated to the instant litigation. FMPO’s limited partners included citizens of Kansas and Colorado. Accordingly, before trial commenced, petitioners sought leave to amend their complaint to substitute FMPO as a plaintiff under Rule 25(c) of the Federal Rules of Civil Procedure. The District Court permitted petitioners to add FMPO as a party but did not remove McMoRan as a party. After a bench trial, the District Court held in favor of petitioners, and respondent appealed. The Court of Appeals reversed and directed that the suit be dismissed for want of jurisdiction. The court held that “although complete diversity was present when the complaint was filed,” the addition of FMPO as a plaintiff destroyed jurisdiction. 907 F. 2d 1022, 1024 (1990). The court based its holding upon our decision in Carden v. Arkoma Associates, 494 U. S. 185 (1990). The court explained that “Carden establishes that [FMPO’s] addition as the real party in interest destroys the district court’s diversity jurisdiction.” 907 F. 2d, at 1025.
Our decision last Term in Carden considered whether the citizenship of limited partners must be taken into account in determining whether diversity jurisdiction exists in an action brought by a limited partnership. The original plaintiff in Carden was the limited partnership; diversity jurisdiction, then, depended upon whether complete diversity of citizenship existed at the time the action was commenced. But nothing in Carden suggests any change in the well-established rule that diversity of citizenship is assessed at the time the action is filed. We have consistently held that if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events. Mollan v. Torrance, 9 Wheat. 537 (1824); Clarke v. Mathewson, 12 Pet. 164, 171 (1838); Wichita Railroad & Light Co. v. Public Util. Comm’n of Kansas, 260 U. S. 48, 54 (1922) (“Jurisdiction once acquired ... is not divested by a subsequent change in the citizenship of the parties. Much less is such jurisdiction defeated by the intervention, by leave of the court, of a party whose presence is not essential to a decision of the controversy between the original parties” (citations omitted)).
The opinions of the District Court and the Court of Appeals establish that the plaintiffs and defendant were diverse at the time the breach-of-contract action arose and at the time that federal proceedings commenced. The opinions also confirm that FMPO was not an “indispensable” party at the time the complaint was filed; in fact, it had no interest whatsoever in the outcome of the litigation until sometime after suit was commenced. Our cases require no more than this. Diversity jurisdiction, once established, is not defeated by the addition of a nondiverse party to the action. A contrary rule could well have the effect of deterring normal business transactions during the pendency of what might be lengthy litigation. Such a rule is not in any way required to accomplish the purposes of diversity jurisdiction.
Respondent relies on our decision in Owen Equipment & Erection Co. v. Kroger, 437 U. S. 365 (1978), to support the result reached by the Court of Appeals. There we held that the ancillary jurisdiction of a District Court did not extend to the entertaining of a claim by an original plaintiff in a diversity action against a nondiverse third-party defendant im-pleaded by the original defendant pursuant to Federal Rule of Civil Procedure 14(a). Owen casts no doubt on the principle established by the cases previously cited that diversity jurisdiction is to be assessed at the time the lawsuit is commenced.
The motion of American Mining Congress for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is granted, and the judgment of the Court of Appeals is
Reversed.
Justice Souter took no part in the consideration or decision of this motion and case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice KAGAN delivered the opinion of the Court.
The Federal Arbitration Act (FAA or Act) requires courts to place arbitration agreements "on equal footing with all other contracts." DIRECTV, Inc. v. Imburgia, 577 U.S. ----, ----, 136 S.Ct. 463, 465, 193 L.Ed.2d 365 (2015) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006) ); see 9 U.S.C. § 2. In the decision below, the Kentucky Supreme Court declined to give effect to two arbitration agreements executed by individuals holding "powers of attorney"-that is, authorizations to act on behalf of others. According to the court, a general grant of power (even if seemingly comprehensive) does not permit a legal representative to enter into an arbitration agreement for someone else; to form such a contract, the representative must possess specific authority to "waive his principal's fundamental constitutional rights to access the courts [and] to trial by jury." Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306, 327 (2015). Because that rule singles out arbitration agreements for disfavored treatment, we hold that it violates the FAA.
I
Petitioner Kindred Nursing Centers L.P. operates nursing homes and rehabilitation centers. Respondents Beverly Wellner and Janis Clark are the wife and daughter, respectively, of Joe Wellner and Olive Clark, two now-deceased residents of a Kindred nursing home called the Winchester Centre.
At all times relevant to this case, Beverly and Janis each held a power of attorney, designating her as an "attorney-in-fact" (the one for Joe, the other for Olive) and affording her broad authority to manage her family member's affairs. In the Wellner power of attorney, Joe gave Beverly the authority, "in my name, place and stead," to (among other things) "institute legal proceedings" and make "contracts of every nature in relation to both real and personal property." App. 10-11. In the Clark power of attorney, Olive provided Janis with "full power ... to transact, handle, and dispose of all matters affecting me and/or my estate in any possible way," including the power to "draw, make, and sign in my name any and all ... contracts, deeds, or agreements." Id., at 7.
Joe and Olive moved into the Winchester Centre in 2008, with Beverly and Janis using their powers of attorney to complete all necessary paperwork. As part of that process, Beverly and Janis each signed an arbitration agreement with Kindred on behalf of her relative. The two contracts, worded identically, provided that "[a]ny and all claims or controversies arising out of or in any way relating to ... the Resident's stay at the Facility" would be resolved through "binding arbitration" rather than a lawsuit. Id., at 14, 21.
When Joe and Olive died the next year, their estates (represented again by Beverly and Janis) brought separate suits against Kindred in Kentucky state court. The complaints alleged that Kindred had delivered substandard care to Joe and Olive, causing their deaths. Kindred moved to dismiss the cases, arguing that the arbitration agreements Beverly and Janis had signed prohibited bringing their disputes to court. But the trial court denied Kindred's motions, and the Kentucky Court of Appeals agreed that the estates' suits could go forward. See App. to Pet. for Cert. 125a-126a, 137a-138a.
The Kentucky Supreme Court, after consolidating the cases, affirmed those decisions by a divided vote. See 478 S.W.3d, at 313. The court began with the language of the two powers of attorney. The Wellner document, the court stated, did not permit Beverly to enter into an arbitration agreement on Joe's behalf. In the court's view, neither the provision authorizing her to bring legal proceedings nor the one enabling her to make property-related contracts reached quite that distance. See id., at 325-326 ; supra, at 1425. By contrast, the court thought, the Clark power of attorney extended that far and beyond. Under that document, after all, Janis had the capacity to "dispose of all matters" affecting Olive. See supra, at 1425. "Given this extremely broad, universal delegation of authority," the court acknowledged, "it would be impossible to say that entering into [an] arbitration agreement was not covered." 478 S.W.3d, at 327.
And yet, the court went on, both arbitration agreements-Janis's no less than Beverly's-were invalid. That was because a power of attorney could not entitle a representative to enter into an arbitration agreement without specifically saying so. The Kentucky Constitution, the court explained, protects the rights of access to the courts and trial by jury; indeed, the jury guarantee is the sole right the Constitution declares "sacred" and "inviolate." Id., at 328-329. Accordingly, the court held, an agent could deprive her principal of an "adjudication by judge or jury" only if the power of attorney "expressly so provide[d]." Id., at 329. And that clear-statement rule-so said the court-complied with the FAA's demands. True enough that the Act precludes "singl[ing] out arbitration agreements." Ibid. (internal quotation marks omitted). But that was no problem, the court asserted, because its rule would apply not just to those agreements, but also to some other contracts implicating "fundamental constitutional rights." Id., at 328. In the future, for example, the court would bar the holder of a "non-specific" power of attorney from entering into a contract "bind[ing] the principal to personal servitude." Ibid.
Justice Abramson dissented, in an opinion joined by two of her colleagues. In their view, the Kentucky Supreme Court's new clear-statement rule was "clearly not ... applicable to 'any contract' but [instead] single[d] out arbitration agreements for disfavored treatment." Id., at 344-345. Accordingly, the dissent concluded, the rule "r[a]n afoul of the FAA." Id., at 353.
We granted certiorari. 580 U.S. ----, 137 S.Ct. 368, 196 L.Ed.2d 283 (2016).
II
A
The FAA makes arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. That statutory provision establishes an equal-treatment principle: A court may invalidate an arbitration agreement based on "generally applicable contract defenses" like fraud or unconscionability, but not on legal rules that "apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue." AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011). The FAA thus preempts any state rule discriminating on its face against arbitration-for example, a "law prohibit[ing] outright the arbitration of a particular type of claim." Id., at 341, 131 S.Ct. 1740. And not only that: The Act also displaces any rule that covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements. In Concepcion, for example, we described a hypothetical state law declaring unenforceable any contract that "disallow[ed] an ultimate disposition [of a dispute] by a jury." Id., at 342, 131 S.Ct. 1740. Such a law might avoid referring to arbitration by name; but still, we explained, it would "rely on the uniqueness of an agreement to arbitrate as [its] basis"-and thereby violate the FAA. Id., at 341, 131 S.Ct. 1740 (quoting Perry v. Thomas, 482 U.S. 483, 493, n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987) ).
The Kentucky Supreme Court's clear-statement rule, in just that way, fails to put arbitration agreements on an equal plane with other contracts. By the court's own account, that rule (like the one Concepcion posited) serves to safeguard a person's "right to access the courts and to trial by jury." 478 S.W.3d, at 327 ; see supra, at 1425 - 1426. In ringing terms, the court affirmed the jury right's unsurpassed standing in the State Constitution: The framers, the court explained, recognized "that right and that right alone as a divine God-given right" when they made it "the only thing" that must be " 'held sacred' " and " 'inviolate.' " 478 S.W.3d, at 328-329 (quoting Ky. Const. § 7 ). So it was that the court required an explicit statement before an attorney-in-fact, even if possessing broad delegated powers, could relinquish that right on another's behalf. See 478 S.W.3d, at 331 ("We say only that an agent's authority to waive his principal's constitutional right to access the courts and to trial by jury must be clearly expressed by the principal"). And so it was that the court did exactly what Concepcion barred: adopt a legal rule hinging on the primary characteristic of an arbitration agreement-namely, a waiver of the right to go to court and receive a jury trial. See 563 U.S., at 341-342, 131 S.Ct. 1740 ; see also 478 S.W.3d, at 353 (Abramson, J., dissenting) (noting that the jury-trial right at the core of "the majority's new rule" is "the one right that just happens to be correlative to the right to arbitrate" (emphasis deleted)). Such a rule is too tailor-made to arbitration agreements-subjecting them, by virtue of their defining trait, to uncommon barriers-to survive the FAA's edict against singling out those contracts for disfavored treatment.
And the state court's sometime-attempt to cast the rule in broader terms cannot salvage its decision. The clear-statement requirement, the court suggested, could also apply when an agent endeavored to waive other "fundamental constitutional rights" held by a principal. 478 S.W.3d, at 331 ; see supra, at 1426. But what other rights, really? No Kentucky court, so far as we know, has ever before demanded that a power of attorney explicitly confer authority to enter into contracts implicating constitutional guarantees. Nor did the opinion below indicate that such a grant would be needed for the many routine contracts-executed day in and day out by legal representatives-meeting that description. For example, the Kentucky Constitution protects the "inherent and inalienable" rights to "acquir[e] and protect[ ] property" and to "freely communicat[e] thoughts and opinions." Ky. Const. § 1. But the state court nowhere cautioned that an attorney-in-fact would now need a specific authorization to, say, sell her principal's furniture or commit her principal to a non-disclosure agreement. (And were we in the business of giving legal advice, we would tell the agent not to worry.) Rather, the court hypothesized a slim set of both patently objectionable and utterly fanciful contracts that would be subject to its rule: No longer could a representative lacking explicit authorization waive her "principal's right to worship freely" or "consent to an arranged marriage" or "bind [her] principal to personal servitude." 478 S.W.3d, at 328 ; see supra, at 1426. Placing arbitration agreements within that class reveals the kind of "hostility to arbitration" that led Congress to enact the FAA. Concepcion, 563 U.S., at 339, 131 S.Ct. 1740. And doing so only makes clear the arbitration-specific character of the rule, much as if it were made applicable to arbitration agreements and black swans.
B
The respondents, Janis and Beverly, primarily advance a different argument-based on the distinction between contract formation and contract enforcement-to support the decision below. Kentucky's clear-statement rule, they begin, affects only contract formation, because it bars agents without explicit authority from entering into arbitration agreements. And in their view, the FAA has "no application" to "contract formation issues." Supp. Brief for Respondents 1. The Act, to be sure, requires a State to enforce all arbitration agreements (save on generally applicable grounds) once they have come into being. But, the respondents claim, States have free rein to decide-irrespective of the FAA's equal-footing principle-whether such contracts are validly created in the first instance. See id., at 3 ("The FAA's statutory framework applies only after a court has determined that a valid arbitration agreement was formed").
Both the FAA's text and our case law interpreting it say otherwise. The Act's key provision, once again, states that an arbitration agreement must ordinarily be treated as "valid, irrevocable, and enforceable." 9 U.S.C. § 2 ; see supra, at 1426. By its terms, then, the Act cares not only about the "enforce[ment]" of arbitration agreements, but also about their initial "valid[ity]"-that is, about what it takes to enter into them. Or said otherwise: A rule selectively finding arbitration contracts invalid because improperly formed fares no better under the Act than a rule selectively refusing to enforce those agreements once properly made. Precedent confirms that point. In Concepcion, we noted the impermissibility of applying a contract defense like duress "in a fashion that disfavors arbitration." 563 U.S., at 341, 131 S.Ct. 1740. But the doctrine of duress, as we have elsewhere explained, involves "unfair dealing at the contract formation stage." Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527, 547, 128 S.Ct. 2733, 171 L.Ed.2d 607 (2008). Our discussion of duress would have made no sense if the FAA, as the respondents contend, had nothing to say about contract formation.
And still more: Adopting the respondents' view would make it trivially easy for States to undermine the Act-indeed, to wholly defeat it. As the respondents have acknowledged, their reasoning would allow States to pronounce any attorney-in-fact incapable of signing an arbitration agreement-even if a power of attorney specifically authorized her to do so. See Tr. of Oral Arg. 27. (After all, such a rule would speak to only the contract's formation.) And why stop there? If the respondents were right, States could just as easily declare everyone incompetent to sign arbitration agreements. (That rule too would address only formation.) The FAA would then mean nothing at all-its provisions rendered helpless to prevent even the most blatant discrimination against arbitration.
III
As we did just last Term, we once again "reach a conclusion that ... falls well within the confines of (and goes no further than) present well-established law." DIRECTV, 577 U.S., at ----, 136 S.Ct., at 471. The Kentucky Supreme Court specially impeded the ability of attorneys-in-fact to enter into arbitration agreements. The court thus flouted the FAA's command to place those agreements on an equal footing with all other contracts.
Our decision requires reversing the Kentucky Supreme Court's judgment in favor of the Clark estate. As noted earlier, the state court held that the Clark power of attorney was sufficiently broad to cover executing an arbitration agreement. See supra, at 1425 - 1426. The court invalidated the agreement with Kindred only because the power of attorney did not specifically authorize Janis to enter into it on Olive's behalf. In other words, the decision below was based exclusively on the clear-statement rule that we have held violates the FAA. So the court must now enforce the Clark-Kindred arbitration agreement.
By contrast, our decision might not require such a result in the Wellner case. The Kentucky Supreme Court began its opinion by stating that the Wellner power of attorney was insufficiently broad to give Beverly the authority to execute an arbitration agreement for Joe. See supra, at 1425 - 1426. If that interpretation of the document is wholly independent of the court's clear-statement rule, then nothing we have said disturbs it. But if that rule at all influenced the construction of the Wellner power of attorney, then the court must evaluate the document's meaning anew. The court's opinion leaves us uncertain as to whether such an impermissible taint occurred. We therefore vacate the judgment below and return the case to the state court for further consideration. See Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530, 534, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012) (per curiam ) (vacating and remanding another arbitration decision because we could not tell "to what degree [an] alternative holding was influenced by" the state court's erroneous, arbitration-specific rule). On remand, the court should determine whether it adheres, in the absence of its clear-statement rule, to its prior reading of the Wellner power of attorney.
For these reasons, we reverse in part and vacate in part the judgment of the Kentucky Supreme Court, and we remand the case for further proceedings not inconsistent with this opinion.
It is so ordered.
Justice GORSUCH took no part in the consideration or decision of this case.
Making matters worse, the Kentucky Supreme Court's clear-statement rule appears not to apply to other kinds of agreements relinquishing the right to go to court or obtain a jury trial. Nothing in the decision below (or elsewhere in Kentucky law) suggests that explicit authorization is needed before an attorney-in-fact can sign a settlement agreement or consent to a bench trial on her principal's behalf. See 478 S.W.3d, at 325 (discussing the Wellner power of attorney's provision for "managing a claim in litigation" without insisting that such commitments would require a clearer grant). Mark that as yet another indication that the court's demand for specificity in powers of attorney arises from the suspect status of arbitration rather than the sacred status of jury trials.
We do not suggest that a state court is precluded from announcing a new, generally applicable rule of law in an arbitration case. We simply reiterate here what we have said many times before-that the rule must in fact apply generally, rather than single out arbitration.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mb. Justice Blackmun
delivered the opinion of the Court.
This bankruptcy case raises issues (a) as to whether priority claims for wages earned by employees prior to an employer's bankruptcy, but unpaid at the inception of the bankruptcy proceeding, are subject to withholding taxes, and, if so, (b) as to whether the taxing entities must file proofs of claim, and (c) as to which priority of payment, if any, the withholding taxes enjoy under § 64a of the Bankruptcy Act (the Act), 11 U. S. C. § 104 (a).
I
On September 15, 1964, Freedomland, Inc., a New York corporation, filed a petition with the United States District Court for the Southern District of New York for an arrangement under Chapter XI of the Act, 11 U. S. C. §§ 701-799. The arrangement failed, and on August 30, 1965, Freedomland was adjudicated a bankrupt. Petitioner, William Otte, was appointed and qualified as the trustee.
During the statutorily prescribed six-month period for the filing of proofs of claim against the estate, see §§57 and 63 of the Act, 11 U. S. C. §§ 93 and 103, 413 former employees of Freedomland filed proofs for unpaid wages (each claim in the amount of $600 or less and all the claims aggregating approximately $80,000) that had been earned within three months preceding the filing of the Chapter XI petition. These wage claims concededly were entitled to a second priority of payment under § 64a (2). No proofs for any federal income or Federal Insurance Contributions Act taxes on these wage claims, with-holdable under Chapters 24 and 21, respectively, of the Internal Revenue Code of 1954, 26 U. S. C. §§ 3401-3404 and 3101-3126, were filed by the United States, and no proofs for any New York City personal income tax, with-holdable under Chapter 46, Titles T and U, of the New York City Administrative Code, were filed by the city.
In November 1969 the trustee filed a motion for an order directing distribution to the 413 priority wage claimants without deduction for any federal, state, or city withholding taxes. He also asked that the referee declare that the trustee was not required to withhold or pay any such tax or to file any report or return relative thereto with the respective taxing authorities. The State of New York, although served, filed no response to the trustee’s motion. The United States and the city did respond. The referee issued an order granting the trustee the relief he requested. App. 48a-50a. In a supporting memorandum decision, the referee stated that the withholding and reporting requirements of the federal and city statutes “would impose a further burden on the administration of these estates which is entirely inconsistent with the objective of efficient expeditious economic administration of bankrupt estates,” and that “compliance with withholding and reporting requirements ... is utterly inconsistent with the spirit and the letter of the Bankruptcy Act.” Id., at 36a, 37a.
The United States and the city filed petitions with the United States District Court to review the referee’s order and decision. After a hearing, the District Court reversed the order and decision insofar as they pertained to federal taxes. It directed the withholding of federal taxes on the priority wage claims, and also concluded that the amounts to be withheld were “taxes which became legally due and owing by che bankrupt,” within the language of § 64a (4), and, therefore, were to be paid as tax claims of the fourth priority. The court observed that little more than a simple bookkeeping effort would be involved in withholding 25% of the wage distributions. It held that proofs of claim were not required because the employees’ proofs gave notice to the trustee and other creditors of the total amounts distributable on account of the claims. The District Court, however, ruled against the city on the ground that the city’s personal income tax did not become effective until 1966, and thus no city tax was due and owing by the bankrupt in 1964 when the Chapter XI petition was filed. In re Freedomland, Inc., 341 F. Supp. 647 (1972).
The trustee, the United States, and the city all appealed. The United States Court of Appeals for the Second Circuit affirmed in part and reversed in part. It held that the trustee was obligated to withhold, to report, and to pay over the withholding taxes on the wage claims, and that the taxing entities were not required to file proofs of claim. It further held, however — and thus to this extent disagreed with the District Court — that both the United States and the city were entitled to be paid as second priority claimants under §64a(2). In re Freedomland, Inc., 480 F. 2d 184 (1973).
We granted the trustee’s petition for certiorari (unopposed by the United States) primarily because the circuits are in disarray as to the priority to be accorded to withholding taxes on prebankruptcy wage claims. 414 U. S. 1156 (1974). No cross-petition was filed by either the United States or the city of New York.
II
Withholding, Reports, and Returns
Every Court of Appeals which has faced the issue, including the Second Circuit in the present case, has held, contrary to the ruling of the referee, that the withholding provisions of the Internal Revenue Code, and of state or municipal tax statutes, require that a trustee in bankruptcy withhold income and social security taxes from payments of wage claims, and that he prepare and submit to the wage claimants and to the taxing authorities the reports and returns statutorily required of employers. United States v. Fogarty, 164 F. 2d 26, 30-33 (CA8 1947); United States v. Curtis, 178 F. 2d 268, 269 (CA6 1949), cert. denied, 339 U. S. 965 (1950); Lines v. California Dept. of Employment, 242 F. 2d 201, 202, reh. den., 246 F. 2d 70 (CA9), cert. denied, 355 U. S. 857 (1957); In re Connecticut Motor Lines, Inc., 336 F. 2d 96 (CA3 1964). To the same effect is In re Daigle, 111 F. Supp. 109, 111 (Me. 1953).
A. The requirement of withholding. Section 3402 (a) of the Internal Revenue Code, 26 U. S. C. § 3402 (a), requires “[e]very employer making payment of wages” to “deduct and withhold upon such wages ... a tax determined . . . .” Section 3401 (a) defines “wages” for withholding purposes to mean, with certain exceptions, “all remuneration ... for services performed by an employee for his employer,” and § 3401 (d) defines “employer” as “the person for whom. an individual performs or performed any service, of whatever nature, as the employee of such person.” The latter section makes an exception where “the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services”; in that case, “employer” means “the person having control of the payment of such wages.” Sections T46-51.0 (a) and U46-8.0 of. the New York City Administrative Code are generally to the same effect.
The trustee contends that the payment of wage claims under the Bankruptcy Act, although for “wages” within the meaning of that Act, is not the “payment of wages” under § 3402 (a), and that, in any event, the trustee is not the wage claimant’s “employer” to whom § 3402 (a) relates.
The payments to the wage claimants who filed in this case are payments for services performed by them for their former employer, Freedomland, before the commencement of the proceeding under the Act. There is’ and can be, no dispute as to this. . The fact that the services were performed for the bankrupt, rather than for the trustee, and the fact that payment is made after the employment relationship terminated, do not convert the remuneration into something other than “wages,” as defined by § 3401 (a) of the Internal Revenue Code. That statute, as has been noted, broadly defines “wages” to include, with stated exceptions not material here, “all remuneration.” And § 3401 (d), in defining “employer,” twice refers to services that the employee “performs or performed.” It thus speaks in the past tense as well as the present and thereby plainly reveals that a continuing employment relationship is not a prerequisite for a payment’s qualification as “wages.” The income tax withholding regulations since 1943 have so provided in specific terms. 26 CFR § 31.3401 (a)-l (a)(5); Treas. Reg. 120 § 406.206 (b) (1954); Treas. Reg. 116 § 405.105 (1944 and 1951 eds.); Treas. Reg. 115 § 404.101 (a) (1943). The regulations are not in conflict with the statute; they further the statutory purpose and are reasonable; and they are a valid exercise of the rule-making power. Cammarano v. United States, 358 U. S. 498, 507-512 (1959).
The payment of the wage claims is thus “payment of wages” under § 3402 (a) of the Internal Revenue Code.
The fact that in bankruptcy payment of wage claims is effected by one other than the bankrupt former employer does not defeat any withholding requirement. Although § 3402 (a) refers to the “employer making payment of wages,” § 3401 (d)(1), as also has been noted, provides that if the person for whom the services were performed “does not have control of the payment of the wages for such services,” the term “employer” then means “the person having control of the payment of such wages.” This obviously was intended to place responsibility for withholding at the point of control. The petitioner trustee suggests that control rests in the referee rather than in the trustee, because of the former’s duty, under § 39a (5) of the Act, 11 U. S. C. § 67 (a)(5), to “declare dividends.” We need not determine whether it is the trustee, with his responsibility, under §§ 47a (8) and (11) of the Act, 11 U. S. C. §§ 75 (a)(8) and (11), for making recommendations and actual payments, or the referee, with his supervision over the general administration of the bankrupt estate, or the estate itself, that has “control of the payment of such wages,” within the meaning of §3401 (d)(1) of the Internal Revenue Code. One of them is the “employer” and, as such, has the duty to withhold or to order the withholding, as the case may be. An “employer,” under § 3402 (a), is thus present.
The situation is the same with respect to PICA withholding. Section 3102 (a) of the Internal Revenue Code, 26 U. S. C. §3102 (a), provides that the tax is to be collected by the employer by deducting “from the wages as and when paid.” Here, too, the payments clearly are “wages” under that statute, even though again, at the time of payment, the employment relationship between the bankrupt and the claimant no longer exists. And here; also, the regulations long and consistently have been to this effect. 26 CFR § 31.3121 (a)-l (i); Treas. Reg. 128 1408.226 (a) (1951); Treas. Reg. 106 §402.-227 (a) (1940). The fact that the PICA withholding provisions of the Code do not define “employer” is of no significance, for that term is not to be given a narrower construction for PICA withholding than for income tax withholding.
Because of the identity of definition already observed, n. 4, supra,, the same rationale necessarily applies to the New York City withholding tax.
The trustee finally suggests that the placing of a withholding obligation upon the trustee amounts to the imposition of a penalty barred by § 57j of the Act, 11 U. S. C. § 93 (j). This argument, however, rests upon the presence of § 6672 of the Internal Revenue Code, 26 U. S. C. § 6672, and §§ T46-65.0 (g) and U46-35.0 (g) of the New York City Administrative Code, all of which impose a penalty, apart from the tax, on a person who willfully fails to fulfill his obligation to withhold or who willfully attempts to evade or defeat any tax. That, obviously, is not this case.
B. The requirement of reports and returns. This routinely follows from the obligation to withhold. Section 6051 (a) of the Internal Revenue Code, 26 U. S. C. § 6051 (a), provides that a person required to withhold must furnish the employee a written statement showing the wages subject to withholding and the amount withheld on account of each tax. A duplicate of that statement is to be available for filing with the Internal Revenue Service. §6051 (d). Sections 6001 and 6011 require every person responsible for payment or collection of taxes to keep such records and make such returns as the Secretary prescribes. The applicable regulations respond to these statutes. 26 CFR §§ 31.6001-1, 31.6001-2, 31.6001-5, 31.6011 (a)-6 (a)(1), and 31.6051-1; Rev. Proc. 71-18, 1971-1 Cum. Bull. 684. It is undisputed that the petitioner trustee must comply with these provisions if he is subject to the withholding requirements of §§ 3402 and 3102. Nicholas v. United States, 384 U. S. 678, 693 (1966).
The New York City Administrative Code provisions are to similar effect, §§ T46-52.0 and T46-54.0, U46-9.0 and U46-11.0, and we reach the same conclusions with respect to reports and returns thereunder.
C. Expense and delay. The trustee argues, as the referee held, that the imposition of obligations to withhold, report, and file returns places a burden on the administration of bankrupt estates that is at odds with economic and expeditious administration and with the spirit of the Act. He places some reliance, as did the referee, on the paper by Referee Hiller, The Folly of the Fogarty Case, 32 Ref. J. 54 (1958), where the author states that “the application of the Fogarty rule is sheer nonsense”- and that the case is “out of harmony with sound bankruptcy law.” Id., at 54, 56.
There is, of course, an overriding concern in the Act with keeping fees and administrative expenses at a minimum so as to preserve as much of the estate as possible for the creditors. 3A W. Collier, Bankruptcy ¶¶ 62.05 [ 1 ], 62.02 [5] (14th ed. 1972). And it cannot be denied that paperwork takes time and occasions expense. In this particular case, withholding must be computed on the 413 wage claims; returns (Forms W-2, W-3, and 941) must be prepared and furnished the claimant and the Internal Revenue Service; records must be maintained; and the taxes withheld must be remitted to the respective taxing entities.
We are not persuaded, however, that this burden would be so undue as to be inconsistent with or violative of the spirit of the Act. It is the same burden, no more and no less, that any employer of the same size must bear, and it is the same burden that is borne by any receiver or arrangement debtor or any other fiduciary with a like number of employees. The burden is not disproportionate. Further, the Internal Revenue Service has endeavored to lighten the load by its alternative 25% combined bankruptcy withholding rate for income and FICA taxes. See n. 2, supra. New York City has done the same with its 1% withholding rate. Neither should the burden make it necessary, as is so often and so easily suggested, to employ an accountant. Computations at the rates of 25% and 1%, respectively, are simple and elementary arithmetic exercises, hardly worthy of an accountant’s talent; a high school student is able to make those computations as is any bookkeeper, clerk, or the trustee himself. The added tasks of withholding, reporting, returning, and remitting are contemplated, in our view, by the Act. The interests of the taxing entities, who are creditors, too, and, through them, the interests of the public, outweigh the minuscule added burden for the estate. See Swarts v. Hammer, 194 U. S. 441, 444 (1904). If relief is to be considered for bankrupt estates in this respect, it is a matter for legislative, not judicial, concern. There is nothing in the Act or in the Internal Revenue Code that relieves the trustee of these duties. Cf. §§ 7507, 108 (b), 371, and 372 of the Internal Revenue Code, 26 U. S. C. §§ 7507, 108 (b), 371, and 372.
Ill
Proofs of Claim
The trustee asserts that because the United States and the city failed to file proofs of claim for the taxes at issue, payment thereof is barred. It is said that these taxing entities were on notice, by reason of Freedomland’s bankruptcy schedules, that the bankrupt owed the priority wage claims; that these claims were to be filed within six months; that the entities could obtain an extension of time, under § 57n of the Act, 11 U. S. C. § 93 (n), in which to compute and file their claims; and that they chose to ignore the referee’s bar order directed, among others, to “taxing authorities and agencies,” App. 24a.
This argument, in our view, misconceives the nature of the taxes that are to be withheld. Liability for the taxes accrues only when the wage is paid. Sections 3402 (a) and 3101 (a) of the 1954 Code; New York City Administrative Code §§ T46-51.0 (a) and U46-8.0. The wages that are the subject of the wage claims, although earned before bankruptcy, were not paid prior to bankruptcy. Freedomland had incurred no liability for the taxes. Liability came into being only during bankruptcy. The taxes do not partake, therefore, of the nature of debts, of the bankrupt for which proofs of claim must be filed.
Furthermore, the filing of proofs by the United States and New York City obviously would serve no purpose here. Proofs apprise the trustee and other creditors of the existence of claims against the estate. The priority wage claims themselves, however, cover the gross wages earned and unpaid. These include any tax that is to be withheld. The tax is not an added increment.
We conclude, therefore, that proofs of claim on the part of the United States and of New York City with respect to withholding taxes on priority wage claims are not required.
IV
With withholding taxes thus determined as properly applicable to priority wage claims, their placement in the payment scale under § 64a must be determined. The choice lies between the first priority (costs and expenses of administration), urged by the United States; the second priority (wages and commissions, limited as the statute specifies), urged by the city of New York; the fourth priority (“taxes which became legally due and owing by the bankrupt”), urged by none of the parties here; and no priority at all. The third and fifth priorities clearly have no possible application to these taxes.
We readily reject the fourth priority. The withholding taxes are not taxes which became due and owing by the bankrupt. As has been noted above, the taxes did not become due and owing at all until the claims, constituting wages, were paid. This took place after bankruptcy, not before. The situation, thus, differs from that where the bankrupt paid wages prior to bankruptcy, but the taxes withheld were not remitted to the taxing entities by the time of the inception of the bankruptcy proceeding. The latter would be taxes “which became legally due and owing by the bankrupt.” See In re John Horne Co., 220 F. 2d 33 (CA7 1955); Pomper v. United States, 196 F. 2d 211 (CA2 1952).
We similarly reject the first priority, although we recognize that this appears to be the favorite conclusion reached by those courts that have passed upon the issue. See n. 3, supra. The leading case for this approach is United States v. Fogarty, supra. The Court there, however, without a statement of underlying reasons, merely concluded that the taxes “should be allowed and classified as an expense of administration,” 164 F. 2d, at 33. In Lines v. California Dept. of Employment, supra, the court followed Fogarty and held that, because the tax accrued “subsequent to the filing of the petition in bankruptcy, such tax had the character of an expense of administration.” 246 F. 2d, at 71.
We think that more than a general observation that the taxes arose during bankruptcy is required to dignify withholding taxes with the prime status of first priority. We grant that the very language of § 64a (1) (“including the actual and necessary costs and expenses of preserving the estate subsequent to filing the petition”) necessarily indicates that first priority items include some in addition to those that preserve or develop the bankrupt estate. Withholding taxes, however, do not strike us as costs or expenses of doing business. They are attributable in their entirety to the availability of funds for the payment of priority wage claims. They accrue only as those claims are paid and, to the extent of that payment, the payment of the taxes should be assured. In addition, it is anomalous to accord withholding taxes a higher priority than the wage claims to which they so directly relate. They can be computed only upon the amount of funds available for payment of the wage claims and should not have a computational base greater than those payments. The withholding taxes are, in full effect, part of the claims themselves and derive from and are carved out of the payment of those claims. We therefore fully agree with the Second Circuit’s observation, 480 F. 2d, at 190: “Conceptually the tax payments should be treated in the same way as the wages from which they derive and of which they are a part.”
We see nothing in United States v. Randall, 401 U. S. 513 (1971), with its observation, id., at 515, that the Bankruptcy Act “is an overriding statement of federal policy on this question of priorities,” that is contrary to the result we reach here. That case concerned § 7501 (a) of the Internal Revenue Code, 26 IT. S. C. § 7501 (a), with its provision for a trust fund for withheld taxes, and the impact of that statute, when not complied with, upon payment of first priority costs and expenses of administration. Randall is not a holding, as the trustee would claim, Brief for Petitioner 18-19, that the withholding taxes do not have the same priority as the wage claims themselves.
We therefore conclude that these federal and city withholding taxes are entitled, as are the priority wage claims from which they emerge, to second priority of payment under § 64a (2) of the Act, 11 U. S. C. § 104 (a).
The judgment of the Court of Appeals is affirmed.
It is so ordered.
Ҥ 104. Debts which have priority.
“(a) The debts to have priority, in advance of the payment of dividends to creditors, and to be paid in full out of bankrupt estates, and the order of payment, shall be (1) the costs and expenses of administration, including the actual and necessary costs and expenses of preserving the estate subsequent to filing the petition . . . ;
(2) wages and commissions, not to exceed $600 to each claimant, which have been earned within three months before the date of the commencement of the proceeding, due to workmen . . . ;
(4) taxes which became legally due and owing by the bankrupt to the United States or to any State or any subdivision thereof which are not released by a discharge in bankruptcy . . .
Under Internal Revenue Service directives, a trustee in bankruptcy, upon paying priority wage claims, has the option of withholding income and FICA taxes either at a combined flat rate of 25% or at the rates prescribed by §§3101 and 3402 of the Code, 26 U. S. C. §§ 3101 and 3402.
First priority: United States v. Fogarty, 164 F. 2d 26, 33 (CA8 1947); Lines v. California Dept. of Employment, 242 F. 2d 201, 203, reh. den., 246 F. 2d 70 (CA9), cert. denied, 355 U. S. 857 (1957). Second priority: In re Freedomland, Inc., 480 F. 2d 184, 190 (CA2 1973). Fourth priority: In re Connecticut Motor Lines, Inc., 336 F. 2d 96, 102-106, 108 (CA3 1964).
In In re John Horne Co., 220 F. 2d 33, 35 (CA7 1955), a case concerning wages paid prior to bankruptcy, the court stated: “We are not impressed with the reasoning of the court in the Fogarty case.” See also Note, 56 Mich. L. Rev. 631 (1958); Comment, Bankruptcy — Priorities—Fourth Priority Assigned Payroll Taxes on Second Priority Wages, 40 N. Y. U. L. Rev. 360 (1965); Note, 19 Rutgers L. Rev. 546 (1965).
The terms “wages” and “employer,” as they appear in Titles T and U of the City Code are given the same meanings they have in the Internal Revenue Code. New York City Administrative Code §§ T46-1.0 (c) and U46-1.0 (b), (e), and (l) (1971).
We see nothing to the contrary in United States v. Embassy Restaurant, Inc., 359 U. S. 29 (1959), which is pressed upon us by the trustee. The issue there was whether contributions by an employer to a union welfare fund, as required under a collective-bargaining agreement, were entitled to second priority as “wages . . . due to workmen.” There is no such issue here, for the trustee acknowledges, as he must, that the present claims are, indeed, for “wages,” within the meaning of the Bankruptcy Act.
“The result would be no different if it is argued that the bankruptcy court rather than its trustee is 'the person having control of the payment of such wages.’ There is no provision excepting a court from the requirement of withholding on amounts paid an employee.” United States v. Fogarty, 164 F. 2d, at 32.
The District Court, on review of the referee’s order and decision, received evidence with respect to costs of compliance. It concluded that compliance “adds only slightly to the trustee’s inescapable task and cost of verifying each claim before payment.” 341 F. Supp. 647, 654 (SDNY 1972).
The trustee has paid the priority wage claims, with the taxes withheld and set aside. This was done, however, pursuant to an agreement that the rights of the parties would not be affected thereby. The United States, therefore, is not in a position to claim that a trust fund has been established under § 7501 (a) of the Internal Revenue Code, 26 U. S. C. § 7501 (a). See United States v. Randall, 401 U. S. 513 (1971); Nicholas v. United States, 384 U. S. 678, 690-691 (1966).
This conclusion makes it unnecessary for us to consider whether, if the Government were to prevail in its first-priority argument, the judgment of the Court of Appeals here could be modified in the absence of a cross-petition by the United States. We are advised that the bankrupt estate’s assets are sufficient to pay all first- and second-priority claims in full. Tr. of Oral Arg. 28-29. Whether the withholding taxes have first- rather than second-priority status is, therefore, of no practical consequence to the Government in the present case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | L | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Opinion of the Court by
Mr. Justice Douglas,
announced by Mr. Justice Harlan.
Grand River is a nonnavigable tributary of the navigable Arkansas River and flows through Oklahoma. Respondent was created by the Oklahoma Legislature to develop hydroelectric power on the Grand River. It is, to use the statutory language of the law creating it, “a governmental agency and body politic and corporate.” Session Laws of Oklahoma, 1935, c. 70, Art. 4, § 1. A report of the Army Corps of Engineers, made in 1930, indicated that federal development at Pensacola, Markham Ferry, and Ft. Gibson — all sites on the Grand River— was not then economically justified. Respondent, following its creation in 1935, proposed a river development plan at these three sites. In 1939 the Army Engineers recommended a three-dam coordinated project as a federal undertaking. Congress by the Flood Control Act of August 18, 1941, incorporated that Grand River plan into a comprehensive plan for the Arkansas River basin.
Meanwhile respondent obtained a license under § 23 (b) of the Federal Power Act to build and operate a project at Pensacola and completed it in 1940. The United States took over the operation of this project during World War II, after which it was returned to respondent. In 1946 the United States started the construction of a project at Ft. Gibson. It has been completed as an integral part of a comprehensive plan for the regulation of navigation, the control of floods, and the production of power on the Arkansas River and its tributaries. Congress, by modifying its plan for the Arkansas River basin, cleared the way for respondent to obtain from the Federal Power Commission a license for a project at Markham Ferry. Thus the United States operates the Ft. Gibson project which is the farthest downstream, while the respondent has the two upstream projects. A 70-acre tract owned by the respondent was condemned when the Ft. Gibson project was built; flowage rights over its lands were acquired; and payment was made for relocation of its transmission lines. Respondent claimed more. It demanded of the United States $10,000,000 for the “taking” of its water power rights at Ft. Gibson and its franchise to develop electric power and energy at that site. The Court of Claims, while reserving the question as to the amount of compensation due, held by a divided vote that the United States was liable. — Ct. Cl. -, 175 F. Supp. 153. The case is here on a writ of certiorari. 361 U. S. 922.
The Court of Claims recognized that if the Grand River were a navigable stream the United States would not be liable for depriving another entrepreneur of the opportunity to utilize the flow of the water to produce power. Our cases hold that such an interest is not compensable because when the United States asserts its superior authority under the Commerce Clause to utilize or regulate the flow of the water of a navigable stream there is no “taking” of “property” in the sense of the Fifth Amendment because the United States has a superior navigation easement which precludes private ownership of the water or its flow. See United States v. Chandler-Dunbar Co., 229 U. S. 53, 69; United States v. Twin City Power Co., 350 U. S. 222, 224-225. The Government contends that the navigational servitude of the United States extends also to nonnavigable waters, pre-empting state-created property rights in such waters, at least when asserted against the Government. In the view we take in this case, however, it is not necessary that we reach that contention. Congress by the 1941 Act, already mentioned, adopted as one work of improvement “for the benefit of navigation and the control of destructive flood-waters” the reservoirs in the Grand River. That action to protect the “navigable capacity” of the Arkansas River (United States v. Rio Grande Irrigation Co., 174 U. S. 690, 708) was within the constitutional power of Congress. We. held in Oklahoma v. Atkinson Co., 313 U. S. 508, that the United States over the objection of Oklahoma could build the Denison Dam on the Red River, also nonnavigable, but a tributary of the Mississippi. We there stated, “There is no constitutional reason why Congress cannot, under the commerce power, treat the watersheds as a key to flood control on navigable streams and their tributaries.” Id., at 525. And see United States v. Appalachian Power Co., 311 U. S. 377, 426; Grand River Dam Authority v. Grand-Hydro, 335 U. S. 359, 373. We also said in Oklahoma v. Atkinson Co., supra, that “. . . the power of flood control extends to the tributaries of navigable streams.” Id., at 525. We added, “It is for Congress alone to decide whether a particular project, by itself or as part of a more comprehensive scheme, will have such a beneficial effect on the arteries of interstate commerce as to warrant it. That determination is legislative in character.” Id., at 527. We held that the fact that the project had a multiple purpose was irrelevant to the constitutional issue, id., at 528-534, as was the fact that power was expected to pay the way. Id., at 533. “[T]he fact that ends other than flood control will also be served, or that flood control may be relatively of lesser importance, does not invalidate the exercise of the authority conferred on Congress.” Id., at 533-534.
We cannot say on this record that the Ft. Gibson dam is any less essential or useful or desirable from the viewpoint of flood control and navigation than was Denison Dam. When the United States appropriates the flow either of a navigable or a nonnavigable stream pursuant to its superior power under the Commerce Clause, it is exercising established prerogatives and is beholden to no one. Plainly under our decisions it could license another to build the project and operate it. If respondent sued for damages for failure of the Federal Government to grant it a license to build the Ft. Gibson project, it could not claim that something of right had been withheld from it. So it is when the United States exercises its prerogative by building the project itself.
Respondent, however, argues that it had a vested interest in the waters of the Grand River and points to the grant made by Oklahoma to it for the development of hydroelectric power on the Grand River. It seeks to trace the title of Oklahoma through the Cherokees who, in consideration of their agreement to remove to the territory which included the Grand River, received on December 31, 1838, a deed from the United States to the territory. By § 15 of the Act of March 3, 1893, 27 Stat: 612, 645, Congress agreed that this Cherokee land could be allotted to the members of the nation in severalty. The argument is that the United States had divested itself entirely of any rights in the water of the Grand River prior to Oklahoma’s admission as a State in 1907. Assuming, arguendo, that that is true, respondent’s claim is not advanced. In dealing with a grant by the United States to the Osage Indians over a nonnavigable stretch of the Arkansas River the Court in Brewer Oil Co. v. United States, 260 U. S. 77, 87-88, said:
“The title of the Indians grows out of a federal grant when the Federal Government had complete sovereignty over the territory in question. Oklahoma when she came into the Union took sovereignty over the public lands in the condition of ownership as they were then, and, if the bed of a non-navigable stream had then become the property of the Osages, there was nothing in the admission of Oklahoma into a constitutional equality of power with other States which required or permitted a divesting of the title.”
Respondent argues that if any rights in the waters of the Grand River remained in the United States after the grant to the Indians in 1838, rights over them were later given to Oklahoma-. The reference is to § 25 of the Act of April 26, 1906, 34 Stat. 137, 146, which granted light and power companies the right to construct dams across nonnavigable streams in Cherokee territory for power and other purposes. The right to acquire or condemn property was granted the companies in prescribed situations “subject to approval by the Secretary of the Interior.” And § 25 contained at the end a proviso critical to respondent’s case and reading as follows: “Provided, That all rights granted hereunder shall be subject to the control of the future Territory or State within which the Indian Territory may be situated.” But this Act was no more than a regulatory measure. It did not purport to grant title to waters and appurtenant lands. The 1906 Act was an assertion of power possessed by the Federal Government to regulate Indian territory. Moreover, no water rights condemned under this Act are shown to have passed to Oklahoma and from Oklahoma to respondent. Yet the Federal Government was the initial proprietor in these western lands and any claim by a State or by others must derive from this federal title. See United States v. Gerlach Live Stock Co., 339 U. S. 725, 747; Federal Power Comm’n v. Oregon, 349 U. S. 435. Congress has made various grants or conveyances or by statute recognized certain appropriations of lands or waters in the public domain made through machinery of the States. United States v. Gerlach Live Stock Co., supra, at 747-748; Federal Power Comm’n v. Oregon, supra, at 446-448. Yet the only Federal Act on which reliance is based by respondent for the grant of these water rights to Oklahoma is § 25 of the Act of April 26, 1906. As we have seen, that was a regulatory measure through which title might be obtained; but no water rights under it were acquired by a light or power company which is now asserted to be in respondent’s chain of title. If the 1906 Act be less clear than we believe, nevertheless the construction urged by respondent would be precluded by the principle that all federal grants are construed in favor of the Government lest they be enlarged to include more than what was expressly included. See United States v. Union Pacific R. Co., 353 U. S. 112, 116.
Respondent argues that since Oklahoma gave it rights to the waters of the Grand River, it has a compensable interest in them under the decision in Federal Power Comm’n v. Niagara Mohawk Power Corp., 347 U. S. 239. That decision merely held that the Federal Power Act treats “usufructuary water rights like other property rights,” id., at 251, making it necessary for a licensee to compensate the claimant for them. Here no licensee claims under the Federal Act; the United States builds the project on its own account.
The Court of Claims erred in failing to distinguish between an appropriation of property and the frustration of an enterprise by reason of the exercise of a superior governmental power. Here respondent has done no more than prove that a prospective business opportunity was lost. More than that is necessary as Omnia Co. v. United States, 261 U. S. 502, holds. In that case the claimant stood to make large profits from a contract it had with a steel company. But the United States, pursuant to the War Power, requisitioned the company’s entire steel production. Suit was brought in the Court of Claims for just compensation. The Court, after pointing out that many laws and rulings of Government reduce the value of property held by individuals, noted that there the Government did not appropriate what the claimant owned but only ended his opportunity to exploit a contract. “Frustration and appropriation are essentially different things.” Id., at 513. And see Mitchell v. United States, 267 U. S. 341, 345; United States ex rel. T. V. A. v. Powelson, 319 U. S. 266, 281-283. No more need be said here.
In conclusion, the United States did not appropriate any business, contract, land, or property of respondent. It had the superior right by reason of the Commerce Clause to build the Ft. Gibson project itself or to license another to do it. The frustration of respondent’s plans and expectations which resulted when the United States chose to undertake the project on its own account did not take property from respondent in the sense of the Fifth Amendment.
Reversed.
H. R. Doc. No. 308, 74th Cong., 1st Sess., Yol. 3.
H. R. Doc. No. 107, 76th Cong., 1st Sess.
55 Stat. 638, 645.
49 Stat. 846, 16 U. S. C. § 817. See Grand River Dam Authority v. Grand-Hydro, 335 U. S. 359.
68 Stat. 450.
Severance damages, storage and headwater benefits accruing to Ft. Gibson from the Pensacola unit, the cost and value of surveys, plans, and specifications for the Ft. Gibson unit, the loss of the use and value of lands and rights-of-way acquired for the interconnection of the Ft. Gibson unit with respondent’s system and for the distribution of power from Ft. Gibson were also claimed. But these claims were denied by the Court of Claims and no review of that denial has been sought here.
Note 3, supra, at 639, 645.
The findings are “There is storage capacity between elevation 554 and elevation 582 that is reserved for the control of flood waters.”
No riparian land is involved, and it cannot be claimed as was •asserted in United States v. Kelly, 243 U. S. 316, 330, that in substance there was a taking of land. And see United States v. Willow River Co., 324 U. S. 499, 507, which narrowly confined the holding in the Kelly case.
See Mills, Oklahoma Indian Land Laws (1924), 27.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | J | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Chief Justice Rehnquist
delivered the opinion of the Court.
We granted certiorari in this case to determine what standard an appellate court should apply in reviewing a trial court’s decision to admit or exclude expert testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U. S. 579 (1993). We hold that abuse of discretion is the appropriate standard. We apply this standard and conclude that the District Court in this case did not abuse its discretion when it excluded certain proffered expert testimony.
I
Respondent Robert Joiner began work as an electrician in the Water & Light Department of Thomasville, Georgia (City), in 1973. This job required him to work with and around the City’s electrical transformers, which used a mineral-oil-based dielectric fluid as a coolant. Joiner often had to stick his hands and arms into the fluid to make repairs. The fluid would sometimes splash onto him, occasionally getting into his eyes and mouth. In 1983 the City discovered that the fluid in some of the transformers was contaminated with polychlorinated biphenyls (PCB’s). PCB’s are widely considered to be hazardous to human health. Congress, with limited exceptions, banned the production and sale of PCB’s in 1978. See 90 Stat. 2020, 15 U. S. C. § 2605(e)(2)(A).
Joiner was diagnosed with small-cell lung cancer in 1991. He sued petitioners in Georgia state court the following year. Petitioner Monsanto manufactured PCB’s from 1935 to 1977; petitioners General Electric and Westinghouse Electric manufactured transformers and dielectric fluid. In his complaint Joiner linked his development of cancer to his exposure to PCB’s and their derivatives, polychlorinated diben-zofurans (furans) and polychlorinated dibenzodioxins (dioxins). Joiner had been a smoker for approximately eight years, his parents had both been smokers, and there was a history of lung cancer in his family. He was thus perhaps already at a heightened risk of developing lung cancer eventually. The suit alleged that his exposure to PCB’s “promoted” his cancer; had it not been for his exposure to these substances, his cancer would not have developed for many years, if at all.
Petitioners removed the case to there, they moved for summary judgment. They contended that (1) there was no evidence that Joiner suffered significant exposure to PCB’s, furans, or dioxins, and (2) there was no admissible scientific evidence that PCB’s promoted Joiner’s cancer. Joiner responded that there were numerous disputed factual issues that required resolution by a jury. He relied largely on the testimony of expert witnesses. In depositions, his experts had testified that PCB’s alone can promote cancer and that furans and dioxins can also promote cancer. They opined that since Joiner had been exposed to PCB’s, furans, and dioxins, such exposure was likely responsible for Joiner’s cancer.
The District Court ruled that there was a genuine issue of material fact as to whether Joiner had been exposed to PCB’s. But it nevertheless granted summary judgment for petitioners because (1) there was no genuine issue as to whether Joiner had been exposed to furans and dioxins, and (2) the testimony of Joiner’s experts had failed to show that there was a link between exposure to PCB’s and small-cell lung cancer. The court believed that the testimony of respondent’s experts to the contrary did not rise above “subjective belief or unsupported speculation.” 864 P. Supp. 1310, 1326 (ND Ga. 1994). Their testimony was therefore inadmissible.
The Court of Appeals for the Eleventh Circuit reversed. 78 F. 3d 524 (1996). It held that “[b]ecause the Federal Rules of Evidence govérning expert testimony display a preference for admissibility, we apply a particularly stringent standard of review to the trial judge’s exclusion of expert testimony.” Id., at 529. Applying that standard, the Court of Appeals held that the District Court had erred in excluding the testimony of Joiner’s expert witnesses. The District Court had made two fundamental errors. First, it excluded the experts’ testimony because it “drew different conclusions from the research than did each of the experts.” The Court of Appeals opined that a district court should limit its role to determining the “legal reliability of proffered expert testimony, leaving the jury to decide the correctness of competing expert opinions.” Id., at 533. Second, the District Court had held that there was no genuine issue of material fact as to whether Joiner had been exposed to fu-rans and dioxins. This was also incorrect, said the Court of Appeals, because testimony in the record supported the proposition that there had been such exposure.
We granted petitioners’ petition for a writ of certiorari, 520 U. S. 1114 (1997), and we now reverse.
H-Í
Petitioners challenge the standard applied by the Court of Appeals in reviewing the District Court’s decision to exclude respondent’s experts’ proffered testimony. They argue that that court should have applied traditional "abuse of discretion” review. Respondent agrees that abuse of discretion is the correct standard of review. He contends, however, that the Court of Appeals applied an abuse-of-diseretion standai’d in this ease. As he reads it, the phrase "particularly stringent” announced no new standard of review. It was simply an acknowledgment that an appellate court can and will devote more resources to analyzing district court decisions that are dispositive of the entire litigation. All evidentiary decisions are reviewed under an abuse-of-discretion standard. He argues, however, that it is perfectly reasonable for appellate courts to give particular attention to those decisions that are outcome determinative.
We have held that abuse of discretion is the proper standard of review of a district court’s evidentiary rulings. Old Chief v. United States, 519 U. S. 172, 174, n. 1 (1997); United States v. Abel, 469 U. S. 45, 54 (1984). Indeed, our cases on the subject go back as far as Spring Co. v. Edgar, 99 U. S. 645, 658 (1879), where we said that “[c]ases arise where it is very much a matter of discretion with the court whether to receive or exclude the evidence; but the appellate court will not reverse in such a case, unless the ruling is manifestly erroneous.” The Court of Appeals suggested that Daubert somehow altered this general rule in the context of a district court’s decision to exclude scientific evidence. But Daubert did not address the standard of appellate review for evi-dentiary rulings at all. It did hold that the “austere” Frye standard of “general acceptance” had not been carried over into the Federal Rules of Evidence. But the opinion also said:
“That the Frye test was displaced by the Rules of Evidence does not mean, however, that the' Rules themselves place no limits on the admissibility of purportedly scientific evidence. Nor is the trial judge disabled from screening such evidence. To the contrary, under the Rules the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.” 509 U. S., at 589 (footnote omitted).
Thus, while the Federal Rules of Evidence allow district courts to admit a somewhat broader range of scientific testimony than would have been admissible under Frye, they leave in place the “gatekeeper” role of the trial judge in screening such evidence. A court of appeals applying “abuse-of-diseretion” review to such rulings may not categorically distinguish between rulings allowing expert testimony and rulings disallowing it. Compare Beech Aircraft Corp. v. Rainey, 488 U. S. 153, 172 (1988) (applying abuse-of-discretion review to a lower court’s decision to exclude evidence), with United States v. Abel, supra, at 54 (applying abuse-of-diseretion review to a lower court’s decision to admit evidence). We likewise reject respondent’s argument that because the granting of summary judgment in this case was “outcome determinative,” it should have been subjected to a more searching standard of review.' On a motion for summary judgment, disputed issues of fact are resolved against the moving party — here, petitioners. But the question of admissibility of expert testimony is not such an issue of fact, and is reviewablé under the abuse-of-diseretion standard.
We hold that'the Court of Appeals erred in its review of the exclusion of Joiner’s experts’ testimony. In applying an overly “stringent” review to that ruling, it failed to give the trial court the deference that is the hallmark of abuse-of-diseretion review. See, e. g., Koon v. United States, 518 U. S. 81, 98-99 (1996).
Ill
We believe that a proper application of the correct standard of review here indicates that the District Court did not abuse its discretion. Joiner’s theory of liability was that his exposure to PCB’s and their derivatives “promoted” his development of small-cell lung cancer. In support of that theory he proffered the deposition testimony of expert witnesses. Dr. Arnold Seheeter testified that he believed it “more likely than not that Mr. Joiner’s lung cancer was causally linked to* cigarette smoking and PCB exposure.” App. 107. Dr. Daniel Teitelbaum testified that Joiner’s “lung cancer was caused by or contributed to in a significant degree by the materials with which he worked.” Id., at 140.
Petitioners contended that the statements of Joiner’s experts regarding causation were nothing more than speculation. Petitioners criticized the testimony of the experts in that it was “not supported by epidemiological studies . . . [and was] based exclusively on isolated studies of laboratory animals.” 3 Record, Doe. No. 46 (Defendants’ Joint Memorandum in Support of Summary Judgment 3). Joiner responded by claiming that his experts had identified “relevant animal studies which support their opinions.” 4 Record, Doe. No. 53 (Plaintiffs’ Brief in Opposition to Defendants’ Motion for Summary Judgment 47). He also directed the court’s attention to four epidemiological studies on which his experts had relied.
The District Court studies on which respondent’s experts relied did not support his contention that exposure to PCB’s had contributed to his cancer. The studies involved infant mice that had developed cancer after being exposed to PCB’s. The infant mice in the studies had had massive doses of PCB’s injected directly into their peritoneums or stomachs. Joiner was an adult human being whose alleged exposure to PCB’s was far less than the exposure in the animal studies. The PCB’s were injected into the mice in a highly concentrated form. The fluid with which Joiner had come into contact generally had a much smaller PCB concentration of between 0-to-500 parts per million. The cancer that these mice developed was alveolo-genin adenomas; Joiner had developed small-cell carcinomas. No study demonstrated that adult mice developed cancer after being exposed to PCB’s. One of the experts admitted that no study had demonstrated that PCB’s lead to cancer in any other species.
Respondent failed to reply to this criticism. Rather than explaining how and why the experts could have extrapolated their opinions from these seemingly far-removed animal studies, respondent chose “to proceed as if the only issue [was] whether animal studies can ever be a proper foundation for an expert’s opinion.” 864 F. Supp., at 1824. Of course, whether animal studies can ever be a proper foundation for an expert’s opinion was not the issue. The issue was whether these experts’ opinions were sufficiently supported by the animal studies on which they purported to rely. The studies were so dissimilar to the facts presented in this litigation that it was not an abuse of discretion for the District Court to have rejected the experts’ reliance on them.
The District Court also concluded that the four epidemiological studies on which respondent relied were not a sufficient basis for the experts’ opinions. The first such study involved workers at an Italian capacitor plant who had been exposed to PCB’s. Bertazzi, Riboldi, Pesatori, Radiee, & Zocchetti, Cancer Mortality of Capacitor Manufacturing Workers, 11 American Journal of Industrial Medicine 165 (1987). The authors noted that lung cancer deaths among ex-employees at the plant were higher than might have been expected, but concluded that “there were apparently no grounds for associating lung cancer deaths (although increased above expectations) and exposure in the plant.” Id., at 172. Given that Bertazzi et al. were unwilling to say that PCB exposure had caused cancer among the workers they examined, their study did not support the experts’ conclusion that Joiner’s exposure to PCB’s caused his cancer.
The second study followed employees who had worked at Monsanto’s PCB production plant. J. Zack & D. Musch, Mortality of PCB Workers at the Monsanto Plant in Sauget, Illinois (Dee. 14, 1979) (unpublished report), 3 Record, Doe. No. 11. The authors of this study found that the incidence of lung cancer deaths among these workers was somewhat higher than would ordinarily be expected. The increase, however, was not statistically significant and the authors of the study did not suggest a link between the increase in lung cancer deaths and the exposure to PCB’s.
The third and fourth studies were likewise of no help. The third involved workers at a Norwegian cable manufacturing company who had been exposed to mineral oil. Ronneberg, Andersen, & Skyberg, Mortality and Incidence of Cancer Among Oil Exposed Workers in a Norwegian Cable Manufacturing Company, 45 British Journal of Industrial Medicine 595 (1988). A statistically significant increase in lung cancer deaths had been observed in these workers. The study, however, (1) made no mention of PCB’s and (2) was expressly limited to the type of mineral oil involved in that study, and thus did not support these experts’ opinions. The fourth and final study involved a PCB-exposed group in Japan that had seen a statistically significant increase in lung cancer deaths. Kuratsune, Nakamura, Ikeda, & Hirohata, Analysis of Deaths Seen Among Patients with Yusho — A Preliminary Report, 16 Chemosphere, Nos. 8/9, p. 2085 (1987). The subjects of this study, however, had been exposed to numerous potential carcinogens, including toxic rice oil that they had ingested.
Respondent points to Dauber?s language that the “focus, of course, must be solely on principles and methodology, not on the conclusions that they generate.” 509 U. S., at 595. He claims that because the District Court’s disagreement was with the conclusion that the experts drew from the studies, the District Court committed legal error and was properly reversed by the Court of Appeals. But conclusions and methodology are not entirely distinct from one another. Trained experts commonly extrapolate from existing data. But nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert. A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered. See Turpin v. Merrell Dow Pharmaceuticals, Inc., 959 F. 2d 1349, 1360 (CA6), cert. denied, 506 U. S. 826 (1992). That is what the District Court did here, and we hold that it did not abuse its discretion in so doing.
We hold, therefore, that abuse of discretion is the proper standard by which to review a district court’s decision to admit or exclude scientific evidence. We further hold that, because it was within the District Court’s discretion to conclude that the studies upon which the experts relied were not sufficient, whether individually or in combination, to support their conclusions that Joiner’s exposure to PCB’s contributed to his cancer, the District Court did not abuse its discretion in excluding their testimony. These conclusions, however, do not dispose of this entire ease.
Respondent’s original contention was that his exposure to PCB’s, furans, and dioxins contributed to his cancer. The District Court ruled that there was a genuine issue of material fact as to whether Joiner had been exposed to PCB’s, but concluded that there was no genuine issue as to whether he had been exposed to furans and dioxins. The District Court accordingly never explicitly considered if there was admissible evidence on the question whether Joiner’s alleged exposure to furans and dioxins contributed to his cancer. The Court of Appeals reversed the District Court’s conclusion that there had been no exposure to furans and dioxins. Petitioners did not challenge this determination in their petition to this Court. Whether Joiner was exposed to furans and dioxins, and whether if there was such exposure, the opinions of Joiner’s experts would then be admissible, remain open questions. We accordingly reverse the judgment of the Court of Appeals and remand this ease for proceedings consistent with this opinion.
It is so ordered.
Joiner’s wife was also a plaintiff in the suit and is a respondent here. For convenience, we refer to respondent in the singular.
Epidemiological studies examine the pattern of disease in human populations.
The peritoneum is the lining of the abdominal cavity.
A capacitor is an electrical component that stores an electric charge.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Thomas
delivered the opinion of the Court.
In this case, we decide whether the payment of benefits pursuant to an early retirement program conditioned on the participants’ release of employment-related claims constitutes a prohibited transaction under the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq. We also determine whether the 1986 amendments to ERISA and the Age Discrimination in Employment Act of 1967 (ADEA), 81 Stat. 602, as amended, 29 U. S. C. § 621 et seq., forbidding age-based discrimination in pension plans apply retroactively.
I
Respondent Paul Spink was employed by petitioner Lockheed Corporation from 1939 until 1950, when he left to work for one of Lockheed’s competitors. In 1979, Lockheed persuaded Spink to return. Spink was 61 years old when he resumed employment with Lockheed. At that time, the terms of the Lockheed Retirement Plan for Certain Salaried Individuals (Plan), a defined benefit plan, excluded from participation employees who were over the age of 60 when hired. This was expressly permitted by ERISA. See 29 U. S. C. § 1052(a)(2)(B) (1982 ed.).
Congress subsequently passed the Omnibus Budget Reconciliation Act of 1986 (OBRA), Pub. L. 99-509, 100 Stat. 1874. Section 9203(a)(1) of OBRA, 100 Stat. 1979, repealed the age-based exclusion provision of ERISA, and the statute now flatly mandates that “[n]o pension plan may exclude from participation (on the basis of age) employees who have attained a specified age.” 29 U. S. C. § 1052(a)(2). Sections 9201 and 9202 of OBRA, 100 Stat. 1973-1978, amended ERISA and the ADEA to prohibit age-based cessations of benefit accruals and age-based reductions in benefit accrual rates. See 29 U. S. C. §§ 1054(b)(l)(H)(i), 623(i)(l).
In an effort to comply with these new laws, Lockheed ceased its prior practice of age-based exclusion from the Plan, effective December 25, 1988. As of that date, all employees, including Spink, who had previously been ineligible to participate in the Plan due to their age at the time of hiring became members of the Plan. Lockheed made clear, however, that it would not credit those employees for years of service rendered before they became members.
When later faced with the need to streamline its operations, Lockheed amended the Plan to provide financial incentives for certain employees to retire early. Lockheed established two programs, both of which offered increased pension benefits to employees who would retire early, payable out of the Plan’s surplus assets. Both programs required as a condition of the receipt of benefits that participants release any employment-related claims they might have against Lockheed. Though Spink was eligible for one of the programs, he declined to participate because he did not wish to waive any ADEA or ERISA claims. He then retired, without earning any extra benefits for doing so.
Spink brought this suit, in his individual capacity and on behalf of others similarly situated, against Lockheed and several of its directors and officers. Among other things, the complaint alleged that Lockheed and the members of the board of directors violated ERISA’s duty of care and prohibited transaction provisions, 29 U. S. C. §§ 1104(a), 1106(a), by amending the Plan to create the retirement programs. Re-latedly, the complaint alleged that the members of Lockheed’s Retirement Committee, who implemented the Plan as amended by the board, violated those same parts of ERISA. The complaint also asserted that the OBRA amendments to ERISA and the ADEA required Lockheed to count Spink’s pre-1988 service years toward his accrued pension benefits. For these alleged ERISA violations, Spink sought monetary, declaratory, and injunctive relief pursuant to §§ 502(a)(2) and (3) of ERISA’s civil enforcement provisions, 29 U. S. C. §§ 1132(a)(2), (3). Lockheed moved to dismiss the complaint for failure to state a claim, and the District Court granted the motion.
The Court of Appeals for the Ninth Circuit reversed in relevant part. 60 F. 3d 616 (1995). The Court of Appeals held that the amendments to the Plan were unlawful under ERISA § 406(a)(1)(D), 29 U. S. C. § 1106(a)(1)(D), which prohibits a fiduciary from causing a plan to engage in a transaction that transfers plan assets to a party in interest or involves the use of plan assets for the benefit of a party in interest. The court reasoned that because the amendments offered increased benefits in exchange for a release of employment claims, they constituted a use of Plan assets to “purchase” a significant benefit for Lockheed. 60 F. 3d, at 624. Though the court found a violation of § 406(a)(1)(D), it decided that there was no need to address Lockheed’s status as a fiduciary. Id., at 623, n. 5. In addition, the Court of Appeals agreed with Spink that Lockheed had violated the OBRA amendments by refusing to include Spink’s service years prior to 1988 in determining his benefits. In so holding, the court found that the OBRA amendments apply retroactively. See id., at 620, n. 1. We issued a writ of certio-rari, 516 U. S. 1087 (1996), and now reverse.
HH I — I
Nothing m ERISA requires employers to establish employee benefits plans. Nor does ERISA mandate what kind of benefits employers must provide if they choose to have such a plan. Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 91 (1983); Alessi v. Raybestos-Manhattan, Inc., 451 U. S. 504, 511 (1981). ERISA does, however, seek to ensure that employees will not be left emptyhanded once employers have guaranteed them certain benefits. As we said in Nachman Corp. v. Pension Benefit Guaranty Corporation, 446 U. S. 359 (1980), when Congress enacted ERISA it “wanted to ... mak[e] sure that if a worker has been promised a defined pension benefit upon retirement — and if he has fulfilled whatever conditions are required to obtain a vested benefit— he actually will receive it.” Id., at 375. Accordingly, ERISA tries to “make as certain as possible that pension fund assets [will] be adequate” to meet expected benefits payments. Ibid.
To increase the chances that employers will be able to honor their benefits commitments — that is, to guard against the possibility of bankrupt pension funds — Congress incorporated several key measures into ERISA. Section 302 of ERISA sets minimum annual funding levels for all covered plans, see 29 U. S. C. §§ 1082(a), 1082(b), and creates tax liens in favor of such plans when those funding levels are not met, see § 1082(f). Sections 404 and 409 of ERISA impose respectively a duty of care with respect to the management of existing trust funds, along with liability for breach of that duty, upon plan fiduciaries. See §§ 1104(a), 1109(a). Finally, § 406 of ERISA prohibits fiduciaries from involving the plan and its assets in certain kinds of business deals. See §1106. It is this last feature of ERISA that is at issue today.
Congress enacted § 406 “to bar categorically a transaction that [is] likely to injure the pension plan.” Commissioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 160 (1993). That section mandates, in relevant part, that “[a] fiduciary with respect to a plan shall not cause the plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect . . . transfer to, or use by or for the benefit of a party in interest, of any assets of the plan.” 29 U. S. C. § 1106(a)(1)(D). The question here is whether this provision of ERISA prevents an employer from conditioning the receipt of early retirement benefits upon the participants’ waiver of employment claims. For the following reasons, we hold that it does not.
Ill
Section 406(a)(1) regdlates the conduct of plan fiduciaries, placing certain transactions outside the scope of their lawful authority. When afiduciary violates the rules set forth in § 406(a)(1), §409 of ERISA, renders him personally liable for any losses incurred by the plan, any ill-gotten profits, and other equitable and remedial relief deemed appropriate by the court. See 29 U. S. C. § 1109(a). But in order to sustain an alleged transgression of § 406(a), a plaintiff must show that a fiduciary caused the plan to engage in the allegedly unlawful transaction. Unless a plaintiff can make that showing, there can be no violation of § 406(a)(1) to warrant relief under the enforcement provisions. Cf. Peacock v. Thomas, 516 U. S. 349, 353 (1996) (“Section 502(a)(3) ‘does not, after all, authorize “appropriate equitable relief” at large, but only “appropriate equitable relief” for the purpose of “redressing any] violations or . . . enforcing] any provisions” of ERISA’ ”) (quoting Mertens v. Hewitt Associates, 508 U. S. 248, 253 (1993)). The Court of Appeals erred by not asking whether fiduciary status existed in this case before it found a violation of § 406(a)(1)(D).
A
We first address the allegation in Spink’s complaint that Lockheed and the board of directors breached their fiduciary duties when they adopted the amendments establishing the early retirement programs. Plan sponsors who alter the terms of a plan do not fall into the category of fiduciaries. As we said with respect to the amendment of welfare benefit plans in Curtiss-Wright Corp. v. Schoonejongen, 514 U. S. 73 (1995), “[e]mployers or other plan sponsors are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans.” Id., at 78 (citing Adams v. Avondale Industries, Inc., 905 F. 2d 943, 947 (CA6 1990)). When employers undertake those actions, they do not act as fiduciaries, 514 U. S., at 78, but are analogous to the settlors of a trust, see Johnson v. Georgia-Pacific Corp., 19 F. 3d 1184, 1188 (CA7 1994).
This rule is rooted in the text of ERISA’s definition of fiduciary. See 29 U. S. C. § 10Q2(21)(A) (quoted n. 2, supra). As the Second Circuit has observed, “only when fulfilling certain defined functions, including the exercise of discretionary authority or control over plan management or administration,” does a person become a fiduciary under §3(21)(A). Siskind v. Sperry Retirement Program, Unisys, 47 F. 3d 498, 505 (1995). “[B]ecause [the] defined functions [in the definition of fiduciary] do not include plan design, an employer may decide to amend an employee benefit plan without being subject to fiduciary review.” Ibid. We recently recognized this very point, noting that “it may be true that amending or terminating a plan . . . cannot be an act of plan ‘management’ or ‘administration.’ ” Varity Corp. v. Howe, 516 U. S. 489, 505 (1996). As noted above, we in fact said as much in Curtiss-Wright, see 514 U. S., at 78, at least with respect to welfare benefit plans.
We see no reason why the rule of Curtiss-Wright should not be extended to pension benefit plans. Indeed, there are compelling reasons to apply the same rule to cases involving both kinds of plans, as most Courts of Appeals have done. The definition of fiduciary makes no distinction between persons exercising authority over welfare benefit plans and those exercising authority over pension plans. It speaks simply of a “fiduciary with respect to a plan,” 29 U. S. C. § 1002(21)(A), and of “management” and “administration” of “such plan,” ibid. And ERISA defines a “plan” as being either a welfare or pension plan, or both. See § 1002(3). Likewise, the fiduciary duty provisions of ERISA are phrased in general terms and apply with equal force to welfare and pension plans. See, e. g., § 1104(a) (specifying duties of a “fiduciary . . . with respect to a plan”). See also Shaw v. Delta Air Lines, Inc., 463 U. S., at 91 (ERISA “sets various uniform standards, including rules concerning . . . fiduciary responsibility, for both pension and welfare plans”). Given ERISA’s definition of fiduciary and the applicability of the duties that attend that status, we think that the rules regarding fiduciary capacity — including the settlor-fiduciary distinction — should apply to pension and welfare plans alike.
Lockheed acted not as a fiduciary but as a settlor when it amended the terms of the Plan to include the retirement programs. Thus, § 406(a)’s requirement of fiduciary status is not met. While other portions of ERISA govern plan amendments, see, e. g., 29 U. S. C. § 1054(g) (amendment generally may not decrease accrued benefits); § 1085b (if adoption of an amendment results in underfunding of a defined benefit plan, the sponsor must post security for the amount of the deficiency), the act of amending a pension plan does not trigger ERISA’s fiduciary provisions.
B
Spink also alleged that the members of Lockheed’s Retirement Committee who implemented the amended Plan violated § 406(a)(1)(D). As with the question whether Lockheed and the board members can be held liable under ERISA’s fiduciary rules, the Court of Appeals erred in holding that the Retirement Committee members violated the prohibited transaction section of ERISA without making the requisite finding of fiduciary status. It is not necessary for us to decide the question whether the Retirement Committee members acted as fiduciaries when they paid out benefits according to the terms of the amended Plan, however, because we do not think that they engaged in any conduct prohibited by § 406(a)(1)(D).
The “transaction” in which fiduciaries may not cause a plan to engage is one that “constitutes a direct or indirect . . . transfer to, or use by or for the benefit of a party in interest, of any assets of the plan.” 29 U. S. C. § 1106(a)(1)(D). Spink reads § 406(a)(1)(D) to apply in cases where the benefit received by the party in interest — in this case, the employer — is not merely a “natural inciden[t] of the administration of pension plans.” Brief for Respondent 10. Lockheed, on the other hand, maintains that a plan administrator’s payment of benefits to plan participants and beneficiaries pursuant to the terms of an otherwise lawful plan is wholly outside the scope of § 406(a)(1)(D). See Reply Brief for Petitioners 10. We agree with Lockheed.
Section 406(a)(1)(D) does not in direct terms include the payment of benefits by a plan administrator. And the sur-roünding provisions suggest that the payment of benefits is in fact not a “transaction” in the sense that Congress used that term in § 406(a). Section 406(a) prohibits fiduciaries from engaging the plan in the “sale,” “exchange,” or “leasing” of property, 29 U. S. C. § 1106(a)(1)(A); the “lending of money” or “extension of credit,” § 1106(a)(1)(B); the “furnishing of goods, services, or facilities,” § 1106(a)(1)(C); and the “acquisition ... of any employer security or employer real property,” § 1106(a)(1)(E), with a party in interest. See also § 1108(b) (listing similar types of “transactions”). These are commercial bargains that present a special risk of plan underfunding because they are struck with plan insiders, presumably not at arm’s length. See Commissioner v. Keystone Consol. Industries, Inc., 508 U. S., at 160. What the “transactions” identified in § 406(a) thus have in common is that they generally involve uses of plan assets that are potentially harmful to the plan. Cf. id., at 160-161 (reasoning that a transfer of unencumbered property to the plan by the employer for the purpose of applying it toward the employer’s funding obligation fell within §406(a)(l)’s companion tax provision, 26 U. S. C. §4975, because it could “jeopardize the ability of the plan to pay promised benefits”). The payment of benefits conditioned on performance by plan participants cannot reasonably be said to share that characteristic.
According to Spink and the Court of Appeals, however, Lockheed’s early retirement programs were prohibited transactions within the meaning of § 406(a)(1)(D) because the required release of employment-related claims by participants created a “significant benefit” for Lockheed. 60 F. 3d, at 624. Spink concedes, however, that among the “incidental” and thus legitimate benefits that a plan sponsor may receive from the operation of a pension plan are attracting and retaining employees, paying deferred compensation, settling or avoiding strikes, providing increased compensation without increasing wages, increasing employee turnover, and reducing the likelihood of lawsuits by encouraging employees who would otherwise have been laid off to depart voluntarily. Brief for Respondent 11.
We do not see how obtaining waivers of employment-related claims can meaningfully be distinguished from these admittedly permissible objectives. Each involves, at bottom, a quid pro quo between the plan sponsor and the participant: that is, the employer promises to pay increased benefits in exchange for the performance of some condition by the employee. By Spink’s admission, the employer can ask the employee to continue to work for the employer, to cross a picket line, or to retire early. The execution of a release of claims against the employer is functionally no different; like these other conditions, it is an act that the employee performs for the employer in return for benefits. Certainly, there is no basis in § 406(a)(1)(D) for distinguishing a valid from an invalid quid pro quo. Section 406(a)(1)(D) simply does not address what an employer can and cannot ask an employee to do in return for benefits. See generally Alessi v. Raybestos-Manhattan, Inc., 451 U. S., at 511 (ERISA “leaves th[e] question” of the content of benefits “to the private parties creating the plan. . . . [T]he private parties, not the Government, control the level of benefits”). Furthermore, if an employer can avoid litigation that might result from laying off an employee by enticing him to retire early, as Spink concedes, it stands to reason that the employer can also protect itself from suits arising out of that retirement by asking the employee to release any employment-related claims he may have.
In short, whatever the precise boundaries of the prohibition in § 406(a)(1)(D), there is one use of plan assets that it cannot logically encompass: a quid pro quo between the employer and plan participants in which the plan pays out benefits to the participants pursuant to its terms. When § 406(a)(1)(D) is read in the context of the other prohibited transaction provisions, it becomes clear that the payment of benefits in exchange for the performance of some condition by the employee is not a “transaction” within the meaning of § 406(a)(1). A standard that allows some benefits agreements but not others, as Spink suggests, lacks a basis in § 406(a)(1)(D); it also would provide little guidance to lower courts and those who must comply with ERISA. We thus hold that the payment of benefits pursuant to an amended plan, regardless of what the plan requires of the employee in return for those benefits, does not constitute a prohibited transaction.
> > — I
Finally, we address whether §§9201 and 9202(a) of OBRA, which amended respectively the ADEA and ERISA to prohibit age-based benefit accrual rules, apply retroactively. Two Terms ago, we set forth the proper approach for determining the retroactive effect of a statute in Landgrafv. USI Film Products, 511 U. S. 244 (1994). We stated that “[w]hen a case implicates a federal statute enacted after the events in suit, the court’s first task is to determine whether Congress has expressly prescribed the statute’s proper reach.” Id., at 280. Thus, we must determine whether Congress has plainly delineated the temporal scope of the OBRA amendments to ERISA and the ADEA.
Section 9204(a)(1) of OBRA, 100 Stat. 1979, expressly provides that “[t]he amendments made by sections 9201 and 9202 shall apply only with respect to plan years beginning on or after January 1,1988, and only to employees who have 1 hour of service in any plan year to which such amendments apply.” 29 U. S. C. § 628 note. This language compels the conclusion that the amendments are prospective. For plan years that began on or after January 1, 1988, age-based accrual rules are unlawful under the amendments; further, only employees who have one hour of service in such a plan year are entitled to the protection of the amendments. But for plan years prior to the effective date, employers cannot be held liable for using age-based accrual rules. Where, as here, the temporal effect of a statute is manifest on its face, “there is no need to resort to judicial default rules,” Land graf v. USI Film Products, supra, at 280, and inquiry is at an end.
Notwithstanding the clarity of § 9204(a)(1), the Court of Appeals believed that the text of §§ 9201 and 9202(a) require retroactive application of the benefit accrual rules. To deny an employee credit for service years during which he was excluded from the plan based on age, even though that exclusion was lawful at the time, the Court of Appeals reasoned, is to reduce the rate of benefits accrual for that employee. 60 F. 3d, at 620. When Congress includes a provision that specifically addresses the temporal effect of a statute, that provision trumps any general inferences that might be drawn from the substantive provisions of the statute. See generally Morales v. Trans World Airlines, Inc., 504 U. S. 374, 384 (1992); Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 228-229 (1957). Even if it were proper to disregard the express time limitations in § 9204(a)(1) in favor of more general language, §§ 9201 and 9202(a) cannot bear the weight of the Court of Appeals’ construction. A reduction in total benefits due is not the same thing as a reduction in the rate of benefit accrual; the former is the final outcome of the calculation, whereas the latter is one of the factors in the equation.
* * *
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Section 408 enumerates specific exceptions to the prohibitions in § 406. See 29 U. S. C. § 1108(b). Lockheed does not argue that any of these exceptions pertain to this ease.
ERISA § 3(21)(A) provides: “[A] person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or
Instead of pursuing this inquiry, the Court of Appeals found that Lockheed was a “party in interest” under §3(14)(C), and asserted that “a party in interest who benefitted from an impermissible transaction can be held liable under ERISA.” 60 F. 3d 616, 623 (CA9 1995). For that same proposition, several Courts of Appeals have relied on statements in Mertens v. Hewitt Associates, 508 U. S. 248 (1993), that “ERISA contains various provisions that can be read as imposing obligations upon nonfiduciaries,” id., at 253-254; see also id., at 254, n. 4 (citing §406(a)), and that “[p]rofes-sional service providers . . . must disgorge assets and profits obtained through participation as parties-in-interest in transactions prohibited by §406,” id., at 262. See, e.g., Reich v. Stangl, 73 F. 3d 1027, 1031-1032 (CA10 1996), cert. pending, No. 95-1631; Landwehr v. DuPree, 72 F. 3d 726, 733-734 (CA9 1995); Reich v. Compton, 57 F. 3d 270, 285 (CA3 1995). Insofar as they apply to § 406(a), these statements in Mertens (which were in any event dicta, since § 406(a) was not at issue) suggest liability for parties in interest only when a violation of § 406(a) has been established— which, as we have discussed, requires a showing that a fiduciary caused the plan to engage in the transaction in question. The Court of Appeals thus was not necessarily wrong in saying that “a party in interest who benefitted from an impermissible transaction can be held liable under ERISA” (emphasis added); but the only transactions rendered impermissible by § 406(a) are transactions caused by fiduciaries.
See, e. g., Siskind v. Sperry Retirement Program, Unisys, 47 F. 3d 498, 505 (CA2 1995); Averhart v. US WEST Management Pension Plan, 46 F. 3d 1480, 1488 (CA10 1994); Fletcher v. Kroger Co., 942 F. 2d 1137, 1139-1140 (CA7 1991); Hozier v. Midwest Fasteners, Inc., 908 F. 2d 1155, 1160-1162 (CA3 1990) (listing cases); Sutton v. Weirton Steel Div. of Nat. Steel Corp., 724 F. 2d 406, 411 (CA4 1983), cert. denied, 467 U. S. 1205 (1984).
As Lockheed notes, see Brief for Petitioners 13; Reply Brief for Petitioners 7, n. 4, there is no claim in this case that the amendments resulted in any violation of the participation, funding, or vesting requirements of ERISA. See 29 U. S. C. §§ 1051-1061 (participation and vesting); §§ 1081-1086 (funding).
Indeed, federal law expressly approves the use of early retirement incentives conditioned upon the release of claims. The Older Workers Benefit Protection Act, Pub. L. 101-433, 104 Stat. 983 (1990), establishes requirements for the enforceability of employee waivers of ADEA claims made in exchange for early retirement benefits. See 29 U. S. C. § 626(f). Of course, the enforceability of a particular waiver under this and other applicable laws, including state law, is a separate issue from the question whether such an arrangement violates ERISA’s prohibited transaction rules. But absent clearer indication than what we have in § 406(a)(1)(D), we would be reluctant to infer that ERISA bars conduct affirmatively sanctioned by other federal statutes.
Spink’s amicus the United States suggests that § 406(a)(1)(D) is not violated so long as the employer provides benefits as compensation for the employee’s labor, not for other things such as a release of claims. See Brief for United States as Amicus Curiae 15-16. But the Government contradicts its own rule with the examples it gives of lawful plans. For instance, the Government recognizes that “[a]n employer may provide increased pension benefits as an incentive for early retirement.” Id., at 20. While retirement benefits themselves may be defined as deferred wages, an increase in retirement benefits as part of an early retirement plan does not compensate the employee so much for services rendered as for the distinct act of leaving the company sooner than planned. The standard offered by the Government is thus of little help in identifying transactions prohibited by § 406(a)(1)(D).
If the benefits payment were merely a sham transaction, meant to disguise an otherwise unlawful transfer of assets to a party in interest, or involved a kickback scheme, that might present a different question from the one before us. Spink does not suggest that Lockheed’s payment was a cover for an illegal scheme, only that payment of the benefits conditioned on the release was itself violative of § 406(a)(1)(D).
Section 9203(a)(1) of OBRA, amending ERISA to prevent the exclusion of employees of a certain age from plan participation, applies “only with respect to plan years beginning on or after January 1, 1988, and only with respect to service performed on or after such date.” OBRA § 9204(b), 100 Stat. 1980. The Court of Appeals acknowledged that Lockheed fully complied with that amendment by admitting Spink as a member of the Plan as of December 25, 1988, the first day of Lockheed’s 1988 plan year.
See 29 U. S. C. § 1054(b)(1)(H)(i) (OBRA § 9202(a)) (defined benefit plan violates ERISA’s benefit accrual requirements “if, under the plan, an employee’s benefit accrual is ceased, or the rate of an employee’s benefit accrual is reduced, because of the attainment of any age”); § 623(i)(1)(A) (OBRA §9201) (prohibiting employers from establishing or maintaining a defined benefit plan that “requires or permits ... the cessation of an employee’s benefit accrual, or the reduction of the rate of an employee’s benefit accrual”).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
This case presents the question whether creditors who submit a claim against a bankruptcy estate and are then sued by the trustee in bankruptcy to recover allegedly preferential monetary transfers are entitled to jury trial under the Seventh Amendment. This action was brought by petitioner Langenkamp, successor trustee to Republic Trust & Savings Company and Republic Financial Corporation (collectively debtors). Debtors were uninsured, nonbank financial institutions doing business in Oklahoma. Debtors filed Chapter 11 bankruptcy petitions on September 24, 1984. At the time of the bankruptcy filings, respondents held thrift and passbook savings certificates issued by debtors, which represented debtors’ promise to repay moneys the respondents had invested.
Within the 90-day period immediately preceding debtors’ Chapter 11 filing, respondents redeemed some, but not all, of debtors’ certificates which they held. Thus, upon the bankruptcy filing, respondents became creditors of the now-bankrupt corporations. Respondents timely filed proofs of claim against the bankruptcy estates. Approximately one year after the bankruptcy filing, the trustee instituted adversary proceedings under 11 U. S. C. § 547(b) to recover, as avoidable preferences, the payments which respondents had received immediately prior to the September 24 filing. A bench trial was held, and the Bankruptcy Court found that the money received by respondents did in fact constitute avoidable preferences. In re Republic Trust & Savings Co., No. 84C-01461, Adversary No. 85-0337 (ND Okla., June 26, 1987), App. to Pet. for Cert. A-45; In re Republic Trust & Savings Co., No. 84-01461, Adversary No. 85-0319 (ND Okla., June 26, 1987), App. to Pet. for Cert. A-64. The United States District Court for the Northern District of Oklahoma affirmed. Republic Financial Corp. v. Langenkamp, Nos. 87-C-616-C, 87-C-618-C, 87-C-619-C (June 30, 1988), App. to Pet. for Cert. A-67. On appeal, the United States Court of Appeals for the Tenth Circuit upheld the District Court’s judgment on three grounds, but reversed on the issue of the holders’ entitlement to a jury trial on the trustee’s preference claims. In re Republic Trust & Savings Co., 897 F. 2d 1041 (1990). Relying on our decisions in Granfinanciera, S. A. v. Nordberg, 492 U. S. 33 (1989), and Katchen v. Landy, 382 U. S. 323 (1966), the Tenth Circuit correctly held that “those appellants that did not have or file claims against the debtors’ estates undoubtedly [were] entitled to a jury trial on the issue whether the payments they received from the debtors within ninety days of the latter’s bankruptcy constitute^] avoidable preferences.” 897 F. 2d, at 1046. The Court of Appeals went further, however, concluding:
“Although some of the appellants did file claims against the estates because they continued to have monies invested in the debtors at the time of bankruptcy, ... we believe they likewise are entitled to a jury trial under the rationale of Granfinanciera and Katchen. Despite these appellants’ claims, the trustee’s actions to avoid the transfers, consolidated by the bankruptcy court, were plenary rather than a part of the bankruptcy court’s summary proceedings involving the ‘process of allowance and disallowance of claims.’” Id., at 1046-1047.
Petitioner contends that the Tenth Circuit erred in holding that those creditors of the debtors who had filed claims against the estate were entitled to a jury trial. We agree.
In Granfinanciera we recognized that by filing a claim against a bankruptcy estate the creditor triggers the process of “allowance and disallowance of claims,” thereby subjecting himself to the bankruptcy court’s equitable power. 492 U. S., at 58-59, and n. 14 (citing Katchen, supra, at 336). If the creditor is met, in turn, with a preference action from the trustee, that action becomes part of the claims-allowance process which is triable only in equity. Ibid. In other words, the creditor’s claim and the ensuing preference action by the trustee become integral to the restructuring of the debtor-creditor relationship through the bankruptcy court’s equity jurisdiction. Granfinanciera, supra, at 57-58. As such, there is no Seventh Amendment right to a jury trial. If a party does not submit a claim against the bankruptcy estate, however, the trustee can recover allegedly preferential transfers only by filing what amounts to a legal action to recover a monetary transfer. In those circumstances the preference defendant is entitled to a jury trial. 492 U. S., at 58-59.
Accordingly, “a creditor’s right to a jury trial on a bankruptcy trustee’s preference claim depends upon whether the creditor has submitted a claim against the estate.” Id., at 58. Respondents filed claims against the bankruptcy estate, thereby bringing themselves within the equitable jurisdiction of the Bankruptcy Court. Consequently, they were not entitled to a jury trial on the trustee’s preference action. The decision by the Court of Appeals overlooked the clear distinction which our cases have drawn and in so doing created a conflict among the Circuits on this issue. For this reason we grant the petition for certiorari, reverse the judgment of the Court of Appeals for the Tenth Circuit, and remand for further proceedings consistent with this opinion.
It is so ordered.
Justice Kennedy took no part in the consideration or decision of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | A | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Powell
delivered the opinion of the Court.
The question presented is whether petitioner, who was committed to a mental hospital upon being acquitted of a criminal offense by reason of insanity, must be released because he has been hospitalized for a period longer than he might have served in prison had he been convicted.
In the District of Columbia a criminal defendant may be acquitted by reason of insanity if his insanity is “affirmatively established by a preponderance of the evidence.” D. C. Code § 24 — 801(j) (1981). If he successfully invokes the insanity defense, he is committed to a mental hospital. §24-301(d)(l). The statute provides several ways of obtaining release. Within 50 days of commitment the acquittee is entitled to a judicial hearing to determine his eligibility for release, at which he has the burden of proving by a preponderance of the evidence that he is no longer mentally ill or dangerous. § 24 — 301(d)(2). If he fails to meet this burden at the 50-day hearing, the committed acquittee subsequently may be released, with court approval, upon certification of his recovery by the hospital chief of service. §24-301(e). Alternatively, the acquittee is entitled to a judicial hearing every six months at which he may establish by a preponderance of the evidence that he is entitled to release. §24-301(k).
Independent of its provision for the commitment of insanity acquittees, the District of Columbia also has adopted a civil-commitment procedure, under which an individual may be committed upon clear and convincing proof by the Government that he is mentally ill and likely to injure himself or others. § 21-545(b). The individual may demand a jury in the civil-commitment proceeding. § 21-544. Once committed, a patient may be released at any time upon certification of recovery by the hospital chief of service. §§ 21-546, 21-548. Alternatively, the patient is entitled after the first 90 days, and subsequently at 6-month intervals, to request a judicial hearing at which he may gain his release by proving by a preponderance of the evidence that he is no longer mentally ill or dangerous. §§21-546, 21-547; see Dixon v. Jacobs, 138 U. S. App. D. C. 319, 328, 427 F. 2d 589, 598 (1970).
H-Í
On September 19, 1975, petitioner was arrested for attempting to steal a jacket from a department store. The next day he was arraigned in the District of Columbia Superior Court on a charge of attempted petit larceny, a misdemeanor punishable by a maximum prison sentence of one year. §§22-103, 22-2202. The court ordered petitioner committed to St. Elizabeths, a public hospital for the mentally ill, for a determination of his competency to stand trial. On March 1, 1976, a hospital psychologist submitted a report to the court stating that petitioner was competent to stand trial, that petitioner suffered from “Schizophrenia, paranoid type,” and that petitioner’s alleged offense was “the product of his mental disease.” Record 51. The court ruled that petitioner was competent to stand trial. Petitioner subsequently decided to plead not guilty by reason of insanity. The Government did not contest the plea, and it entered into a stipulation of facts with petitioner. On March 12,1976, the Superior Court found petitioner not guilty by reason of insanity and committed him to St. Elizabeths pursuant to § 24-301(d)(l).
On May 25, 1976, the court held the 50-day hearing required by § 24-301(d)(2)(A). A psychologist from St. Eliza-beths testified on behalf of the Government that, in the opinion of the staff, petitioner continued to suffer from paranoid schizophrenia and that “because his illness is still quite active, he is still a danger to himself and to others.” Tr. 9. Petitioner’s counsel conducted a brief cross-examination, and presented no evidence. The court then found that “the defendant-patient is mentally ill and as a result of his mental illness, at this time, he constitutes a danger to himself or others.” Id., at 13. Petitioner was returned to St. Elizabeths. Petitioner obtained new counsel and, following some procedural confusion, a second release hearing was held on February 22, 1977. By that date petitioner had been hospitalized for more than one year, the maximum period he could have spent in prison if he had been convicted. On that basis he demanded that he be released unconditionally or recommitted pursuant to the civil-commitment standards in § 21— 545(b), including a jury trial and proof by clear and convincing evidence of his mental illness and dangerousness. The Superior Court denied petitioner’s request for a civil-commitment hearing, reaffirmed the findings made at the May 25, 1976, hearing, and continued petitioner’s commitment to St. Elizabeths.
Petitioner appealed to the District of Columbia Court of Appeals. A panel of the court affirmed the Superior Court, 396 A. 2d 183 (1978), but then granted rehearing and reversed, 411 A. 2d 624 (1980). Finally, the court heard the case en banc and affirmed the judgment of the Superior Court. 432 A. 2d 364 (1981). The Court of Appeals rejected the argument “that the length of the prison sentence [petitioner] might have received determines when he is entitled to release or civil commitment under Title 24 of the D. C. Code.” Id., at 368. It then held that the various statutory differences between civil commitment and commitment of insanity acquittees were justified under the equal protection component of the Fifth Amendment. Id., at 371-376.
We granted certiorari, 454 U. S. 1141 (1982), and now affirm.
Ill
It is clear that “commitment for any purpose constitutes a significant deprivation of liberty that requires due process protection.” Addington v. Texas, 441 U. S. 418, 425 (1979). Therefore, a State must have “a constitutionally adequate purpose for the confinement.” O’Connor v. Donaldson, 422 U. S. 563, 574 (1975). Congress has determined that a criminal defendant found not guilty by reason of insanity in the District of Columbia should be committed indefinitely to a mental institution for treatment and the protection of society. See H. R. Rep. No. 91-907, pp. 73-74 (1970); 432 A. 2d, at 371 (“[T]he District of Columbia statutory scheme for commitment of insane criminals is ... a regulatory, prophylactic statute, based on a legitimate governmental interest in protecting society and rehabilitating mental patients”). Petitioner does not contest the Government’s authority to commit a mentally ill and dangerous person indefinitely to a mental institution, but rather contends that “the petitioner’s trial was not a constitutionally adequate hearing to justify an indefinite commitment.” Brief for Petitioner 14.
Petitioner’s argument rests principally on Addington v. Texas, supra, in which the Court held that the Due Process Clause requires the State in a civil-commitment proceeding to demonstrate by clear and convincing evidence that the individual is mentally ill and dangerous. 441 U. S., at 426-427. Petitioner contends that these due process standards were not met in his case because the judgment of not guilty by reason of insanity did not constitute a finding of present mental illness and dangerousness and because it was established only by a preponderance of the evidence. Petitioner then concludes that the Government’s only conceivably legitimate justification for automatic commitment is to ensure that insanity acquittees do not escape confinement entirely, and that this interest can justify commitment at most for a period equal to the maximum prison sentence the acquit-tee could have received if convicted. Because petitioner has been hospitalized for longer than the one year he might have served in prison, he asserts that he should be released unconditionally or recommitted under the District’s civil-commitment procedures.
A
. We turn first to the question whether the finding of insanity at the criminal trial is sufficiently probative of mental illness and dangerousness to justify commitment. A verdict of not guilty by reason of insanity establishes two facts: (i) the defendant committed an act that constitutes a criminal offense, and (ii) he committed the act because of mental illness. Congress has determined that these findings constitute an adequate basis for hospitalizing the acquittee as a dangerous and mentally ill person. See H. R. Rep. No. 91-907, supra, at 74 (expressing fear that “dangerous criminals, particularly psychopaths, [may] win acquittals of serious criminal charges on grounds of insanity” and yet “escape hospital commitment”); S. Rep. No. 1170, 84th Cong., 1st Sess., 13 (1955) (“Where [the] accused has pleaded insanity as a defense to a crime, and the jury has found that the defendant was, in fact, insane at the time the crime was committed, it is just and reasonable in the Committee’s opinion that the insanity, once established, should be presumed to continue and that the accused should automatically be confined for treatment until it can be shown that he has recovered”). We cannot say that it was unreasonable and therefore unconstitutional for Congress to make this determination.
The fact that a person has been found, beyond a reasonable doubt, to have committed a criminal act certainly indicates dangerousness. See Lynch v. Overholser, 369 U. S. 705, 714 (1962) (The fact that the accused was found to have committed a criminal act is “strong evidence that his continued liberty could imperil ‘the preservation of public peace’ ”). Indeed, this concrete evidence generally may be at least as persuasive as any predictions about dangerousness that might be made in a civil-commitment proceeding. We do not agree with petitioner’s suggestion that the requisite dangerousness is not established by proof that a person committed a nonviolent crime against property. This Court never has held that “violence,” however that term might be defined, is a prerequisite for a constitutional commitment.
Nor can we say that it was unreasonable for Congress to determine that the insanity acquittal supports an inference of continuing mental illness. It comports with common sense to conclude that someone whose mental illness was sufficient to lead him to commit a criminal act is likely to remain ill and in need of treatment. The precise evidentiary force of the insanity acquittal, of course, may vary from case to case, but the Due Process Clause does not require Congress to make classifications that fit every individual with the same degree of relevance. See Marshall v. United States, 414 U. S. 417, 428 (1974). Because a hearing is provided within 50 days of the commitment, there is assurance that every acquittee has prompt opportunity to obtain release if he has recovered.
Petitioner also argues that, whatever the evidentiary value of the insanity acquittal, the Government lacks a legitimate reason for committing insanity acquittees automatically because it can introduce the insanity acquittal as evidence in a subsequent civil proceeding. This argument fails to consider the Government’s strong interest in avoiding the need to conduct a de novo commitment hearing following every insanity acquittal — a hearing at which a jury trial may be demanded, § 21-544, and at which the Government bears the burden of proof by clear and convincing evidence. Instead of focusing on the critical question whether the acquittee has recovered, the new proceeding likely would have to relitigate much of the criminal trial. These problems accent the Government’s important interest in automatic commitment. See Mathews v. Eldridge, 424 U. S. 319, 348 (1976). We therefore conclude that a finding of not guilty by reason of insanity is a sufficient foundation for commitment of an insanity acquittee for the purposes of treatment and the protection of society.
B
Petitioner next contends that his indefinite commitment is unconstitutional because the proof of his insanity was based only on a preponderance of the evidence, as compared to Addington’s civil-commitment requirement of proof by clear and convincing evidence. In equating these situations, petitioner ignores important differences between the class of potential civil-commitment candidates and the class of insanity acquittees that justify differing standards of proof. The Addington Court expressed particular concern that members of the public could be confined on the basis of “some abnormal behavior which might be perceived by some as symptomatic of a mental or emotional disorder, but which is in fact within a range of conduct that is generally acceptable.” 441 U. S., at 426-427. See also O’Connor v. Donaldson, 422 U. S., at 575. In view of this concern, the Court deemed it inappropriate to ask the individual “to share equally with society the risk of error.” Addington, 441 U. S., at 427. But since automatic commitment under § 24-301(d)(1) follows only if the acquittee himself advances insanity as a defense and proves that his criminal act was a product of his mental illness, there is good reason for diminished concern as to the risk of error. More important, the proof that he committed a criminal act as a result of mental illness eliminates the risk that he is being committed for mere “idiosyncratic behavior,” Addington, 441 U. S., at 427. A criminal act by definition is not “within a range of conduct that is generally acceptable.” Id., at 426-427.
We therefore conclude that concerns critical to our decision in Addington are diminished or absent in the case of insanity acquittees. Accordingly, there is no reason for adopting the same standard of proof in both cases. “[D]ue process is flexible and calls for such procedural protections as the particular situation demands.” Morrissey v. Brewer, 408 U. S. 471, 481 (1972). The preponderance of the evidence standard comports with due process for commitment of insanity acquittees.
C
The remaining question is whether petitioner nonetheless is entitled to his release because he has been hospitalized for a period longer than he could have been incarcerated if convicted. The Due Process Clause “requires that the nature and duration of commitment bear some reasonable relation to the purpose for which the individual is committed. ” Jackson v. Indiana, 406 U. S. 715, 738 (1972). The purpose of commitment following an insanity acquittal, like that of civil commitment, is to treat the individual’s mental illness and protect him and society from his potential dangerousness. The committed acquittee is entitled to release when he has recovered his sanity or is no longer dangerous. See O’Connor v. Donaldson, supra, at 575-576; 432 A. 2d, at 372, and n. 16; H. R. Rep. No. 91-907, pp. 73-74 (1970). And because it is impossible to predict how long it will take for any given individual to recover — or indeed whether he ever will recover — Congress has chosen, as it has with respect to civil commitment, to leave the length of commitment indeterminate, subject to periodic review of the patient’s suitability for release.
In light of the congressional purposes underlying commitment of insanity acquittees, we think petitioner clearly errs in contending that an acquittee’s hypothetical maximum sentence provides the constitutional limit for his commitment. A particular sentence of incarceration is chosen to reflect society’s view of the proper response to commission of a particular criminal offense, based on a variety of considerations such as retribution, deterrence, and rehabilitation. See, e. g., Gregg v. Georgia, 428 U. S. 153, 183-186 (1976) (opinion of Stewart, Powell, and Stevens, JJ.); Kennedy v. Mendoza-Martinez, 372 U. S. 144, 168 (1963); Williams v. New York, 337 U. S. 241, 248-249 (1949). The State may punish a person convicted of a crime even if satisfied that he is unlikely to commit further crimes.
Different considerations underlie commitment of an insanity acquittee. As he was not convicted, he may not be punished. His confinement rests on his continuing illness and dangerousness. Thus, under the District of Columbia statute, no matter how serious the act committed by the acquit-tee, he may be released within 50 days of his acquittal if he has recovered. In contrast, one who committed a less serious act may be confined for a longer period if he remains ill and dangerous. There simply is no necessary correlation between severity of the offense and length of time necessary for recovery. The length of the acquittee’s hypothetical criminal sentence therefore is irrelevant to the purposes of his commitment.
<3
We hold that when a criminal defendant establishes by a preponderance of the evidence that he is not guilty of a crime by reason of insanity, the Constitution permits the Government, on the basis of the insanity judgment, to confine him to a mental institution until such time as he has regained his sanity or is no longer a danger to himself or society. This holding accords with the widely and reasonably held view that insanity acquittees constitute a special class that should be treated differently from other candidates for commitment. We have observed before that “[w]hen Congress undertakes to act in areas fraught with medical and scientific uncertainties, legislative options must be especially broad and courts should be cautious not to rewrite legislation . . . .” Marshall v. United States, 414 U. S., at 427. This admonition has particular force in the context of legislative efforts to deal with the special problems raised by the insanity defense.
The judgment of the District of Columbia Court of Appeals is
Affirmed.
Section 24-301(j) provides:
“Insanity shall not be a defense in any criminal proceeding in the United States District Court for the District of Columbia or in the Superior Court of the District of Columbia, unless the accused or his attorney in such proceeding, at the time the accused enters his plea of not guilty or within 15 days thereafter or at such later time as the court may for good cause permit, files with the court and serves upon the prosecuting attorney written notice of his intention to rely on such defense. No person accused of an offense shall be acquitted on the ground that he was insane at the time of its commission unless his insanity, regardless of who raises the issue, is affirmatively established by a preponderance of the evidence.”
Section 24-301(d)(l) provides:
“If any person tried upon an indictment or information for an offense raises the defense of insanity and is acquitted solely on the ground that he was insane at the time of its commission, he shall be committed to a hospital for the mentally ill until such time as he is eligible for release pursuant to this subsection or subsection (e) of this section.”
Under this provision, automatic commitment is permissible only if the defendant himself raised the insanity defense. See H. R. Rep. No. 91-907, p. 74 (1970); Lynch v. Overholser, 369 U. S. 705 (1962).
Section 24-301(d)(2) provides in relevant part:
“(A) A person confined pursuant to paragraph (1) of this subsection shall have a hearing, unless waived, within 50 days of his confinement to determine whether he is entitled to release from custody. . . .
“(B) If the hearing is not waived, the court shall cause notice of the hearing to be served upon the person, his counsel, and the prosecuting attorney and hold the hearing. Within 10 days from the date the hearing was begun, the court shall determine the issues and make findings of fact and conclusions of law with respect thereto. The person confined shall have the burden of proof. If the court finds by a preponderance of the evidence that the person confined is entitled to his release from custody, either conditional or unconditional, the court shall enter such order as may appear appropriate.”
The statute does not specify the standard for determining release, but the District of Columbia Court of Appeals held in this case that, as in release proceedings under § 24-301(e) and § 21-545(b), the confined person must show that he is either no longer mentally ill or no longer dangerous to himself or others. See 432 A. 2d 364, 372, and n. 16 (1981) (en banc).
Section 24-301(e) provides in relevant part:
“Where any person has been confined in a hospital for the mentally ill pursuant to subsection (d) of this section, and the superintendent of such hospital certifies: (1) That such person has recovered his sanity; (2) that, in the opinion of the superintendent, such person will not in the reasonable future be dangerous to himself or others; and (3) in the opinion of the superintendent, the person is entitled to his unconditional release from the hospital, and such certificate is filed with the clerk of the court in which the person was tried, and a copy thereof served on the United States Attorney or the Corporation Counsel of the District of Columbia, whichever office prosecuted the accused, such certificate shall be sufficient to authorize the court to order the unconditional release of the person so confined from further hospitalization at the expiration of 15 days from the time said certificate was filed and served as above; but the court in its discretion may, or upon objection of the United States or the District of Columbia shall, after due notice, hold a hearing at which evidence as to the mental condition of the person so confined may be submitted, including the testimony of 1 or more psychiatrists from said hospital. The court shall weigh the evidence and, if the court finds that such person has recovered his sanity and will not in the reasonable future be dangerous to himself or others, the court shall order such person unconditionally released from further confinement in said hospital. If the court does not so find, the court shall order such person returned to said hospital. ...”
Section 24-301(k) provides in relevant part:
“(1) A person in custody or conditionally released from custody, pursuant to the provisions of this section, claiming the right to be released from custody, the right to any change in the conditions of his release, or other relief concerning his custody, may move the court having jurisdiction to order his release, to release him from custody, to change the conditions of his release, or to grant other relief.
“(3) ... On all issues raised by his motion, the person shall have the burden of proof. If the court finds by a preponderance of the evidence that the person is entitled to his release from custody, either conditional or unconditional, a change in the conditions of his release, or other relief, the court shall enter such order as may appear appropriate.
“(5) A court shall not be required to entertain a 2nd or successive motion for relief under this section more often than once every 6 months. A court for good cause shown may in its discretion entertain such a motion more often than once every 6 months.”
Section 21-545(b) provides in relevant part:
“If the court or jury finds that the person is mentally ill and, because of that illness, is likely to injure himself or other persons if allowed to remain at liberty, the court may order his hospitalization for an indeterminate period, or order any other alternative course of treatment which the court believes will be in the best interests of the person or of the public.” See In re Nelson, 408 A. 2d 1233 (D. C. 1979) (reading into the statute the due process requirement of “clear and convincing” proof).
Section 24-301(a) authorizes the court to “order the accused committed to the District of Columbia General Hospital or other mental hospital designated by the court, for such reasonable period as the court may determine for examination and observation and for care and treatment if such is necessary by the psychiatric staff of said hospital.”
Petitioner’s counsel seemed concerned primarily about obtaining a transfer for petitioner to a less restrictive wing of the hospital. See Tr. 11-12.
“A subsequent motion for unconditional release under § 301(k) was denied in March of 1977. Three months later, however, [petitioner] was granted conditional release on terms recommended by St. Elizabeths’ staff, allowing daytime and overnight visits into the community. He was also admitted into the civil division of the hospital, though as a result of disruptive behavior, he was retransferred to the forensic division.” 432 A. 2d, at 368. n. 6.
In the Court of Appeals petitioner apparently based these arguments on equal protection rather than due process, arguing that it was irrational for the Government to deny him a civil-commitment hearing at which the Government bore the burden of proof by clear and convincing evidence. See id., at 371. Both petitioner and the Government acknowledge that this equal protection argument essentially duplicates petitioner’s due process argument. That is, if the Due Process Clause does not require that an insanity acquittee be given the particular procedural safeguards provided in a civil-commitment hearing under Addington, then there necessarily is a rational basis for equal protection purposes for distinguishing between civil commitment and commitment of insanity acquittees. See Reply Brief for Petitioner 22-23; Brief for United States 55. We agree, and therefore address petitioner’s arguments in terms of the Due Process Clause.
Petitioner does raise one additional equal protection argument that stands on its own. The District of Columbia provides for a jury at civil-commitment hearings, see §21-544, and petitioner contends that equal protection requires that insanity acquittees also be permitted to demand a jury at the 50-day hearing. Because we determine that an acquittee’s commitment is based on the judgment of insanity at the criminal trial, rather than solely on the findings at the 50-day hearing, see infra, at 363-366, the relevant equal protection comparison concerns the procedures available at the criminal trial and at a civil-commitment hearing. We therefore agree with the Court of Appeals that the absence of a jury at the 50-day hearing “is justified by the fact that the acquittee has had a right to a jury determination of his sanity at the time of the offense.” 432 A. 2d, at 873.
It is important to note what issues are not raised in this case. Petitioner has not sought appellate review of the Superior Court’s findings in 1976 and 1977 that he remained mentally ill and dangerous, and, indeed, the record does not indicate that since 1977 he ever has sought a release hearing — a hearing to which he was entitled every six months.
Nor are we asked to decide whether the District’s procedures for release are constitutional. As noted above, see supra, at 357-359, the basic standard for release is the same under either civil commitment or commitment following acquittal by reason of insanity: the individual must prove by a preponderance of the evidence that he is no longer dangerous or mentally ill. There is an important difference, however, in the release provisions for these two groups. A patient who is committed civilly is entitled to unconditional release upon certification of his recovery by the hospital chief of service, see § 21-546, whereas a committed insanity acquittee may be released upon such certification only with court approval, see § 24-301(e). Neither of these provisions is before the Court, as petitioner has challenged neither the adequacy of the release standards generally nor the disparity in treatment of insanity acquittees and other committed persons. See 432 A. 2d. at 373. n. 19.
The proof beyond a reasonable doubt that the acquittee committed a criminal act distinguishes this case from Jackson v. Indiana, 406 U. S. 715 (1972), in which the Court held that a person found incompetent to stand trial could not be committed indefinitely solely on the basis of the finding of incompetency. In Jackson there never was any affirmative proof that the accused had committed criminal acts or otherwise was dangerous.
In attacking the predictive value of the insanity acquittal, petitioner complains that “[w]hen Congress enacted the present statutory scheme, it did not cite any empirical evidence indicating that mentally ill persons who have committed a criminal act are likely to commit additional dangerous acts in the future.” Reply Brief for Petitioner 13. He further argues that the available research fails to support the predictive value of prior dangerous acts. See id., at 13-14. We do not agree with the suggestion that Congress’ power to legislate in this area depends on the research conducted by the psychiatric community. We have recognized repeatedly the “uncertainty of diagnosis in this field and the tentativeness of professional judgment. The only certain thing that can be said about the present state of knowledge and therapy regarding mental disease is that science has not reached finality of judgment. . . .” Greenwood v. United States, 350 U. S. 366, 375 (1956). See Estelle v. Smith, 451 U. S. 454, 472 (1981); Addington v. Texas, 441 U. S. 418, 429-430 (1979); Powell v. Texas, 392 U. S. 514, 535-537 (1968) (plurality opinion). The lesson we have drawn is not that government may not act in the face of this uncertainty, but rather that courts should pay particular deference to reasonable legislative judgments.
See Overholser v. O’Beirne, 112 App. D. C. 267, 276, 302 F. 2d 852, 861 (1961) (Burger, J.) (“[T]o describe the theft of watches and jewelry as ‘non-dangerous’ is to confuse danger with violence. Larceny is usually less violent than murder or assault, but in terms of public policy the purpose of the statute is the same as to both”) (footnote omitted). Thus, the “danger” may be to property rights as well as to persons. It also may be noted that crimes of theft frequently may result in violence from the efforts of the criminal to escape or the victim to protect property or the police to apprehend the fleeing criminal.
The relative “dangerousness” of a particular individual, of course, should be a consideration at the release hearings. In this context, it is noteworthy that petitioner’s continuing commitment may well rest in significant part on evidence independent of his acquittal by reason of insanity of the crime of attempted larceny. In December 1976 a medical officer at St. Elizabeths reported that petitioner “has a history of attempted suicide.” Record 87. In addition, petitioner at one point was transferred to the civil division of the hospital, but was transferred back to the forensic division because of disruptive behavior. See n. 9, swpra. The Government also advises that after petitioner was released unconditionally following the second panel decision below, he had to be recommitted on an emergency civil basis two weeks later for conduct unrelated to the original commitment. See Brief for United States 15, n. 18.
See n. 2, swpra. In this case petitioner stipulated that he had committed the offense by reason of insanity.
That petitioner raised the insanity defense also diminishes' the significance of the deprivation. The Addington Court noted that the social stigma of civil commitment “can have a very significant impact on the individual.” 441 U. S., at 426. A criminal defendant who successfully raises the insanity defense necessarily is stigmatized by the verdict itself, and thus the commitment causes little additional harm in this respect.
A defendant could be required to prove his insanity by a higher standard than a preponderance of the evidence. See Leland v. Oregon, 343 U. S. 790, 799 (1952). Such an additional requirement hardly would benefit a criminal defendant who wants to raise the insanity defense, yet imposition of a higher standard would be a likely legislative response to a holding that an insanity acquittal could support automatic commitment only if the verdict were supported by clear and convincing evidence.
As the Court of Appeals held below, “[s]ociety may not excuse a defendant’s criminal behavior because of his insanity and at the same time punish him for invoking an insanity defense.” 432 A. 2d, at 369.
The Court has held that a convicted prisoner may be treated involuntarily for particular psychiatric problems, but that upon expiration of his prison sentence he may be committed only as would any other candidate for civil commitment. See McNeil v. Director, Patuxent Institution, 407 U. S. 245 (1972); Humphrey v. Cady, 405 U. S. 504 (1972); Baxstrom v. Herold, 383 U. S. 107 (1966). None of those cases involved an insanity acquittee, and none suggested that a person under noncriminal confinement could not be hospitalized in excess of the period for which he could have served in prison if convicted for the dangerous acts he had committed.
The inherent fallacy of relying on a criminal sanction to determine the length of a therapeutic confinement is manifested by petitioner’s failure to suggest any clear guidelines for deciding when a patient must be released. For example, he does not suggest whether the Due Process Clause would require States to limit commitment of insanity acquittees to maximum sen-tenees or minimum sentences. Nor does he explain what should be done in the case of indeterminate sentencing or suggest whether account would have to be taken of the availability of release time or the possibility of parole. And petitioner avoids entirely the important question how his theory would apply to those persons who committed especially serious criminal acts. Petitioner thus would leave the States to speculate how they may deal constitutionally with acquittees who might have received life imprisonment, life imprisonment without possibility of parole, or the death penalty.
A recent survey of commitment statutes reported that 14 jurisdictions provide automatic commitment for at least some insanity acquittees, while many other States have a variety of special methods of committing insanity acquittees. See Note, Commitment Following an Insanity Acquittal, 94 Harv. L. Rev. 605, 605-606, and nn. 4-6 (1981). Nineteen States commit insanity acquittees under the same procedures used for civil commitment. Id., at 605, n. 3. It appears that only one State has enacted into law petitioner’s suggested requirement that a committed insanity acquittee be released following expiration of his hypothetical maximum criminal sentence. See Conn. Gen. Stat. § 53a-47(b) (1981).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | D | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice KENNEDY delivered the opinion of the Court.
This case presents the question whether severance payments made to employees terminated against their will are taxable wages under the Federal Insurance Contributions Act (FICA), 26 U.S.C. § 3101 et seq.
The Court of Appeals for the Sixth Circuit held that the payments are not wages taxed by FICA. To reach its holding, the Court of Appeals relied not on FICA's definition of wages but on § 3402(o ) of the Internal Revenue Code, a provision governing income-tax withholding. That conclusion, for the reasons to be discussed, was incorrect.
FICA's broad definition of wages includes the severance payments made here. And § 3402(o ) does not alter that definition. Section 3402(o ) instructs that any severance payment "shall be treated as if it were a payment of wages." According to the Court of Appeals, § 3402(o ) suggests that the definition of wages for income-tax withholding does not extend to severance payments; and so, the argument continues, severance payments also must be beyond the terms of FICA's similar definition. But § 3402(o ) is entirely compatible with the proposition that some or all payments do fall within the broad definition of the term wages. Section 3402(o ) was enacted in response to a narrow, specific problem regarding income-tax withholding. In addition, were the Court to rule that the severance payments made here are exempt from FICA taxation but not from withholding under § 3402 for income-tax purposes, it would contravene the holding in Rowan Cos. v. United States, 452 U.S. 247, 101 S.Ct. 2288, 68 L.Ed.2d 814 (1981), which held there should be congruence in the rules for FICA and income-tax withholding.
I
Quality Stores, Inc., an agricultural-specialty retailer, entered bankruptcy proceedings in 2001. Before and following the filing of an involuntary Chapter 11 bankruptcy petition, respondents Quality Stores and affiliated companies, all referred to here as Quality Stores, terminated thousands of employees. The employees received severance payments, which all parties to this case stipulate were the result of a reduction in work force or discontinuance of a plant or operation. The payments were made pursuant to one of two different termination plans. (For reasons later to be explained, it should be noted that neither termination plan tied severance payments to the receipt of state unemployment compensation.)
Under the first plan, terminated employees received severance pay based on job grade and management level. The president and chief executive officer received 18 months of severance pay, senior managers received 12 months of severance pay, and other employees received one week of severance pay for each year of service.
The second plan was designed to facilitate Quality Stores' postbankruptcy operations and encourage employees to put off their job searches. To receive severance pay, employees had to complete their last day of service as determined by the employer. Officers received between 6 and 12 months of severance pay, and full-time employees and employees paid by the hour received one week of severance pay for every year of service if the employees had been employed for at least two years, up to a stated maximum of severance pay. Workers who had been employed for less than two years received a week of severance pay.
Quality Stores reported the severance payments as wages on W-2 tax forms, paid the employer's required share of FICA taxes, and withheld employees' share of FICA taxes. Then Quality Stores asked 3,100 former employees to allow it to file FICA tax refund claims for them. About 1,850 former employees agreed to allow Quality Stores to pursue FICA refunds. On its own behalf and on behalf of the former employees, Quality Stores filed for a refund of $1,000,125 in FICA taxes. The Internal Revenue Service neither allowed nor denied the claim.
Quality Stores initiated a proceeding in the Bankruptcy Court seeking a refund of the disputed amount. The Bankruptcy Court granted summary judgment in its favor. The District Court and Court of Appeals for the Sixth Circuit affirmed, concluding that severance payments are not "wages" under FICA. See In re Quality Stores, Inc., 693 F.3d 605 (2012). Other Courts of Appeals, however, have concluded that at least some severance payments do constitute wages subject to FICA tax. See, e.g., CSX Corp. v. United States, 518 F.3d 1328 (C.A.Fed.2008) ; University of Pittsburgh v. United States, 507 F.3d 165 (C.A.3 2007) ; North Dakota State Univ. v. United States, 255 F.3d 599 (C.A.8 2001). The United States, claiming that the FICA taxes must be withheld, sought review here; and certiorari was granted, 570 U.S. ----, 134 S.Ct. 49, 186 L.Ed.2d 962 (2013).
II
A
The first question is whether FICA's definition of "wages" encompasses severance payments. The beginning point is the relevant statutory text. Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. ----, ----, 134 S.Ct. 736, 741-742, 187 L.Ed.2d 654 (2014).
To fund benefits provided by the Social Security Act and Medicare, FICA taxes "wages" paid by an employer or received by an employee "with respect to employment." 26 U.S.C. §§ 3101(a), (b), 3111(a), (b). Congress chose to define wages under FICA "broadly." Mayo Foundation for Medical Ed. and Research v. United States, 562 U.S. ----, ----, 131 S.Ct. 704, 708-709, 178 L.Ed.2d 588 (2011). FICA defines "wages" as "all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash." § 3121(a). The term "employment" encompasses "any service, of whatever nature, performed ... by an employee for the person employing him." § 3121(b).
Under this definition, and as a matter of plain meaning, severance payments made to terminated employees are "remuneration for employment." Severance payments are, of course, "remuneration," and common sense dictates that employees receive the payments "for employment." Severance payments are made to employees only. It would be contrary to common usage to describe as a severance payment remuneration provided to someone who has not worked for the employer. Severance payments are made in consideration for employment-for a "service ... performed" by "an employee for the person employing him," per FICA's definition of the term "employment." Ibid.
In Social Security Bd. v. Nierotko, 327 U.S. 358, 66 S.Ct. 637, 90 L.Ed. 718 (1946), the Court interpreted the term "wages" in the Social Security statutory context to have substantial breadth. In that case a worker, who had been wrongfully terminated, sought to have his backpay counted as taxable wages for the purpose of obtaining credits under the Social Security system. The Court stated that the term "service," used with respect to Social Security, "means not only work actually done but the entire employer-employee relationship for which compensation is paid to the employee by the employer." Id., at 365-366, 66 S.Ct. 637.
As confirmation of that principle, severance payments often vary, as they did here, according to the function and seniority of the particular employee who is terminated. For example, under both termination plans, Quality Stores employees were given severance payments based on job grade and management level. And under the second termination plan, nonofficer employees who had served at least two years with their company received more in severance pay than nonofficer employees who had not-a standard example of a company policy to reward employees for a greater length of good service and loyalty.
In this respect severance payments are like many other benefits employers offer to employees above and beyond salary payments. Like health and retirement benefits, stock options, or merit-based bonuses, a competitive severance payment package can help attract talented employees. Here, the terminations leading to the severance payments were triggered by the employer's involuntary bankruptcy proceeding, a prospect against which employees may wish to protect themselves in an economy that is always subject to changing conditions.
Severance payments, moreover, can be desirable from the perspective of the employer as an alternative or supplemental form of remuneration. In situations in which Chapter 11 bankruptcy reorganization is necessary, an employer may seek to retain goodwill by paying its terminated employees well, thus reinforcing its reputation as a worthy employer. Employers who downsize in a period of slow business may wish to retain the ability to rehire employees who have been terminated.
A specific exemption under FICA for certain termination-related payments reinforces the conclusion that the payments in question are well within the definition of wages. Section 3121(a)(13)(A) exempts from taxable wages any severance payments made "because of ... retirement for disability ." That exemption would be unnecessary were severance payments in general not within FICA's definition of "wages." Cf. American Bank & Trust Co. v. Dallas County, 463 U.S. 855, 864, 103 S.Ct. 3369, 77 L.Ed.2d 1072 (1983) (declining to read a statute in a manner that would cause "specific exemptions" to be "superfluous"). FICA's definitional section, moreover, provides a lengthy list of specific exemptions from the definition of wages. For example, FICA exempts from wages payments on account of disability caused by sickness or accident, cash payments made for domestic service in a private home under a certain amount, and cash tips less than a certain amount. See §§ 3121(a) (2)(A), (7)(B), (12)(B). The specificity of these exemptions reinforces the broad nature of FICA's definition of wages. FICA's statutory history sheds further light on the text of § 3121, which defines the term "wages." FICA was originally enacted in Title VIII of the Social Security Act, 49 Stat. 636. (In 1939, Title VIII was transferred to the Internal Revenue Code and became FICA. 53 Stat. 1387.) Title VIII contained, in substance, definitions of "wages" and "employment" identical to those FICA now provides. See § 811(a), 49 Stat. 639; § 811(b), ibid. With respect to the Social Security Act, in 1936 the Treasury Department promulgated a regulation stating that the statutory definition of "wages" included "dismissal pay." Bureau of Internal Revenue, Employees' Tax and the Employers' Tax Under Title VIII of the Social Security Act, 1 Fed.Reg. 1764, 1769 (1936). Congress responded a few years later, in 1939, by creating an exception from "wages" for "[d]ismissal payments which the employer is not legally required to make." Social Security Act Amendments of 1939, § 606, 53 Stat. 1384 (codified at 26 U.S.C. § 1426(a)(4) (1940 ed.)).
In 1950, however, Congress repealed that exception. Social Security Act Amendments, § 203(a), 64 Stat. 525-527. "When Congress acts to amend a statute, we presume it intends its amendment to have real and substantial effect."
Stone v. INS, 514 U.S. 386, 397, 115 S.Ct. 1537, 131 L.Ed.2d 465 (1995). Congress has not revisited its 1950 amendment; and since that time, FICA has contained no exception for severance payments.
B
The next question is whether § 3402(o ) of the Internal Revenue Code relating to income-tax withholding is a limitation on the meaning of "wages" for FICA purposes. Section 3402 provides:
"( o ) Extension of withholding to certain payments other than wages.
"(1) General rule
"For purposes of this chapter (and so much of subtitle F as relates to this chapter)-
"(A) any supplemental unemployment compensation benefit paid to an individual,
. . . . .
"shall be treated as if it were a payment of wages by an employer to an employee for a payroll period."
(Pursuant to stipulations by the parties, the Court of Appeals determined that the severance payments constitute "supplemental unemployment compensation benefits," or SUBs. See § 3402(o )(2)(A). The Court assumes, for purposes of this case, that this premise is correct.)
Quality Stores argues that § 3402(o )'s instruction that SUBs be treated "as if" they were wages for purposes of income-tax withholding is an indirect means of stating that the definition of wages for income-tax withholding does not cover severance payments. It contends, further, that if the definition of wages for purposes of income-tax withholding does not encompass severance payments, then severance payments are not covered by FICA's similar definition of wages.
The Court disagrees that § 3402(o ) should be read as Quality Stores suggests. The chapter governing income-tax withholding has a broad definition of the term "wages": "all remuneration ... for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash." § 3401(a). The definitional section for income-tax withholding, like the definitional section for FICA, contains a series of specific exemptions that reinforce the broad scope of its definition of wages. The provision exempts from wages, for example, any remuneration paid for domestic service in a private home, for services rendered to a foreign government, and for services performed by a minister of a church in the course of his duties. §§ 3401(a)(3), (5), (9). Severance payments are not exempted, and they squarely fall within the broad textual definition of wages for purposes of income-tax withholding under § 3401(a), for the same reasons outlined above with respect to FICA's similar definition of wages.
Quality Stores contends that, the broad wording of the definition in § 3401(a) aside, severance payments must fall outside the definition of wages for income-tax withholding. Otherwise, it argues, § 3402(o ) would be superfluous. But, as the Government points out, § 3402(o )'s command that all severance payments be treated "as if" they were wages for income-tax withholding is in all respects consistent with the proposition that at least some severance payments are wages. As the Federal Circuit explained when construing § 3402(o ), the statement that "all men shall be treated as if they were six feet tall does not imply that no men are six feet tall." CSX Corp., 518 F.3d, at 1342.
In the last of its textual arguments, Quality Stores draws attention to the boldface heading of § 3402(o ), which states, "Extension of withholding to certain payments other than wages." It contends the heading declares that the payments enumerated within § 3402(o ) are "other than wages." Captions, of course, can be "a useful aid in resolving" a statutory text's "ambiguity."
FTC v. Mandel Brothers, Inc., 359 U.S. 385, 388-389, 79 S.Ct. 818, 3 L.Ed.2d 893 (1959). But Quality Stores cannot rely on the statutory heading to support its argument that § 3402(o ), without ambiguity, excludes all severance payments from the definition of wages. The heading states that withholding is extended to "certain payments." This falls short of a declaration that all the payments listed in § 3402(o ) are not wages.
Next, the regulatory background against which § 3402(o ) was enacted illustrates the limited nature of the problem the provision was enacted to address. For this purpose, it is instructive to concentrate on the statutory term "supplemental unemployment benefits," which defines the scope of § 3402(o )'s income-tax withholding mandate.
The concept of SUBs originated in labor demands for a guaranteed annual wage. When it became clear this was "impractical in their industries, unions such as the Steelworkers and the United Auto Workers transformed their guaranteed annual wage demands into proposals to supplement existing unemployment compensation programs." Coffy v. Republic Steel Corp., 447 U.S. 191, 200, 100 S.Ct. 2100, 65 L.Ed.2d 53 (1980). A SUB plan, as originally conceived, offered "second-level protection against layoff" by supplementing unemployment benefits offered by the States. Ibid.
In the 1950's, major American employers such as Ford Motor Company adopted SUB plans of this type, agreeing to fund trusts that would provide SUBs to terminated employees. For example, Ford's contract with employees defined the concept of SUBs as the receipt of "both a state system unemployment benefit and a Weekly Supplemental Benefit ... without reduction of the state system unemployment benefit because of the payment of the Weekly Supplemental Benefit." Note, Effect of Receiving Supplemental Unemployment Benefits on Eligibility for State Benefits, 69 Harv. L.Rev. 362, 364, n. 11 (1955) ; see J. Becker, Guaranteed Income for the Unemployed: The Story of SUB (1968). Employer plans that provided SUBs sought "to provide economic security for regular employees" and "to assure a stable work force through periods of short-term layoffs." Coffy, supra, at 200, 100 S.Ct. 2100.
But an obstacle arose. For these plans to work, it was necessary to avoid having the SUBs defined under federal law as "wages." That was because some States only provided unemployment benefits if terminated employees were not earning "wages" from their employers. See Brief for United States 29; CSX Corp.,supra, at 1334-1335; Note, 69 Harv. L.Rev., at 366 ("The typical state unemployment compensation statute provides that 'an individual shall be deemed unemployed in any week with respect to which no wages are payable to him and during which he performs no services ...' " (ellipsis and emphasis in original)); id., at 367 ("[S]tates tend to treat as 'wages' those items which the federal government treats as 'wages' ").
The inability of terminated employees to receive state unemployment benefits, of course, would render SUBs far less useful to them and their employers. Employers, as a consequence, undertook to ensure that the Federal Government did not construe benefits paid out by SUB plans as "wages." CSX Corp., supra, at 1334-1335.
In at least partial response to the prospect of differential treatment of SUBs based on the vagaries of state law, the IRS promulgated a series of Revenue Rulings in the 1950's and 1960's that took the position that SUB payments were not "wages" under FICA as well as for purposes of income-tax withholding. Rev. Rul. 56-249, 1956-1 Cum. Bull. 488; see Rev. Rul. 58-128, 1958-1 Cum. Bull. 89 ; Rev. Rul. 60-330, 1960-2 Cum. Bull. 46; see also IRS Technical Advice Memorandum 9416003, 1993 WL 642695 (Apr. 22, 1994) (hereinafter TAM 9416003 ).
Although the IRS exempted SUBs paid to terminated employees from withholding for income-tax purposes, the payments still were considered taxable income. Rev. Rul. 56-249, 1956-1 Cum. Bull. 488. As a result, terminated employees faced significant tax liability at the end of the year.
The Treasury Department suggested Congress authorize the agency to promulgate regulations allowing voluntary withholding. Statements and Recommendations of the Department of the Treasury: Hearings on H.R. 13270 before the Senate Committee on Finance, 91st Cong., 1st Sess., 905-906 (1969).
In 1969, Congress chose instead to address the withholding problem by enacting § 3402(o ). It provides that all severance payments-that is, both SUBs as well as severance payments that the IRS considered wages-shall be "treated as if" they were wages for purposes of income-tax withholding. It is apparent that the definition Congress adopted in § 3402(o ) is not limited to the SUBs that the IRS had deemed exempt from wages under FICA. See § 3402(o )(2)(A). It must be presumed that Congress was aware that § 3402(o ) covered more than the severance payments that were excluded from income-tax withholding. Not all severance payment plans were tied to state unemployment benefits; and, before § 3402(o )'s 1969 enactment, the IRS ruled that severance payments not linked to state unemployment benefits were wages for purposes of income-tax withholding. See Rev. Rul. 65-251, 1965-2 Cum. Bull. 395; see also TAM 9416003 (the IRS' original 1956 exception for SUBs provided "a limited exception from the definition of wages for ... federal income tax withholding ... only if the payments are designed to supplement the receipt of state unemployment compensation and are actually tied to state unemployment benefits"); ibid. ("SUB-pay plans must be designed to supplement unemployment benefits ...").
Once this background is understood, the Court of Appeals' interpretation of § 3402(o ) as standing for some broad definitional principle is shown to be incorrect. Although Congress need not have agreed with the Revenue Rulings to enact § 3402(o ), its purpose to eliminate the withholding problem caused by the differential treatment of severance payments is the necessary background to understand the meaning and purpose of the provision. The problem Congress sought to resolve was the prospect that terminated employees would owe large payments in taxes at the end of the year as a result of the IRS' exemption of certain SUBs from withholding. It remained possible that the IRS would determine that other forms of SUB plans, perhaps linked differently to state unemployment benefits, should be exempt from withholding. If Congress had only incorporated the Revenue Rulings already in effect, that response may have risked the withholding problem arising once again. On the other hand, by drawing a withholding requirement that was broader than then-current IRS exemptions, Congress avoided these practical problems. A requirement that a form of remuneration already included as wages be treated "as if" it were wages created no administrative difficulties.
The Court of Appeals understood Congress' decision to include within § 3402(o ) a larger set of SUBs than was already exempt from withholding under IRS Revenue Rulings to mean that all SUBs were excluded from the definition of wages. But that assumption, although in the abstract not necessarily an illogical inference, is unsustainable, considering the regulatory background against which § 3402(o ) was enacted. Congress interpreted the Revenue Rulings not at all as a definitive gloss on the meaning of the term "wages" in § 3401. The better reading is that Congress determined that, whatever position the IRS took with respect to certain categories of severance payments, the problem with withholding should be solved by treating all severance payments as wages requiring withholding.
The necessary conclusion is that § 3402(o ) does not narrow the term "wages" under FICA to exempt all severance payments. This reasoning is consistent with Rowan, a previous decision interpreting FICA. In Rowan, the Court held that Treasury Regulations interpreting "wages" under FICA to include the value of meals and lodging were invalid. The Government conceded, for income-tax purposes, that the taxpayer in Rowan was correct to exempt the value of the meals and lodging in computing the wages properly withheld under § 3402. 452 U.S., at 250-251, 101 S.Ct. 2288. But it argued, nevertheless, that the value of the meals and lodging was taxable as wages under FICA, pursuant to Treasury Regulations. The Rowan Court observed that the definition of wages under FICA was in substance the same as for purposes of withholding. Id., at 255, 101 S.Ct. 2288. The Court read that similarity to be "strong evidence that Congress intended 'wages' to mean the same thing under FICA ... and income-tax withholding."Ibid. To support that conclusion, the Court noted a "congressional concern for 'the interest of simplicity and ease of administration.' " Ibid. (quoting S.Rep. No. 1631, 77th Cong., 2d Sess., 165 (1942)). Because "Congress intended ... to coordinate the income-tax withholding system with FICA" in order "to promote simplicity and ease of administration," the Court held that it would be "extraordinary" for Congress to intend the definitions of "wages" to vary between FICA and income-tax withholding. 452 U.S., at 257, 101 S.Ct. 2288.
The specific holding of Rowan -that regulations governing meals and lodging were invalid-has little or no bearing on the issue confronting us here. What is of importance is the major principle recognized in Rowan : that simplicity of administration and consistency of statutory interpretation instruct that the meaning of "wages" should be in general the same for income-tax withholding and for FICA calculations.
Quality Stores contends that, under the mandate of § 3402(o ), severance payments are not subject to FICA taxation but are to be deemed wages for purposes of income-tax withholding. It justifies this differential treatment in the name of uniformity. But that so-called uniformity as to the definitions of wages (i.e., that severance payments are not wages) is not consistent with the broad textual definitions of wages under FICA and income-tax withholding. Nor is it consistent with this Court's holding that administrative reasons justify treating severance payments as taxable for both FICA and income-tax purposes. To read Congress' command to withhold severance payments as an implicit overruling of the broad definition of wages in FICA would disserve the statutory text and the congressional interest in administrative simplicity deemed controlling in Rowan .
In concluding, the Court notes that the IRS still provides that severance payments tied to the receipt of state unemployment benefits are exempt not only from income-tax withholding but also from FICA taxation. See, e.g., Rev. Rul. 90-72, 1990-2 Cum. Bull. 211. Those Revenue Rulings are not at issue here. Because the severance payments here were not linked to state unemployment benefits, the Court does not reach the question whether the IRS' current exemption is consistent with the broad definition of wages under FICA.
* * *
The severance payments here were made to employees terminated against their will, were varied based on job seniority and time served, and were not linked to the receipt of state unemployment benefits. Under FICA's broad definition, these severance payments constitute taxable wages. 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.
Justice KAGAN took no part in the consideration or decision of this case.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | L | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Frankfurter
delivered the opinion of the Court.
This is an action to recover damages for injury to goods in the course of an export shipment by rail. The Westinghouse Electric and Manufacturing Company delivered to the Pennsylvania Railroad Company in Sharon, Pennsylvania, goods ultimately destined for the Mexican Light and Power Company. According to the bill of lading issued by the Pennsylvania Railroad the goods were consigned to
The Mexican Light & Power Co. Ltd.,
c/o Fausto Trevino, Customs Agent,
(National Railways of Mexico).
The destination was Laredo, Texas, with the further notation
“For Export to: El Oro, Estado de Mexico via Acambaro via Laredo.”
The transportation charges were prepaid at the export rate, less than the domestic, and they covered shipment not merely into Laredo but up to the international boundary.
The Texas-Mexican Railway was the last of the series of connecting carriers over which the machinery was routed by the Pennsylvania. The former, having received the shipment at Alice, Texas, continued the carriage to its yards at Laredo. At Laredo, there was issued to Fausto Trevino, the agent, what formally appears to be a bill of lading consigning the shipment to petitioner at El Oro. The record is silent as to the circumstances that brought this document into existence, but it is admitted that the respondent received no payment for transporting the goods other than its share in the export rate prepaid to the Pennsylvania under the Sharon bill of lading. Trevino did use the second bill of lading for clearing the shipment with the Mexican customs, but there is no showing that the first bill of lading would not have served as documentation for this purpose. The respondent railroad then moved the goods, still in the original cars, from its yards to the international boundary. There, the shipment passed to the National Railways of Mexico and it was on its lines, in Mexico, that the machinery was injured.
Petitioner brought this suit in one of the district courts of Texas. Judgment went for the railroad. The Texas Court of Civil Appeals reversed, 190 S. W. 2d 838, but was in turn reversed by the Supreme Court of Texas. 145 Tex. 50, 193 S. W. 2d 964. We granted certiorari, 329 U. S. 697, because important issues affecting the carrier’s liability under the Interstate Commerce Act were pressed upon us.
On full consideration of the case it falls within a very narrow compass. The goods consigned to Laredo moved on the bill of lading issued at Sharon with the indicated connections, including the Texas-Mexican. By virtue of the Carmack Amendment, 34 Stat. 584, amended, 38 Stat. 1196, that bill of lading determines the rights of the consignee. While each connecting carrier is, of course, liable for damage occurring on its line, only the initial carrier is liable for damage on any of the connections. Unless, therefore, the Texas-Mexican Railway was an initial carrier with reference to the Mexican Railroad it cannot be responsible for injuries on that road. And it did not become an initial carrier merely by force of what purported to be a bill of lading issued at Laredo unless the so-called second bill of lading represents the initiation of a new shipment on the Texas-Mexican.
We agree with the Texas Supreme Court that nothing happened at Laredo to displace the duty which was created at Sharon for the carriage of the goods by the Texas-Mexican to the international boundary, or to modify the terms of its undertaking when, at Alice, it received the goods under the Sharon bill of lading.
What was said of the shipment of cattle in Missouri, Kansas & Texas R. Co. v. Ward, 244 U. S. 383, 387, is precisely applicable to the shipment of machinery in this case:
“The terms of the original bill of lading were not altered by the second issued by the connecting carrier. As appellants were already bound to transport the cattle at the rate and upon the terms named in the original bill of lading, the acceptance by the shipper of the second bill was without consideration and was void.”
No matter what the convenience which a consignee may derive from a bill of lading issued by a connecting carrier on a through shipment, unless the connecting carrier has received a consideration for the bill of lading in addition to that which flowed under the bill of lading issued by the initiating carrier, the Carmack Amendment makes such second bill of lading void. It can neither enlarge the liability of the connecting carrier nor contract that of the initiating carrier. That is what was meant when the Ward case said that the purpose of the Carmack Amendment was “to create in the initial carrier unity of responsibility for the transportation to destination.” Missouri, Kansas & Texas R. Co. v. Ward, supra, at 386. This is an even stronger case for the application of this principle. For in the Ward case the Court found the second bill of lading void for lack of consideration although it was “alleged to have been issued in consideration of a special reduced rate theretofore duly filed with the Interstate Commerce Commission” because there was nothing to indicate that that special rate “affected the through rate already agreed upon in the original bill of lading.” 244 U. S. at 385-86.
Properly finding that the so-called bill of lading did not evidence any new and independent undertaking, when judged by the rigid requirements by which bills of lading are valid under the Carmack Amendment, the Texas Supreme Court was right in holding that the shipment over the Texas-Mexican legally moved only under the original bill of lading, that the Pennsylvania was never displaced as the initial carrier, and that therefore the Texas-Mexican was not liable for damage that occurred on the Mexican Railroad.
Judgment affirmed.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice White
delivered the opinion of the Court.
Petitioner, a taxpayer and voter in Midland County, Texas, sought a determination by this Court that the Texas Supreme Court erred in concluding that selection of the Midland County Commissioners Court from single-member districts of substantially unequal population did not necessarily violate the Fourteenth Amendment. We granted review, 388 U. S. 905 (1967), because application of the one man, one vote principle of Reynolds v. Sims, 377 U. S. 533 (1964), to units of local government is of broad public importance. We hold that petitioner, as a resident of Midland County, has a right to a vote for the Commissioners Court of substantially equal weight to the vote of every other resident.
Midland County has a population of about 70,000. The Commissioners Court is composed of five members. One, the County Judge, is elected at large from the entire county, and in practice casts a vote only to break a tie. The other four are Commissioners chosen from districts. The population of those districts, according to the 1963 estimates that were relied upon when this case was tried, was respectively 67,906; 852; 414; and 828. This vast imbalance resulted from placing in a single district virtually the entire city of Midland, Midland County’s only urban center, in which 95% of the county’s population resides.
The Commissioners Court is assigned by the Texas Constitution and by various statutory enactments with a variety of functions. According to the commentary to Vernon’s Texas Statutes, the court:
“is the general governing body of the county. It establishes a courthouse and jail, appoints numerous minor officials such as the county health officer, fills vacancies in the county offices, lets contracts in the name of the county, builds roads and bridges, adr ministers the county’s public welfare services, performs numerous duties in regard to elections, sets the county tax rate, issues bonds, adopts the county budget, and serves as a board of equalization for tax assessments.”
The court is also authorized, among other responsibilities, to build and run a hospital, Tex. Rev. Civ. Stat. Ann., Art. 4492 (1966), an airport, id., Art. 2351 (1964), and libraries, id., Art. 1677 (1962). It fixes boundaries of school districts within the county, id., Art. 2766 (1965), may establish a regional public housing authority, id., Art. 1269k, § 23a (1963), and determines the districts for election of its own members, Tex. Const., Art. V, § 18.
Petitioner sued the Commissioners Court and its members in the Midland County District Court, alleging that the disparity in district population violated the Fourteenth Amendment and that he had standing as a resident, taxpayer, and voter in the district with the largest population. Three of the four commissioners testified at the trial, all telling the court (as indeed the population statistics for the established districts demonstrated) that population was not a major factor in the districting process. The trial court ruled for petitioner. It made no explicit reference to the Fourteenth Amendment, but said the apportionment plan in effect was not “for the convenience of the people,” the apportionment standard established by Art. V, § 18, of the Texas Constitution. The court ordered the defendant commissioners to adopt a new plan in which each precinct would have “substantially the same number of people.”
The Texas Court of Civil Appeals reversed the judgment of the District Court and entered judgment for the respondents, 397 S. W. 2d 919 (1965). It held that neither federal nor state law created a requirement that Texas county commissioners courts be districted according to population.
The Texas Supreme Court reversed the Court of Civil Appeals, 406 S. W. 2d 422 (1966). It held that under “the requirements of the Texas and the United States Constitutions” the present districting scheme was impermissible “for the reasons stated by the trial court.” 406 S. W. 2d, at 425. However, the Supreme Court disagreed with the trial court’s conclusion that precincts must have substantially equal populations, stating that such factors as “number of qualified voters, land areas, geography, miles of county roads and taxable values” could be considered. 406 S. W. 2d, at 428. It also decreed that no Texas courts could redistrict the Commissioners Court. “This is the responsibility of the commissioners court and is to be accomplished within the constitutional boundaries we have sought to delineate.” 406 S. W. 2d, at 428-429.
In Reynolds v. Sims, supra, the Equal Protection Clause was applied to the apportionment of state legislatures. Every qualified resident, Reynolds determined, has the right to a ballot for election of state legislators of equal weight to the vote of every other resident, and that right is infringed when legislators are elected from districts of substantially unequal population. The question now before us is whether the Fourteenth Amendment likewise forbids the election of local government officials from districts of disparate population. As has almost every court which has addressed itself to this question, we hold that it does.
The Equal Protection Clause reaches the exercise of state power however manifested, whether exercised directly or through subdivisions of the State.
“Thus the prohibitions of the Fourteenth Amendment extend to all action of the State denying equal protection of the laws; whatever the agency of the State taking the action . . . .” Cooper v. Aaron, 368 U. S. 1, 17 (1958).
Although the forms and functions of local government and the relationships among the various units are matters of state concern, it is now beyond question that a State’s political subdivisions must comply with the Fourteenth Amendment. The actions of local government are the actions of the State. A city, town, or county may no more deny the equal protection of the laws than it may abridge freedom of speech, establish an official religion, arrest without probable cause, or deny due process of law.
When the State apportions its legislature, it must have due regard for the Equal Protection Clause. Similarly, when the State delegates lawmaking power to local government and provides for the election of local officials from districts specified by statute, ordinance, or local charter, it must insure that those qualified to vote have the right to an equally effective voice in the election process. If voters residing in oversize districts are denied their constitutional right to participate in the election of state legislators, precisely the same kind of deprivation occurs when the members of a city council, school board, or county governing board are elected from districts of substantially unequal population. If the five senators representing a city in the state legislature may not be elected from districts ranging in size from 60,000 to 500,000, neither is it permissible to elect the members of the city council from those same districts. In either case, the votes of some residents have greater weight than those of others; in both cases the equal protection of the laws has been denied.
That the state legislature may itself be properly apportioned does not exempt subdivisions from the Fourteenth Amendment. While state legislatures exercise extensive power over their constituents and over the various units of local government, the States universally leave much policy and decisionmaking to their governmental subdivisions. Legislators enact many laws but do not attempt to reach those countless matters of local concern necessarily left wholly or partly to those who govern at the local level. What is more, in providing for the governments of their cities, counties, towns, and districts, the States characteristically provide for representative government — for decisionmaking at the local level by representatives elected by the people. And, not infrequently, the delegation of power to local units is contained in constitutional provisions for local home rule which are immune from legislative interference. In a word, institutions of local government have always been a major aspect of our system, and their responsible and responsive operation is today of increasing importance to the quality of life of more and more of our citizens. We therefore see little difference, in terms of the application of the Equal Protection Clause and of the principles of Reynolds v. Sims, between the exercise of state power through legislatures and its exercise by elected officials in the cities, towns, and counties.
We are urged to permit unequal districts for the Midland County Commissioners Court on the ground that the court’s functions are not sufficiently “legislative.” The parties have devoted much effort to urging that alternative labels — “administrative” versus “legislative” — be applied to the Commissioners Court. As the brief description of the court’s functions above amply demonstrates, this unit of local government cannot easily be classified in the neat categories favored by civics texts. The Texas commissioners courts are assigned some tasks which would normally be thought of as “legislative,” others typically assigned to “executive” or “administrative” departments, and still others which are “judicial.” In this regard Midland County’s Commissioners Court is representative of most of the general governing bodies of American cities, counties, towns, and villages. One knowledgeable commentator has written of “the states’ varied, pragmatic approach in establishing governments.” R. Wood, in Politics and Government in the United States 891-892 (A. Westin ed. 1965). That approach has produced a staggering number of governmental units— the preliminary calculation by the Bureau of the Census for 1967 is that there are 81,304 “units of government” in the United States — and an even more staggering diversity. Nonetheless, while special-purpose organizations abound and in many States the allocation of functions among units results in instances of overlap and vacuum, virtually every American lives within what he and his neighbors regard as a unit of local government with general responsibility and power for local affairs. In many cases citizens reside within and are subject to two such governments, a city and a county.
The Midland County Commissioners Court is such a unit. While the Texas Supreme Court found that the Commissioners Court’s legislative functions are “negligible,” 406 S. W. 2d, at 426, the court does have power to make a large number of decisions having a broad range of impacts on all the citizens of the county. It sets a tax rate, equalizes assessments, and issues bonds. It then prepares and adopts a budget for allocating the county’s funds, and is given by statute a wide range of discretion in choosing the subjects on which to spend. In adopting the budget the court makes both, long-term judgments about the way Midland County should develop — whether industry should be solicited, roads improved, recreation facilities built, and land set aside for schools — and immediate choices among competing needs.
The Texas Supreme Court concluded that the work actually done by the Commissioners Court “disproportionately concern [s] the rural areas,” 406 S. W. 2d, at 428. Were the Commissioners Court a special-purpose unit of government assigned the performance of functions affecting definable groups of constituents more than other constituents, we would have to confront the question whether such a body may be apportioned in ways which give greater influence to the citizens most affected by the organization's functions. That question, however, is not presented by this case, for while Midland County authorities may concentrate their attention on rural roads, the relevant fact is that the powers of the Commissioners Court include the authority to make a substantial number of decisions that affect all citizens, whether they reside inside or outside the city limits of Midland. The Commissioners maintain buildings, administer welfare services, and determine school districts both inside and outside the city. The taxes imposed by the court fall equally on all property in the county. Indeed, it may not be mere coincidence that a body apportioned with three of its four voting members chosen by residents of the rural area surrounding the city devotes most of its attention to the problems of that area, while paying for its expenditures with a tax imposed equally on city residents and those who live outside the city. And we might point out that a decision not to exercise a function within the court’s power — a decision, for example, not to build an airport or a library, or not to participate in the federal food stamp program — is just as much a decision affecting all citizens of the county as an affirmative decision.
The Equal Protection Clause does not, of course, require that the State never distinguish between citizens, but only that the distinctions that are made not be arbitrary or invidious. The conclusion of Reynolds v. Sims was that bases other than population were not acceptable grounds for distinguishing among citizens when determining the size of districts used to elect members of state legislatures. We hold today only that the Constitution permits no substantial variation from equal population in drawing districts for units of local government having general governmental powers over the entire geographic area served by the body.
This Court is aware of the immense pressures facing units of local government, and of the greatly varying problems with which they must deal. The Constitution does not require that a uniform straitjacket bind citizens in devising mechanisms of local government suitable for local needs and efficient in solving local problems. Last Term, for example, the Court upheld a procedure for choosing a school board that placed the selection with school boards of component districts even though the component boards had equal votes and served unequal populations. Sailors v. Board of Education, 387 U. S. 105 (1967). The Court rested on the administrative nature of the area school board’s functions and the essentially appointive form of the scheme employed. In Dusch v. Davis, 387 U. S. 112 (1967), the Court permitted Virginia Beach to choose its legislative body by a scheme that included at-large voting for candidates, some of whom had to be residents of particular districts, even though the residence districts varied widely in population.
The Sailors and Dusch cases demonstrate that. the Constitution and this Court are not roadblocks in the path of innovation, experiment, and development among units of local government. We will not bar what Professor Wood has called “the emergence of a new ideology and structure of public bodies, equipped with new capacities and motivations . . ..” R. Wood, 1400 Governments, at 175 (1961). Our decision today is only that the Constitution imposes one ground rule for the development of arrangements of local government: a requirement that units with general governmental powers over an entire geographic area not be apportioned among single-member districts of substantially unequal population.
The judgment below is vacated and the case is remanded for disposition not inconsistent with this opinion.
It is so ordered.
Mr. Justice Marshall took no part in the consideration or decision of this case.
Interpretive Commentary, Vernon’s Ann. Tex. Const., Art. V, §18 (1955). See also W. Benton, Texas: Its Government and Polities 360-370 (1966); Municipal and County Government (J. Claunch ed. 1961); C. McCleskey, The Government and Politics of Texas (1966).
The Texas Supreme Court determined that neither the State nor the Federal Constitution requires that population be the sole basis for apportioning the Midland County Commissioners Court. There is therefore no independent state ground for the refusal to award the relief requested by petitioner. And since the Supreme Court opinion contemplated no further proceedings in the lower Texas courts, a “final judgment” that population does not govern the apportionment of the Commissioners Court is before us. See Mercantile Nat. Bank v. Langdeau, 371 U. S. 555 (1963); Construction Laborers v. Curry, 371 U. S. 542 (1963); Radio Station WOW v. Johnson, 326 U. S. 120 (1945).
Cases in which the highest state courts applied the principles of Reynold v. Sims to units of local government include Miller v. Board of Supervisors, 63 Cal. 2d 343, 405 P. 2d 857, 46 Cal. Rptr. 617 (1965); Montgomery County Council v. Garrott, 243 Md. 634, 222 A. 2d 164 (1966); Hanlon v. Towey, 274 Minn. 187, 142 N. W. 2d 741 (1966); Armentrout v. Schooler, 409 S. W. 2d 138 (Mo. 1966); Seaman v. Fedourich, 16 N. Y. 2d 94, 209 N. E. 2d 778, 262 N. Y. S. 2d 444 (1965); Bailey v. Jones, 81 S. D. 617, 139 N. W. 2d 385 (1966); State ex rel. Sonneborn v. Sylvester, 26 Wis. 2d 43, 132 N. W. 2d 249 (1965). Newbold v. Osser, 425 Pa. 478, 230 A. 2d 54 (1967), seemed to assume application of Reynolds. In opposition to these cases are only the decision of the Texas Supreme Court in the case before us and Brouwer v. Bronkema, 377 Mich. 616, 141 N. W. 2d 98 (1966), in which the eight justices of the Michigan Supreme Court divided evenly on the question.
Among the many federal court cases applying Reynolds v. Sims to local government are Hyden v. Baker, 286 F. Supp. 475 (D. C. M. D. Tenn. 1968); Martinolich v. Dean, 256 F. Supp. 612 (D. C. S. D. Miss. 1966); Strickland v. Burns, 256 F. Supp. 824 (D. C. M. D. Tenn. 1966); Ellis v. Mayor of Baltimore, 234 F. Supp. 945 (D. C. Md. 1964), affirmed and remanded, 352 F. 2d 123 (C. A. 4th Cir. 1965).
A precedent frequently cited in opposition to this conclusion is Tedesco v. Board of Supervisors, 43 So. 2d 514 (La. Ct. App. 1949), appeal dismissed for want of a substantial federal question, 339 U. S. 940 (1950). Petitioner points out that the Equal Protection Clause was not invoked in Tedesco, where the districting of the New Orleans City Council was challenged under the Privileges and Immunities Clause. A more realistic answer is that Tedesco, decided 12 years before Baker v. Carr, 369 U. S. 186 (1962), has been severely undermined by Baker and the succeeding apportionment cases. See, among the great many cases so concluding, Delozier v. Tyrone Area School Bd., 247 F. Supp. 30 (D. C. W. D. Pa. 1965).
Cooper v. Aaron, 358 U. S. 1, 16 (1958); see, e. g., See v. City of Seattle, 387 U. S. 541 (1967); Thompson v. City of Louisville, 362 U. S. 199 (1960); Terminiello v. Chicago, 337 U. S. 1 (1949).
Inequitable apportionment of local governing bodies offends the Constitution even if adopted by a properly apportioned legislature representing the majority of the State’s citizens. The majority of a State — by constitutional provision, by referendum, or through accurately apportioned representatives — can sno more place .a minority in oversize districts without depriving that minority of equal protection of the laws than they can deprive the minority of the ballot altogether, or impose upon them a tax rate in excess of that to be paid by equally situated members of the majority. Government — National, State, and local — must grant to each citizen the equal protection of its laws, which includes an equal opportunity to influence the election of lawmakers, no matter how large the majority wishing to deprive other citizens of equal treatment or how small the minority who object to their mistreatment. Lucas v. Colorado General Assembly, 377 U. S. 713 (1964), stands as a square adjudication by this Court of these principles.
Midland County is apparently untypical in choosing the members of its local governing body from • districts. “On the basis of available figures, coupled with rough estimates from samplings made of the situations in various States, it appears that only about 25 percent of . . . local government governing boards are elected, in whole or in part, from districts or, while at large, under schemes including district residence requirements.” Brief for the United States as Amicus Curiae 22, n. 31, filed in Sailors v. Board of Education, 387 U. S. 105 (1967), and the other 1966 Term local reapportionment cases.
U. S. Dept. of Commerce, Bureau of the Census, Census of Governments 1967, Governmental Units in 1967, at 1 (prelim, rept. Oct. 1967).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
Petitioners were convicted of various state crimes and sentenced to fixed terms.of imprisonment. They were then committed to the Patuxent Institution in lieu of sentence, for an indeterminate period, pursuant to the Maryland Defective Delinquency Law, Md. Ann. Code, Art. 31B. They sought federal habeas corpus, challenging on constitutional grounds the criteria and procedures that led to their commitment, and the conditions of their confinement. They contend, inter alia, that the statutory standard for commitment is impermissibly vague, that they are entitled to put the government to the burden of proof beyond a reasonable doubt, that at the compulsory psychiatric examination prescribed by the statute they were entitled to have the assistance of counsel and to invoke the privilege against self-incrimination, and that they are being denied a constitutional right to treatment. The District Court denied relief sub nom. Sas v. Maryland, 295 F. Supp. 389 (Md. 1969), and the Court of Appeals affirmed sub nom. Tippett v. Maryland, 436 F. 2d 1153 (CA4 1971). We granted certiorari, 404 U. S. 999 (1971), to consider whether, and to what extent, the constitutional guarantees invoked by petitioners apply to this kind of commitment process. After briefing and oral argument, it now appears that this case does not present these issues in a manner that warrants the exercise of the certiorari jurisdiction of this Court.
1. Of the four petitioners, one has been unconditionally released from confinement, and the other three are subject to criminal sentences that have not yet expired, and that would bar their release from custody even if their claims were to prevail. This fact, while not necessarily dispositive of all the claims presented by these petitioners, casts those claims in a different light, not contemplated by our original grant of the writ. Cf. McNeil v. Director, Patuxent Institution, ante, p. 245.
2. Under our decisions in Baxstrom v. Herold, 383 U. S. 107 (1966), Humphrey v. Cady, 405 U. S. 504 (1972), and Jackson v. Indiana, 406 U. S. 715 (1972), petitioners’ challenge to the Maryland Defective Delinquency Law should be considered in relation to the criteria, procedures, and treatment that the State of Maryland, makes available to other persons, not “defective delinquents,” committed for compulsory psychiatric treatment. We are informed that the statutes governing civil commitment, in Maryland are presently undergoing substantial revision, designed to provide greater substantive and procedural safeguards to committed persons. Accordingly, it seems a particularly inopportune time for this Court to consider a comprehensivé challenge to the Defective Delinquency Law.
In these circumstances, the writ of fore dismissed as improvidently granted.
It is so ordered.
Petitioner Murel was originally committed as a defective delinquent in 1962, and Creswell in 1958; their separate petitions for federal habeas corpus were denied without hearing in 1963. On appeal, the Court of Appeals consolidated these and other similar cases, and remanded all of them for a hearing, sub nom. Sas v. Maryland, 334 F. 2d 506 (CA4 1964). The hearing was deferred, by agreement of the parties, pending the outcome of related litigation in the state courts, which culminated in tSe decision in Director v. Daniels, 243 Md. 16, 221 A. 2d 397, cert. denied sub nom. Avey v. Boslow, 385 U. S. 940 (1966). The federal habeas hearing was then held in the consolidated cases, which by this time also included that of petitioners Hayes and Avey, who had been committed after the Court of Appeals’ remand order. The. petitions were again denied, 295 F. Supp. 389 (Md. 1969), and the Court of Appeals affirmed, 436 F. 2d 1153 (CA4 1971).
At the start of this litigation nine years ago both Murel and Creswell were subject to confinement' that was wholly attributable to the Defective Delinquency Law, their sentences having expired. This is no longer the case because Murel was recently released, and Creswell was convicted and sentenced on new charges. We therefore do not reach their claims.
We do not suggest that these claims, are moot, or that a case or controversy is lacking, or that habeas corpus is inappropriate to test the special incidents, if any, of these defective-delinquency confinements. See Carajas v. LaVallee, 391 U. S. 234 (1968); Jones v. Cunningham, 371 U. S. 236 (1963); North Carolina v. Rice, 404 U. S. 244, 248 (1971).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Rehnquist
delivered the opinion of the Court.
While proceeding up the Columbia River, the oil tanker S. S. Santa Maria, bareboat chartered by petitioner, was struck by a barge owned by respondent Oliver J. Olson & Co. The barge was being towed by the tugboat San Ja-cinto, owned by respondent Star & Crescent Towboat Co. Both vessels were damaged. Petitioner commenced this admiralty action for damages to the Santa Maria, and respondent cross-libeled for damages to the barge. The District Court found the collision resulted solely from negligence on the part of the crew of the San Jacinto, and dismissed the cross-libel. 304 F. Supp. 519 (Ore. 1969). The Ninth Circuit affirmed the finding that the San Jacinto had been negligent, but determined that the Santa Maria was also negligent in violating the “half-distance” rule, 30 Stat. 99, 33 U. S. C. § 192. That court therefore reversed with directions that the District Court determine the amount of damage sustained by the barge and assess damages under the divided-damages rule. See The Schooner Catherine v. Dickinson, 17 How. 170 (1855). We granted certiorari, 405 U. S. 954 (1972), principally to consider petitioner’s request that we abandon the divided-damages rule. The orderly disposition of the issues presented by the petition for certiorari, however, requires that we address ourselves to the issue of liability before reaching the question of damages. Since in so doing we conclude that the Court of Appeals was wrong in holding the Santa Maria liable at all, we do not reach the issue of damages.
I
On the evening of December 24, 1967, the Santa Maria, loaded with 17,000 tons of petroleum products, was proceeding up the Columbia River toward Portland. The ship was steaming on the Oregon side of the channel, with clear visibility. At the same time, the San Jacinto was proceeding downriver, towing a 275-foot barge, fully loaded with lumber, by a 250-foot towline. Proceeding on the Washington side of the channel, it had encountered foggy weather conditions upriver. As the San Jacinto approached Cooper Point, the Santa Maria, steaming upstream, sighted the tug both visually and by radar. The two vessels were more than a mile apart and on opposite sides of the 500-foot-wide shipping channel. There was heavy fog, described as “tule fog,” around Cooper Point, but the fog was localized on the Washington side of the channel. Although there was haze and drizzle, there was no fog on the Oregon side of the channel; the visibility from the bridge of the Santa Maria upstream was between one and one-half and two miles.
As the San Jacinto entered the fog on the Washington side off Cooper Point, the Santa Maria lost visual contact with the tug and barge. The Santa Maria’s pilot did not track the San Jacinto on radar, believing that the tug would remain on the Washington side of the channel and knowing that there was ample room for a port-to-port passage. At this time, the Santa Maria was proceeding at half-speed making approximately seven knots.
The watch on the San Jacinto had not sighted the Santa Maria when the tug entered the heavy fog off Cooper Point. The tug’s captain testified that, after entering the fog, he cut speed to three or three and one-half knots, and the visibility dead ahead was approximately 50 yards. The San Jacinto’s navigators were “navigating by visual sight of the Washington coast,” and the captain estimated that the tug passed between 50 and 75 yards off Cooper Point. At that point, the crew of the San Jacinto heard one blast of a ship’s horn (later discovered to have been that of the Santa Maria), and responded with the fog signal for a tug with a barge in tow. No visual sighting of a ship was made, however. Shortly thereafter, the captain sighted range lights, which, he testified, he thought were 20 degrees off his starboard bow. To avoid what he anticipated to be a momentary collision, the captain swung the San Jacinto to port — towards the Oregon side of the channel — and executed a U-turn, hoping to run upriver and thus avoid a collision.
The San Jacinto started the U-turn while still in the heavy fog, and the execution of the turn brought the tug on a course directly across that of the Santa Maria. The Santa Maria sighted the San Jacinto emerging from the fog, at right angles to the Santa Maria, at a distance of approximately 900 feet. Full astern was immediately ordered. The San Jacinto, quickly completing the turn, headed safely upriver. Before the Santa Maria could completely stop, however, the barge in tow sideslipped across the channel, crashing into the port bow of the Santa Maria; the force of that blow drove the tanker aground.
The District Court found that the San Jacinto and the barge, and those in charge of navigation, were negligent in eight respects, including navigating at excessive speed, failing to maintain a proper lookout, and “acting hastily and without sufficient cause in pulling the tow across the channel when there was adequate clearance for the tug and barge to pass port to port.” The court found that “the collision was proximately caused by the sole fault and negligence” of the San Jacinto and the barge, and that the acts of negligence allegedly committed by the Santa Maria did not “proximately [contribute] to the collision and resulting damage.” 304 F. Supp., at 521, 522.
The Ninth Circuit partially reversed, holding that the Santa Maria was proceeding at an immoderate speed in traveling at three to seven knots “while approaching the edge of the fog bank.” That court reasoned that the San Jacinto was only 900 feet from the Santa Maria when the tug emerged from the fog bank, and the Santa Maria’s, speed was such that she could not stop within half that distance. The court, relying on The Silver Palm, 94 F. 2d 754 (CA9), cert. denied sub nom. United States v. Silver Line, Ltd., 304 U. S. 576 (1937), deemed it immaterial that the visibility up the Oregon side of the channel — the direction in which the Santa Maria was headed — was almost two miles, because in its view the “relevant distance” for calculating the proper speed under the half-distance rule was the distance between the tanker and the fog bank — to port of the Santa Maria. Finding statutory fault, and ruling that petitioner had failed to prove that that fault could not have possibly contributed to the collision, see The Pennsylvania, 19 Wall. 125 (1874), the Court of Appeals held the Santa Maria liable for half the total damages.
II
The question of the liability of the Santa Maria turns on the application of Art. 16 of the Inland Rules of Navigation, 33 U. S. C. § 192. That Rule provides in pertinent part:
“Every vessel shall, in a fog, mist, falling snow, or heavy rainstorms, go at a moderate speed, having careful regard to the existing circumstances and conditions.” (Emphasis added.)
Although the statutory test for determining the proper speed at which a vessel should proceed in a fog is phrased in general terms, our decisions have attached a well-recognized gloss to that phrase. This gloss on the statutory rule, variously referred to as the half-distance rule or the “rule of sight,” is that, in a fog, “a moderate speed” is that
“rate of speed as would enable [the vessel] to come to a standstill, by reversing her engines at full speed, before she should collide with a vessel which she should see through the fog.” The Nacoochee, 137 U. S. 330, 339 (1890).
See also The Colorado, 91 U. S. 692, 702 (1876); The Umbria, 166 U. S. 404, 417 (1897). As stated in The Chattahoochee, 173 U. S. 540, 548 (1899), “[t]he principal reason for such reduction of speed is that it will give [both] vessels time to avoid a collision after coming in sight of each other.” If two vessels, upon sighting each other, are proceeding at rates of speed such that each can stop before it reaches the point at which the courses of the two intersect, collision is impossible.
There can be no quarrel with the salutary purpose of this “rule of thumb.” It is premised on the notion that when a ship is traveling under foggy weather conditions in waters in which other ships might be proceeding on intersecting courses, the speed of each ship must be such as to enable her to stop within half the distance separating the ships when they first sight each other. Implicit in the rule, however, is the assumption that vessels can reasonably be expected to be traveling on intersecting courses. If, on the facts of the case, it is totally unrealistic to anticipate the possibility that a vessel will travel on a particular heading that would intersect the course of another ship, the reason for the rule is rather clearly not present.
Those cases in which this Court has upheld a finding of statutory fault because of a violation of the half-distance rule involved ships proceeding in fog on established coastal shipping lanes, The City of New York, 147 U. S. 72 (1893); The Nacoochee, supra; cf. The Colorado, supra (Lake Huron), or ships traveling near or in a harbor, The Umbria, supra; cf. The Ludvig Holberg, 157 U. S. 60 (1895) (no fault). We do not imply that because a vessel is running near fog, as opposed to running in it, the vessel is not required to proceed at “a moderate speed” in relation to the distance to the fog cover. That was, indeed, the circumstance in The Silver Palm, supra, upon which the Ninth Circuit relied. But there a naval cruiser was traveling, with clear visibility ahead but with fog banks on each side, on the busy coastal shipping lane between San Francisco and Los Angeles. On such a course it is reasonable to expect that another ship might steam out of the fog at right angles to, and on a collision course with, the first vessel. The rule of sight was applicable there precisely because of the reasonable possibility that such an event might occur.
The facts of our case were significantly different. The Santa Maria and the San Jacinto were proceeding on opposite sides of a well-defined and relatively narrow channel. The Santa Mrnia had last sighted the tug only a mile ahead, proceeding along the Washington coast. Those in charge of the navigation of the tanker cannot be faulted for not anticipating the tug’s totally unorthodox maneuver in darting across such a channel. The Victory & The Plymothian, 168 U. S. 410 (1897). The visibility in the direction in which the Santa Maria was headed was almost two miles. There is no evidence in the record suggesting that the speed of the tanker would have prevented her from coming to a complete halt within half the distance of sighting a vessel that was either proceeding on a remotely foreseeable intersecting course or else being overtaken by her. The tug emerged from a fog bank only 900 feet from the tanker on a course and for reasons that no seaman could, under the circumstances, have anticipated.
The District Court’s finding that any negligence on the part of the Santa Maria did not “proximately [contribute] to the collision” was but another way of saying that fault based on the half-distance rule must have some relationship to the dangers against which that rule was designed to protect. Here it did not. We believe that the District Court, and not the Court of Appeals, reached the correct result on the issue of liability.
Since in our view respondents alone were at fault, there is no occasion to consider how damages should be apportioned were both vessels at fault.
Reversed.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
DECREE
This cause having come on to be heard on the exceptions to the Reports of the Special Master dated May 14, 1980, and September 15, 1980, and having been argued by counsel and this Court having stated its conclusions in its opinion announced May 26, 1981, 451 U. S. 725, and having considered the positions of the respective parties as to the terms of this decree, It Is Ordered, Adjudged, and Decreed As Follows:
1. The exceptions of the defendant State of Louisiana to the Report of the Special Master dated May 14, 1980, are overruled and accordingly:
(a) the motions of the State of New Jersey, the United States and the Federal Energy Regulatory Commission, and Columbia Gas Transmission Corporation et al., for leave to intervene as party plaintiffs are granted; and
(b) the motion of Associated Gas Distributors for leave to file a brief as amicus curiae is granted.
2. The exceptions of the defendant State of Louisiana to the Report of the Special Master dated September 15, 1980, are overruled, the plaintiff’s exceptions are sustained to the extent indicated in this Court’s opinion, and accordingly:
(a) the motion of the defendant State of Louisiana to dismiss the bill of complaint is denied; and
(b) the motion of the plaintiff States for judgment on the pleadings is granted in part.
3. The motion of the plaintiff States for entry of decree and the motion of the Solicitor General for entry of decree are granted. The motion of the defendant State of Louisiana for entry of decree is denied.
4. Section 1 of the Louisiana First Use Tax Act, La. Rev. Stat. Ann. §47:1303C (West Supp. 1981), violates the Supremacy Clause and the Louisiana First Use Tax Act, La. Rev. Stat. Ann. §§47:1301^7:1307 (West Supp. 1981), is unconstitutional under the Commerce Clause.
5. Effective with the date of entry of this decree, the defendant State of Louisiana, its officers, agents, and employees are permanently enjoined and prohibited from collecting the Louisiana First Use Tax.
6. Within thirty (30) days after the entry of this decree, the defendant State of Louisiana shall:
(a) render to the plaintiffs and file with the Court a true, full, accurate, and appropriate account of any and all revenues collected pursuant to the First Use Tax Act and of the interest earned by the defendant as a result of its investment of these revenues and the interest earned thereon; and
(b) refund to the taxpayers any and all revenues collected pursuant to the First Use Tax together with any and all interest earned as a result of its investment of these revenues and the interest earned thereon, but to the extent that the First Use Tax revenues and the interest earned thereon have been invested by the defendant State of Louisiana in interest-bearing securities, the defendant State of Louisiana shall transfer to the taxpayers the proceeds of principal and interest from such securities as each of such securities matures.
7. The Court retains jurisdiction to entertain such further proceedings, enter such orders, and issue such writs as may from time to time be deemed necessary or advisable to give proper force and effect to this decree or to effectuate the rights of the parties in the premises.
Justice Powell took no part in the consideration or decision of these motions or this decree.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | K | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Marshall
delivered the opinion of the Court.
We decide today that a court of appeals may grant a motion to dismiss a dispensable party whose presence spoils statutory diversity jurisdiction.
I
Petitioner Newman-Green, Inc., an Illinois corporation, brought this state-law contract action in District Court against a Venezuelan corporation, four Venezuelan citizens, and William L. Bettison, a United States citizen domiciled in Caracas, Venezuela. Newman-Green’s complaint alleged that the Venezuelan corporation had breached a licensing agreement, and that the individual defendants, joint and several guarantors of royalty payments due under the agreement, owed money to Newman-Green. Several years of discovery and pretrial motions followed. The District Court ultimately granted partial summary judgment for the guarantors and partial summary judgment for Newman-Green. 590 F. Supp. 1083 (ND Ill. 1984). Only Newman-Green appealed.
At oral argument before a panel of the Seventh Circuit Court of Appeals, Judge Easterbrook inquired as to the statutory basis for diversity jurisdiction, an issue which had not been previously raised either by counsel or by the District Court Judge. In its complaint, Newman-Green had invoked 28 U. S. C. § 1332(a)(3), which confers jurisdiction in the District Court when a citizen of one State sues both aliens and citizens of a State (or States) different from the plaintiff’s. In order to be a citizen of a State within the meaning of the diversity statute, a natural person must both be a citizen of the United States and be domiciled within the State. See Robertson v. Cease, 97 U. S. 646, 648-649 (1878); Brown v. Keene, 8 Pet. 112, 115 (1834). The problem in this case is that Bettison, although a United States citizen, has no domicile in any State. He is therefore “stateless” for purposes of § 1332(a)(3). Subsection 1332(a)(2), which confers jurisdiction in the District Court when a citizen of a State sues aliens only, also could not be satisfied because Bettison is a United States citizen.
When a plaintiff sues more than one defendant in a diversity action, the plaintiff must meet the requirements of the diversity statute for each defendant or face dismissal. Strawbridge v. Curtiss, 3 Cranch 267 (1806). Here, Bettison’s “stateless” status destroyed complete diversity under § 1332(a)(3), and his United States citizenship destroyed complete diversity under § 1332(a)(2). Instead of dismissing the case, however, the Court of Appeals panel granted Newman-Green’s motion, which it had invited, to amend the complaint to drop Bettison as a party, thereby producing complete diversity under § 1332(a)(2). 832 F. 2d 417 (1987). The panel, in an opinion by Judge Easterbrook, relied both on 28 U. S. C. § 1653 and on Rule 21 of the Federal Rules of Civil Procedure as sources of its authority to grant this motion. The panel noted that, because the guarantors are jointly and severally liable, Bettison is not an indispensable party and dismissing him would not prejudice the remaining guarantors. 832 F. 2d, at 420, citing Fed. Rule Civ. Proc. 19(b). The panel then proceeded to the merits of the case, ruling in Newman-Green’s favor in large part but remanding to allow the District Court to quantify damages and to resolve certain minor issues.
The Court of Appeals granted the remaining guarantors’ motion for rehearing en banc and reversed the panel decision. 854 F. 2d 916 (1988). Writing for the en banc majority, Judge Posner concluded that neither § 1653 nor Rule 21 empowers appellate courts to dismiss a dispensable party whose presence spoils statutory diversity jurisdiction. The court did not, however, order the dismissal of the lawsuit. Recognizing that Rule 21 permits district courts to drop a dispensable nondiverse party, the court remanded the case to the District Court for it to determine whether it would be prudent to drop Bettison from the litigation. Judge Easter-brook, joined by the other two members of the original panel, wrote a dissenting opinion in which he elaborated on the panel opinion. Id., at 927.
Unlike the Seventh Circuit, the Courts of Appeals for the Second, Third, Ninth, and District of Columbia Circuits have held that appellate courts have the power to dismiss jurisdictional spoilers like Bettison. We granted Newman-Green’s petition for certiorari in order to resolve this conflict, 488 U. S. 1003 (1989), and now reverse.
II
The existence of federal jurisdiction ordinarily depends on the facts as they exist when the complaint is filed. See, e. g., Smith v. Sperling, 354 U. S. 91, 93, n. 1 (1957). Like most general principles, however, this one is susceptible to exceptions, and the two that are potentially applicable here are reflected in 28 U. S. C. § 1653 and Rule 21 of the Federal Rules of Civil Procedure. We discuss each potential exception in turn.
A
Title 28 U. S. C. § 1653, enacted as part of the revision of the Judicial Code in 1948, provides that “[defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.” At first blush, the language of this provision appears to cover the situation here, where the complaint is amended to drop a nondiverse party in order to preserve statutory jurisdiction. But § 1653 speaks of amending “allegations of jurisdiction,” which suggests that it addresses only incorrect statements about jurisdiction that actually exists, and not defects in the jurisdictional facts themselves. Under this reading of the statute, which we believe is correct, § 1653 would apply if Bettison were, in fact, domiciled in a State other than Illinois or was, in fact, not a United States citizen, but the complaint did not so allege. It does not apply to the instant situation, where diversity jurisdiction does not, in fact, exist.
This interpretation of § 1653 is consistent with the language of its predecessor statute, enacted in 1915, which expressly limited jurisdictional amendments to cases in which diversity jurisdiction “in fact existed at the time the suit was brought or removed, though defectively alleged.” § 274(c), Act of Mar. 3, 1915, 38 Stat. 956, 28 U. S. C. § 399 (1946 ed.). There is nothing in the 1948 legislative history to indicate that, in changing the wording of this statute, Congress intended to abandon the limitation just quoted. On the contrary, the only legislative guide available — the Revision Note to § 1653 — explains that the predecessor statute was changed solely to expand the power to cure defective allegations of jurisdiction from diversity cases to all cases. Historical and Revision Notes to 28 U. S. C. §1653. Other than that, “[cjhanges were made in phraseology.” Ibid. Surely a change that would empower federal courts to amend a complaint so as to produce jurisdiction where none actually existed before is much more than a change in phraseology. Furthermore, every Court of Appeals that has considered the scope of § 1653 has held that it allows appellate courts to remedy inadequate jurisdictional allegations, but not defective jurisdictional facts. We decline to reject this longstanding interpretation of the statute.
B
We turn next to the other source of authority discussed by the Court of Appeals, Rule 21 of the Federal Rules of Civil Procedure, which provides that “[pjarties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just.” As both the en banc majority and dissent recognized below, it is well settled that Rule 21 invests district courts with authority to allow a dispensable nondiverse party to be dropped at any time, even after judgment has been rendered. Although the Federal Rules of Civil Procedure strictly apply only in the district courts, Fed. Rule Civ. Proc. 1, the policies informing Rule 21 may apply equally to the courts of appeals. The narrow question before us, therefore, is whether a court of appeals may do what a district court can do and dismiss a dispensable nondiverse party itself, or whether a court of appeals must remand the case to the district court, leaving it to the district court’s discretion to dismiss the party?
Almost every modern Court of Appeals faced with this issue has concluded that it has the authority to dismiss a dispensable nondiverse party by virtue of Rule 21. As with § 1653, we are reluctant to disturb this well-settled judicial construction, particularly when there is no evidence that this authority has been abused by the courts of appeals (or the district courts for that matter). Furthermore, we have ourselves exercised a similar authority under Rule 21. In Mullaney v. Anderson, 342 U. S. 415 (1952), the defendant first questioned the plaintiff-union’s standing to bring suit when the case reached this Court. Relying explicitly on Rule 21, we avoided deciding the standing issue by granting the union’s motion to add as parties two of its members. Although we did not discuss extensively Rule 21’s applicability in the appellate setting, we did note that the change in the parties would not have “affected the course of the litigation” if it had occurred at some earlier point, and would not “embarrass the defendant.” Id., at 417. The Court further remarked that dismissing the petition and thereby requiring the plaintiffs to start over in the District Court “would entail needless waste and runs counter to effective judicial administration.” Ibid. Finally, the Court expressed confidence that amendments at such a late stage “will rarely come into play.” Ibid; cf. Rogers v. Paul, 382 U. S. 198, 198-199 (1965) (per curiam)
The motion granted in Mullaney represented the exercise of an appellate power that long predates the enactment of the Federal Rules. In Anonymous, 1 F. Cas. 996, 997 (No. 444) (CC Mass. 1812), Justice Story, sitting as Circuit Justice, wrote that “[t]here is then, in the nature of an appellate jurisdiction, nothing which forbids the granting of amendments.” Justice Story derived this appellate power from “the course of the common law,” which permitted “‘the superior court . . . [to] make such amendments, as the court below may.’” Ibid., quoting King v. Ponsonby, 1 Wils. 303, 95 Eng. Rep. 631 (K. B. 1751); see also 1 F. Cas, at 997, citing Pease v. Morgan, 7 Johns. 468, 469 (N. Y. 1811). He also looked to § 32 of the Judiciary Act of 1789, which provided that a federal court “may at any time permit either of the parties to amend any defect in the process or pleadings, upon such conditions as the said courts respectively shall in their discretion and by their rules prescribe.” 1 Stat. 91, formerly codified at 28 U. S. C. §777 (1946 ed.). He cautioned, however, that this amendment power should be used in such a way that “no unfair advantage shall be taken by one party, and no oppression practised by the other.” 1 F. Cas., at 998.
While Justice Story’s opinion dealt generally with the amendment power of appellate courts, Chief Justice Marshall’s opinion for this Court in Carneal v. Banks, 10 Wheat. 181 (1825), dealt with the issue at hand — the power of appellate courts to grant motions to dismiss dispensable non-diverse parties. The case involved a suit by plaintiff Banks against two groups of defendants, the heirs of Harvie and the heirs of Carneal. Only the heirs of Carneal had citizenship diverse from the plaintiff. After noting this jurisdictional problem, the Court stated: “The bill... as to Harvie’s heirs, may be dismissed, without in any manner affecting the suit against Carneal’s heirs. That they have been improperly made defendants in his bill, cannot affect the jurisdiction of the Court as between those parties who are properly before it.” Id., at 188. The Court predicated this ruling, in part, on the fact that it was not “indispensable to bring Harvie’s heirs before the Court.” Ibid. Although the Court did not state explicitly whether the Circuit Court in which the case arose had dismissed Harvie’s heirs, a review of the Circuit Court’s opinion in Carneal reveals that the lower court never dismissed the nondiverse parties. Thus, this Court itself dismissed the nondiverse parties while acting in an appellate capacity.
By contrast, Horn v. Lockhart, 17 Wall. 570 (1873), clearly involved a trial court’s decision to dismiss dispensable non-diverse parties. In approving such action, however, the Court used language that is strikingly reminiscent of that employed in Carneal: “[T]he question always is, or should be, when objection is taken to the jurisdiction of the court by reason of the citizenship of some of the parties, whether . . . they are indispensable parties, for if their interests are severable and a decree without prejudice to their rights can be made, the jurisdiction of the court should be retained and the suit dismissed as to them.” 17 Wall., at 579. This similarity of language is not surprising; the considerations implicit in a trial court’s exercise of this power are equally applicable when an appellate court exercises the same power. Moreover, once it is recognized that trial courts have this amendment power, it is exceedingly difficult to argue that a similar power exercised by appellate courts presents the risk of jurisdiction retroactively conferred.
Although these 19th-century cases were decided in a procedural era different from our own, it is apparent that the weight of authority favored the view that appellate courts possessed the authority to grant motions to dismiss dispensable nondiverse parties. Courts relied then on §32 of the Judiciary Act of 1789 or on the inherent power of appellate courts. Today courts rely on Mullaney or Federal Rule 21. We decline to disturb that deeply rooted understanding of appellate power, particularly when requiring dismissal after years of litigation would impose unnecessary and wasteful burdens on the parties, judges, and other litigants waiting for judicial attention. See Mullaney, 342 U. S., at 417. Appellate-level amendments to correct jurisdictional defects may not be the most intellectually satisfying approach to the spoiler problem, but, as Judge Posner eloquently noted, because “law is an instrument of governance rather than a hymn to intellectual beauty, some consideration must be given to practicalities.” 854 F. 2d, at 925.
In this case, the practicalities weigh heavily in favor of the decision made by the Court of Appeals panel to grant Newman-Green’s motion to dismiss Bettison as a party. If the entire suit were dismissed, Newman-Green would simply refile in the District Court against the Venezuelan corporation and the four Venezuelans and submit the discovery materials already in hand. The case would then proceed to a preordained judgment. See id., at 932, 939-940 (Easter-brook, J., dissenting). Newman-Green should not be compelled to jump through these judicial hoops merely for the sake of hypertechnical jurisdictional purity.
Although we hold that the courts of appeals have the authority to dismiss a dispensable nondiverse party, we emphasize that such authority should be exercised sparingly. In each case, the appellate court should carefully consider whether the dismissal of a nondiverse party will prejudice any of the parties in the litigation. It may be that the presence of the nondiverse party produced a tactical advantage for one party or another. If factual disputes arise, it might be appropriate to remand the case to the district court, which would be in a better position to make the prejudice determination. But we decline to erect a per se rule that the district court must first make such a determination in every case.
In the instant case, it is evident that none of the parties will be harmed by Bettison’s dismissal. First, Bettison’s presence did not provide Newman-Green with a tactical advantage. Discovery directed to Bettison while he was a party would have been available even if he had not been a party. See, e. g., Fed. Rule Civ. Proc. 30(a); 28 U. S. C. § 1783. Second, given that all of the guarantors (including Bettison) are jointly and severally liable, it cannot be argued that Bettison was indispensable to the suit. Fed. Rule Civ. Proc. 19(b); see 854 F. 2d, at 938 (Easterbrook, J., dissenting). The only person who faces any prejudice is Bettison himself, who has participated in this litigation from the start, and who would face the possibility of suit in a state or Venezuelan court. The panel solved this problem by terminating the litigation against Bettison with prejudice, thus leaving the other guarantors with the burden of pursuing Bettison to obtain contribution or indemnity. 832 F. 2d, at 420. The panel’s disposition was entirely appropriate. Nothing but a waste of time and resources would be engendered by remanding to the District Court or by forcing these parties to begin anew.
Ill
For the reasons stated, the judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
This complete diversity requirement is based on the diversity statute, not Article III of the Constitution. State Farm Fire & Casualty Co. v. Tashire, 386 U. S. 523, 530-531 (1967).
The panel’s merits determination has no bearing on the jurisdictional question presently before us. We note nonetheless that the panel decision, combined with the partial summary judgment granted Newman-Green in the District Court, provided the guarantors with a strong incentive to have the ease dismissed for want of jurisdiction.
See, e. g., Long v. District of Columbia, 261 U. S. App. D. C. 1, 8-9, 820 F. 2d 409, 416-417 (1987); Continental Airlines, Inc. v. Goodyear Tire & Rubber Co., 819 F. 2d 1519, 1523, and n. 3 (CA9 1987); Caspary v. Louisiana Land & Exploration Co., 725 F. 2d 189, 191-192 (CA2 1984) (per curiam); Underwood v. Maloney, 256 F. 2d 334, 339 (CA3), cert. denied, 358 U. S. 864 (1958); cf. Reed v. Robilio, 376 F. 2d 392, 394 (CA6 1967).
Although Revision Notes are not conclusive evidence of congressional intent, we have previously stated that no change in law should be presumed from the 1948 revision of the Judicial Code “unless an intent to make such changes is clearly expressed.” Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 227 (1957). No such intent is clearly expressed with regard to § 1653.
See, e. g., Rockwell Int’l Credit Corp. v. United States Aircraft Ins. Group, 823 F. 2d 302, 304 (CA9 1987); Sarnoff v. American Home Products Corp., 798 F. 2d 1075, 1079 (CA7 1986); Aetna Casualty & Surety Co. v. Hillman, 796 F. 2d 770, 775-776 (CA5 1986); Boelens v. Redman Homes, Inc., 759 F. 2d 504, 512 (CA5 1985); Pressroom Unions-Printers League Income Security Fund v. Continental Assurance Co., 700 F. 2d 889, 893 (CA2), cert. dism’d, 463 U. S. 1233 (1983); Field v. Volkswagenwerk AG, 626 F. 2d 293, 305-306 (CA3 1980); cf. Carson v. Allied News Co., 511 F. 2d 22, 24 (CA7 1975); Thomas v. Anderson, 223 F. 41, 43 (CA8 1915).
See, e. g., Fritz v. American Home Shield Corp., 751 F. 2d 1152, 1154-1155 (CA11 1985); Publicker Industries, Inc. v. Roman Ceramics Corp., 603 F. 2d 1065, 1068-1069 (CA3 1979); Caperton v. Beatrice Pocahontas Coal Co., 585 F. 2d 683, 691-692, and n. 23 (CA4 1978).
See, e. g., Long, 820 F. 2d, at 416-417; Ross v. Int'l Brotherhood of Electrical Workers, 634 F. 2d 453, 456-457 (CA9 1980); Fidelity & Casualty Co. v. Reserve Ins. Co., 596 F. 2d 914, 918 (CA9 1979); Underwood, 256 F. 2d, at 339; cf. Caspary, 725 F. 2d, at 191-192 (relying on Fed. Rule Civ. Proc. 15). Other courts have remanded the ease to the district court with mandatory instructions to allow an amendment dismissing the non-diverse party in order to preserve diversity jurisdiction. See, e. g., Jaser v. Neiv York Property Ins. Underwriting Assn., 815 F. 2d 240, 244 (CA2 1987). The cases holding that appellate courts are powerless to remedy such jurisdictional defects are few and far between. See, e. g., Field, supra, at 306; Dollar S. S. Lines, Inc. v. Merz, 68 F. 2d 594, 595 (CA9 1934).
Mullaney v. Anderson, 342 U. S. 415 (1952), cannot be explained as a case involving a technical change to identify the real parties in interest. The addition of the union members was considered necessary to establish the existence of a justiciable case. At the time, it was not clear that unions had standing to sue on behalf of their members. See NAACP v. Button, 371 U. S. 415, 428 (1963).
Section 32 of the Judiciary Act was repealed with the passage of the Federal Rules of Civil Procedure. Act of June 25, 1948, Pub. L. 773, 62 Stat. 869, 993.
We recognize that copies of the Circuit Court opinion in Carneal are not easily available; however, a handwritten copy resides in the National Archives.
In Kennedy v. Bank of Georgia, 8 How. 586 (1850), the Court rejected the argument that its prior judgment in the same case was void for want of jurisdiction because it lacked the power to accept a stipulation amending the pleadings to reflect correctly the existence of diversity jurisdiction. In so doing, the Court stated: “[I]t has been the practice of this court, where amendments are necessary, to remand the cause to the Circuit Court for that purpose. The only exception to this rule has been, where counsel on both sides have agreed to the amendment.” Id., at 611. This passage suggests that the Court viewed this limitation on its amendment power as discretionary. There is no indication that the Court thought it lacked the authority to permit such amendments. On the contrary, in discussing the proper course of action in the case, the Court incorporated Justice Story’s broad view of the common-law power of appellate courts to accept amendments. See ibid., citing Anonymous, 1 F. Cas. 996 (No. 444) (CC Mass. 1812). Although there is language in several 19th-century cases that can be read to suggest that the Court did not have the authority to allow such amendments, see Denny v. Pironi, 141 U. S. 121, 124 (1891); Menard v. Goggan, 121 U. S. 253, 254 (1887); Peper v. Fordyce, 119 U. S. 469, 471 (1886); Halsted v. Buster, 119 U. S. 341, 342 (1886); Continental Ins. Co. v. Rhoads, 119 U. S. 237, 240 (1886), we believe these cases are best understood as examples of the discretionary practice referred to in Kennedy v. Bank of Georgia, supra. See Norton v. Larney, 266 U. S. 511, 515-516 (1925).
The en banc Court of Appeals thought it would require a “crystal ball” to determine the fate of this litigation in the District Court upon remand, speculating that Newman-Green might abandon its federal-court action and move to state court or even to a Venezuelan court. 854 F. 2d, at 925. We agree with Judge Easterbrook, however, that “[a] great many zeros precede the first significant digit in the probability of this.” Id., at 940 (dissenting opinion). As he cogently explained:
“After the panel of our court flagged the jurisdictional problem, [Newman-Green] had to decide what it wanted to do. [Newman-Green] had lost the bulk of its case in the district court (although it had won some $200,000 on a portion of the case no longer in dispute). It was guaranteed a new run at the subject in state court, against all defendants, by retaining Bettison as a defendant. [Newman-Green] instead filed a motion to dismiss Bettison and take its chances on the merits. If it was willing to pursue this suit in federal court without Bettison when all it had to show for itself was a loss, and to abandon any hope of reaching Bettison’s assets if it should prevail, what is it going to do now that it has an opinion in its favor on the merits? Go to state court, where things could get worse but are not likely to get better? If this suit is dismissed, it will be refiled in federal court. The only question is just how much time will be lost along the way.” Ibid.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Per Curiam.
Respondent Francois Daniel Lesage, an African immigrant of Caucasian descent, applied for admission to the Ph.D. program in counseling psychology at the University of Texas’ Department of Education for the 1996-1997 academic year. In the year Lesage applied, the school received 223 applications for the program and offered admission to roughly 20 candidates. App. to Pet. for Cert. A-22. It is undisputed that the school considered the race of its applicants at some stage during the review process. The school rejected Lesage’s application and offered admission to at least one minority candidate. Lesage filed suit seeking money damages and injunctive relief. He alleged that, by establishing and maintaining a race-conscious admissions process, the school had violated the Equal Protection Clause of the Fourteenth Amendment and Rev. Stat. § 1977, 42 U. S. C. § 1981, Rev. Stat. § 1979, as amended, 42 U. S. C. § 1983 (1994 ed., Supp. III), and 78 Stat. 252, 42 U. S. C. § 2000d.
Petitioners sought summary judgment, offering evidence that, even if the school’s admissions process had been completely colorblind, Lesage would not have been admitted. At least 80 applicants had higher undergraduate grade point averages (GPA’s) than Lesage, 152 applicants had higher Graduate Record Examination (GRE) scores, and 73 applicants had both higher GPA’s and higher GRE scores. App. to Pet. for Cert. A-23. In an affidavit, Professor Ricardo Ainslie, one of two members of the school’s admissions committee, stated that Lesage’s personal statement indicated that he had “ 'a rather superficial interest in the field with a limited capacity to convey his interests and ideas,’ ” and that his letters of recommendation were “weak.” Id., at A-24. Ainslie stated that Lesage’s application was rejected early in the review process, when the committee was winnowing the full application pool to a list of 40. Ibid. The District Court concluded that “any consideration of race had no effect on this particular individual’s rejection,” and that there was “uncontested evidence that the students ultimately admitted to the program ha[d] credentials that the committee considered superior to Plaintiffs.” Id., at A-26 to A-27. It therefore granted summary judgment for petitioners with respect to all of Lesage’s claims for relief.
The Court of Appeals for the Fifth Circuit reversed. 158 F. 3d 213 (1998). The court did not review the District Court’s conclusion that there was no genuine issue as to whether the school would have rejected Lesage under a colorblind admissions process. Instead, it held that such a determination was “irrelevant to the pertinent issue on summary judgment, namely, whether the state violated Lesage’s constitutional rights by rejecting his application in the course of operating a racially discriminatory admissions program.” Id., at 222. An applicant who was rejected at a stage of the review process that was race conscious, the court reasoned, has “suffered an implied injury”— the inability to compete on an equal footing. Ibid. Because there remained a factual dispute as to whether the stage of review during which Lesage’s application was eliminated was in some way race conscious, the court held that summary judgment was inappropriate and remanded the case for trial. Ibid.
Insofar as the Court of Appeals held that summary judgment was inappropriate on Lesage’s §1983 action seeking damages for the school’s rejection of his application for the 1996-1997 academic year even if petitioners conclusively established that Lesage would have been rejected under a race-neutral policy, its decision is inconsistent with this Court’s well-established framework for analyzing such claims. Under Mt. Healthy City Bd. of Ed. v. Doyle, 429 U. S. 274 (1977), even if the government has considered an impermissible criterion in making a decision adverse to the plaintiff, it can nonetheless defeat liability by demonstrating that it would have made the same decision absent the forbidden consideration. See id., at 287. See also Crawford-El v. Britton, 523 U.S. 574, 593 (1998); Board of Comm’rs, Wabaunsee Cty. v. Umbehr, 518 U. S. 668, 675 (1996). Our previous decisions on this point have typically involved alleged retaliation for protected First Amendment activity rather than racial discrimination, but that distinction is immaterial. The underlying principle is the same: The government can avoid liability by proving that it would have made the same decision without the impermissible motive.
Simply put, where a plaintiff challenges a discrete governmental decision as being based on an impermissible criterion and it is undisputed that the government would have made the same decision regardless, there is no cognizable injury warranting relief under § 1983.
Of course, a plaintiff who challenges an ongoing race-conscious program and seeks forward-looking relief need not affirmatively establish that he would receive the benefit in question if race were not considered. The relevant injury in such cases is “the inability to compete on an equal footing.” Northeastern Fla. Chapter, Associated Gen. Contractors of America v. Jacksonville, 508 U. S. 656, 666 (1993). See also Adarand Constructors, Inc. v. Peña, 515 U. S. 200, 211 (1995). But where there is no allegation of an ongoing or imminent constitutional violation to support a claim for forward-looking relief, the government’s conclusive demonstration that it would have made the same decision absent the alleged discrimination precludes any finding of liability.
Lesage’s second amended complaint sought injunctive relief and alleged that petitioners “have established and are maintaining, under color of the laws of the State of Texas, an affirmative action admissions program at the College of Education that classifies applicants on the basis of race and ethnicity.” App. to Pet. for Cert. A-22 (emphasis added). But in deciding that summary judgment was improper, the Court of Appeals did not distinguish between Lesage’s retrospective claim for damages and his forward-looking claim for injunctive relief based on continuing discrimination. Further, in their petition for certiorari, petitioners assert that “[t]he case at bar differs from Ada-rand because there is no allegation that the department of counseling psychology continues to use race-based admissions subsequent to the Fifth Circuit’s Hopwood v. State of Texas[, 78 F. 3d 932, cert. denied, 518 U. S. 1033 (1996),] decision.” Pet. for Cert. 13. The brief in opposition does not contest this statement. It therefore appears, although we do not decide, that Lesage has abandoned any claim that the school is presently administering a discriminatory admissions process.
Insofar as the Court of Appeals held that petitioners were not entitled to summary judgment on Lesage’s § 1983 claim for damages relating to the rejection of his application for the 1996-1997 academic year even if he would have been denied admission under a race-neutral policy, its decision contradicts our holding in Mt. Healthy. We therefore grant the petition for writ of certiorari and reverse the judgment of the Court of Appeals in this respect.
Lesage also asserted claims under 42 U. S. C. §§ 1981 and 2000d. Whether these claims remain, and whether Lesage has abandoned his claim for injunctive relief on the ground that petitioners are continuing to operate a discriminatory admissions process, are matters open on remand. The case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Scalia
delivered the opinion of the Court.
We are presented with one of the most expansive class actions ever. The District Court and the Court of Appeals approved the certification of a class comprising about one and a half million plaintiffs, current and former female employees of petitioner Wal-Mart who allege that the discretion exercised by their local supervisors over pay and promotion matters violates Title VII by discriminating against women. In addition to injunctive and declaratory relief, the plaintiffs seek an award of backpay. We consider whether the certification of the plaintiff class was consistent with Federal Rules of Civil Procedure 23(a) and (b)(2).
I
A
Petitioner Wal-Mart is the Nation's largest private employer. It operates four types of retail stores throughout the country: Discount Stores, Supercenters, Neighborhood Markets, and Sam’s Clubs. Those stores are divided into seven nationwide divisions, which in turn comprise 41 regions of 80 to 85 stores apiece. Each store has between 40 and 53 separate departments and 80 to 500 staff positions. In all, Wal-Mart operates approximately 3,400 stores and employs more than 1 million people.
Pay and promotion decisions at Wal-Mart are generally committed to local managers’ broad discretion, which is exercised “in a largely subjective manner.” 222 F. R. D. 137, 145 (ND Cal. 2004). Local store managers may increase the wages of hourly employees (within limits) with only limited corporate oversight. As for salaried employees, such as store managers and their deputies, higher corporate authorities have discretion to set their pay within preestablished ranges.
Promotions work in a similar fashion. Wal-Mart permits store managers to apply their own subjective criteria when selecting candidates as “support managers,” which is the first step on the path to management. Admission to Wal-Mart’s management training program, however, does require that a candidate meet certain objective criteria, including an above-average performance rating, at least one year’s tenure in the applicant’s current position, and a willingness to relocate. But except for those requirements, regional and district managers have discretion to use their own judgment when selecting candidates for management training. Promotion to higher office — e. g., assistant manager, co-manager, or store manager — is similarly at the discretion of the employee’s superiors after prescribed objective factors are satisfied.
B
The named plaintiffs in this lawsuit, representing the 1.5 million members of the certified class, are three current or former Wal-Mart employees who allege that the company discriminated against them on the basis of their sex by denying them equal pay or promotions, in violation of Title VII of the Civil Rights Act of 1964, 78 Stat. 255, as amended, 42 U. S. C. § 2000e~l et seq.
Betty Dukes began working at a Pittsburg, California, Wal-Mart in 1994. She started as a cashier, but later sought and received a promotion to customer service manager. After a series of disciplinary violations, however, Dukes was demoted back to cashier and then to greeter. Dukes concedes she violated company policy, but contends that the disciplinary actions were in fact retaliation for invoking internal complaint procedures and that male employees have not been disciplined for similar infractions. Dukes also claims two male greeters in the Pittsburg store are paid more than she is.
Christine Kwapnoski has worked at Sam’s Club stores in Missouri and California for most of her adult life. She has held a number of positions, including a supervisory position. She claims that a male manager yelled at her frequently and screamed at female employees, but not at men. The manager in question “told [her] to ‘doll up,’ to wear some makeup, and to dress a little better.” App. 1003a.
The final named plaintiff, Edith Arana, worked at a Wal-Mart store in Duarte, California, from 1995 to 2001. In 2000, she approached the store manager on more than one occasion about management training, but was brushed off. Arana concluded she was being denied opportunity for advancement because of her sex. She initiated internal complaint procedures, whereupon she was told to apply directly to the district manager if she thought her store manager was being unfair. Arana, however, decided against that and never applied for management training again. In 2001, she was fired for failure to comply with Wal-Mart’s timekeeping policy.
These plaintiffs, respondents here, do not allege that Wal-Mart has any express corporate policy against the advancement of women. Rather, they claim that their local managers’ discretion over pay and promotions is exercised disproportionately in favor of men, leading to an unlawful disparate impact on female employees, see 42 U. S. C. § 2000e-2(k). And, respondents say, because Wal-Mart is aware of this effect, its refusal to cabin its managers’ authority amounts to disparate treatment, see §2000e-2(a). Their complaint seeks injunctive and declaratory relief, punitive damages, and backpay. It does not ask for compensatory damages.
Importantly for our purposes, respondents claim that the discrimination to which they have been subjected is common to all Wal-Mart’s female employees. The basic theory of their case is that a strong and uniform “corporate culture” permits bias against women to infect, perhaps subconsciously, the discretionary decisionmaking of each one of Wal-Mart’s thousands of managers — thereby making every woman at the company the victim of one common discriminatory practice. Respondents therefore wish to litigate the Title VII claims of all female employees at Wal-Mart’s stores in a nationwide class action.
C
Class certification is governed by Federal Rule of Civil Procedure 23. Under Rule 23(a), the party seeking certification must demonstrate, first, that
“(1) the class is so numerous that joinder of all members is impracticable;
“(2) there are questions of law or fact common to the class;
“(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
“(4) the representative parties will fairly and adequately protect the interests of the class.”
Second, the proposed class must satisfy at least one of the three requirements listed in Rule 23(b). Respondents rely on Rule 23(b)(2), which applies when “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.”
Invoking these provisions, respondents moved the District Court to certify a plaintiff class consisting of “ ‘[a]ll women employed at any Wal-Mart domestic retail store at any time since December 26,1998 who have been or may be subjected to Wal-Mart’s challenged pay and management track promotions policies and practices.’” 222 F. R. D., at 141-142 (quoting Plaintiff’s Motion for Class Certification in Case No. 3:01-cv-02252-CRB (ND Cal), Doc. 99, p. 37). As evidence that there were indeed “questions of law or fact common to” all the women of Wal-Mart, as Rule 23(a)(2) requires, respondents relied chiefly on three forms of proof: statistical evidence about pay and promotion disparities between men and women at the company, anecdotal reports of discrimination from about 120 of Wal-Mart’s female employees, and the testimony of a sociologist, Dr. William Bielby, who conducted a “social framework analysis” of Wal-Mart’s “culture” and personnel practices, and concluded that the company was “vulnerable” to gender discrimination. 603 F. 3d 671, 601 (CA9 2010) (en banc).
Wal-Mart unsuccessfully moved to strike much of this evidence. It also offered its own countervailing statistical and other proof in an effort to defeat Rule 23(a)’s requirements of commonality, typicality, and adequate representation. Wal-Mart further contended that respondents’ monetary claims for backpay could not be certified under Rule 23(b)(2), first because that Rule refers only to injunctive and declaratory relief, and second because the backpay claims could not be manageably tried as a class without depriving Wal-Mart of its right to present certain statutory defenses. With one limitation not relevant here, the District Court granted respondents’ motion and certified their proposed class.
D
A divided en banc Court of Appeals substantially affirmed the District Court’s certification order. 603 F. 3d 571. The majority concluded that respondents’ evidence of commonality was sufficient to “raise the common question whether Wal-Mart’s female employees nationwide were subjected to a single set of corporate policies (not merely a number of independent discriminatory acts) that may have worked to unlawfully discriminate against them in violation of Title VII.” Id., at 612 (emphasis deleted). It also agreed with the District Court that the named plaintiffs’ claims were sufficiently typical of the class as a whole to satisfy Rule 23(a)(3), and that they could serve as adequate class representatives, see Rule 23(a)(4). Id., at 614-615. With respect to the Rule 23(b)(2) question, the Ninth Circuit held that respondents’ backpay claims could be certified as part of a (b)(2) class because they did not “predominare]” over the requests for declaratory and injunctive relief, meaning they were not “superior in strength, influence, or authority” to the nonmonetary claims. Id., at 616 (internal quotation marks and brackets omitted).
Finally, the Court of Appeals determined that the action could be manageably tried as a class action because the District Court could adopt the approach the Ninth Circuit approved in Hilao v. Estate of Marcos, 103 F. 3d 767, 782-787 (1996). There compensatory damages for some 9,541 class members were calculated by selecting 137 claims at random, referring those claims to a special master for valuation, and then extrapolating the validity and value of the untested claims from the sample set. See 603 F. 3d, at 625-626. The Court of Appeals “s[aw] no reason why a similar procedure to that used in Hilao could not be employed in this case.” Id., at 627. It would allow Wal-Mart “to present individual defenses in the randomly selected'sample cases,’ thus revealing the approximate percentage of class members whose unequal pay or nonpromotion was due to something other than gender discrimination.” Ibid., n. 56 (emphasis deleted).
We granted certiorari. 562 U. S. 1091 (2010).
1 — <
The class action is “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Califano v. Yamasaki, 442 U. S. 682, 700-701 (1979). In order to justify a departure from that rule, “a class representative must be part of the class and 'possess the same interest and suffer the same injury’ as the class members.” East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U. S. 395, 403 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U. S. 208, 216 (1974)). Rule 23(a) ensures that the named plaintiffs are appropriate representatives of the class 'whose claims they wish to litigate. The Rule's four requirements — numerosity, commonality, typicality, and adequate representation — “effectively ‘limit the class claims to those fairly encompassed by the named plaintiff’s claims.’ ” General Telephone Co. of Southwest v. Falcon, 457 U. S. 147, 156 (1982) (quoting General Telephone Co. of Northwest v. EEOC, 446 U. S. 318, 330 (1980)).
A
The crux of this case is commonality — the rule requiring a plaintiff to show that “there are questions of law or fact common to the class.” Rule 23(á)(2). That language is easy to misread, since “[a]ny competently crafted class complaint literally raises common ‘questions.’ ” Naga-reda, Class Certification in the Age of Aggregate Proof, 84 N. Y. U. L. Rev. 97, 131-132 (2009). For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get? Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members “have suffered the same injury,” Falcon, supra, at 157. This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways — by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention — for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution— which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.
“What matters to class certification... is not the raising of common ‘questions’ — even in droves — but, rather, the capacity of a class-wide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers.” Nagareda, supra, at 132.
Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule — that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc. We recognized in Falcon that “sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,” 457 U. S., at 160, and that certification is proper only if “the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied,” id., at 161; see id., at 160 (“[AJctual, not presumed, conformance with Rule 23(a) remains... indispensable”). Frequently that “rigorous analysis” will entail some overlap with the merits of the''plaintiff’s underlying claim. That cannot be helped. “ ‘[T]he class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.’” Id., at 160 (quoting Coopers & Lybrand v. Livesay, 437 U. S. 463, 469 (1978); some internal quotation marks omitted). Nor is there anything unusual about that consequence: The necessity of touching aspects of the merits in order to resolve preliminary matters, e. g., jurisdiction and venue, is a familiar feature of litigation. See Szabo v. Bridgeport Machines, Inc., 249 F. 3d 672, 676-677 (CA7 2001) (Easterbrook, J.).
In this case, proof of commonality necessarily overlaps with respondents’ merits contention that Wal-Mart engages in a pattern or practice of discrimination. That is so because, in resolving an individual’s Title VII claim, the crux of the inquiry is “the reason for a particular employment decision,” Cooper v. Federal Reserve Bank of Richmond, 467 U. S. 867, 876 (1984). Here respondents wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer to the crucial question why was I disfavored.
B
This Court’s opinion in Falcon describes how the commonality issue must be approached. There an employee who claimed that he was deliberately denied a promotion on account of race obtained certification of a class comprising all employees wrongfully denied promotions and all applicants wrongfully denied jobs. 457 U. S., at 152. We rejected that composite class for lack of commonality and typicality, explaining:
“Conceptually, there is a wide gap between (a) an indi-. vidual’s claim that he has been denied a promotion [or higher pay] on discriminatory grounds, and his otherwise unsupported allegation that the company has a policy of discrimination, and (b) the existence of a class of persons who have suffered the same injury as that individual, such that the individual’s claim and the class claims will share common questions of law or fact and that the individual's claim will be typical of the class claims.” Id., at 157-158.
Falcon suggested two ways in which that conceptual gap might be bridged. First, if the employer “used a biased testing procedure to evaluate both applicants for employment and incumbent employees, a class action on behalf of every applicant or employee who might have been prejudiced by the test clearly would satisfy the commonality and typicality requirements of Rule 23(a).” Id., at 159, n. 15. Second, “[significant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective de-cisionmaking processes.” Ibid. We think that statement precisely describes respondents’ burden in this case. The first manner of bridging the gap obviously has no application here; Wal-Mart has no testing procedure or other company-wide evaluation method that can be charged with bias. The whole point of permitting discretionary decisionmaking is to avoid evaluating employees under a common standard.
The second manner of bridging the gap requires “[significant proof” that Wal-Mart “operated under a general policy of discrimination.” That is entirely absent here. Wal-Mart’s announced policy forbids sex discrimination, see App. 1567a-1596a, and as the District Court recognized the company imposes penalties for denials. of equal employment opportunity, 222 F. R. D., at 154. The only evidence of a “general policy of discrimination” respondents produced was the testimony of Dr. William Bielby, their sociological expert. Relying on “social framework” analysis, Bielby testified that Wal-Mart has a “strong corporate culture,” that makes it “vulnerable” to “gender bias.” Id., at 152. He could not, however, “determine with any specificity how regularly stereotypes play a meaningful role in employment decisions at Wal-Mart. At his deposition... Dr. Bielby conceded that he could not calculate whether 0.5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking.” 222 F. R. D. 189,192 (ND Cal. 2004). The parties dispute whether Bielby’s testimony even met the standards for the admission of expert testimony under Federal Rule of Evidence 702 and our Dau-bert case, see Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U. S. 579 (1993). The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. 222 F. R. D., at 191. We doubt that is so, but even if properly considered, Bielby’s testimony does nothing to advance respondents’ case. “[Wjhether 0.5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking” is the essential question on which respondents’ theory of commonality depends. If Bielby admittedly has no answer to that question, we can safely disregard what he has to say. It is worlds away from “[significant proof” that Wal-Mart “operated under a general policy of discrimination.”
C
The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal-Mart’s “policy” of allowing discretion by local supervisors over employment matters. On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business — one that we have said “should itself raise no inference of discriminatory conduct,” Watson v. Fort Worth Bank & Trust, 487 U. S. 977, 990 (1988).
To be sure, we have recognized that, “in appropriate cases,” giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory — since “an employer's undisciplined system of subjective decisionmaking [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination.” Id., at 990-991. But the recognition that this type of Title VII claim “can” exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation — and surely most managers in a corporation that forbids sex discrimination — would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. Others may choose to reward various attributes that produce disparate impact — such as scores on general aptitude tests or educational achievements, see Griggs v. Duke Power Co., 401 U. S. 424, 431-432 (1971). And still other managers may be guilty of intentional discrimination that produces a sex-based disparity. In such a company, demonstrating the invalidity of one manager’s use of discretion will do nothing to demonstrate the invalidity of another's. A party seeking to certify a nationwide class will be unable to show that all the employees’ Title VII claims will in fact depend on the answers to common questions.
Respondents have not identified a common mode of exercising discretion that pervades the entire company — aside from their reliance on Dr. Bielby’s social-framework analysis that we have rejected. In a company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction. Respondents attempt to make that showing by means of statistical and anecdotal evidence, but their evidence falls well short.
The statistical evidence consists primarily of regression analyses performed by Dr. Richard Drogin, a statistician, and Dr. Marc Bendick, a labor economist. Drogin conducted his analysis region by region, comparing the number of women promoted into management positions with the percentage of women in the available pool of hourly workers. After considering regional and national data, Drogin concluded that “there are statistically significant disparities between men and women at Wal-Mart... [and] these disparities... can be explained only by gender discrimination.” 603 F. 3d, at 604 (internal quotation marks omitted). Bendick compared work-force data from Wal-Mart and competitive retailers and concluded that Wal-Mart “promotes a lower percentage of women than its competitors.” Ibid.
Even if they are taken at face value, these studies are insufficient to establish that respondents’ theory can be proved on a elasswide basis. In Falcon, we held that one named plaintiff’s experience of discrimination was insufficient to infer that “discriminatory treatment is typical of [the employer’s employment] practices.” 457 U. S., at 158. A similar failure of inference arises here. As Judge Ikuta observed in her dissent, “[information about disparities at the regional and national level does not establish the existence of disparities at individual stores, let alone raise the inference that a company-wide policy of discrimination is implemented by discretionary decisions at the store and district level.” 603 F. 3d, at 637. A regional pay disparity, for example, may be attributable to only a small set of Wal-Mart stores, and cannot by itself establish the uniform, store-by-store disparity upon which the plaintiffs’ theory of commonality depends.
There is another, more fundamental, respect in which respondents’ statistical proof fails. Even if it established (as it does not) a pay or promotion pattern that differs from the nationwide figures or the regional figures in all' of Wal-Mart’s 3,400 stores, that would still not demonstrate that commonality of issue exists. Some managers will claim that the availability of women, or qualified women, or interested women, in their stores’ area does not mirror the national or regional statistics. And almost all of them will claim to have been applying some sex-neutral, performance-based criteria — whose nature and effects will differ from store to store. In the landmark case of ours which held that giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory, the plurality opinion conditioned that holding ón the corollary that merely proving that the discretionary system has produced a racial or sexual disparity is not enough. “The plaintiff must begin by identifying the specific employment practice that is challenged.” Watson, supra, at 994; accord, Wards Cove Packing Co. v. Atonio, 490 U. S. 642, 656 (1989) (approving that statement), superseded by statute on other grounds, 42 U. S. C. § 2000e-2(k). That is all the more necessary when a class of plaintiffs is sought to be certified. Other than the bare existence of delegated discretion, respondents have identified no “specific employment practice” — much less one that ties all their 1.5 million claims together. Merely showing that Wal-Mart’s policy of discretion has produced an overall sex-based disparity does not suffice.
Respondents’ anecdotal evidence suffers from the same defects, and in addition is too weak to raise any inference that all the individual, discretionary personnel decisions are discriminatory. In Teamsters v. United States, 431 U. S. 324 (1977), in addition to substantial statistical evidence of companywide discrimination, the Government (as plaintiff) produced about 40 specific accounts of racial discrimination from particular individuals. See id., at 338. That number was significant because the company involved had only 6,472 employees, of whom 571 were minorities, id., at 337, and the class itself consisted of around 334 persons, United States v. T. I. M. E.-D. C., Inc., 517 F. 2d 299, 308 (CA5 1975), overruled on other grounds, Teamsters, supra. The 40 anecdotes thus represented roughly one account for every eight members of the class. Moreover, the Court of Appeals noted that the anecdotes came from individuals “spread throughout” the company who “for the most part” worked at the company’s operational centers that employed the largest numbers of the class members. 517 F. 2d, at 315, and n. 30. Here, by contrast, respondents filed some 120 affidavits reporting experiences of discrimination — about 1 for every 12,500 class members — relating to only some 235 out of Wal-Mart’s 3,400 stores. 603 F. 3d, at 634 (Ikuta, J., dissenting). More than half of these reports are concentrated in only 6 States (Alabama, California, Florida, Missouri, Texas, and Wisconsin); half of all States have only one or two anecdotes; and 14 States have no anecdotes about Wal-Mart’s operations at all. Id., at 634-635, and n. 10. Even if every single one of these accounts is true, that would not demonstrate that the entire company “operated] under a general policy of discrimination,” Falcon, 457 U. S., at 159, n. 15, which is what respondents must show to certify a companywide class.
The dissent misunderstands the nature of the foregoing analysis. It criticizes our focus on the dissimilarities between the putative class members on the ground that we have “blend[ed]” Rule 23(a)(2)’s commonality requirement with. Rule 23(b)(3),s inquiry into whether common questions “predominate” over individual ones. See post, at 374-376 (Ginsburg, J., concurring in part and dissenting in part). That is not so. We quite agree that for purposes of Rule 23(a)(2) “ ‘[e]ven a single [common] question’ ” will do, post, at 376, n. 9 (quoting Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L. Rev. 149, 176, n. 110 (2003)). We consider dissimilarities not in order to determine (as Rule 23(b)(3) requires) whether common questions predominate, but in order to determine (as Rule 23(a)(2) requires) whether there is “[e]ven a single [common] question.” And there is not here. Because respondents provide no convincing proof of a companywide discriminatory pay and promotion policy, we have concluded that they have not established the existence of any common question.
In sum, we agree with Chief Judge Kozinski that the members of the class
“held a multitude of jobs, at different levels of Wal-Mart’s hierarchy, for variable lengths of time, in 3,400 stores, sprinkled acroos 50 statec, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed.... Some thrived while others did poorly. They have little in common but their sex and this lawsuit.” 603 F. 3d, at 652 (dissenting opinion).
Ill
We also conclude that respondents’ claims for backpay were improperly certified under Federal Rule of Civil Procedure 23(b)(2). Our opinion in Ticor Title Ins. Co. v. Brown, 511 U. S. 117, 121 (1994) (per curiam), expressed serious doubt about whether claims for monetary relief may be certified under that provision. We now hold that they may not, at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief.
A
Rule 23(b)(2) allows class treatment when “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” One possible reading of this provision is that it applies only to requests for such injunctive or declaratory relief and does not authorize the class certification of monetary claims at all. We need not reach that broader question in this case, because we think that, at a minimum, claims for individualized relief (like the backpay at issue here) do not satisfy the Rule. The key to the (b)(2) class is “the indivisible nature of the injunctive or declaratory remedy warranted — the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them.” Nagareda, 84 N. Y. U. L. Rev., at 132. In other words, Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.
That interpretation accords with the history of the Rule. Because Rule 23 “stems from equity practice” that predated its codification, Amchem, Products, Inc. v. Windsor, 521 U. S. 591, 613 (1997), in determining its meaning we have previously looked to the historical models on which the Rule was based, Ortiz v. Fibreboard Corp., 527 U. S. 815, 841-845 (1999). As we observed in Amchem, “[c]ivil rights cases against parties charged with unlawful, class-based discrimination are prime examples” of what (b)(2) is meant to capture. 521 U. S., at 614. In particular, the Rule reflects a series of decisions involving challenges to racial segregation — conduct that was remedied by a single classwide order. In none of the cases cited by the Advisory Committee as examples of (b)(2)’s antecedents did the plaintiffs combine any claim for individualized relief with their classwide injunction. See Advisory Committee’s Note, 28 U. S. C. App., pp. 1260-1261 (1964 ed., Supp. II) (citing cases); e. g., Potts v. Flax, 313 F. 2d 284, 289, n. 5 (CA5 1963); Brunson v. Board of Trustees of School Dist. No. 1, Clarendon Cty., 311 F. 2d 107, 109 (CA4 1962) (per curiam); Frasier v. Board of Trustees of Univ. of N. C., 134 F. Supp. 589, 593 (MDNC 1955) (three-judge court), aff’d, 350 U. S. 979 (1956) (per curiam).
Permitting the combination of individualized and class-wide relief in a (b)(2) class is also inconsistent with the structure of Rule 23(b). Classes certified trader (b)(1) and (b)(2) share the most traditional justifications for class treatment— that individual adjudications would be impossible or unworkable, as in a (b)(1) class, or that the relief sought must perforce affect the entire class at once, as in a (b)(2) class. For that reason these are also mandatory classes: The Rule provides no opportunity for (b)(1) or (b)(2) class members to opt out, and does not even oblige the District Court to afford them notice of the action. Rule 23(b)(3), by contrast, is an “adventuresome innovation” of the 1966 amendments, Am-chem, 521 U. S., at 614 (internal quotation marks omitted), framed for situations “in which 'class-action treatment is not as clearly called for/” id., at 615 (quoting Advisory Committee’s Notes, 28 U. S. C. Ápp., p. 697 (1994 ed.)). It allows class certification in. a much wider set of circumstances but with greater procedural protections. Its only prerequisites are that “the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Rule 23(b)(3). And unlike (b)(1) and (b)(2) classes, the (b)(3) class is not mandatory; class members are entitled to receive “the best notice that is practicable under the circumstances” and to withdraw from the class at their option. See Rule 23(c)(2)(B).
Given that structure, we think it clear that individualized monetary claims belong in Rule 23(b)(3). The procedural protections attending the (b)(3) class — predominance, superiority, mandatory notice, and the right to opt out — are missing from (b)(2) not because the Rule considers them unnecessary, but because it considers them unnecessary to a (b)(2) class. When a class seeks an indivisible injunction benefiting all its members at once, there is no reason to undertake a case-specific inquiry into whether class issues predominate or whether class action is a superior method of adjudicating the dispute. Predominance and superiority are self-evident. But with
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Harlan
delivered the opinion of the Court.
Upon reargument the Court has come to the conclusion that the writ of certiorari should be dismissed as improvidently granted.
The New York Court of Appeals denied petitioner’s motion for leave to appeal without stating any ground for its decision. 306 N. Y. 981. In these circumstances we must ascertain whether that court’s decision “might” have rested on a nonfederal ground, for if it did we must decline to take jurisdiction. Stembridge v. Georgia, 343 U. S. 541, 547 (1952); see also Lynch v. New York ex rel. Pierson, 293 U. S. 52, 54 (1934). We approach the matter first by considering what the petitioner has alleged as a basis for the constitutional issues which he asks us to review on the merits.
The constitutional questions involved are whether respondents, members of the Yonkers Board of Education, in refusing the use of any of the Yonkers public school buildings to the Yonkers Committee for Peace for a forum on “peace and war,” discriminated against the Committee, so as to deprive the Committee’s members of their rights of freedom of speech, assembly, and equal protection of the laws, under the First and Fourteenth Amendments.
Petitioner concedes that a State may withhold its school facilities altogether from use by nonscholastic groups. It is implicit in this concession that petitioner also recognizes that a State may make reasonable classifications in determining the extent to which its schools shall be available for nonscholastic uses, and petitioner has not attacked on this score the classifications made by the applicable New York statute and respondents’ regulations. The question of whether the regulations are unconstitutionally vague was not raised below, and hence is not open here. Therefore the burden of petitioner’s grievance would seem to be that respondents have applied the statute and regulations to similar groups differently than they have to the Committee for Peace. And yet petitioner has failed to allege in his pleading, which upon respondents’ motion was dismissed prior to answer, that other organizations of a similar character to the Committee for Peace have been allowed use of the Yonkers schools. The allegations of that pleading simply are that unnamed and undescribed “organizations” have been allowed to use Yonkers school buildings in the past “for the purpose of public assembly and discussion.” Whether such organizations are in any way comparable to the Committee for Peace nowhere appears in the pleading. And what the practice of the Board of Education has been in permitting the nonscholastic use of school buildings is not shown.
What has been alleged is entirely too amorphous to permit adjudication of the constitutional issues asserted. And we think the most reasonable inference from this record is that the Court of Appeals’ denial of petitioner’s motion for leave to appeal went on that ground, rather than on the ground, suggested on behalf of respondents, that in proceeding by way of leave to appeal rather than by an appeal as of right the petitioner had followed the wrong appellate route. This conclusion is fortified by two additional circumstances. If the Court of Appeals had considered the constitutional issues adequately presented, it presumably would have saved petitioner’s right to appeal as of right by putting its denial of leave to appeal on the ground that an appeal lay as of right. See N. Y. Civ. Prac. Act, § 592 (5) (a). Otherwise we would have to assume that the Court of Appeals desired to thwart review of the constitutional questions, an assumption wholly unjustified by this record. Furthermore, the decision of New York’s intermediate appellate court against the petitioner was because of the insufficiency of his pleading.
If the insufficiency of petitioner’s pleading was the reason for the Court of Appeals’ denial of leave to appeal, the past decisions of this Court still leave room for argument as to whether we should dismiss for lack of jurisdiction because the state court’s decision rested on an adequate nonfederal ground. It is established law that this Court is not finally concluded by the state court’s determination as to the sufficiency of pleadings asserting a federal right. Some of the cases seem to suggest that the scope of our review is limited to determining whether the state court has by-passed the federal right under forms of local procedure, from which it would seem to follow that if we find that such is not the case we should dismiss for want of jurisdiction. Cf. American Railway Express Co. v. Levee, 263 U. S. 19, 21 (1923); Davis v. Wechsler, 263 U. S. 22, 24 (1923). There can be no suggestion of by-passing in this instance. Other cases, however, indicate that we should accept jurisdiction and decide the sufficiency of the pleadings de novo for ourselves. See Boyd v. Nebraska ex rel. Thayer, 143 U. S. 135, 180 (1892); Carter v. Texas, 177 U. S. 442, 447 (1900); First National Bank v. Anderson, 269 U. S. 341, 346 (1926); Brown v. Western Railway of Alabama, 338 U. S. 294, 296 (1949). In the present case, the route which we travel would make no difference in the result. Even if we were to look at the matter ourselves de novo, we could not on this vague and empty record decide the constitutional issues sought to be presented. This Court has often refused to decide constitutional questions on an inadequate record. See, e. g., International Brotherhood of Teamsters v. Denver Milk Producers, Inc., 334 U. S. 809 (1948); Rescue Army v. Municipal Court, 331 U. S. 549, 575-585 (1947); Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U. S. 752, 762-763 (1947); Alabama State Federation of Labor v. McAdory, 325 U. S. 450 (1945). In the circumstances of this case, we prefer to rest our decision on the ground that we lack jurisdiction. For if we could not ourselves decide on this record the constitutional issues tendered, we consider that by the same token the New York Court of Appeals was entirely justified in refusing to pass on them, and that we should therefore regard its denial of leave to appeal as resting on an adequate nonfederal ground. See Vandalia R. Co. v. Indiana ex rel. South Bend, 207 U. S. 359 (1907); Brinkmeier v. Missouri P. R. Co., 224 U. S. 268 (1912).
We conclude that the writ of certiorari must be dismissed as improvidently granted.
Dismissed.
The Chief Justice, Mr. Justice Black, Mr. Justice Douglas and Mr. Justice Clark dissent, believing that the allegations of the petition are sufficient to state a case of discrimination under the Equal Protection Clause.
Certiorari was granted. 347 U. S. 926. The case was set for reargument both on the merits and as to the jurisdiction of this Court. 348 U. S. 881.
The state statute, insofar as applicable here, allows each board of education to adopt reasonable regulations for the use of school property, when not in use for school purposes, for any of the following purposes: “For holding social, civic and recreational meetings and entertainments, and other uses pertaining to the welfare of the community . . . ,” “For meetings, entertainments and occasions where admission fees are charged, when the proceeds thereof are to be expended for an educational or charitable purpose . . .” and “For civic forums and community centers. . . .” N. Y. Education Law, § 414 (3), (4), (6). It is not clear whether this last use is restricted by subsequent language in the section so as to permit only such forums as are established by the board of education.
The regulations adopted by respondents do not enlarge upon these classifications in the statute.
After reciting the respondents' refusal to permit the Committee for Peace to use any of the Yonkers school buildings on two occasions in 1952, the petition goes on to allege:
“14. That pursuant to Section 414 of the Education Law of the State of New York, the respondents, and/or their predecessors, as members of the Board of Education of the City of Yonkers, adopted regulations for the use of the schoolbouses, grounds or other property when not in use for school purposes in Yonkers, New York, whereby organizations at all times herein mentioned were and are permitted the use of the school buildings when not in use.
“15. That at all times herein mentioned and at all times since the adoption of the aforesaid regulations, the school buildings, grounds and property of and in the City of Yonkers have on numerous occasions (whose number are best known to respondents and at such numerous times and occasions that the practice is an accepted practice) been permitted to be used pursuant to Section 414 of the Education Law by organizations for the purpose of public assembly and discussion.
“16. That at no time herein mentioned did the respondents inform petitioner of the reason for the denial of his application, nor did they ask petitioner or his organization to fulfill any further requirements or conditions for permission to use by them of a school building in Yonkers, New York, for purposes of public assembly or discussion.
“17. That by reason of the action of the respondents in failing to give a reason for its action whereas permission is freely granted to others applying, it is evident that the respondents are concealing a design to discriminate against petitioner and his said organization, for which discrimination there is no foundation in law or fact, and that the acts of respondents are arbitrary and unreasonable.
“18. The action of respondents violates the right of petitioner and the constituent members of his organization of freedom of speech and assembly guaranteed by the Constitution of the United States and denies them the equal protection of the laws in violation of the Constitution of the United States.”
It may be noted that in an affidavit in support of the motion for leave to appeal to the Court of Appeals, petitioner’s attorney sought to remedy this vital defect by including the assertion, “that other organizations similar to petitioner’s have obtained similar use” of the schools from the Yonkers Board of Education. But it does not appear that petitioner ever sought to amend his pleading in these respects.
New York has two methods of appeal to the Court of Appeals— an appeal as of right and by leave to appeal. An appeal as of right lies, inter alia, where there is “directly involved the construction of the constitution of the state or of the United States N. Y. Const., Art. VI, §7(1); N. Y. Civ. Prac. Act, § 588 (1)(a). In all cases in which an appeal does not lie as of right, appeal is by leave of the Appellate Division or the Court of Appeals. N. Y. Const., Art. VI, § 7 (6); N. Y. Civ. Prac. Act, § 589. Had wrong appellate procedure been the reason for the Court of Appeals’ denial of leave to appeal, its decision would have rested on an adequate nonfederal ground, depriving this Court of jurisdiction. Cf. Parker v. Illinois, 333 U. S. 571 (1948); Central Union Telephone Co. v. City of Edwardsville, 269 U. S. 190 (1925).
This section provides that when leave to appeal is denied “upon the ground that the appeal would lie as of right,” the appellant is automatically entitled to an additional 30 days after the denial to file an appeal as of right. The Court of Appeals has thus stated its ground of denial in many instances where leave to appeal was denied because an appeal lay as of right. See, e. g., In re Arbitration between E. Milius & Co. and Regal Shirt Corp., 305 N. Y. 562, 111 N. E. 2d 438 (1953); In re Brinn, 305 N. Y. 626, 111 N. E. 2d 738 (1953); In re Wuttke, 305 N. Y. 694, 112 N. E. 2d 777 (1953); In re Hecht, 305 N. Y. 800, 113 N. E. 2d 553 (1953); Auten v. Auten, 306 N. Y. 752, 118 N. E. 2d 110 (1954).
In affirming the judgment of the court of first instance, the Appellate Division of the Supreme Court, Second Department, stated: “The proceeding was properly before the court. However, the petition does not allege facts which establish a clear legal right to the relief sought nor which establish that respondents failed to perform a duty enjoined by law.” 281 App. Div. 987, 120 N. Y. S. 2d 854.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Burton
delivered the opinion of the Court.
This is a companion case to No. 393, Labor Board v. Denver Building Trades Council (the Denver case), ante, p. 675, and No. 85, Local 74, United Brotherhood of Carpenters v. Labor Board (the Chattanooga case), post, p. 707.
The principal question here is whether a labor organization and its agent committed an unfair labor practice, within the meaning of § 8 (b) (4) (A) of the National Labor Relations Act, 49 Stat. 449, 29 U. S. C. § 151, as amended by the Labor Management Relations Act, 1947, when, by peaceful picketing, the agent induced employees of a subcontractor on a construction project to engage in a strike in the course of their employment, where an object of such inducement was to force the general contractor to terminate its contract with another subcontractor. For the reasons hereafter stated, we hold that an unfair labor practice was committed.
In December, 1947, the Giorgi Construction Company, a partnership (here called Giorgi), having its principal place of business at Port Chester, New York, contracted to build a private dwelling in Greenwich, Connecticut. The contract price was $15,200. Giorgi did part of the work with its own employees but subcontracted the electrical work to Samuel Langer and the carpentry work to Nicholas Deltorto, the principal place of business of each of whom was also at Port Chester. Langer’s subcontract was for $325.
Langer in the past had employed union men but, prior to this project, had become involved in a dispute with petitioner, International Brotherhood of Electrical Workers, Local 501, A. F. of L., here called the Electricians Union, because of his employment of nonunion men. By the middle of April, 1948, Langer’s two electricians, neither of whom was a member of the Electricians Union, had completed the roughing in of the electrical work which was necessary before the walls of the house could be completed. At that point, on two days when no employees of Langer were present on the project, but before the completion of Langer’s subcontract, William Patterson, the other petitioner herein, visited the project in his capacity of agent and business representative of the Electricians Union. The only workmen then present were Deltorto and his two carpenters, each of whom was a member of Local 543, United Brotherhood of Carpenters & Joiners of America, A. F. of L., here called the Carpenters Union. Patterson informed Deltorto and one or both of his workmen that the electrical work on the job was being done by nonunion men. Deltorto and his men expressed ignorance of that fact, but Patterson, on the second day of his visits, repeated the statement and proceeded to picket the premises himself, carrying a placard which read “This job is unfair to organized labor: I. B. E. W. 501 A. F. L.” Deltorto and his men thereupon stopped work and left the project. Del-torto promptly telephoned Giorgi, the general contractor, that his carpenters had walked off the job because the electrical delegate had picketed it. Patterson also telephoned Giorgi saying that Langer was “unfair” and that Giorgi would have to replace Langer with a union contractor in order to complete the job. He added that if Giorgi did not replace Langer, he would not receive any skilled trades to finish the rest of the work.
No communication was had with Langer by either of petitioners. The next day, Giorgi recited these circumstances to Langer and the latter released Giorgi from the electrical subcontract, saying that he would step aside so that a union subcontractor could take over. He did no further work on the project. Giorgi informed Deltorto that the trouble had been straightened out, and thé latter’s carpenters returned to the project.
On a charge filed by Langer, based upon these events, the Regional Director of the National Labor Relations Board issued a complaint against the Electricians Union and Patterson. It alleged that they had induced and encouraged the employees of Deltorto to engage in a strike or a concerted refusal in the course of their employment to perform services for him, an object thereof being to force or require Giorgi to cease doing business with Langer in violation of § 8 (b) (4) (A).
With the consent of the present petitioners, a restraining order was issued against them by the United States District Court for the Southern District of New York, pursuant to § 10 (1) . The complaint was referred to the same trial examiner who heard the Denver case, ante, p. 675. He distinguished the action of petitioners from that which he had found in the Denver case to constitute a strike signal, and recommended dismissal of the complaint on the ground that petitioners’ action here was permissible under § 8 (c), despite the provisions of § 8 (b) (4) (A). The Board, with two members dissenting, upheld its jurisdiction of the complaint against a claim that the actions complained of did not sufficiently affect interstate commerce. The majority of the Board so holding then affirmed the rulings which the examiner had made during the hearings, adopted certain of his findings, conclusions and recommendations, attached his intermediate report to its decision, but declined to follow his recommendation to dismiss the complaint. The Board expressly held that § 8 (c) did not immunize petitioners’ conduct from the proscriptions of § 8 (b) (4) (A). 82 N. L. R. B. 1028. It ordered petitioners to—
“Cease and desist from inducing or encouraging the employees of Nicholas Deltorto or any employer, by picketing or related conduct, to engage in a strike or a concerted refusal in the course of their employment to perform any services, where an object thereof is to force or require Giorgi Construction Co. or any other employer or person to cease doing business with Samuel Langer.” Id., at 1030.
Petitioners asked the United States Court of Appeals, under § 10 (f), to review and set aside that order. The Board answered and asked enforcement of it. With one judge dissenting, the court below ordered enforcement. 181 F. 2d 34. We granted certiorari. 340 U. S. 902. See Labor Board v. Denver Building Trades Council, ante, p. 675.
1. Petitioners contest the jurisdiction of the Board on the ground of the insufficiency of the effect of the actions complained of upon interstate commerce. The facts, which were found in detail in the intermediate report, approved by the Board and upheld by the court below, are in our opinion sufficient to sustain that jurisdiction on the grounds stated in the Denver case, ante, p. 675. In addition, the contractor and both subcontractors in the instant case had their principal places of business in New York. The performance of their contractual obligations on this project in Connecticut accordingly emphasizes the interstate movement of the services and materials which they here supplied.
2. The secondary character of the activities here complained of and their objectives also come within the pattern of the Denver case. In the instant case, a labor dispute had been pending for some time between Langer and the Electricians Union, but no demands were made upon him directly by either of petitioners in connection with this project. There are no findings that the picketing was aimed at Langer to force him to employ union workmen on this job. On the contrary, the findings demonstrate that the picketing was directed at Deltorto’s employees to induce them to strike and thus force Deltorto, the carpentry subcontractor, to force Giorgi, the general contractor, to terminate Langer’s electrical subcontract.
3. The Denver case also covers the point that it was sufficient that an objective of the picketing, although not necessarily the only objective of the picketing, was to force Giorgi to terminate Langer’s uncompleted contract and thus cease doing business with him on the project.
4. The principal feature of the instant case, not squarely covered by the Denver case, is that there is no finding here that the picketing and other activities of petitioners were mere signals in starting and stopping a strike in accordance with by-laws or other controlling practices of the Electricians and Carpenters Unions. The complaint here is not that petitioners, like the Trades Council in the Denver case, themselves engaged in or called a strike of Deltorto’s carpenters in order to force the general contractor to cease doing business with the electrical subcontractor. Here the complaint is that petitioners, by peaceful picketing, rather than by prearranged signal, induced or encouraged the employees of Deltorto to strike (or to engage in a concerted refusal to perform any services for Deltorto) in the course of their employment to force Giorgi, the contractor, to cease doing business with Langer, the electrical subcontractor.
While in the Denver case we have held that § 8 (c) had no application to a strike signal, there are other considerations that enter into the decision here. The question here is what effect, if any, shall be given to § 8 (c) in its application to peaceful picketing conducted by a labor organization or its agents merely as an inducement or encouragement of employees to engage in a secondary boycott. Petitioners contend that § 8 (c) immunizes peaceful picketing, even though the picketing induces a secondary boycott made unlawful by § 8 (b) (4). The Board reached the opposite conclusion and the court below approved the Board’s order as applied to the facts of this case which it recognized as amounting to “bare instigation” of the secondary boycott. We agree with the Board.
a. To exempt peaceful picketing from the condemnation of § 8 (b) (4) (A) as a means of bringing about a secondary boycott is contrary to the language and purpose of that section. The words “induce or encourage” are broad enough to include in them every form of influence and persuasion. There is no legislative history to Justify an interpretation that Congress by those terms has limited its proscription of secondary boycotting to cases where the means of inducement or encouragement amount to a “threat of reprisal or force or promise of benefit.” Such an interpretation would give more significance to the means used than to the end sought. If such were the case there would have been little need for § 8 (b) (4) defining the proscribed objectives, because the use of “restraint and coercion” for any purpose was prohibited in this whole field by § 8 (b) (1) (A).
“Induce or encourage” appear in like context in § 303. The action proscribed by the terms of § 8 (b) (4) is made in § 303 the basis for the recovery of damages in a civil action. Because § 8 (c) is in terms limited to unfair labor practice proceedings and § 303 refers only to civil actions for damages, it seems clear that § 8 (c) does not apply to an action under § 303. That section does not mention unfair labor practices through which alone the provisions of § 8 (c) can become applicable. If § 8 (c) were given the effect which petitioners urge, it would limit § 8 (b) (4) (A) so as to give the words “induce or encourage” a meaning in that section different than they have in § 303. We think that the words are entitled to the same meaning in §§ 8 (b) (4) and 303.
b. The intended breadth of the words “induce or encourage” in § 8 (b) (4) (A) is emphasized by their contrast with the restricted phrases used in other parts of § 8 (b). For example, the unfair labor practice described in § 8 (b) (1) is one “to restrain or coerce” employees; in § 8 (b) (2) it is to “cause or attempt to cause an employer”; in § 8 (b) (5) it is to “require of employees”; and in § 8 (b) (6) it is to “cause or attempt to cause an employer.” The scope of “induce” and especially of “encourage” goes beyond each of them.
c. To exempt peaceful picketing from the reach of § 8 (b) (4) would be to open the door to the customary means of enlisting the support of employees to bring economic pressure to bear on their employer. The Board quickly recognized that to do so would be destructive of the purpose of § 8 (b) (4) (A). It said “To find that peaceful picketing was not thereby proscribed would be to impute to Congress an incongruous intent to pérmit, through indirection, the accomplishment of an objective which it forbade to be accomplished directly.” United Brotherhood of Carpenters, 81 N. L. R. B. 802, 811. Also—
“It was the objective of the unions’ secondary activities . . . and not the quality of the means employed to accomplish that objective, which was the dominant factor motivating Congress in enacting that provision. ... In these circumstances, to construe Section 8 (b) (4) (A) as qualified by Section 8 (c) would practically vitiate its underlying purpose and amount to imputing to Congress an unrealistic approach to the problem.” (Emphasis in original.) Id., at 812.
The legislative history does not sustain a congressional purpose to outlaw secondary boycotts under § 8 (b) (4) and yet in effect to sanction them under § 8 (c).
d. We find no indication that Congress thought that the kind of picketing and related conduct which was used in this case to induce or encourage a strike for an unlawful object was any less objectionable than engaging directly in that strike. The court below, after finding that there was “bare instigation” here rather than an appeal to reason by “the expressing of any views, argument, or opinion,” traced the development of the doctrine that he who provokes or instigates a wrong makes himself a party to it. That court then reached the conclusion that it is “highly unlikely that by § 8 (c) Congress meant to abolish a doctrine, so deeply embedded in our civil and criminal law.” 181 F. 2d at 39.
e. The remedial function of § 8 (c) is to protect nonco-ercive speech by employer and labor organization alike in furtherance of a lawful object. It serves that purpose adequately without extending its protection to speech or picketing in furtherance of unfair labor practices such as are defined in § 8 (b) (4). The general terms of § 8 (c) appropriately give way to the specific provisions of §8(b) (4).
5. The prohibition of inducement or encouragement of secondary pressure by § 8 (b) (4) (A) carries no unconstitutional abridgment of free speech. The inducement or encouragement in the instant case took the form of picketing followed by a telephone call emphasizing its purpose. The constitutionality of § 8 (b) (4) (A) is here questioned only as to its possible relation to the freedom of speech guaranteed by the First Amendment. This provision has been sustained by several Courts of Appeals. The substantive evil condemned by Congress in § 8 (b) '(4) is the secondary boycott and we recently have recognized the constitutional right of states to proscribe picketing in furtherance of comparably unlawful objectives. There is no reason why Congress may not do likewise.
6. Petitioners object to the breadth of the Board’s order as stated in 82 N. L. R. B. at 1030, supra, pp. 698-699. They contend that its language prohibits inducement not only of employees of Deltorto but also the inducement of employees of any other employer to strike, where an object thereof is to force Giorgi or any other employer or person to cease doing business with Langer. To confine the order solely to secondary pressure through Giorgi or Deltorto would leave Langer and other employers who do business with him exposed to the same type of pressure through other comparable channels. The order properly enjoins petitioners from exerting this pressure upon Langer, through other employers, as well as through Giorgi and Deltorto. We may well apply here the principle stated in International Salt Co. v. United States, 332 U. S. 392, 400: “When the purpose to restrain trade appears from a clear violation of law, it is not necessary that all of the untraveled roads to that end be left open and that only the worn one be closed.” And see United States v. United States Gypsum Co., 340 U. S. 76, 90.
The judgment of the Court of Appeals accordingly is
Affirmed.
Mr. Justice Reed, Mr. Justice Douglas and Mr. Justice Jackson would reverse the judgment of the Court of Appeals.
61 Stat. 140-141, 29 U. S. C. (Supp. III) § 158 (b) (4) (A). For text see Labor Board v. Denver Building Trades Council, ante, p. 677, note 1.
The complaint referred originally not only to the unfair labor practice here considered but also to coercion in violation of § 8 (b) (1) (A), and to threats of action addressed to other employers. Those charges were dismissed by the Board and are not before us.
61 Stat. 149-150, 29 U. S. C. (Supp. III) § 160 (l). For text see Labor Board v. Denver Building Trades Council, ante, p. 682, note 10.
61 Stat. 148-149, 29 U. S. C. (Supp. III) § 160 (f).
“The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.” 61 Stat. 142, 29 U. S. C. (Supp.III) § 158 (c).
This issue is extensively reviewed and determined in favor of the view that § 8 (c) does not immunize otherwise unfair labor practice against § 8 (b) (4) (A) in United Brotherhood of Carpenters, 81 N. L. R. B. 802, 807-816. In affirming that conclusion the Court of Appeals for the Tenth Circuit said:
“They established a picket at the building project of Klassen. And they placed Klassen on a so-called blacklist and gave wide circulation of the fact among those particularly interested in the building industry, all for the purpose of compelling Klassen to cease doing business with Wadsworth. There is nothing in the language or legislative history of section 8 (c) which indicates persuasively .a Congressional intent to create an asylum of immunity from the proscription of section 8 (b) (4) (A) for acts and conduct of that kind.” Labor Board v. United Brotherhood of Carpenters, 184 F. 2d 60, 62.
Petition for certiorari was filed in this Court and action on the petition was withheld pending decision of the instant cases. The United Brotherhood of Carpenters filed a brief as amicus curiae in connection with the hearings of these cases and the petition of certiorari is this day being denied, post, p. 947. See also, United Brotherhood of Carpenters v. Sperry, 170 F. 2d 863, 868-869; Printing Specialties Union, 82 N. L. R. B. 271; Bricklayers Union, 82 N. L. R. B. 228; Local 1796, United Brotherhood of Carpenters, 82 N. L. R. B. 211; Dennis, The Boycott Under the Taft-Hartley Act, N. Y. U. Third Annual Conference on Labor (1950), 367, 382-386,
Induce: “1. To lead on; to influence; to prevail on; to move by persuasion or influence.”
Encourage: “1. To give courage to; to inspire with courage, spirit, or hope; to raise the confidence of; to animate; hearten; ....
“2. To embolden, incite, or induce as by inspiration, recommendation, etc.; hence, to advise; ....
“3. To give help or patronage to, as an industry; to foster; . . . .” Webster’s New Int’l Diet., Unabridged (2d ed. 1945).
“Sec. 303. (a) It shall be unlawful, for the purposes of this section only, in an industry or activity affecting commerce, for any labor organization to engage in, or to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal in the course of their employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services, where an object thereof is—
“(1) forcing or requiring any employer or self-employed person to join any labor or employer organization or any employer or other person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person;
“(b) Whoever shall be injured in his business or property by reason of any violation of subsection (a) may sue therefor in any district court of the United States subject to the limitations and provisions of section 301 hereof without respect to the amount in controversy, or in any other court having jurisdiction of the parties, and shall recover the damages by him sustained and the cost of the suit.” 61 Stat. 158-159,29 U. S. C. (Supp. Ill) § 187.
See Labor Board v. United Brotherhood of Carpenters, 184 F. 2d 60, 62, certiorari denied this day as No. 387, post, p. 947; Labor Board v. Local 74, United Brotherhood of Carpenters, 181 F. 2d 126, 132, aff’d as No. 85, post, p. 707; Labor Board v. Wine, Liquor & Distillery Workers Union, 178 F. 2d 584, 587-588; Printing Specialties Union v. Le Baron, 171 F. 2d 331, 334-335; United Brotherhood of Carpenters v. Sperry, 170 F. 2d 863, 868-869. See also, as to § 8 (b) (4) (C), Douds v. Local 1250, 170 F. 2d 700, 701.
See Building Service Union v. Gazzam, 339 U. S. 532; International Brotherhood of Teamsters v. Hanke, 339 U. S. 470; Hughes v. Superior Court, 339 U. S. 460; Giboney v. Empire Storage Co., 336 U. S. 490.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | G | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Douglas
delivered the opinion of the Court.
Eagle River is a tributary of the Colorado River; and Water District 37 is a Colorado entity encompassing all Colorado lands irrigated by water of the Eagle and its tributaries. The present case started in the Colorado courts and is called a supplemental water adjudication under Colo. Rev. Stat. Ann. § 148-9-7 (1963). The Colorado court issued a notice which, inter alia, asked all owners and claimants of water rights in those streams “to file a statement of claim and to appear ... in regard to all water rights owned or claimed by them.” The United States was served with this notice pursuant to 43 U. S. C. § 666. The United States moved to be dismissed as a party, asserting that 43 U. S. C. § 666 does not constitute consent to have adjudicated in a state court the reserved water rights of the United States.
The objections of the United States were overruled by the state District Court and on a motion for a writ of prohibition the Colorado Supreme Court took the same view. 169 Colo. 665, 458 P. 2d 760. The case is here on a petition for certiorari, which we granted. 397 U. S. 1005.
We affirm the Colorado decree.
It is clear from our cases that the United States often has reserved water rights based on withdrawals from the public domain. As we said in Arizona v. California, 373 U. S. 546, the Federal Government had the authority both before and after a State is admitted into the Union “to reserve waters for the use and benefit of federally reserved lands.” Id., at 597. The federally reserved lands include any federal enclave. In Arizona v. California we were primarily concerned with Indian reservations. Id., at 598-601. The reservation of waters may be only implied and the amount will reflect the nature of the federal enclave. Id., at 600-601. Here the United States is primarily concerned with reserved waters for the White River National Forest, withdrawn in 1905, Colorado having been admitted into the Union in 1876.
The United States points out that Colorado water rights are based on the appropriation system which requires the permanent fixing of rights to the use of water at the time of the adjudication, with no provision for the future needs, as is often required in case of reserved water rights. Ibid. Since those rights may potentially be at war with appropriative rights, it is earnestly urged that 43 U. S. C. § 666 gave consent to join the United States only for the adjudication of water rights which the United States acquired pursuant to state law.
The consent to join the United States “in any suit (1) for the adjudication of rights to the use of water of a river system or other source” would seem to be all-inclusive. We deem almost frivolous the suggestion that the Eagle and its tributaries are not a “river system” within the meaning of the Act. No suit by any State could possibly encompass all of the water rights in the entire Colorado River which runs through or touches many States. The “river system” must be read as embracing one within the particular State’s jurisdiction. With that to one side, the first clause of §666 (a)(1), read literally, would seem to cover this case for “rights to the use of water of a river system” is broad enough to embrace “reserved” waters.
The main reliance of the United States appears to be on Clause 2 of § 666 (a) which reads:
. . for the administration of such rights, where it appears that the United States is the owner of or is in the process of acquiring water rights by appropriation under State law, by purchase, by exchange, or otherwise.”
This provision does not qualify § 666 (a)(1), for (1) and (2) are separated by an “or.” Yet even if “or” be read as “and,” we see no difficulty with Colorado’s position. Section 666 (a) (2) obviously includes water rights previously acquired by the United States through appropriation or presently in the process of being so acquired. But we do not read § 666 (a) (2) as being restricted to appropriative rights acquired under state law. In the first place “the administration of such rights” in § 666 (a)(2) must refer to the rights described in (1) for they are the only ones which in this context “such” could mean; and as we have seen they are all-inclusive, in terms at least. Moreover, (2) covers rights acquired by appropriation under state law and rights acquired “by purchase” or “by exchange,” which we assume would normally be appropriative rights. But it also includes water rights which the United States has “otherwise” acquired. The doctrine of ejusdem generis is invoked to maintain that “or otherwise” does not encompass the adjudication of reserved water rights, which are in no way dependent for their creation or existence on state law. We reject that conclusion for we deal with an all-inclusive statute concerning “the adjudication of rights to the use of water of a river system” which in § 666 (a)(1) has no exceptions and which, as we read it, includes appropriative rights, riparian rights, and reserved rights.
It is said that this adjudication is not a “general” one as required by Dugan v. Rank, 372 U. S. 609, 618. This proceeding, unlike the one in Dugan, is not a private one to determine whether named claimants have priority over the United States. The whole community of claims is involved and as Senator McCarran, Chairman of the Committee reporting on the bill, said in reply to Senator Magnuson: “S. 18 is not intended ... to be used for any other purpose than to allow the United States to be joined in a suit wherein it is necessary to adjudicate all of the rights of various owners on a given stream. This is so because unless all of the parties owning or in the process of acquiring water rights on a particular stream can be joined as parties defendant, any subsequent decree would be of little value.”
It is said, however, that since this is a supplemental adjudication only those who claim water rights acquired since the last adjudication of that water district are before the court. It is also said that the earliest priority date decreed in such an adjudication must be later than the last priority date decreed in the preceding adjudication. The last water adjudication in this water district was entered on February 21, 1966, and the United States was not a party to that or to any prior proceeding in this water district. The United States accordingly says that since the United States cannot be barred by the previous decrees and since the owners of previously decreed rights are not before the court, the consent envisaged by 43 U. S. C. § 666 is not present.
We think that argument is extremely technical; and we decline to confine 43 U. S. C. § 666 so narrowly. The absence of owners of previously decreed rights may present problems going to the merits, in case there develops a collision between them and any reserved rights of the United States. All such questions, including the volume and scope of particular reserved rights, are federal questions which, if preserved, can be reviewed here after final judgment by the Colorado court.
Affirmed
[For concurring statement of Mr. Justice Harlan, see post, p. 530.]
66 Stat. 560, 43 U. S. C. §666 (a), provides:
“Consent is given to join the United States as a defendant in any suit (1) for the adjudication of rights to the use of water of a river system or other source, or (2) for the administration of such rights, where it appears that the United States is the owner of or is in the process of acquiring water rights by appropriation under State law, by purchase, by exchange, or otherwise, and the United States is a necessary party to such suit. The United States, when a party to any such suit, shall (1) be deemed to have waived any right to plead that the State laws are inapplicable or that the United States is not amenable thereto by reason of its sovereignty, and (2) shall be subject to the judgments, orders, and decrees of the court having jurisdiction, and may obtain review thereof, in the same manner and to the same extent as a private individual under like circumstances: Provided, That no judgment for costs shall be entered against the United States in any such suit.”
See Coffin v. Left Hand Ditch Co., 6 Colo. 443, 446; Mason v. Hills Land & Cattle Co., 119 Colo. 404, 204 P. 2d 153.
See Comment, 48 Calif. L. Rev. 94, 111 (1960).
S. Rep. No. 755, 82d Cong., 1st Sess., 9. And see Pacific Live Stock Co. v. Oregon Water Bd., 241 U. S. 440, 448.
Colo. Rev. Stat. Ann. § 148-9-7.
Id., §148-9-13.
The Colorado court stated:
“We are not determining whether the United States has reserved water rights in connection with lands withdrawn subsequent to August 1, 1876, the date of Colorado’s admission to the Union; nor, if so, whether these rights have priority over previously adjudicated rights. These questions properly should be decided after the United States presents its specific claims for adjudication and the issues of fact and law are clearly drawn.” 169 Colo., at 577, 458 P. 2d, at 770.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Black
delivered the opinion of the Court.
Respondent, who is not an Indian, operates a general store in Arizona on the Navajo Indian Reservation under a license required by federal statute. He brought this action in the Superior Court of Arizona against petitioners, a Navajo Indian and his wife who live on the Reservation, to collect for goods sold them there on credit. Over petitioners’ motion to dismiss on the ground that jurisdiction lay in the tribal court rather than in the state court, judgment was entered in favor of respondent. The Supreme Court of Arizona affirmed, holding that since no Act of Congress expressly forbids their doing so Arizona courts are free to exercise jurisdiction over civil suits by non-Indians against Indians though the action arises on an Indian reservation. 83 Ariz. 241, 319 P. 2d 998. Because this was a doubtful determination of the important question of state power over Indian affairs, we granted certiorari. 356 U. S. 930.
Originally the Indian tribes were separate nations within what is now the United States. Through conquest and treaties they were induced to give up complete independence and the right to go to war in exchange for federal protection, aid, and grants of land. When the lands granted lay within States these governments sometimes sought to impose their laws and courts on the Indians. Around 1830 the Georgia Legislature extended its laws to the Cherokee Reservation despite federal treaties with the Indians which set aside this land for them. The Georgia statutes forbade the Cherokees from enacting laws or holding courts and prohibited outsiders from being on the Reservation except with permission of the State Governor. The constitutionality of these laws was tested in Worcester v. Georgia, 6 Pet. 515, when the State sought to punish a white man, licensed by the Federal Government to practice as a missionary among the Cherokees, for his refusal to leave the Reservation. Rendering one of his most courageous and eloquent opinions, Chief Justice Marshall held that Georgia’s assertion of power was invalid. “The Cherokee nation ... is a distinct community, occupying its own territory ... in which the laws of Georgia can have no force, and which the citizens of Georgia have no right to enter, but with the assent of the Cherokees themselves, or in conformity with treaties, and with the acts of congress. The whole intercourse between the United States and this nation, is, by our constitution and laws, vested in the government of the United States.” 6 Pet., at 561.
Despite bitter criticism and the defiance of Georgia which refused to obey this Court’s mandate in Worcester the broad principles of that decision came to be accepted as law. Over the years this Court has modified these principles in cases where essential tribal relations were not involved and where the rights of Indians would not be jeopardized, but the basic policy of Worcester has remained. Thus, suits by Indians against outsiders in state courts have been sanctioned. See Felix v. Patrick, 145 U. S. 317, 332; United States v. Candelaria, 271 U. S. 432. See also Harrison v. Laveen, 67 Ariz. 337, 196 P. 2d 456. And state courts have been allowed to try non-Indians who committed crimes against each other on a reservation. E. g., New York ex rel. Ray v. Martin, 326 U. S. 496. But if the crime was by or against an Indian, tribal jurisdiction or that expressly conferred on other courts by Congress has remained exclusive. Donnelly v. United States, 228 U. S. 243, 269-272; Williams v. United States, 327 U. S. 711. Essentially, absent governing Acts of Congress, the question has always been whether the state action infringed on the right of reservation .Indians to make their own laws and be ruled by them. Cf. Utah & Northern Railway v. Fisher, 116 U. S. 28.
Congress has also acted consistently upon the assumption that the States have no power to regulate the affairs of Indians on a reservation. To assure adequate government of the Indian tribes it enacted comprehensive statutes in 1834 regulating trade with Indians and organizing a Department of Indian Affairs. 4 Stat. 729, 735. Not satisfied solely with centralized government of Indians, it encouraged tribal governments and courts to become stronger and more highly organized. See, e. g., the Wheeler-Howard Act, §§ 16, 17, 48 Stat. 987, 988, 25 U. S. C. §§ 476, 477. Congress has followed a policy calculated eventually to make all Indians full-fledged participants in American society. This policy contemplates criminal and civil jurisdiction over Indians by any State ready to assume the burdens that go with it as soon as the educational and economic status of the Indians permits the change without disadvantage to them. See H. R. Rep. No. 848, 83d Cong., 1st Sess. 3, 6, 7 (1953). Significantly, when Congress has wished the States to exercise this power it has expressly granted them the jurisdiction which Worcester v. Georgia had denied.
No departure from the policies which have been applied to other Indians is apparent in the relationship between the United States and the Navajos. On June 1, 1868, a treaty was signed between General William T. Sherman, for the United States, and numerous chiefs and headmen of the “Navajo nation or tribe of Indians.” At the time this document was signed the Navajos were an exiled people, forced by the United States to live crowded together on a small piece of land on the Pecos River in eastern New Mexico, some 300 miles east of the area they had occupied before the coming of the white man. In return for their promises to keep peace, this treaty “set apart” for “their permanent home” a portion of what had been their native country, and provided that no one, except United States Government personnel, was to enter the reserved area. Implicit in these treaty terms, as it was in the treaties with the Cherokees involved in Worcester v. Georgia, was the understanding that the internal affairs of the Indians remained exclusively within the jurisdiction of whatever tribal government existed. Since then, Congress and the Bureau of Indian Affairs have assisted in strengthening the Navajo tribal government and its courts. See the Navajo-Hopi Rehabilitation Act of 1950, § 6, 64 Stat. 46, 25 U. S. C. § 636; 25 CFR §§11.1 through 11.87NH. The Tribe itself has in recent years greatly improved its legal system through increased expenditures and better-trained personnel. Today the Navajo Courts of Indian Offenses exercise broad criminal and civil jurisdiction which covers suits by outsiders against Indian defendants. No Federal Act has given state courts jurisdiction over such controversies. In a general statute Congress did express its willingness to have any State assume jurisdiction over reservation Indians if the State Legislature or the people vote affirmatively to accept such responsibility. To date, Arizona has not accepted jurisdiction, possibly because the people of the State anticipate that the burdens accompanying such power might be considerable.
There can be no doubt that to allow the exercise of state jurisdiction here would undermine the authority of the tribal courts over Reservation affairs and hence would infringe on the right of the Indians to govern themselves. It is immaterial that respondent is not an Indian. He was on the Reservation and the transaction with an Indian took place there. Cf. Donnelly v. United States, supra; Williams v. United States, supra. The cases in this Court have consistently guarded the authority of Indian governments over their reservations. Congress recognized this authority in the Navajos in the Treaty of 1868, and has done so ever since. If this power is to be taken away from them, it is for Congress to do it. Lone Wolf v. Hitchcock, 187 U. S. 653, 564-566.
Reversed.
31 Stat. 1066, as amended, 32 Stat. 1009, 25 U. S. C. §262, provides: “Any person desiring to trade with the Indians on any Indian reservation shall, upon establishing the fact, to the satisfaction of the Commissioner of Indian Affairs, that he is a proper person to engage in such trade, be permitted to do so under such rules and regulations as the Commissioner of Indian Affairs may prescribe for the protection of said Indians.”
The Georgia laws are set out extensively in Worcester v. Georgia, 6 Pet. 515, 521-528. The principal treaties involved are found at 7 Stat. 18, 39.
For interesting accounts of this episode in the struggle for power between state and federal governments see IV Beveridge, The Life of John Marshall, 539-552; I Warren, The Supreme Court in United States History, c. 19. See also Cherokee Nation v. Georgia, 5 Pet. 1.
See The Kansas Indians, 5 Wall. 737; Ex parte Crow Dog, 109 U. S. 556; United States v. Kagama, 118 U. S. 375; United States v. Forness, 125 F. 2d 928; Iron Crow v. Oglala Sioux Tribe, 231 F. 2d 89; Begay v. Miller, 70 Ariz. 380, 222 P. 2d 624; Cohen, Federal Indian Law (Revision by the United States Interior Department 1958); 55 Decisions of the Department of the Interior 56-64.
The Federal Government’s power over Indians is derived from Art. I, § 8, cl. 3, of the United States Constitution, Perrin v. United States, 232 U. S. 478, and from the necessity of giving uniform protection to a dependent people. United States v. Kagama, supra.
For example, Congress has granted to the federal courts exclusive jurisdiction upon Indian reservations over 11 major crimes. And non-Indians committing crimes against Indians are now generally tried in federal courts. See 18 U. S. C. §§437-439, 1151-1163; Cohen, op. cit. supra, note 4, at 307-326.
See, e. g., 62 Stat. 1224, 64 Stat. 846, 25 U. S. C. §§ 232, 233 (1952) (granting broad civil and criminal jurisdiction to New York); 18 U. S. C. § 1162, 28 U. S. C. § 1360 (granting broad civil and criminal jurisdiction to California, Minnesota, Nebraska, Oregon, and Wisconsin). The series of statutes granting extensive jurisdiction over Oklahoma Indians to state courts are discussed in Cohen, op. cit. supra, note 4, at 985-1051.
15 Stat. 667. In 16 Stat. 566 (1871), Congress declared that no Indian tribe or nation within the United States should thereafter be recognized as an independent power with whom the United States could execute a treaty but provided that this should not impair the obligations of any treaty previously ratified. Thus the 1868 treaty with the Navajos survived this Act.
Young, The Navajo Yearbook (1955), 165, 201; id. (1957), 107, 110.
In the 1949 Navajo-Hopi Rehabilitation Bill, S. 1407, 81st Cong., 1st Sess., setting up a 10-year program of capital and other improvements on the Reservation, Congress provided for concurrent state, federal and tribal jurisdiction. President Truman vetoed the bill because he felt that subjecting the Navajo and Hopi to state jurisdiction was undesirable in view of their illiteracy, poverty and primitive social concepts. He was also impressed by the fact that the Indians vigorously opposed the bill. 95 Cong. Rec. 14784-14785. After the objectionable features of the bill were deleted it was passed again and became law. 64 Stat. 44, 25 U. S. C. §§ 631-640.
Act of Aug. 15, 1953, c. 505, §§ 6, 7, 67 Stat. 590, provides as follows: “Notwithstanding the provisions of any Enabling Act for the admission of a State, the consent of the United States is hereby given to the people of any State to amend, where necessary, their State constitution or existing statutes, as the case may be, to remove any legal impediment to the assumption of civil and criminal jurisdiction in accordance with the provisions of this Act: Provided, That the provisions of this Act shall not become effective with respect to such assumption of jurisdiction by any such State until the people thereof have appropriately amended their State constitution or statutes as the case may be.
"... The consent of the United States is hereby given to any other State not having jurisdiction with respect to criminal offenses or civil causes of action, or with respect to both, as provided for in this Act, to assume jurisdiction at such time and in such manner as the people of the State shall, by affirmative legislative action, obligate and bind the State to assumption thereof.”
Arizona has an express disclaimer of jurisdiction over Indian lands in its Enabling Act, § 20, 36 Stat. 569, and in Art. XX, Fourth, of its Constitution. Cf. Draper v. United States, 164 U. S. 240.
See H. R. Rep. No. 848, 83d Cong., 1st Sess. 3, 7 (1953); Secretary of Interior, Annual Report (1955), 247-248; id. (1956), 215-216; id. (1957), 253-254.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | B | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Douglas
delivered the opinion of the Court.
This is a suit for a declaratory judgment (Judicial Code § 274d, 28 U. S. C. § 400) and an injunction, instituted by respondent for the determination of the legality and enforceability of a provision of a patent license agreement. The District Court, whose jurisdiction was based on diversity of citizenship (Judicial Code § 24 (1), 28 U. S. C. §41 (1)), entered judgment for petitioner, holding the provision valid. The Circuit Court of Appeals reversed by a divided vote, 156 F. 2d 198, being of the opinion that the provision in question was illegal under the line of decisions represented by Mercoid Corporation v. Mid-Continent Co., 320 U. S. 661. The case is here on a petition for a writ of certiorari which we granted because of the public importance of the question presented and of the apparent conflict between the decision below and Allbright-Nell Co. v. Stanley Hiller Co., 72 F. 2d 392, decided by the Seventh Circuit Court of Appeals.
Petitioner, organized in 1934, has patents on a machine which bears the trade-mark “Transwrap.” This machine makes transparent packages, simultaneously fills them with such articles as candy, and seals them. In 1937 petitioner sold and respondent acquired the Transwrap business in the United States, Canada, and Mexico, the right to use the trade-mark “Transwrap,” and an exclusive license to manufacture and sell the Transwrap machine under the patents petitioner then owned or might acquire. The agreement contained a formula by which royalties were to be computed and paid. The term of the agreement was ten years with an option in respondent to renew it thereafter for five-year periods during the life of the patents covered by the agreement. The agreement could be terminated by petitioner on notice for specified defaults on respondent’s part. The provision of the agreement around which the present controversy turns is a covenant by respondent to assign to petitioner improvement patents applicable to the machine and suitable for use in connection with it.
The parties had operated under the agreement for several years when petitioner ascertained that respondent had taken out certain patents on improvements in the machine. Petitioner notified respondent that its failure to disclose and assign these improvements constituted a breach of the agreement and called on respondent to remedy the default. When that did not occur, petitioner notified respondent that the agreement would be terminated on a day certain. Thereupon respondent instituted this action asking that the provisions respecting the improvement patents be declared illegal and unenforceable and that petitioner be enjoined from terminating the agreement.
In a long and consistent line of cases the Court has held that an owner of a patent may not condition a license so as to tie to the use of the patent the use of other materials, processes or devices which lie outside of the monopoly of the patent. Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502; Carbice Corp. v. American Patents Dev. Corp., 283 U. S. 27; Leitch Mfg. Co. v. Barber Co., 302 U. S. 458; Morton Salt Co. v. Suppiger Co., 314 U. S. 488; B. B. Chemical Co. v. Ellis, 314 U. S. 495; Mercoid Corporation v. Mid-Continent Co., supra; Mercoid Corp. v. Honeywell Co., 320 U. S. 680. As stated in Morton Salt Co. v. Suppiger Co., supra, p. 492, “. . . the public policy which includes inventions within the granted monopoly excludes from it all that is not embraced in the invention. It equally forbids the use of the patent to secure an exclusive right or limited monopoly not granted by the Patent Office and which it is contrary to public policy to grant.” If such practices were tolerated, ownership of a patent would give the patentee control over unpatented articles which but for the patent he would not possess. “If the restraint is lawful because of the patent, the patent will have been expanded by contract. That on which no patent could be obtained would be as effectively protected as if a patent had been issued. Private business would function as its own patent office and impose its own law upon its licensees.” Mercoid Corp. v. Mid-Continent Co., supra, p. 667. The requirement that a licensee under a patent use an unpat-ented material or device with the patent might violate the anti-trust laws but for the attempted protection of the patent. Id. The condemnation of the practice, however, does not depend on such a showing. Though control of the unpatented article or device falls short of a prohibited restraint of trade or monopoly, it will not be sanctioned. Morton Salt Co. v. Suppiger Co., supra. For it is the tendency in that direction which condemns the practice and which, if approved by a court either through enjoining infringement or enforcing the covenant, would receive a powerful impetus. Id.
The Circuit Court of Appeals was of the view that the principle of those cases was applicable here and rendered illegal and unenforceable the covenant to assign the improvement patents to petitioner. It stated, 156 F. 2d, p. 202, “The owner of all property, by withholding it upon any other terms, may, if he can, force others to buy from him; land is the best example and every parcel of land is a monopoly. But it is precisely in this that a patent is not like other property; the patentee may not use it to force others to buy of him things outside its four corners. If the defendant gets the plaintiff’s patents, it will have put itself in that position, in part at any rate, by virtue of the compulsion of its own patents.”
It went on to note that since all improvement patents would not expire until after expiration of petitioner’s patents on the machine, the arrangement put respondent at a competitive disadvantage. For respondent would lose the negative command over the art which ownership of the improvement patents would have given it. Moreover, respondent, though able to renew the license on conditions stated in the agreement, would be irretrievably tied to it so as to be “forced, either to cease all efforts to patent improvements, or to keep renewing the contract in order to escape the consequences of its own ingenuity.” Id., p. 203.
First. The first difficulty we have with the position of the Circuit Court of Appeals is that Congress has made all patents assignable and has granted the assignee the same exclusive rights as the patentee. “Every application for patent or patent or any interest therein shall be assignable in law by an instrument in writing, and the applicant or patentee or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent or patent to the whole or any specified part of the United States.” R. S. § 4898, 35 U. S. C. Supp. V § 47. The statute does not limit the consideration which may be paid for the assignment to any species or kind of property. At least so far as the terms of the statute are concerned, we see no difference whether the consideration is services (cf. Standard Parts Co. v. Peck, 264 U. S. 52) or cash, or the right to use another patent.
An improvement patent may, like a patent on a step in a process, have great strategic value. For it may, on expiration of the basic patent, be the key to a whole technology. One who holds it may therefore have a considerable competitive advantage. And one who assigns it and thereby loses negative command of the art may by reason of his assignment have suffered a real competitive handicap. For thereafter he will have to pay toll to the as-signee, if he practices the invention. But the competí-tive handicap or disadvantage which he suffers is no greater and no less whether the consideration for the assignment be the right to use the basic patent or something else of value. That is to say, the freedom of one who assigns a patent is restricted to the same degree whether the assignment is made pursuant to a license agreement or otherwise.
If Congress, by whose authority patent rights are created, had allowed patents to be assigned only for a specified consideration, it would be our duty to permit no exceptions. But here Congress has made no such limitation. A patent is a species of property. It gives the patentee or his assignee the “exclusive right to make, use, and vend the invention or discovery” for a limited period. R. S. § 4884, 35 U. S. C. § 40. That is to say, it carries for the statutory period “a right to be free from competition in the practice of the invention.” Mercoid Corporation v. Mid-Continent Co., supra, p. 665. That exclusive right, being the essence of the patent privilege, is, for purposes of the assignment statute, of the same dignity as any other property which may be used to purchase patents.
Second. What we have said is not, of course, a complete answer to the position of the Circuit Court of Appeals. For the question remains whether here, as in Mercoid Corporation v. Mid-Continent Co., supra, and its predecessors, the condition in the license agreement violates some other principle of law or public policy. The fact that a patentee has the power to refuse a license does not mean that he has the power to grant a license on such conditions as he may choose. United States v. Masonite Corp., 316 U. S. 265, 277.
As we have noted, such a power, if conceded, would enable the patentee not only to exploit the invention but to use it to acquire a monopoly not embraced in the patent. Thus, if he could require all licensees to use his unpatented materials with the patent, he would have, or stand in a strategic position to acquire, a monopoly in the unpatented materials themselves. Beyond the “limited monopoly” granted by the patent, the methods by which a patent is exploited are “subject to the general law.” United States v. Masonite Corp., supra, p. 277. Protection from competition in the sale of unpatented materials is not granted by either the patent law or the general law. He who uses his patent to obtain protection from competition in the sale of unpatented materials extends by contract his patent monopoly to articles as respects which the law sanctions neither monopolies nor restraints of trade.
It is at precisely this point that our second difficulty with the view of the Circuit Court of Appeals is found. An improvement patent, like the basic patent to which it relates, is a legalized monopoly for a limited period. The law permits both to be bought and sold. One who uses one patent to acquire another is not extending his patent monopoly to articles governed by the general law and as respects which neither monopolies nor restraints of trade are sanctioned. He is indeed using one legalized monopoly to acquire another legalized monopoly.
Mercoid Corporation v. Mid-Continent Co., supra, and its predecessors, by limiting a patentee to the monopoly found within the four corners of the grant, outlawed business practices which the patent law unaided by restrictive agreements did not protect. Take the case of the owner of an unpatented machine who leases it or otherwise licenses its use on condition that all improvements which the lessee or licensee patents should be assigned. He is using his property to acquire a monopoly. But the monopoly, being a patent, is a lawful one. The general law would no more make that acquisition of a patent unlawful than it would the assignment of a patent for cash. Yet a patent is a species of property; and if the owner of an unpatented machine could exact that condition, why may not the owner of a patented machine?
It is true that for some purposes the owner of a patent is under disabilities with which owners of other property are not burdened. Thus where the use of unpatented materials is tied to the use of a patent, a court will not lend its aid to enforce the agreement though control of the un-patented article falls short of a prohibited restraint of trade or monopoly. Morton Salt Co. v. Suppiger Co., supra. There is a suggestion that the same course should be followed in this case since the tendency of the practice we have here would be in the direction of concentration of economic power that might run counter to the policy of the anti-trust laws. The difficulty is that Congress has not made illegal the acquisition of improvement patents by the owner of a basic patent. The assignment of patents is indeed sanctioned. And as we have said, there is no difference in the policy of the assignment statute whatever consideration may be used to purchase the improvement patents. And apart from violations of the anti-trust laws to which we will shortly advert, the end result is the same whether the owner of a basic patent uses a license to obtain improvement patents or uses the wealth which he accumulates by exploiting his basic patent for that purpose. In sum, a patent license may not be used coercively to exact a condition contrary to public policy. But what falls within the terms of the assignment statute is plainly not per se against the public interest.
It is, of course, true that the monopoly which the licensor obtains when he acquires the improvement patents extends beyond the term of his basic patent. But as we have said, that is not creating by agreement a monopoly which the law otherwise would not sanction. The grant of the improvement patent itself creates the monopoly. On the facts of the present case the effect on the public interest would seem to be the same whether the licensee or the licensor owns the improvement patents.
There is a suggestion that the enforcement of the condition gives the licensee less incentive to make inventions when he is bound to turn over to the licensor the products of his inventive genius. Since the primary aim of the patent laws is to promote the progress of science and the useful arts (United States v. Masonite Corp., supra, p. 278 and cases cited), an arrangement which diminishes the incentive is said to be against the public interest. Whatever force that argument might have in other situations, it is not persuasive here. Respondent pays no additional royalty on any improvement patents which are used. By reason of the agreement any improvement patent can be put to immediate use and exploited for the account of the licensee. And that benefit continues so long as the agreement is renewed. The agreement thus serves a function of supplying a market for the improvement patents. Whether that opportunity to exploit the improvement patents would be increased but for the agreement depends on vicissitudes of business too conjectural on this record to appraise.
Third. We are quite aware of the possibilities of abuse in the practice of licensing a patent on condition that the licensee assign all improvement patents to the licensor. Conceivably the device could be employed with the purpose or effect of violating the anti-trust laws. He who acquires two patents acquires a double monopoly. As patents are added to patents a whole industry may be regimented. The owner of a basic patent might thus perpetuate his control over an industry long after the basic patent expired. Competitors might be eliminated and an industrial monopoly perfected and maintained. Through the use of patent pools or multiple licensing agreements the fruits of invention of an entire industry might be systematically funneled into the hands of the original patentee. See United Shoe Machinery Co. v. La Chapelle, 212 Mass. 467, 99 N. E. 289.
A patent may be so used as to violate the anti-trust laws. Standard Sanitary Mfg. Co. v. United States, 226 U. S. 20; United Shoe Machinery Corp. v. United States, 258 U. S. 451; Ethyl Gasoline Corp. v. United States, 309 U. S. 436; United States v. Masonite Corp., supra. Such violations may arise through conditions in the license whereby- the licensor seeks to control the conduct of the licensee by the fixing of prices (Ethyl Gasoline Corp. v. United States, supra; United States v. Masonite Corp., supra) or by other restrictive practices. United Shoe Machinery Corp. v. United States, supra. Moreover, in the Clayton Act, 38 Stat. 730, 731, 15 U. S. C. § 14, Congress made it unlawful to condition the sale or lease of one article on an agreement not to use or buy a competitor’s article (whether either or both are patented), where the effect is “to substantially lessen competition or tend to create a monopoly.” See International Business Machines Corp. v. United States, 298 U. S. 131. Congress, however, has made no specific prohibition agains't conditioning a patent license on the assignment by the licensee of improvement patents. But that does not mean that the practice we have here has immunity under the anti-trust laws. Indeed, the recent case of Hartford-Empire Co. v. United States, 323 U. S. 386, 324 U. S. 570, dramatically illustrates how the use of a condition or covenant in a patent license that the licensee will assign improvement patents may give rise to violations of the anti-trust laws.
The District Court found no violation of the anti-trust laws in the present case. The Circuit Court of Appeals did not reach that question. Hence it, as well as any other questions which may have been preserved, are open on our remand of the cause to the Circuit Court of Appeals.
We only hold that the inclusion in the license of the condition requiring the licensee to assign improvement patents is not per se illegal and unenforceable.
Reversed.
Mr. Justice Black, Mr. Justice Rutledge, and Mr. Justice Burton would affirm the judgment for the reasons set forth in the opinion of the Circuit Court of Appeals.
The relevant portions of this provision read as follows:
“If the Licensee shall discover or invent an improvement which is applicable to the Transwrap Packaging Machine and suitable for use in connection therewith and applicable to the making and closing of the package, but not to the filling nor to the contents of the package, it shall submit the same to the Licensor, which may, at its option, apply, for Letters Patent covering the same. In the event of the failure of the Licensor so to apply for Letters Patent covering such additional improvements, inventions or patentable ideas, the Licensee may apply for the same. In the event that such additional Letters Patent are applied for and are granted to the Licensor, they shall be deemed covered by the terms of this License Agreement and may be used by the Licensee hereunder without any further consideration, license fee or royalty as above provided. In the event that any such additional improvements are patented by the Licensee for use in connection with Transwrap Packaging Machines, (after the refusal or failure of the Licensor to apply for Patents thereon), the Licensor may, nevertheless, have the use but not the exclusive use of the same outside of the several territories covered by this License Agreement. The expenses of obtaining any such Patents shall be paid by the party applying therefor.”
By another provision of the agreement, likewise challenged, it was provided that during the term of the license all improvement patents, whether secured by petitioner or by respondent, were to be included in the terms of the license without payment of an additional royalty. The petitioner, however, was to have the right to use and license the use of any such improvements outside the territories covered by the agreement.
Petitioner joined issue and filed a counterclaim asking that the improvement patents be assigned, that the agreement be held terminated and that respondent be enjoined from using the original or improvement patents. The District Court dismissed the complaint, declared the agreement terminated, and ordered respondent to assign the petitioner the improvement patents. The Circuit Court of Appeals, on reversing, held not only that the provision for the assignment of the improvement patents was unlawful but also that petitioner was excused from any further performance because respondent had repudiated its agreement to assign those patents. It remanded the cause to the District Court to determine whether petitioner was entitled to restitution.
See James v. Campbell, 104 U. S. 356, 358; Hollister v. Benedict Mfg. Co., 113 U. S. 59, 67; Cramp & Sons Co. v. International Curtis Co., 246 U. S. 28, 39-40; United States v. Dubilier Condenser Corp., 289 U. S. 178, 187.
See Patents and Free Enterprise, Monograph No. 31, Investigation of Concentration of Economic Power, Temporary National Economic Committee, 76th Cong., 3d Sess., chs. V & VII; Wood, Patents and Antitrust Law (1941), chs. 3 & 4; Marcus, Patents, Antitrust Law and Antitrust Judgments through Hartford-Empire, (1945-46) 34 Georgetown L. J. 1.
See note 45 Col. L. Rev. 601.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Kennedy
announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, III, and IV, and an opinion with respect to Part V, in which The Chief Justice, Justice White, and Justice Scalia join.
The Court of Appeals held invalid an Ohio statute that, with certain exceptions, prohibits any person from performing an abortion on an unmarried, unemancipated, minor woman absent notice to one of the woman’s parents or a court order of approval. We reverse, for we determine that the statute accords with our precedents on parental notice and consent in the abortion context and does not violate the Fourteenth Amendment.
I
A
The Ohio Legislature, in November 1985, enacted Amended Substitute House Bill 319 (H. B. 319), which amended Ohio Rev. Code Ann. § 2919.12 (1987), and created Ohio Rev. Code Ann. §§ 2151.85 and 2505.073 (Supp. 1988). Section 2919.12(B), the cornerstone of this legislation, makes it a criminal offense, except in four specified circumstances, for a physician or other person to perform an abortion on an unmarried and unemancipated woman under 18 years of age. See § 2919.12(D) (making the first offense a misdemeanor and subsequent offenses felonies); § 2919.12(E) (imposing civil liability).
The first and second circumstances in which a physician may perform an abortion relate to parental notice and consent. First, a physician may perform an abortion if he provides “at least twenty-four hours actual notice, in person or by telephone,” to one of the woman’s parents (or her guardian or custodian) of his intention to perform the abortion. §2919.12(B)(l)(a)(i). The physician, as an alternative, may notify a minor’s adult brother, sister, stepparent, or grandparent, if the minor and the other relative each file an affidavit in the juvenile court stating that the minor fears physical, sexual, or severe emotional abuse from one of her parents. See §§ 2919.12(B)(l)(a)(i), 2919.12(B)(1)(b), 2919.12(B)(1)(c). If the physician cannot give the notice “after a reasonable effort,” he may perform the abortion after “at least forty-eight hours constructive notice” by both ordinary and certified mail. §2919.12(B)(2). Second, a physician may perform an abortion on the minor if one of her parents (or her guardian or custodian) has consented to the abortion in writing. See § 2919.12(B)(l)(a)(ii).
The third and fourth circumstances depend on a judicial procedure that allows a minor to bypass the notice and consent provisions just described. The statute allows a physician to perform an abortion without notifying one of the minor’s parents or receiving the parent’s consent if a juvenile court issues an order authorizing the minor to consent, § 2919.12(B)(l)(a)(iii), or if a juvenile court or court of appeals, by its inaction, provides constructive authorization for the minor to consent, § 2919.12(B)(l)(a)(iv).
The bypass procedure requires the minor to file a complaint in the juvenile court, stating (1) that she is pregnant; (2) that she is unmarried, under 18 years of age, and uneman-cipated; (3) that she desires to have an abortion without notifying one of her parents; (4) that she has sufficient maturity and information to make an intelligent decision whether to have an abortion without such notice, or that one of her parents has engaged in a pattern of physical, sexual, or emotional abuse against her, or that notice is not in her best interests; and (5) that she has or has not retained an attorney. §§ 2151.85(A)(1) — (5). The Ohio Supreme Court, as discussed below, has prescribed pleading forms for the minor to use. See App. 6-14.
The juvenile court must hold a hearing at the earliest possible time, but not later than the fifth business day after the minor files the complaint. § 2151.85(B)(1). The court must render its decision immediately after the conclusion of the hearing. Ibid. Failure to hold the hearing within this time results in constructive authorization for the minor to consent to the abortion. Ibid. At the hearing the court must appoint a guardian ad litem and an attorney to represent the minor if she has not retained her own counsel. § 2151.85(B) (2). The minor must prove her allegation of maturity, pattern of abuse, or best interests by clear and convincing evidence, § 2151.85(C), and the juvenile court must conduct the hearing to preserve the anonymity of the complainant, keeping all papers confidential. §§ 2151.85(D), (F).
The minor has the right to expedited review. The statute provides that, within four days after the minor files a notice of appeal, the clerk of the juvenile court shall deliver the notice of appeal and record to the state court of appeals. § 2505.073(A). The clerk of the court of appeals dockets the appeal upon receipt of these items. Ibid. The minor must file her brief within four days after the docketing. Ibid. If she desires an oral argument, the court of appeals must hold one within five days after the docketing and must issue a decision immediately after oral argument. Ibid. If she waives the right to an oral argument, the court of appeals must issue a decision within five days after the docketing. Ibid. If the court of appeals does not comply with these time limits, a constructive order results authorizing the minor to consent to the abortion. Ibid.
B
Appellees in this action include the Akron Center for Reproductive Health, a facility that provides abortions; Max Pierre Gaujean, M. D., a physician who performs abortions at the Akron Center; and Rachael Roe, an unmarried, un-emancipated, minor woman, who sought an abortion at the facility. In March 1986, days before the effective date of H. B. 319, appellees and others brought a facial challenge to the constitutionality of the statute in the United States District Court for the Northern District of Ohio. The District Court, after various proceedings, issued a preliminary injunction and later a permanent injunction preventing the State of Ohio from enforcing the statute. Akron Center for Reproductive Health v. Rosen, 633 F. Supp. 1123 (1986).
The Court of Appeals for the Sixth Circuit affirmed, concluding that H. B. 319 had six constitutional defects. These points, discussed below, related to the sufficiency of the expedited procedures, the guarantee of anonymity, the constructive authorization provisions, the clear and convincing evidence standard, the pleading requirements, and the physician’s personal obligation to give notice to one of the minor’s parents. Akron Center for Reproductive Health v. Slaby, 854 F. 2d 852 (1988). The State of Ohio, on appeal under 28 U. S. C. § 1254(2) (1982 ed.), prob. juris, noted, 492 U. S. 916 (1989), challenges the Court of Appeals’ decision in its entirety. Appellees seek affirmance on the grounds adopted by the Court of Appeals and on other grounds.
II
We have decided five cases addressing the constitutionality of parental notice or parental consent statutes in the abortion context. See Planned Parenthood of Central Mo. v. Danforth, 428 U. S. 52 (1976); Bellotti v. Baird, 443 U. S. 622 (1979); H. L. v. Matheson, 450 U. S. 398 (1981); Planned Parenthood Assn. of Kansas City, Mo., Inc. v. Ashcroft, 462 U. S. 476 (1983); Akron v. Akron Center for Reproductive Health, Inc., 462 U. S. 416 (1983). We do not need to determine whether a statute that does not accord with these cases would violate the Constitution, for we conclude that H. B. 319 is consistent with them.
A
This dispute turns, to a large extent, on the adequacy of H. B. 319’s judicial bypass procedure. In analyzing this aspect of the dispute, we note that, although our cases have required bypass procedures for parental consent statutes, we have not decided whether parental notice statutes must contain such procedures. See Matheson, supra, at 413, and n. 25 (upholding a notice statute without a bypass procedure as applied to immature, dependent minors). We leave the question open, because, whether or not the Fourteenth Amendment requires notice statutes to contain bypass procedures, H. B. 319’s bypass procedure meets the requirements identified for parental consent statutes in Danforth, Bellotti, Ashcroft, and Akron. Danforth established that, in order to prevent another person from having an absolute veto power over a minor’s decision to have an abortion, a State must provide some sort of bypass procedure if it elects to require parental consent. See 428 U. S., at 74. As we hold today in Hodgson v. Minnesota, ante, p. 417, it is a corollary to the greater intrusiveness of consent statutes that a bypass procedure that will suffice for a consent statute will suffice also for a notice statute. See also Matheson, supra, at 411, n. 17 (notice statutes are not equivalent to consent statutes because they do not give anyone a veto power of over a minor’s abortion decision).
The principal opinion in Bellotti stated four criteria that a bypass procedure in a consent statute must satisfy. Appellees contend that the bypass procedure does not satisfy these criteria. We disagree. First, the Bellotti principal opinion indicated that the procedure must allow the minor to show that she possesses the maturity and information to make her abortion decision, in consultation with her physician, without regard to her parents’ wishes. See 443 U. S., at 643 (opinion of Powell, J.). The Court reaffirmed this requirement in Akron by holding that a State cannot presume the immaturity of girls under the age of 15. 462 U. S., at 440. In the case now before us, we have no difficulty concluding that H. B. 319 allows a minor to show maturity in conformity with the principal opinion in Bellotti. The statute permits the minor to show that she “is sufficiently mature and well enough informed to decide intelligently whether to have an abortion.” Ohio Rev. Code Ann. §2151.85(0(1) (Supp. 1988).
Second, the Bellotti principal opinion indicated that the procedure must allow the minor to show that, even if she cannot make the abortion decision by herself, “the desired abortion would be in her best interests.” 443 U. S., at 644. We believe that H. B. 319 satisfies the Bellotti language as quoted. The statute requires the juvenile court to authorize the minor’s consent where the court determines that the abortion is in the minor’s best interest and in cases where the minor has shown a pattern of physical, sexual, or emotional abuse. See §2151.85(0(2).
Third, the Bellotti principal opinion indicated that the procedure must insure the minor’s anonymity. See 443 U. S., at 644. H. B. 319 satisfies this standard. Section 2151.85 (D) provides that “[t]he [juvenile] court shall not notify the parents, guardian, or custodian of the complainant that she is pregnant or that she wants to have an abortion.”- Section 2151.85(F) further states:
“Each hearing under this section shall be conducted in a manner that will preserve the anonymity of the complainant. The complaint and all other papers and records that pertain to an action commenced under this section shall be kept confidential and are not public records.”
Section 2505.073(B), in a similar fashion, requires the court of appeals to preserve the minor’s anonymity and confidentiality of all papers on appeal. The State, in addition, makes it a criminal offense for an employee to disclose documents not designated as public records. See §§ 102.03(B), 102.99(B).
Appellees argue that the complaint forms prescribed by the Ohio Supreme Court will require the minor to disclose her identity. Unless the minor has counsel, she must sign a complaint form to initiate the bypass procedure and, even if she has counsel, she must supply the name of one of her parents at four different places. See App. 6-14 (pleading forms). Appellees would prefer protections similar to those included in the statutes that we reviewed in Bellotti and Ashcroft. The statute in Bellotti protected anonymity by permitting use of a pseudonym, see Planned Parenthood League of Massachusetts v. Bellotti, 641 F. 2d 1006, 1025 (CA1 1981), and the statute in Ashcroft allowed the minor to sign the petition with her initials, see 462 U. S., at 491, n. 16. Appellees also maintain that the Ohio laws requiring court employees not to disclose public documents are irrelevant because the right to anonymity is broader than the right not to have officials reveal one’s identity to the public at large.
Confidentiality differs from anonymity, but we do not believe that the distinction has constitutional significance in the present context. The distinction has not played a part in our previous decisions, and, even if the Bellotti principal opinion is taken as setting the standard, we do not find complete anonymity critical. H. B. 319, like the statutes in Bellotti and Ashcroft, takes reasonable steps to prevent the public from learning of the minor’s identity. We refuse to base a decision on the facial validity of a statute on the mere possibility of unauthorized, illegal disclosure by state employees. H. B. 319, like many sophisticated judicial procedures, requires participants to provide identifying information for administrative purposes, not for public disclosure.
Fourth, the Bellotti principal opinion indicated that courts must conduct a bypass procedure with expedition to allow the minor an effective opportunity to obtain the abortion. See 443 U. S., at 644. H. B. 319, as noted above, requires the trial court to make its decision within five “business day[s]” after the minor files her complaint, § 2151.85(B)(1); requires the court of appeals to docket an appeal within four “days” after the minor files a notice of appeal, § 2505.073(A); and requires the court of appeals to render a decision within five “days” after docketing the appeal, ibid.
The District Court and the Court of Appeals assumed that all of the references to days in §§ 2151.85(B)(1) and 2505.073(A) meant business days as opposed to calendar days. Cf. Ohio Rule App. Proc. 14(A) (excluding nonbusiness days from computations of less than seven days). They calculated, as a result, that the procedure could take up to 22 calendar days because the minor could file at a time during the year in which the 14 business days needed for the bypass procedure would encompass 3 Saturdays, 3 Sundays, and 2 legal holidays. Appellees maintain, on the basis of an affidavit included in the record, that a 3-week delay could increase by a substantial measure both the costs and the medical risks of an abortion. See App. 18. They conclude, as did those courts, that H. B. 319 does not satisfy the Bellotti principal opinion’s expedition requirement.
As a preliminary matter, the 22-day calculation conflicts with two well-known rules of construction discussed in our abortion cases and elsewhere. “Where fairly possible, courts should construe a statute to avoid a danger of unconstitutionality.” Ashcroft, 462 U. S., at 493 (opinion of Powell, J.). Although we recognize that the other federal courts “ ‘are better schooled in and more able to interpret the laws of their respective States’ ” than are we, Frisby v. Schultz, 487 U. S. 474, 482 (1988), the Court of Appeals’ decision strikes us as dubious. Interpreting the term “days” in § 2505.073(A) to mean business days instead of calendar days seems inappropriate and unnecessary because of the express and contrasting use of “business day[s]” in § 2151.85(B)(1). In addition, because appellees are making a facial challenge to a statute, they must show that “no set of circumstances exists under which the Act would be valid.” Webster v. Reproductive Health Services, 492 U. S. 490, 524 (1989) (O’Connor, J., concurring). The Court of Appeals should not have invalidated the Ohio statute on a facial challenge based upon a worst-case analysis that may never occur. Cf. Ohio Rev. Code Ann. § 2505.073(A) (Supp. 1988) (allowing the court of appeals, upon the minor’s motion, to shorten or extend the time periods). Moreover, under our precedents, the mere possibility that the procedure may require up to 22 days in a rare case is plainly insufficient to invalidate the statute on its face. Ashcroft, for example, upheld a Missouri statute that contained a bypass procedure that could require 17 calendar days plus a sufficient time for deliberation and decisionmak-ing at both the trial and appellate levels. See 462 U. S., at 477, n. 4, 491, n. 16.
B
Appellees ask us, in effect, to extend the criteria used by some Members of the Court in Bellotti and the cases following it by imposing three additional requirements on bypass procedures. First, they challenge the constructive authorization provisions in H. B. 319, which enable a minor to obtain an abortion without notifying one of her parents if either the juvenile court or the court of appeals fails to act within the prescribed time limits. See Ohio Rev. Code Ann. §§2151.85 (B)(1), 2505.073(A), and 2919.12(B)(l)(a)(iv) (1987 and Supp. 1988). They speculate that the absence of an affirmative order when a court fails to process the minor’s complaint will deter the physician from acting.
We discern no constitutional defect in the statute. Absent a demonstrated pattern of abuse or defiance, a State may expect that its judges will follow mandated procedural requirements. There is no showing that the time limitations imposed by H. B. 319 will be ignored. With an abundance of caution, and concern for the minor’s interests, Ohio added the constructive authorization provisions in H. B. 319 to ensure expedition of the bypass procedures even if these time limits are not met. The State represents that a physician can obtain certified documentation from the juvenile or appellate court that constructive authorization has occurred. Brief for Appellant 36. We did not require a similar safety net in the bypass procedures in Ashcroft, supra, at 479-480, n. 4, and find no defect in the procedures that Ohio has provided.
Second, appellees ask us to rule that a bypass procedure cannot require a minor to prove maturity or best interests by a standard of clear and convincing evidence. They maintain that, when a State seeks to deprive an individual of liberty interests, it must take upon itself the risk of error. See Santosky v. Kramer, 455 U. S. 745, 755 (1982). House Bill 319 violates this standard, in their opinion, not only by placing the burden of proof upon the minor, but also by imposing a heightened standard of proof.
This contention lacks merit. A State does not have to bear the burden of proof on the issues of maturity or best interests. The principal opinion in Bellotti indicates that a State may require the minor to prove these facts in a bypass procedure. See 443 U. S., at 643 (opinion of Powell, J.). A State, moreover, may require a heightened standard of proof when, as here, the bypass procedure contemplates an ex parte proceeding at which no one opposes the minor’s testimony. We find the clear and convincing standard used in H. B. 319 acceptable. The Ohio Supreme Court has stated:
“Clear and convincing evidence is that measure or degree of proof which will produce in the mind of the trier of facts a firm belief or conviction as to the allegations sought to be established. It is intermediate, being more than a mere preponderance, but not to the extent of such certainty as is required beyond a reasonable doubt as in criminal cases. It does not mean clear and unequivocal.” Cross v. Ledford, 161 Ohio St. 469, 477, 120 N. E. 2d 118, 123 (1954) (emphasis deleted).
Our precedents do not require the State to set a lower standard. Given that the minor is assisted in the courtroom by an attorney as well as a guardian ad litem, this aspect of H. B. 319 is not infirm under the Constitution.
Third, appellees contend that the pleading requirements in H. B. 319 create a trap for the unwary. The minor, under the statutory scheme and the requirements prescribed by the Ohio Supreme Court, must choose among three pleading forms. See Ohio Rev. Code Ann. § 2151.85(C) (Supp. 1988); App. 6-14. The first alleges only maturity and the second alleges only best interests. She may not attempt to prove both maturity and best interests unless she chooses the third form, which alleges both of these facts. Appellees contend that the complications imposed by this scheme deny a minor the opportunity, required by the principal opinion in Bellotti, to prove either maturity or best interests or both. See 443 U. S., at 643-644.
Even on the assumption that the pleading scheme could produce some initial confusion because few minors would have counsel when pleading, the simple and straightforward procedure does not deprive the minor of an opportunity to prove her case. It seems unlikely that the Ohio courts will treat a minor’s choice of complaint form without due care and understanding for her unrepresented status. In addition, we note that the minor does not make a binding election by the initial choice of pleading form. The minor, under H. B. 319, receives appointed counsel after filing the complaint and may move for leave to amend the pleadings. See § 2151.85(B) (2); Ohio Rule Juvenile Proc. 22(B); see also Hambleton v. R. G. Barry Corp., 12 Ohio St. 3d 179, 183-184, 465 N. E. 2d 1298, 1302 (1984) (finding a liberal amendment policy in the state civil rules). Regardless of whether Ohio could have written a simpler statute, H. B. 319 survives a facial challenge.
Ill
Appellees contend our inquiry does not end even if we decide that H. B. 319 conforms to Danforth, Bellotti, Mathe-son, Ashcroft, and Akron. They maintain that H. B. 319 gives a minor a state-law substantive right “to avoid unnecessary or hostile parental involvement” if she can demonstrate that her maturity or best interests favor abortion without notifying one of her parents. They argue that H. B. 319 deprives the minor of this right without due process because the pleading requirements, the alleged lack of expedition and anonymity, and the clear and convincing evidence standard make the bypass procedure unfair. See Mathews v. Eldridge, 424 U. S. 319, 335 (1976). We find no merit in this argument.
The confidentiality provisions, the expedited procedures, and the pleading form requirements, on their face, satisfy the dictates of minimal due process. We see little risk of erroneous deprivation under these provisions and no need to require additional procedural safeguards. The clear and convincing evidence standard, for reasons we have described, does not place an unconstitutional burden on the types of proof to be presented. The minor is assisted by an attorney and a guardian ad litem and the proceeding is ex parte. The standard ensures that the judge will take special care in deciding whether the minor’s consent to an abortion should proceed without parental notification. As a final matter, given that the statute provides definite and reasonable deadlines, Ohio Rev. Code Ann. §2505.073(A) (Supp. 1988), the constructive authorization provision, § 2151.85(B)(1), also comports with due process on its face.
> 1 — I
Appellees, as a final matter, contend that we should invalidate H. B. 319 in its entirety because the statute requires the parental notice to be given by the physician who is to perform the abortion. In Akron, the Court found unconstitutional a requirement that the attending physician provide the information and counseling relevant to informed consent. See 462 U. S., at 446-449. Although the Court did not disapprove of informing a woman of the health risks of an abortion, it explained that “[t]he State’s interest is in ensuring that the woman’s consent is informed and unpressured; the critical factor is whether she obtains the necessary information and counseling from a qualified person, not the identity of the person from whom she obtains it.” Id., at 448. Appellees maintain, in a similar fashion, that Ohio has no reason for requiring the minor’s physician, rather than some other qualified person, to notify one of the minor’s parents.
Appellees, however, have failed to consider our precedent on this matter. We upheld, in Matheson, a statute that required a physician to notify the minor’s parents. See 450 U. S., at 400. The distinction between notifying a minor’s parents and informing a woman of the routine risks of an abortion has ample justification; although counselors may provide information about general risks as in Akron, appel-lees do not contest the superior ability of a physician to garner and use information supplied by a minor’s parents upon receiving notice. We continue to believe that a State may require the physician himself or herself to take reasonable steps to notify a minor’s parent because the parent often will provide important medical data to the physician. As we explained in Matheson:
“The medical, emotional, and psychological consequences of an abortion are serious and can be lasting; this is particularly so when the patient is immature. An adequate medical and psychological case history is important to the physician. Parents can provide medical and psychological data, refer the physician to other sources of medical history, such as family physicians, and authorize family physicians to give relevant data.” 450 U. S., at 411 (footnote omitted).
The conversation with the physician, in addition, may enable a parent to provide better advice to the minor. The parent who must respond to an event with complex philosophical and emotional dimensions is given some access to an experienced and, in an ideal case, detached physician who can assist the parent in approaching the problem in a mature and balanced way. This access may benefit both the parent and child in a manner not possible through notice by less qualified persons.
Any imposition on a physician’s schedule, by requiring him or her to give notice when the minor does not have consent from one of her parents or court authorization, must be evaluated in light of the complete statutory scheme. The statute allows the physician to send notice by mail if he or she cannot reach the minor’s parent “after a reasonable effort,” Ohio Rev. Code Ann. §2919.12(B)(2) (1987), and also allows him or her to forgo notice in the event of certain emergencies, see §2919.12(0(2). These provisions are an adequate recognition of the physician’s professional status. On this facial challenge, we find the physician notification requirement unobjectionable.
V
The Ohio statute, in sum, does not impose an undue, or otherwise unconstitutional, burden on a minor seeking an abortion. We believe, in addition, that the legislature acted in a rational manner in enacting H. B. 319. A free and enlightened society may decide that each of its members should attain a clearer, more tolerant understanding of the profound philosophic choices confronted by a woman who is considering whether to seek an abortion. Her decision will embrace her own destiny and personal dignity, and the origins of the other human life that lie within the embryo. The State is entitled to assume that, for most of its people, the beginnings of that understanding will be within the family, society’s most intimate association. It is both rational and fair for the State to conclude that, in most instances, the family will strive to give a lonely or even terrified minor advice that is both compassionate and mature. The statute in issue here is a rational way to further those ends. It would deny all dignity to the family to say that the State cannot take this reasonable step in regulating its health professions to ensure that, in most cases, a young woman will receive guidance and understanding from a parent. We uphold H. B. 319 on its face and reverse the judgment of the Court of Appeals.
It is so ordered.
Justice Stevens and Justice O’Connor join only Parts I, II, III, and IV of the opinion.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | E | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Mr. Justice Clark
delivered the opinion of the Court.
The sole issue in this patent infringement suit, filed in the Northern District of Indiana, is whether as a matter of law respondent Allbright-Nell Co., an Illinois manufacturer, by openly assuming and controlling in this action the defense of its customer, respondent Peter Eckrich & Sons, Inc., of Indiana, subjected itself to the jurisdiction of that court and waived the statutory venue requirements of 28 U. S. C. § 1400 (b). The motion of Allbright-Nell to dismiss as to it because venue in the Northern District of Indiana was improper was sustained without opinion. The Court of Appeals affirmed, 279 F. 2d 594. We granted certiorari, 364 U. S. 813. We affirm the judgment.
Allbright-Nell manufactured the alleged infringing device, a machine for cutting sausage meat, known as the “ANCO Emulsitator.” It sold some of the devices to Eckrich, whose principal place of business was at Fort Wayne, Indiana. In the contract of sale, Allbright-Nell agreed to defend any infringement suits which might be filed against Eckrich involving the device and to bear all of the expense thereof, including any recovery. While Eckrich was using the machines, petitioners sued it in Indiana for infringement. Pursuant to its contract, Allbright-Nell employed attorneys who defended the suit in the name of Eckrich. Thereafter, before any judgment was entered, petitioners amended their complaint, naming Allbright-Nell as a party defendant. Service was made upon Allbright-Nell by serving its president in Illinois. Motions to quash (on the ground that such service was made outside of the jurisdiction of the court) and to dismiss (on the ground that venue under § 1400 (b) was improper) were promptly filed. The petitioners admit that this service conferred no jurisdiction on the court and also concede that Allbright-Nell had no place of business in Indiana and, therefore, under § 1400 (b), venue as to it could not lie in Indiana. However, they urge that the presence of Allbright-Nell through the attorneys, openly defending and controlling the suit against Eckrich, gave the court jurisdiction over the former. In effect, petitioners argue, Allbright-Nell was in fact before the court protecting its own interests, was acting only as a “puppeteer” of Eckrich, and was seeking all the benefits of litigation but attempting to avoid all of its responsibilities, save the ultimate application of res judicata. It, therefore, should be deemed to have entered a general appearance and waived its objection to venue. In the face of § 1400 (b), however, we think not.
While objection to venue “may be lost by failure to assert it seasonably, by formal submission in a cause, or by submission through conduct, . . . courts affix to conduct [such] consequences as to place of suit consistent with the policy behind” the applicable venue statute. Neirbo Co., v. Bethlehem Corp., 308 U. S. 165, 168. As is pointed out in the cases, Congress adopted the predecessor to § 1400 (b) as a special venue statute in patent infringement actions to eliminate the “abuses engendered” by previous venue provisions allowing such suits to be brought in any district in which the defendant could be served. Stonite Co. v. Melvin Lloyd Co., 315 U. S. 561. The Act was designed “to define the exact jurisdiction of the . . . courts in these matters,” at p. 565, n. 5, and not to “dovetail with the general [venue] provisions.” Id., 566. As late as 1957 we have held § 1400 (b) to be “the sole and exclusive provision controlling venue in patent infringement actions.” Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 229 (1957). The language of this special statute is clear and specific. The practice complained of here was not at all unusual at the time of this statute’s passage, and for us to enlarge upon the mandate of the Congress as to venue in such patent actions would be an intrusion into the legislative field.
In fact, the petitioners would have us do now what this Court specifically refused to do 45 years ago in Merriam Co. v. Saalfield, 241 U. S. 22 (1916). There the entire defense of the named defendant (Saalfield) was openly financed and controlled by one Ogilvie, as to whom venue was improper; Merriam sought by supplemental bill to make Ogilvie a defendant before a final judgment was rendered, but after the issue of unfair competition had been decided; and Ogilvie would have been bound by the final judgment under res judicata. Nevertheless, his seasonable motion to quash the substituted service had upon the attorneys defending Saalfield was sustained. We believe the holding in Merriam completely supports our conclusion here. If a general appearance could be found in such conduct, the facts there were stronger, for the proceedings against Saalfield, handled entirely by Ogilvie, had progressed to the appointment of a master to determine the amount of damages. All that remained when it was sought to join Ogilvie was an accounting. Yet a unanimous Court sustained the dismissal, saying:
“ [I] f the decree [of injunction and accounting] . . . was not final as between appellant [Merriam Co.] and Saalfield, it cannot be res judicata as against Ogilvie; and thus the fundamental ground for proceeding against the latter by . . . substituted service of process disappears. This sufficiently shows the weakness of appellant’s position, which, upon analysis, is found to be this: that upon the theory that Ogilvie would be estopped by a final decree if and when made, it sought to bring him into the suit, before final decree, as if he were already estopped. However convenient this might be to a complainant in appellant’s position, it is inconsistent with elementary principles.” At pp. 28-29.
Petitioners stress that here the conduct of Allbright-Nell continued after it was named a party. We are not persuaded that this has any bearing upon the issue to be decided. The conduct which will amount to a waiver of venue is that of the defendant alone and nothing a plaintiff might do can change the legal consequences which attach to that conduct. Cf. Olberding v. Illinois Central R. Co., 346 U. S. 338. Certainly the point in time at which petitioners sought to join Allbright-Nell will control the amount of its total activities which will be considered in determining whether venue has been waived; but this cannot alter the conclusions to be drawn from that conduct. Therefore, whether Allbright-Nell’s actions took place before or after being named a party is immaterial to the question of waiver under the special venue provisions of § 1400 (b).
Petitioners insist that this result exalts form over substance. We think not. “The requirement of venue is specific and unambiguous; it is not one of those vague principles which, in the interest of some overriding policy, is to be given a ‘liberal’ construction.” Olberding v. Illinois Central R. Co., supra, at 340.
Affirmed.
28 U. S. C. § 1400 (b):
“Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”
The appeal was allowed under 28 U. S. C. § 1292 (b) on the certificate of the District Court that the order dismissing Allbright-Nell involved a controlling question of law and that immediate appeal would materially advance the termination of the litigation. -
Subsequently, a second suit involving a different patent was filed in the same court, naming both of the respondents here as defendants. The court entered similar orders in it, and the cases were consolidated on appeal.
It is conceded that Allbright-Nell, by openly controlling the defense of this suit, in which it has an interest, will be bound by the final judgment and precluded by res judicata, from relitigating the same issues. Souffront v. La Compagnie Des Sucreries De Porto Rico, 217 U. S. 475; Lovejoy v. Murray, 3 Wall. 1.
Some 30 years prior to that time this Court had occasion to pass on the effect of such conduct with relation to res judicata in Lovejoy v. Murray, 3 Wall. 1, 19 (1865), which held that one who controlled the defense in a suit was precluded from relitigating in a second action the issues adjudicated in the first.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | I | sc_issuearea |
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
Justice Scalia
delivered the opinion of the Court.
In this ease, we consider whether 11U. S. C. § 506(e) allows an administrative claimant of a bankruptcy estate to seek payment of its claim from property encumbered by a secured creditor’s lien.
I
This case arises out of the bankruptcy proceedings of Hen House Interstate, Inc., which at one time owned or operated several restaurants and service stations, as well as an outdoor-advertising firm. On September 5,1991, Hen House filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Missouri. As a Chapter 11 debtor-in-possession, Hen House retained possession of its assets and continued operating its business.
Respondent had been Hen House’s primary lender. At the time the Chapter 11 petition was filed, it held a security interest in essentially all of Hen House’s real and personal property, securing an indebtedness of over $4 million. After the Chapter 11 proceedings were commenced, it agreed to lend Hen House an additional $300,000 to help finance the reorganization. The Bankruptcy Court entered a financing order approving the loan agreement and authorizing Hen House to use loan proceeds and cash collateral to pay expenses, including workers’ compensation expenses.
During the attempted reorganization, Hen House obtained workers’ compensation insurance from petitioner Hartford Underwriters (which was unaware of the bankruptcy proceedings). Although the poliey required monthly premium payments, Hen House repeatedly failed to make them; Hartford continued to provide insurance nonetheless. The reorganization ultimately failed, and on January 20, 1993, the Bankruptcy Court converted the ease to a liquidation proceeding under Chapter 7 and appointed a trustee. At the time of the conversion, Hen House owed Hartford more than $50,000 in unpaid premiums. Hartford learned of Hen House’s bankruptcy proceedings after the conversion, in March 1993.
Recognizing that the estate lacked unencumbered funds to pay the premiums, Hartford attempted to charge the premiums to respondent, the secured creditor, by filing with the Bankruptcy Court an “Application for Allowance of Administrative Expense, Pursuant to 11 U. S. C. § 503 and Charge Against Collateral, Pursuant to 11 U. S. C. § 506(e).” The Bankruptcy Court ruled in favor of Hartford, and the District Court and an Eighth Circuit panel affirmed, In re Hen House Interstate, Inc., 150 F. 3d 868 (CA8 1998). The Eighth Circuit subsequently granted en bane review, however, and reversed, concluding that § 506(c) could not be invoked by an administrative claimant. In re Hen House Interstate, Inc., 177 F. 3d 719 (1999). We granted certiorari. 528 U. S. 985 (2000).
II
Petitioner’s effort to recover the unpaid premiums involves two provisions, 11 U. S. C. §§ 503(b) and 506(c). Section 503(b) provides that “the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the ease,” are treated as administrative expenses, which are, as a rule, entitled to priority over prepetition unsecured claims, see §§ 507(a)(1), 726(a)(1), 1129(a)(9)(A). Respondent does not dispute that the cost of the workers’ compensation insurance Hen House purchased from petitioner is an administrative expense within the meaning of this provision. Administrative expenses, however, do not have priority over secured claims, see §§506, 725-726, 1129(b)(2)(A); United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd., 484 U. S. 365, 378-379 (1988), and because respondent held a security interest in essentially all of the estate’s assets, there were no unencumbered funds available to pay even administrative claimants.
Petitioner therefore looked to § 506(e), which constitutes an important exception to the rule that secured claims are superior to administrative claims. That section provides as follows:
“The trustee may recover from property securing an allowed secured claim the reasonable, necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to the holder of such claim.” § 506(c).
Petitioner argued that this provision entitled it to recover from the property subject to respondent’s security interest the unpaid premiums owed by Hen House, since its furnishing of workers’ compensation insurance benefited respondent by allowing continued operation of Hen House’s business, thereby preserving the value of respondent’s collateral; or alternatively, that such benefit could be presumed from respondent’s consent to the postpetition financing order. Although it was contested below whether, under either theory, the workers’ compensation insurance constituted a “benefit to the holder” within the meaning of § 506(e), that issue is not before us here; we assume for purposes of this decision that it did, and consider only whether petitioner — an administrative claimant — is a proper party to seek recovery under § 506(e).
In answering this question, we begin with the understanding that Congress “says in a statute what it means and means in a statute what it says there,” Connecticut Nat. Bank v. Germain, 503 U. S. 249, 254 (1992). As we have previously noted in construing another provision of §506, when “the statute’s language is plain, ‘the sole function of the courts’ ” — at least where the disposition required by the text is not absurd — “‘is to enforce it according to its terms.’ ” United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 241 (1989) (quoting Caminetti v. United States, 242 U. S. 470, 485 (1917)). Here, the statute appears quite plain in specifying who may use § 506(c) — “[t]he trustee.” It is true, however, as petitioner notes, that all this actually “says” is that the trustee may seek recovery under the section, not that others may not. The question thus becomes whether it is a proper inference that the trustee is the only party empowered to invoke the provision. We have little difficulty answering yes.
Several contextual features here support the conclusion that exclusivity is intended. First, a situation in which a statute authorizes specific action and designates a particular party empowered to take it is surely among the least appropriate in which to presume nonexclusivity. “Where a statute . .. names the parties granted [the] right to invoke its provisions,... such parties only may act.” 2A N. Singer, Sutherland on Statutory Construction §47.23, p. 217 (5th ed. 1992) (internal quotation marks omitted); see also Federal Election Comm’n v. National Conservative Political Action Comm., 470 U. S. 480, 486 (1985). Second, the fact that the sole party named — -the trustee — has a unique role in bankruptcy proceedings makes it entirely plausible that Congress would provide a power to him and not to others. Indeed, had no particular parties been specified — had § 506(c) read simply “ftjhere may be recovered from property securing an allowed secured claim the reasonable, necessary costs and expenses, etc.” — the trustee is the most obvious party who would have been thought empowered to use the provision. It is thus far more sensible to view the provision as answering the question “Who may use the provision?” with “only the trustee” than to view it as simply answering the question “May the trustee use the provision?” with “yes.”
Nor can it be argued that the point of the provision was simply to establish that certain costs may be recovered from collateral, and not to say anything about who may recover them. Had that been Congress’s intention, it could easily have used the formulation just suggested. Similarly, had Congress intended the provision to be broadly available, it could simply have said so, as it did in describing the parties who could act under other sections of the Code. Section 502(a), for example, provides that a claim is allowed unless “a party in interest” objects, and § 503(b)(4) allows “an entity’ to file a request for payment of an administrative expense. The broad phrasing of these sections, when contrasted with the use of “the trustee” in § 506(e), supports the conclusion that entities other than the trustee are not entitled to use § 506(c). Russello v. United States, 464 U. S. 16, 23 (1983).
Petitioner’s primary argument from the text of § 506(c) is that “what matters is that section 506(e) does not say that ‘only’ a trustee may enforce its provisions.” Brief for Petitioner 29. To bolster this argument, petitioner cites other provisions of the Bankruptcy Code that do use “only” or other expressly restrictive language in specifying the parties at issue. See, e. g., § 109(a) (“[Ojnly a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title”); § 707(b) (providing that a case may be dismissed for substantial abuse by “the court, on its own motion or on a motion by the United States trustee, but not at the request or suggestion of any party in interest”). Petitioner argues that in the absence of such restrictive language, no party in interest is excluded. This theory — that the expression of one thing indicates the inclusion of others unless exclusion is made explicit — is contrary to common sense and common usage. Many provisions of the Bankruptcy Code that do not contain an express exclusion cannot sensibly be read to extend to all parties in interest. See, e.g., § 863(b)(1) (providing that “[tjhe trustee, after notice and a hearing, may use, sell, or lease ... property of the estate”); § 364(a) (providing that “the trustee” may incur debt on behalf of the bankruptcy estate); § 554(a) (giving “the trustee” power to abandon property of the bankruptcy estate).
Petitioner further argues that § 1109 evidences the right of a nontrustee to recover under § 506(c). We are not persuaded. That section, which provides that a “party in interest” “may raise and may appear and be heard on any issue in a ease under [Chapter 11],” is by its terms inapplicable here, since petitioner’s attempt to use § 506(c) came after the bankruptcy proceeding was converted from Chapter 11 to Chapter 7. In any event, we do not read § 1109(b)’s general provision of a right to be heard as broadly allowing a creditor to pursue substantive remedies that other Code provisions make available only to other specific parties. Cf. 7 L. King, Collier on Bankruptcy ¶ 1109.05 (rev. 15th ed. 1999) (“In general, section 1109 does not bestow any right to usurp the trustee’s role as representative of the estate with respect to the initiation of certain types of litigation that belong exclusively to the estate”).
I-H ► — i H-I
Because we believe that by far the most natural reading of § 506(c) is that it extends only to the trustee, petitioner’s burden of persuading us that the section must be read to allow its use by other parties is “‘exceptionally heavy.’” Patterson v. Shumate, 504 U. S. 753, 760 (1992) (quoting Union Bank v. Wolas, 502 U. S. 151, 156 (1991)). To support its proffered reading, petitioner advances arguments based on pre-Code practice and policy considerations. We address these arguments in turn.
A
Section 506(c)’s provision for the charge of certain administrative expenses against lienholders continues a practice that existed under the Bankruptcy Act of 1898, see, e. g., In re Tyne, 257 F. 2d 310, 312 (CA7 1958); 4 Collier on Bankruptcy, supra, ¶ 506.05[1]. It was not to be found in the text of the Act, but traced its origin to early eases establishing an equitable principle that where a court has custody of property, costs of administering and preserving the property are a dominant charge, see, e.g., Bronson v. La Crosse & Milwaukee R. Co., 1 Wall. 405, 410 (1864); Atlantic Trust Co. v. Chapman, 208 U. S. 360, 376 (1908). It was the norm that recovery of costs from a secured creditor would be sought by the trustee, see, e. g., Textile Banking Co. v. Widener, 265 F. 2d 446, 453-454 (CA4 1959); Tyne, supra, at 312. Petitioner cites a number of lower court cases, however, in which — without meaningful discussion of the point— parties other than the trustee were permitted to pursue such charges under the Act, sometimes simultaneously with the trustee’s pursuit of his own expenses, see, e. g., First Western Savings and Loan Assn. v. Anderson, 252 F. 2d 544, 547-548 (CA9 1958); In re Louisville Storage Co., 21F. Supp. 897,898 (WD Ky. 1936), aff’d, 93 F. 2d 1008 (CA6 1938), but sometimes independently, see In re Chapman Coal Co., 196 F. 2d 779, 780 (CA7 1952); In re Rotary Tire & Rubber Co., 2 F. 2d 364 (CA6 1924). Petitioner also relies on early decisions of this Court allowing individual claimants to seek recovery from secured assets, see Louisville, E. & St. L. R. Co. v. Wilson, 138 U. S. 501, 506 (1891); Burnham, v. Bowen, 111 U. S. 776, 779, 783 (1884); New York Dock Co. v. S. S. Poznan, 274 U. S. 117, 121 (1927). Wilson and Burnham involved equity re-ceiverships, and were not only pre-Code, but predate the Bankruptcy Act of 1898 that the Code replaced; while New York Dock was a case arising in admiralty.
It is questionable whether these precedents establish a' bankruptcy practice sufficiently widespread and well recognized to justify the conclusion of implicit adoption by the Code. We have no confidence that the allowance of recovery from collateral by nontrustees is “the type of ‘rule’ that. . . Congress was aware of when enacting the Code.” United States v. Ron Pair Enterprises, Inc., 489 U. S., at 246. Cf. Dewsnup v. Timm, 502 U. S. 410, 418 (1992) (relying on “clearly established” pre-Code practice); Kelly v. Robinson, 479 U. S. 36, 46 (1986) (giving weight to pre-Code practice that was “widely accepted” and “established”). In any event, whole pre-Code practice “informs our understanding of the language of the Code,” id., at 44, it cannot overcome that language. It is a tool of construction, not an extratextual supplement. We have applied it to the construction of provisions which were “subject to interpretation,” id., at 50, or contained “ambiguity in the text,” Dewsnup, supra, at 417. “[Wlhere the meaning of the Bankruptcy Code’s text is itself clear ... its operation is unimpeded by contrary . . . prior practice,” BFP v. Resolution Trust Corporation, 511 U. S. 531, 546 (1994) (internal quotation marks omitted). See, e. g., Pennsylvania Dept. of Public Welfare v. Davenport, 495 U. S. 552, 563 (1990); United States v. Ron Pair Enterprises, Inc., supra, at 245-246.
In this ease, we think the language of the Code leaves no room for clarification by pre-Code practice. If § 506(e) provided only that certain costs and expenses could be recovered from property securing a secured claim, without specifying any particular party by whom the recovery could be pursued, the ease would be akin to those in which we used prior practice to fill in the details of a pre-Code concept that the Code had adopted without elaboration. See, e. g., United States v. Noland, 517 U. S. 535, 539 (1996) (looking to pre-Code practice in interpreting Code’s reference to “principles of equitable subordination”); Midlantic Nat. Bank v. New Jersey Dept. of Environmental Protection, 474 U. S. 494, 501 (1986) (codification of trustee’s abandonment power held to incorporate established exceptions). Here, however, it is not the unelaborated concept but only a specifically narrowed one that has been adopted: a rule allowing the charge of costs to secured assets by the trustee. Pre-Code practice cannot transform §506(c)’s reference to “the trustee” to “the trustee and other parties in interest.”
B
Finally, petitioner argues that its reading is necessary as a matter of policy, since in some cases the trustee may lack an incentive to pursue payment. Section 506(c) must be open to nontrustees, petitioner asserts, lest secured creditors enjoy the benefit of services without paying for them. Moreover, ensuring that administrative claimants are compensated may also serve purposes beyond the avoidance of unjust enrichment. To the extent that there are circumstances in which the trustee will not use the section although an individual creditor would, allowing suits by nontrustees could encourage the provision of postpetition services to debtors on more favorable terms, which would in turn further bankruptcy’s goals.
Although these concerns may be valid, it is far from clear that the policy implications favor petitioner’s position. The class of eases in which § 506(c) would lie dormant without nontrustee use is limited by the fact that the trustee is obliged to seek recovery under the section whenever his fiduciary duties so require. And limiting § 506(c) to the trustee does not leave those who provide goods or services that benefit secured interests without other means of protecting themselves as against other creditors: They may insist on cash payment, or contract directly with the secured creditor, and may be able to obtain superpriority under § 364(c)(1) or a security interest under §§ 364(c)(2), (3), or § 364(d). And of course postpetition creditors can avoid unnecessary losses simply by paying attention to the status of their accounts, a protection which, by all appearances, petitioner neglected here.
On the other side of the ledger, petitioner’s reading would itself lead to results that seem undesirable as a matter of policy. In particular, expanding the number of parties who could use § 506(e) would create the possibility of multiple administrative claimants seeking recovery under the seetion. Eaeh such claim would require inquiry into the necessity of the services at issue and the degree of benefit to the secured creditor. Allowing recovery to be sought at the behest of parties other than the trustee could therefore impair the ability of the bankruptcy court to coordinate proceedings, as well as the ability of the trustee to manage the estate. Indeed, if administrative claimants were free to seek recovery on their own, they could proceed even where the trustee himself planned to do so. See, e. g., In re Bluffton Castings Corp., 224 B. R. 902, 904 (Bkrtcy. Ct. ND Ind. 1998). Further, where unencumbered assets were scarce, creditors might attempt to use § 506(e) even though their claim to have benefited the secured creditor was quite weak. The possibility of being targeted for such claims by various administrative claimants could make secured creditors less willing to provide postpetition financing.
In any event, we do not sit to assess the relative merits of different approaches to various bankruptcy problems. It suffices that the natural reading of the text produces the result we announce. Achieving a better policy outcome — if what petitioner urges is that — is a task for Congress, not the courts. Kawaauhau v. Geiger, 523 U. S. 57, 64 (1998); Noland, 517 U. S., at 541-542, n. 3; Wolas, 502 13. S., at 162.
* * *
We have considered the other points urged by petitioner and find them to be without merit. We conclude that 11 U. S. C. § 506(c) does not provide an administrative claimant an independent right to use the section to seek payment of its claim. The judgment of the Eighth Circuit is affirmed.
It is so ordered.
Kespondent Union Planters Bank is the successor of Magna Bank, which is in turn the successor of Landmark Bank of Illinois. Hen House was originally indebted to Landmark Bank. For simplicity, we will not distinguish between the various entities.
In addition to seeking recovery under § 506(c), petitioner argued to the Eighth Circuit en banc that it was entitled to recover under the terms of the postpetition financing order itself Petitioner sought to enforce that order under Federal Rule of Bankruptcy Procedure 7071, which incorporates Federal Rule of Civil Procedure 71 (“When an order is made in favor of a person who is not a party to the action, that person may enforce obedience to the order by the same process as if a party . ..”). The Eighth Circuit declined to address this issue, since it had not been raised until the rehearing en banc, In re Hen House Interstate, Inc., 177 F. 3d 719, 724 (1999). We similarly do not reach the issue here.
Debtors-in-possession may also use the section, as they are expressly given the rights and powers of a trustee by 11 U. S. C. § 1107.
The frequency with which such’circumstances arise may depend in part on who ultimately receives the recovery obtained by a trustee under § 506(c). Petitioner argues that it goes to the party who provided the services that benefited collateral (assuming that party has not already been compensated by the estate). Respondent argues that this reading, like a reading that allows creditors themselves to use § 506(c), upsets the Code's priority scheme by giving administrative claimants who benefit collateral an effective priority over others — allowing, for example, a Chapter 11 administrative creditor (like petitioner) to obtain payment via § 506(c) while Chapter 7 administrative creditors remain unpaid, despite §726(b)’s provision that Chapter 7 administrative claims have priority over Chapter 11 administrative claims. Thus, respondent asserts that a trustee’s recovery under § 506(c) simply goes into the estate to be distributed according to the Code’s priority provisions. Since this ease does not involve a trustee’s recovery under § 506(c), we do not address this question, or the related question whether the trustee may use the provision prior to paying the expenses for which reimbursement is sought, see In re K & L Lakeland, Inc., 128 F. Bd 203, 207, 212 (CA4 1997).
We do not address whether a bankruptcy court can allow other interested parties to act in the trustee’s stead in pursuing recovery under § 506(e). Amici American Insurance Association and National Union Fire Insurance Co. draw our attention to the practice of some courts of allowing creditors or creditors’ committees a derivative right to bring avoidance actions when the trustee refuses to do so, even though the applicable Code provisions, see 11 U. S. C. §§544, 545, 547(b), 548(a), 549(a), mention only the trustee. See, e. g., In re Gibson Group, Inc., 66 F. 3d 1436, 1438 (CA6 1995). Whatever the validity of that practice, it has no analogous application here, since petitioner did not ask the trustee to pursue payment under § 506(c) and did not seek permission from the Bankruptcy Court to take such action in the trustee’s stead. Petitioner asserted an independent right to use § 506(c), which is what we reject today. Cf. In re Xonics Photochemical, Inc., 841 F. 2d 198, 202-203 (CA7 1988) (holding that creditor had no right to bring avoidance action independently, but noting that it might have been able to seek to bring derivative suit).
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer: | H | sc_issuearea |
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